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FCC Chairman: Government Airwaves Could Be Answer To Spectrum Crunch

By William Launder Of DOW JONES NEWSWIRES BOSTON -(Dow Jones)- The U.S. could consider addressing the country's shortage of airwaves for mobile telecommunications by re-licensing government-held spectrum for commercial use, the chairman of the Federal Communications Commission said Tuesday. "We have to do things like look harder and more carefully at government spectrum," and look for "innovative ways" to share airwaves between the private and public sector, FCC Chairman Julius Genachowski said at a cable industry conference in Boston. Mobile operators are increasingly seeking deals to acquire more spectrum from each other and from cable operators, in an attempt to meet consumers' surging demand for broadband-intensive video-streaming services on mobile devices and tablets like Apple Inc.'s (AAPL) iPad. Genachowski said the spectrum crunch was the positive result of an entrepreneurial economy that resulted in the popularity of bandwidth-intensive applications available to consumers. Mobile congestion is "in the category of problems you want to have," he said, adding that foreign regulators are increasingly "envious of what they see in the U.S. in terms of broadband innovation." The FCC chairman also pointed to new efforts by cable operators to introduce usage-based pricing as a "completely appropriate" step to meet consumers' needs. Comcast Corp. (CMCSA, CMCSK), the country's largest cable operator by subscribers, last week began experimenting with a usage-based pricing model. Time Warner Cable Inc. (TWC) also is testing a flexible usage plan, after an initial foray into usage-based pricing was canceled several years ago because of customer concerns about overcharges. Genachowski conceded that the current regulation for the television industry could need updating to better address the new dynamics surrounding programming fees and other costs associated with distributing television content. "The creators of programming have the right to charge for carriage of their content," Genachowski said. But "there are questions about if that framework is addressing some of issues that are coming up now." Disputes about the consistent rate hikes that TV programmers levy on distributors are resulting in a growing list of network blackouts when distributors and programmers fail to reach an agreement on price. -By William Launder, Dow Jones Newswires; 212-416-3412; william.launder@dowjones.com

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