FCC’s Kevin Martin says broadcasters will leave 700 MHz in 2009; implies the commission may consider EchoStar-DirecTV merger if they change business model

LAS VEGAS--FCC Chairman Kevin Martin said that the 2009 deadline for the transition of commercial broadcasters to digital TV spectrum would be a hard date, leaving 700 MHz free and clear for the wireless service providers. He also indirectly implied the FCC may consider a merger between satellite TV provider EchoStar and DirecTV if they changed they changed the way they charged for and delivered their programming.

In a question and answer session with Consumer Electronics Association CEO Gary Shapiro, Martin said the 700 MHz auction this January would raise billions in license fees, and the FCC had the responsibility to ensure that spectrum was free and clear for the winning bidders to deploy broadband services after the Feb. 19, 2009, deadline.

“It’s a hard date,” Martin said. “I think it will be difficult, too, but it’s a hard date.”

The deadline has not been so hard and fast in the past. The original deadline for DTV transition was in 2006, but the federal government added the caveat that the broadcasters could delay their relocation until 85% of homes in any given market could receive digital signals. Critics like U.S. Sen. John McCain pointed out that such a benchmark could drag out relocation until as far out as 2015. Winners of earlier 700 MHz licenses encountered problems trying to launch broadband and media services over their new spectrum, including Qualcomm, which was forced to limit the footprint of its MediaFLO network when it couldn’t reach agreements with broadcasters in major markets. The government finally set a firm deadline for next year, in which all broadcasters must vacate the spectrum.

While firm on the 700 MHz auction, Martin sidestepped the issue of whether the FCC would consider allowing a merger of EchoStar and DirecTV after denying their first request in 2002. Shapiro asked Martin if, in deciding to allow the merger of broadcasters Sirius Satellite Radio and XM Satellite Radio, the FCC would be more receptive to the merger of the two rival satellite TV providers. Martin didn’t address the prospect of EchoStar and DirecTV merging directly, but he said the reason the FCC is considering Sirius and XM’s proposal is that the two have agreed to revamp their channel bundles, allowing customers to buy smaller packages of radio channels for cheaper prices rather than subscribe to big expensive bundles.

While Martin did not say he would favor an EchoStar-DirecTV tie-up if they did the same, Martin has been a staunch proponent of a la carte pricing in the cable and satellite TV industries, and he took the opportunity at CES to again criticize the cable industry’s ever-increasing service rates.

Martin said that across all communications sectors prices have fallen dramatically over the years, whether in the broadband, wireline telephony or wireless space. “The one exception to that is cable,” Martin said. “Cable prices have doubled.”