THURSDAY, OCTOBER 21, 2010


FCC wants unused spectrum for mobile


Broadcasters urged to free up airwaves to


meet wireless demand BY CECILIA KANG


Federal Communications Com-


missionChairman JuliusGenach- owski said he plans to encourage broadcasters to give up unused spectrum for auction to wireless carriers, an initial step toward achieving an agency goal of mak- ing networks faster for mobile phones andtablet computers. In an interview Wednesday,


Genachowski said he planned to introduce a proposal at the agen- cy’s Nov. 30 meeting that would lay the groundworkforbroadcast- ers to voluntarily release airwaves for sale to mobile carriers, which have been struggling to keep up with consumer demand for Inter- net-capablewirelessdevices. His comments come as the FCC


struggles to assert its regulatory authority over broadband net- works in the face of court chal- lenges andindustrypressure. Genachowski declined to com-


ment on whether the meeting would include a vote on his con- troversial net-neutrality proposal, which would essentially require Internet service providers to treat allWeb traffic equally. “I have nothing to add to what


I’ve said before,” he said when asked whether he thought he would be able tomove forward on net-neutrality rules if he didn’t hold a vote on his proposal next month. The agency has instead been


focusedonmobilebroadbandreg- ulations. Lastmonth, it approved apolicy thatwouldallowconsum- ers to tap super Wi-Fi networks


“The demands on our spectrum are increasing.”


—Julius Genachowski, FCC chairman.


that aremore robust and connect at longer-distances than current hotspots. Analysts on Wednesday called


the auction proposal incremental and said it would not provide im- mediate relief to users struggling to keep their smartphones from grinding to a halt in congested metropolitan areas such as New York. “I think it’s best viewed as setting the table in the event that Congress approves incentive auc- tionauthority,”saidRebeccaArbo- gast, ananalyst at StifelNicolaus. Specifically, Genachowski said


hewouldpropose granting broad- casters the ability to share digital channels, giving them leeway to relinquish unused airwaves that could then be auctioned by the government. The FCC would also seek to free spectrum by improv- ing reception on other airwaves and attracting broadcasters to those channels. Genachowski said some spec-


trumwouldbe available for exper- imentation by universities and re- searchers. The proposal also wouldexplorewhetherbroadcast- ers could re-lease their spectrum that isn’t beingused. “There is a lot of work we have


to do to take care of our nation’s invisible infrastructure, our air- waves,” Genachowski said. “The demands on our spectrumare in- creasing so rapidly that we know that ifwedon’t take stepsnowand in the near future, we will have seriousproblems.” kangc@washpost.com


KLMNO


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Economy & Business A17 ‘Modest’ optimism in Fed survey, but not on jobs BY NEIL IRWIN The economy is no longer de-


celerating but the pace of growth has remained tepid in recent weeks, according to anewFederal Reserve survey. The Fed’s “beige book,” a com-


pilation of anecdotal reports from businesses across the coun- try releasedWednesday, reported that “national economic activity continued to rise, albeit at a mod- est pace” from September through early October. That con- clusion contrasted with that of the previous beige book, released in early September, which report- ed “widespread signs of decelera- tion compared with previous pe- riods.” Still, the new survey gave little evidence that the job market is


picking up, saying that “hiring remained limited, with many firms reluctant to add to perma- nent payrolls given economic softness.” The latest report comes ahead


of a Nov. 2-3 meeting of Fed policymakers, at which they are likely to approve new, unconven- tional efforts to stimulate growth. Thefindings in the beigebook—a weak labor market, modest growth and few signs of inflation — offer support for these new steps, which would include major new purchases of bonds to pump more money into the economy. The stock market rose 1 per-


cent Wednesday, as measured by Standard & Poor’s 500-stock in- dex, after solid earnings reports from Boeing and Yahoo. TheFedsurvey includes results from various industries and parts


of the country. The findings were mixed. “Manufacturing activity con-


tinued to expand” across most of the country, with signs of strength in the export sector, semiconductors and high-tech equipment, and automobile pro- duction, the beige book reported. But it noted that “hiring at manu- facturing firms remained slug- gish.”


With regard to the service in-


dustry, “accounting activity im- proved slightly, spurred by merg- er and acquisitions work,” the survey found. It added that the Boston and Dallas Federal Re- serve banks “noted increases in consulting activity,” and “there were some reports from architec- tural firms that activity had picked up.” Demand for transpor- tation services appeared to have


slowed, however. Retail spending was “flat to


moderately positive” in most of the country, with declining sales the Southeast. The housing market remained


weak, with home-sales activity and prices little changed in most of the country/Butwith construc- tion activity rose in the Chicago, St. Louis and Kansas City Fed districts, which together encom- pass much of the Midwest. Com- mercial real estate was even less rosy than housing, as “industry contacts appeared to believe that the commercial real estate and construction sectors would re- main weak for some time.” Bank lending was similarly


mixed, with only uneven signs of improvement in the availability of loans.


irwinn@washpost.com Global bank rules might be ‘minimum’ standard


BY HOWARD SCHNEIDER Investors around the world are


likely to regard new banking rules proposed by an internation- al group of central bankers as a “minimum” standard and will probably force banks to set aside even more capital than required as a buffer against losses, accord- ing to one of the regulations’ main authors. “Banks and their investors will


want more,” said Stephen Cec- chetti, an economist working with the Basel Committee on Banking Supervision, which has been writing new rules for the global financial industry. “A pru- dent manager together with shareholders would surely want the bank to have theirowndiscre- tionary margin” beyond the regu-


latory standards. The committee, based in Basel, Switzerland, wants governments to roughly triple the amount of capital banks set aside, to an amount equal to 7.5 percent of their deposits and other liabili- ties. That requirement and other measures proposed by the com- mittee will be reviewed by fi- nance ministers of the G-20 group of nations when they meet in South Korea this week and is expected to be endorsed by G-20 heads of state at a summit next month. Cecchetti, the committee’s


chief staff member and head of the Monetary and Economic De- partment at the Basel-basedBank for International Settlements, said in a recent interview that he expects that national regulators could also force banks to boost


capital levels beyond the mini- mumstandard proposed in Basel. U.S. officials plan to integrate


the Basel proposals into the fi- nancial regulations approved this year by Congress. Other countries are expected to follow suit, Cec- chetti said, so that the newcapital rules are in place by 2013 across major financial markets. Cecchetti said the Basel group


is looking toward a second round of changes designed to expand the “regulatory perimeter” and ensure that a host of non-bank financial firms are adequately regulated. The recent crisis drew atten-


tion to what was dubbed the “shadow” banking system: the network of hedge funds, insur- ance, securities and other firms that were beyond the scope of traditional banking regulations


but helped throw the entire sys- tem into gridlock. “We viewed banks as being the


first step only. The regulatory perimeter cannot be porous” and allow companies that create cred- it and perform other functions of a bank to escape regulation, he said. The committee is also working


with a companion group, the Financial Stability Board, to de- velop new requirements for the largest and most complex finan- cial firms, which have traditional- ly been considered too big to fail. The hope is to keep such firms


on a tighter leash, with stiffer capital requirements and per- haps stricter lending and other rules to ensure that they either don’t fail—or, if they do, that they will not need a public bailout. schneiderh@washpost.com


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