When AT&T wanted to start developing cellular in 1947, the FCC rejected the idea, believing that spectrum could be best used by other services that were not "in the nature of convenience or luxury." This view—that this would be a niche service for a tiny user base—persisted well into the 1980s. "Land mobile," the generic category that covered cellular, was far down on the FCC's list of priorities. In 1949, it was assigned just 4.7 percent of the spectrum in the relevant range. Broadcast TV was allotted 59.2 percent, and government uses got one-quarter.
Television broadcasting had become the FCC's mission, and land mobile was a lark. Yet Americans could have enjoyed all the broadcasts they would watch in, say, 1960 and had cellular phone service too. Instead, TV was allocated far more bandwidth than it ever used, with enormous deserts of vacant television assignments—a vast wasteland, if you will—blocking mobile wireless for more than a generation.
How empty was this spectrum? Across America's 210 television markets, the 81 channels originally allocated to TV created some 17,010 slots for stations. From this, the FCC planned in 1952 to authorize 2,002 TV stations. By 1962, just 603 were broadcasting in the United States. Yet broadcasters vigorously defended the idle bandwidth. When mobile telephone advocates tried to gain access to the lightly used ultra-high frequency (UHF) band, the broadcasters deluged the commission, arguing ferociously and relentlessly that mobile telephone service was an inefficient use of spectrum.
It may seem surprising that they were so determined to preserve those vacant frequencies. Given that commercial TV station licenses were severely limited—enough to support only three national networks—they might have seen the scores of unused channels as a threat. What if policy makers got serious about increasing competition? Shrinking the TV band by slicing off chunks for mobile phone services could have protected incumbent broadcasters from future television competitors. Why, then, did they oppose it?
The answer: The broadcasters believed they held sufficient veto power to prevent the prospect of competing stations. Meanwhile, they cherished the option value of unused spectrum. This thinking proved prescient: Years later, unoccupied TV frequencies would be awarded to the incumbent broadcasters, without payment, during the transition to digital television.