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CBO Estimates $15.8B in Savings From Incentive Auctions, Spectrum Fees

Wednesday, October 12, 2011

By Paul Barbagallo  

The Congressional Budget Office has estimated that the spectrum-related provisions included in President Obama's jobs bill would reduce federal spending by nearly $15.8 billion over the 2012-2021 period.

The CBO score reflects a projected $27.7 billion in offsetting receipts from the bill's proposed so-called "incentive" spectrum auctions and spectrum fees, and a $11.9 billion increase in new spending.

The American Jobs Act of 2011 (S. 1549), much like previous administrative proposals, would authorize the Federal Communications Commission to hold voluntary incentive auctions, allowing television broadcasters, who license spectrum through the FCC, to release some of it back to the government in exchange for a share of the auction proceeds.

The CBO said that the commission-held incentive auctions—in addition to other spectrum auctions—could raise as much $23.3 billion for the Treasury over the 2012-2021 period.

On top of that, new licensing and permitting fees could total $4.4 billion over the same period. The president's bill would impose spectrum fees on MSS (mobile satellite service)-ATC (ancillary terrestrial component) licensees or the auction of terrestrial rights.

First-Responder Network.

The Obama administration, as the George W. Bush administration before it, has proposed giving the FCC the authority to impose spectrum fees on unauctioned spectrum, but the proposed jobs bill would require the agency to impose fees on MSS-ATC licensees or auction the terrestrial rights. Going forward, the commission would be given the authority to impose such fees on other licensees as it sees fit.

While nearly doubling the wireless spectrum available for mobile broadband, the Obama's bill would create, for the first time, a nationwide, interoperable, public safety broadband network that would tie fire, police, and emergency first-responders together in the event of a national emergency, such as the terrorist attacks of Sept. 11, 2001.

The bill would specifically allocate a the 10 megahertz D Block of spectrum in the 700 MHz band, which is worth as much as $2 billion to $4 billion to commercial bidders, for the building of the network. The CBO concluded that by not auctioning the D Block, while also setting aside funds for construction and operation of the network, spending would increase by $11.9 billion.

For the CBO estimate, visit http://www.cbo.gov/ftpdocs/124xx/doc12470/s1549.pdf.

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