Failure of Deficit Panel Puts Pressure On Congress to Pass Spectrum Bill This Year

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By Paul Barbagallo  

The failure of the Joint Select Committee on Deficit Reduction to meet its deadline for drafting recommendations to Congress will put new pressure on lawmakers to pass spectrum legislation this year or early next year, with the sides still very much at odds.

It was widely believed that the so-called super committee would propose some form of legislation authorizing the Federal Communications Commission to hold “incentive” auctions, in which television broadcasters, who license spectrum through the agency, could voluntarily release some of it back to the government in exchange for a share of the auction proceeds.

As part of that legislation, Congress would dedicate another portion of the auction revenues for the building a nationwide emergency communications 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 idea has garnered support from both Democrats and Republicans, as well as from the wireless industry, which is eager to bid on spectrum at auction to solve capacity demands created by smartphones and tablet computers; and from emergency first-responder agencies, who still do not have a nationwide interoperable communications network.

In response to the announcement Nov. 21, Senate Commerce Committee Chairman John D. Rockefeller IV (D-W.Va.) expressed disappointment that the super committee not only failed to reach a deal but that his bill—S. 911, the Public Safety Spectrum and Wireless Innovation Act—would not be subject to an up-or-down vote in Congress as part of a deficit reduction package.

“Winning ideas like S. 911 cannot keep falling victim to this partisan stubbornness,” Rockefeller said in an e-mailed statement. “I will continue to pursue all avenues to get S. 911 enacted this year.”

‘Everything Was on the Table.'

The Congressional Budget Office has estimated the auction of broadcast TV spectrum would generate $24.5 billion in revenues between 2012 and 2021 and reduce the federal deficit by at least $6.5 billion.

“Democrats on the committee made clear everything was on the table,” said Sen. John Kerry (D-Mass.), a member of both the super committee and the Senate Commerce Committee, and a supporter of Rockefeller's S. 911. “Our offers were balanced. We walked the line of shared sacrifice, however difficult, and we proposed painful choices for programs we care about deeply.”

Apart from the partisan bickering within the super committee on broader debt-reduction issues, Senate Democrats and Republican leaders on the House Energy and Commerce Committee have been in sharp disagreement over how to finance the construction of an interoperable broadband network for public safety, a costly and first-of-its-kind endeavor.

Senate leaders, including Rockefeller and Sen. Charles Schumer (D-N.Y.), among others, want the FCC to allocate a 10 megahertz block of spectrum in the 700 MHz band—known as the “D Block”—for the building of a network, with $10 billion from incentive auction revenue set aside for start-up funding.

Republicans, meanwhile, have cautioned that if the D Block is allocated, rather than auctioned, the General Treasury would receive less revenue. As chairman of the House Energy and Commerce Communications subcommittee, Rep. Greg Walden (R-Ore.) in particular has raised sharp questions about precisely how much spectrum public safety entities need for a nationwide network.

Walden has also been sympathetic to arguments of broadcasters that a bill authorizing incentive auctions could stunt the industry's plans to make more innovative use of their airwaves, such as transmitting high-definition signals, “multicasting” multiple channels, and delivering mobile TV to phones, laptops, and tablet computers.

In Walden's discussion draft of spectrum legislation, the D Block would be auctioned to commercial bidders along spectrum relinquished by broadcasters. In a House Commerce Committee Democrats' draft, much like Rockefeller's aptly numbered S. 911, the D Block would be allocated to public safety.

Rep. Fred Upton (R-Mich.), chairman of the full House Energy and Commerce Committee and a member of the super committee, who shares Walden's position on the D Block and spectrum generally, issued a general statement expressing his displeasure about the super committee's announcement.

“I am bitterly disappointed that we were not able to find enough common ground to deliver the deficit reduction choices that Congress needs to make, but I am not deterred in my commitment to keep at it,” Upton said in an e-mailed statement. “Differences continue to divide us, but focusing solely on those differences serves no one.”

Upton did not address the issue of spectrum or the D Block. Walden could not be reached for comment at BNA's press time.

Wireless Industry Bemoans Announcement.

Already some industry trade groups were saying Nov. 21 that they would lobby Congress to move forward with standalone legislation.

“The wireless industry's need for additional spectrum is well documented. If the super committee process doesn't provide a path to addressing [the] need for more spectrum, then there are other vehicles available that will ensure our members can access unused or underutilized spectrum and meet consumers' demand for wireless broadband services,” said Jot Carpenter, vice president, government affairs, CTIA-The Wireless Association. “We look forward to working with Congress to ensure the U.S. wireless industry remains the world's leader.”

Fred Campbell, president of the Wireless Communications Association International, said Congress's failure to adopt spectrum legislation this year would be a significant blow to mobile broadband providers and consumers.

“WCAI urges Congress to complete its work on spectrum legislation this year,” Campbell said in a statement.

Several congressional and industry sources told BNA that a next likely vehicle for spectrum legislation is the omnibus package.

Walden has said he would schedule a markup of a spectrum bill if the super committee fails to act. S. 911 cleared the Senate Commerce Committee in June, but has yet to reach the Senate floor.