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Obama Again Calls for ‘Incentive Auctions,' Nationwide Public Safety Broadband Network

Wednesday, February 15, 2012

By Paul Barbagallo  

President Obama's $3.803 trillion fiscal year 2013 budget plan retains previous administration proposals to nearly double the wireless spectrum available for mobile broadband and to create a nationwide, interoperable, public safety broadband network that would link fire, police, and emergency first-responders in the event of a national emergency, such as the terrorist attacks of Sept. 11, 2001.

For the second straight year, the president's budget calls for allocating a 10 megahertz block of spectrum in the 700 MHz band D Block for the building of a nationwide emergency communications network.

The budget plan also again proposes legislation authorizing the Federal Communications Commission to hold “voluntary incentive auctions,”a concept in which the agency would reclaim airwaves from television broadcasters and auction them off to mobile network operators, sharing some of the proceeds with the TV stations that volunteer to cease broadcasting.

“High-speed, wireless broadband is fast becoming a critical component of business operations and economic growth,” the budget plan states. “The United States needs to lead the world in providing broad access to the fastest networks possible. To do that, however, requires freeing up of transmission rights to underutilized portions of the spectrum currently dedicated to other private and federal uses.”

The administration touted incentive auctions as a “critical”first step to repurposing spectrum for smartphones and tablet computers.

The research firm Yankee Group estimates that by 2015 consumer use of wireless applications and services will be nearly 60 times today's volume.

Budget Says Auctions Could Raise $27 Billion.

Revenue from incentive auctions would also help pay for building a nationwide public safety network. Obama's FY 2013 budget plan would redirect $7 billion in incentive auction revenue toward network deployment costs, and another $300 million toward R&D.

The plan's total commitment for a nationwide emergency communications network is slightly more than $10 billion—$7 billion from auction revenues and $3.1 billion from not auctioning the D Block to commercial bidders. (The 10 MHz sliver of spectrum has been valued at between $2 billion and $4 billion. Under current law, the D Block must be auctioned.)

A White House fact sheet on the president's budget plan indicates that incentive auctions could raise as much as $27 billion.

The administration estimates that the proposals will reduce the deficit by $21 billion over the next 10 years, roughly $5 billion more than congressional projections.

Obama Endorses Unlicensed Spectrum Use.

As outlined in the president's budget plan, some of the spectrum reclaimed from television broadcasters would be set aside for unlicensed use.

The issue has sparked intense debate on Capitol Hill.

One provision in the Republican-led Middle Class Tax Relief and Job Creation Act of 2011 (H.R. 3630), which passed the House in December, would bar the FCC from reserving TV band spectrum for unlicensed use.

In contrast, a Democrat-led version of the legislation would allow the commission to decide how much broadcast TV spectrum should be used for unlicensed use.

H.R. 3630 is now under consideration by the conferees on the Payroll Tax Cut Conference Committee because its spectrum provisions could be used for spending cuts, tax increases, or some combination of the two to raise the money required to fund a 10-month extension of the 2 percentage point payroll tax cut and unemployment insurance benefits, as well as to prevent a cut in reimbursement rates for Medicare providers.

Hours after Obama publicly released his budget, a group of more than 100 companies, trade associations, and public interest groups sent a letter to congressional leaders endorsing the Democrats' bill.

Budget Boost for FCC, NTIA.

For the two agencies in charge of allocating the airwaves—the FCC and the Commerce Department's National Telecommunications and Information Administration—Obama has proposed a slight boost in funding for FY 2013.

The budget plan proposes $346.78 million for the FCC, an increase from the $339.8 million the agency received from Congress in 2012.

As in previous years, the president's budget would give the FCC the authority to levy fees on spectrum license holders, which could raise as much as $4.8 billion over the next decade. The proposal, however, has never garnered support on the Hill.

Overall, the president's FY 2013 budget request for the FCC includes funds to accelerate broadband deployment throughout the nation; implement the FCC's reforms to the Universal Service Fund programs; improve the FCC's information technology infrastructure; invest in the FCC's technical and engineering capabilities to detect interference issues; test new technologies; and study participation in the communications industry.

Meanwhile, Obama has also proposed $46.9 million for the NTIA, an increase over the $45.5 million Congress appropriated for 2012.

Funding would enable the NTIA to continue trying to free government-held spectrum for mobile broadband and oversee the grants awarded under the American Recovery and Reinvestment Act (Pub. L. No. 111-05).

For the FCC's FY 2013 budget submission, visit http://www.fcc.gov/encyclopedia/fcc-strategic-plan. More information about the president's budget request for the NTIA is available at http://www.whitehouse.gov/omb/budget.

 

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