Latta Introduces Incentive Auctions Bill; More Comprehensive Measure Expected

Keep up with the latest developments and legal issues in the telecommunications and emerging technology sectors, with exclusive access to a comprehensive collection of telecommunications law news,...

Rep. Robert Latta (R-Ohio) has introduced legislation (H.R. 1622) that would authorize the Federal Communications Commission to hold voluntary “incentive auctions,” in which television broadcasters, who license spectrum through the FCC, could release some of it back to the government in exchange for a share of the proceeds of a subsequent spectrum auction.

The agency does not currently have the statutory authority to divvy up proceeds of an auction among private entities; all auction revenue must be deposited in the Treasury. The Obama administration and FCC officials have touted incentive auctions, a key recommendation of the FCC's National Broadband Plan, as a means of not only freeing up spectrum for future mobile broadband uses but also to help reduce the federal deficit.

The White House estimates that incentive auctions could raise as much as $27.8 billion for the federal government over the next decade after TV broadcasters and other spectrum licensees are incentivized for their participation.

“In order to meet tomorrow's high volume of mobile data, it is imperative we allow the [FCC] to conduct voluntary incentive auctions,” Latta said in a statement April 18. “Passing this measure would permit the wireless broadband industry to grow, increasing U.S. jobs, productivity and innovation.”

According to recent estimates from CTIA-The Wireless Association, the nation's mobile broadband providers will need an additional 800 MHz of spectrum before the decade is up to keep pace with consumer demand for bandwidth-hungry smart phones and tablet computers, a major expansion from the industry's current slice of roughly 500 MHz. As part of the National Broadband Plan, the FCC set a goal of reallocating some 500 megahertz of spectrum for mobile broadband and similar applications by 2020, of which 300 MHz between 225 MHz and 3.7 GHz would be made available by 2015.

Latta's bill, the Spectrum Innovation Act, would give the FCC one year to establish rules for incentive auction revenue sharing. The bill also states that the FCC “may not reclaim frequencies of broadcast television licensees directly or indirectly on an involuntary basis … .”

Broadcasters Express Concerns.

The National Association of Broadcasters, while not opposing incentive auctions that are “truly voluntary,” has raised concerns that the federal government's scramble for airwaves could stunt the industry's plans to make more innovative use of the spectrum, such as transmitting high-definition signals, “multicasting” multiple channels, and delivering mobile TV to phones, laptops, and tablet computers.

In the Senate, Commerce Chairman John D. Rockefeller IV (D-W.V.) already has introduced legislation to authorize the FCC to hold voluntary incentive auctions of spectrum. That bill (S. 28) would also force the FCC to allocate a 10 megahertz chunk of spectrum in the 700 MHz band known as the D Block for the building of a nationwide interoperable public safety broadband network, which runs counter to the agency's own National Broadband Plan proposal to auction off the D Block to commercial bidders and use the proceeds--estimated to be as much as $3.2 billion--to help fund the construction and maintenance of the network. Latta's bill does not address the D Block.

Rep. Greg Walden, the chairman of the House Energy and Commerce Subcommittee Communications and Technology, is expected to produce a more “comprehensive” bill that would address both the need for additional spectrum for future mobile broadband uses and the building of a public safety broadband network, but only after the subcommittee holds several more hearings on the matter.

By Paul Barbagallo

Request Tech & Telecom on Bloomberg Law