Debt Limit Deal Leaves Spectrum for Later

Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., is “disappointed that the House failed to make communications safer and more reliable for first responders,” he said Monday. Rockefeller had hoped that a version of his spectrum act, S-911, “would have been in the deficit package this week,” he said. “Despite that setback, I will continue to fight to make sure that by the 10th anniversary of 9/11 we have this bill signed into law.” The Senate Commerce Committee will likely look at spectrum during the phase two process that will dominate the fall legislative calendar, a GOP committee aide said. Spectrum is very attractive since it’s a revenue raiser, the aide said.

In the House Commerce Committee, “bipartisan negotiations [on spectrum] are ongoing,” so there’s not yet a timeline for moving a bill to markup, a committee spokeswoman for the majority said. House Commerce Committee Ranking Member Henry Waxman, D-Calif., strongly believes Congress should act before Sept. 11, his spokeswoman said. “The House Republicans rejected all provisions that raise revenue, including spectrum,” said House Communications Subcommittee Ranking Member Anna Eshoo, D-Calif. “That said, we need to get spectrum policy right the first time around, and take the time necessary to create broad, bipartisan consensus."

Each House and Senate committee would have to submit recommendations to the phase two committee by Oct. 14, and the joint committee would vote on legislation by Nov. 23. “Expect spectrum to be included in the recommendations that the bipartisan select committee submits to Congress in November,” said David Taylor, managing partner of Capitol Solutions, who lobbies for companies. “Spectrum remains one of few deficit reduction options measured in tens of billions of dollars that enjoy broad bipartisan support."

The offset from spectrum auctions could be part of the discussions when the special bipartisan panel starts its work on future cuts, a government official agreed. Leaving auctions out of the bill before Congress this week “certainly doesn’t enhance” prospects that the FCC will get authority to hold voluntary incentive auctions, the official said. “I think it’s back to where we were earlier in the year. … I think there’s still a possibility of getting it done."

"Since there’s not a vehicle moving forward, it’s sort of back to the committees of jurisdiction, can you get something moving forward?” said Rural Cellular Association President Steve Berry. “It’s possible that Rockefeller can get his bill through the Senate. … He’s totally dedicated to getting something out of committee and to the floor. In the House, again you're back to the committee of jurisdiction.” Berry said legislation “isn’t dead, it’s just mutated to a committee issue again.”

The debt deal gives House Commerce “additional time” to move its spectrum legislation through the committee, said Director Vince Jesaitis of the Information Technology Industry Council. “The path is a little less clear in the Senate, as floor time will be short leading up to the end of the fiscal year on September 30, and it appears there will be a focus on other issues such as patent reform and [free trade agreements] that were forced to the back burner as a result of the debt ceiling negotiations.” The joint select committee’s deficit reduction task and the coming 10th anniversary of 9/11 are reasons to think spectrum legislation “still gets done this year,” Jesaitis said.

The proposed joint select committee would include 12 members chosen by House and Senate leaders. The House speaker, House minority leader, Senate majority leader and Senate minority leader each gets three picks. The speaker and Senate majority leader would choose the two co-chairs of the group. Congressional leaders likely will include “a mix of leadership representatives, Budget Committee chairmen and ranking members, and Finance and Ways & Means Committee chairmen and ranking members, much like you saw in the Bowles-Simpson Fiscal Commission and in the Biden deficit reduction talks,” Taylor said. It’s possible that House Speaker John Boehner, R-Ohio, might select House Commerce Committee Chairman Fred Upton, R-Mich., because House Commerce has broad jurisdiction and Boehner has been a proponent of regular order, said an industry lobbyist.

Spectrum’s prominence in the committee’s recommendations will depend on the body’s “personality,” a broadcast lobbyist said. It’s reasonable to assume the committee will discuss spectrum, but there are many unanswered questions about the composition and authority of the committee, the lobbyist said. Who serves on the committee will have a big impact on the body’s priorities for deficit reduction, the lobbyist said. But Brattle Group economist Coleman Bazelon said any group looking for revenue, regardless of membership, is likely to see the benefit of voluntary incentive and other spectrum auctions: They raise significant revenue but not controversy, he said.

Senate debt limit legislation initially had included voluntary incentive auctions and a provision to reallocate the 700 MHz D-block to public safety. “Once this turned into a package that would only cut spending, and create the new commission which would have to come up with additional cuts and revenue raisers, spectrum lost momentum,” Jesaitis said. There was also a procedural issue because of the rule requiring that any legislation resulting in new revenue must originate in the House, Jesaitis said. Since the spectrum provisions appeared in the Senate bill, the House could have issued a “blue slip” that would send it back to the Senate, he said.

The wireless industry will continue its push for comprehensive spectrum legislation, said CTIA Vice President Jot Carpenter. “There is bi-partisan recognition that more spectrum for the U.S. wireless industry will benefit American consumers and the U.S. economy.” NAB was “pleased that the negotiated debt ceiling bill … does not threaten free and local broadcasting,” said President Gordon Smith. “NAB will continue working with lawmakers on incentive auction legislation that is truly voluntary.”

Multiple telecom analysts predicted spectrum will be in play in this fall’s talks. In a note Monday, Stifel Nicolaus cited “ongoing budget, public-safety, and wireless industry pressures” as reasons for spectrum legislation to pass this year. Missing the debt limit vehicle is only a “temporary” setback for spectrum legislation, MF Global’s Paul Gallant said. He still expects “Congress to give the FCC spectrum auction authority and provide new funding for a public safety network in late 2011,” most likely as part of the joint select committee process, the analyst said. Medley Global Advisors’ Jeff Silva agreed that “deficit-reduction politics are a driving force behind the major policy goal of injecting more spectrum into a market with an unquenchable thirst for wireless data,” but said “buy-in by the broadcast industry remains key to actually getting legislation though Congress this year."

The House is expected to leave early for August recess, possibly right after Monday night’s vote, Hill and industry officials said. An early departure could postpone two House hearings scheduled Wednesday related to potential interference to GPS by the proposed LightSquared network in the Science Committee and Armed Services subcommittee on Strategic Forces. It’s unclear whether the Senate also will leave early, Hill officials said. The Senate has a cybercrime hearing scheduled Wednesday in the Judiciary Committee.