Spectrum Experts Join Congressional Deficit Reduction Committee

Under recent debt ceiling legislation, the 12-member joint select committee must develop legislation by Nov. 23 to achieve at least $1.5 trillion in deficit reduction over 10 years. Congress must vote on the final package by Dec. 23. The debt limit deal requires Congressional committees to report legislation to the select committee by Oct. 14 that could reduce the deficit. Senate Commerce has already approved S-911, spectrum legislation to authorize voluntary incentive auctions and reallocate the 700 MHz D-block to public safety and House Commerce is working on its own spectrum legislation. The Congressional Budget Office estimates that spectrum auctions could reduce the deficit by $24.5 billion.

"The topic [of spectrum] should be on the table and let’s just leave it at that,” Toomey said in a conference call with reporters Wednesday afternoon. The Kerry and Upton offices declined to comment about whether the special committee should look at spectrum. A spokeswoman for Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., praised Kerry’s selection. “We definitely are hopeful that the committee will make spectrum a priority,” she said.

Kerry and Upton support authorizing voluntary incentive auctions, but have differed on the details. Kerry supports reallocating the 700 MHz D-block to public safety, but Upton wants to put it up for commercial auction. At a Senate Commerce Committee markup in June, Kerry voted for the Spectrum Act (S-911) by Chairman Jay Rockefeller, D-W.Va., and Ranking Member Kay Bailey Hutchison, R-Texas. Earlier in the year, Kerry introduced comprehensive spectrum legislation with Sen. Olympia Snowe, R-Maine, to authorize incentive auctions.

Upton may be more helpful to broadcasters than Kerry, who has clashed with broadcasters in the past, broadcast lobbyists said. Last year, Kerry floated draft retransmission consent legislation that would have implemented many of the changes sought by some pay-TV distributors. Kerry historically has tended to side with cable companies over broadcasters, a broadcast industry lobbyist said. Meanwhile, Upton’s draft spectrum legislation included several protections sought by broadcasters.

Toomey is expected to oppose adopting S-911, as written, in the special committee’s final bill. Toomey voted against S-911 at the June markup because he said it would increase spending too much. He’s not likely to support reallocating the D-block to public safety and more likely to support an auction, a former Senate leadership aide said. Toomey declined to comment on Rockefeller’s bill in the conference call Wednesday.

"Kerry and Upton both raise the prospects of spectrum being in the mix,” said Information Technology Industry Council Government Affairs Director Vince Jesaitis. But lobbyists and analysts alike said spectrum would have been on the table anyway. “Spectrum remains one of few offsets measured in tens of billions of dollars that has broad bipartisan support,” said Wireless Broadband Coalition Executive Director David Taylor. The committee “will be looking for every bit of noncontroversial revenue they can get without having to raise taxes, and spectrum is an easy target,” said a former Senate leadership aide. “Kerry’s presence means it is all the more certain, and the Senate could have the upper hand in ensuring the D-block is granted to public safety.” Upton’s focus on the select committee will likely be healthcare, but he likely will act as a “good counterweight” to Kerry on spectrum, a broadcast industry lobbyist said.

Some said spectrum isn’t a lock for the final bill. “In theory, having three Commerce members might give spectrum a priority, but given their divergent views on spending, it’s not a given that spectrum will make the final cut,” said MF Global analyst Paul Gallant. Spectrum will probably be on the table, but it’s “far from certain” that auctions will be in the final package, given disagreements about D-block within the select committee “and Republican emphasis on spending cuts to the exclusion of any revenue enhancements,” said Medley Global Advisors analyst Jeff Silva. “The prospect of automatic, across-the-board spending cuts divided between domestic and defense programs if the $1.2 trillion deficit reduction-target is not met provides powerful incentives for Democrats and Republicans to negotiate a package that could include incentive auction legislation. But it won’t be easy.” Stifel Nicolaus thinks spectrum is likely to be considered, but if it’s dropped, “we believe there will still be strong fiscal and communications policy pressures to pass a spectrum-auction/public-safety bill this Congress,” the analyst firm said Wednesday.

What happens to the D-block is unclear. “In a purely fiscal discussion, the committee may be tempted to just auction [the D-block], but reallocation has real momentum at this point,” Gallant said. Rockefeller wants to pass S-911 before Sept. 11, “but it could be difficult to secure floor time while the special deficit-reduction committee and process are in play,” Stifel Nicolaus said.

In addition to Kerry, Reid selected Sen. Patty Murray, D-Wash., and Senate Finance Committee Chairman Max Baucus, D-Mont. Besides Upton, Boehner chose Ways and Means Committee Chairman Dave Camp, R-Mich., and Rep. Jeb Hensarling, R-Texas. In addition to Toomey, McConnell chose Republican Whip Jon Kyl, R-Ariz., and Sen. Rob Portman, R-Ohio., for the committee. House Minority Leader Nancy Pelosi, D-Calif., had yet to announce her three picks at our deadline. Murray and Hensarling will be co-chairs. Murray had a bill last year (S-3710, 111th Congress) to renew broadband stimulus programs at the NTIA and Rural Utilities Service, assigning an additional $4 billion for that purpose.

"Our challenge is to find common ground without damaging anyone’s principles,” Kerry, Baucus and Murray said in a joint statement Tuesday. “We believe we can get there. This Committee was designed to require bipartisanship, and we are going to work hard with our Republican colleagues to attain it.” Upton issued a statement that focused on healthcare.