Momentum Growing for FCC Getting Authority to Hold Incentive Auctions

"The president’s proposal is further evidence that spectrum auctions remain one of the few multi-billion dollar deficit reduction options that Democrats, Republicans, Congress and the Administration support,” said Managing Partner David Taylor of Capitol Solutions, whose clients include wireless interests that seek incentive auctions. “The administration’s decision to include spectrum auctions on the list of options it supports to finance the president’s new jobs plan has increased the prospects that the Joint Select Committee on Deficit Reduction includes spectrum issues in its recommendations to Congress later this year.” While President Barack Obama outlined his spectrum objectives in the FY 2012 budget, the Jobs Act “provides a much clearer indication of the steps the Administration supports to achieve those goals,” Taylor said.

"I think realistically, from everything the Republicans have done publicly, they got the message during recess that they at least need to be perceived as trying to work on this stuff,” said Public Knowledge Legal Director Harold Feld. “The Republican leadership was very measured in its responses. Everyone is being very courteous to each other. … I think that there’s going to be an effort.” A key question is whether the Jobs bill is broken into pieces for consideration by Congress, which Feld predicted will be a fight on Capitol Hill.

Congress could consider a few infrastructure parts of the bill as a standalone measure, Feld said, saying a proposed infrastructure bank has the support of the U.S. Chamber of Commerce and several of the spectrum provisions are self-funded. “I do think there are good political reasons for Republicans to want to find specific pieces of this and propose them as stand-alone bills, which could easily include the spectrum piece,” he said. But he said “the spectrum stuff is complicated. Everybody keeps thinking that it’s easy because it’s free money, but it’s not free money. It’s money with all kinds of strings and conditions attached to it.” Spectrum provisions already proved in July to be too complicated to easily include in legislation raising the debt ceiling, which led to the super committee, Feld said. “Everybody is convinced it comes out of the super committee,” he said. “It’s still complicated. Everybody is convinced it’s going to be in the Jobs bill. It’s complicated, but I still think it’s got its best chance in the Jobs bill."

Information Technology and Innovation Foundation Senior Fellow Richard Bennett said he expects the work of the super committee to preempt any other action on incentive auctions. The broad principle behind spectrum fees makes sense, he said. “It’s sort of amazing when you think about it that anyone in the United States has a spectrum license that they didn’t have to pay for, given that it’s such a valuable resource and there’s so much demand for it now,” he said. “When they teach kids in public policy courses 30 years from now that there was once a time in America when people could get spectrum licenses for free, the kids are going to say, ‘You're kidding. That couldn’t possibly be the case.'”

The jobs bill shows that spectrum is still a “hot issue,” but isn’t likely to change the debate, a broadcast lobbyist said. Republicans have made clear their opposition to the jobs bill, so it seems unlikely to pass, the lobbyist said. The super committee remains the most likely venue for passing spectrum provisions, the lobbyist said. The Obama administration sent the options in the bill to the super committee so it might include parts of the jobs package in the panel’s recommendations, a wireless lobbyist said.

"The super committee process is probably the more likely vehicle for spectrum legislation,” agreed Potomac Research analyst Paul Glenchur. “Partisan obstacles affect both efforts but seem more daunting for the jobs proposal.” MF Global analyst Paul Gallant said parts of the jobs bill could be enacted. “Spectrum fees appear on the radar periodically but never survive congressional gauntlet, and I don’t expect any different outcome this time,” he said. “But auction authority and a public safety network definitely stand a good chance of getting done by Congress in the relatively near future.”

"There appears to be a number of wireless provisions in President Obama’s jobs bill that could garner bipartisan congressional support, but I tend to think spectrum fees is not one of them. Despite the revenue-raising benefit of spectrum fees amid a huge budget deficit, history suggests that proposal in particular is unlikely to get traction,” said Jeff Silva, analyst at Medley Global Advisors. “While some Republicans have been resistant to attaching strings to spectrum, whether auctioned or not, it would be a mistake to label spectrum fees purely as a partisan proposal. The Bush Administration proposed spectrum fees -- albeit unsuccessfully -- throughout the decade of 2000. Republican spectrum auction proposals were routinely shot down by Democrats in the 1980s before President Clinton embraced auctions and convinced lawmakers in his party to authorize competitive bidding in a 1993 budget bill. With no end in sight to federal budget deficits, the spectrum fee proposal is unlikely to go away and may even one day get the nod from Congress. It likely won’t be this year, though."

Spectrum fees will face tough opposition from most everyone with a spectrum license because the jobs bill provision is so broad and aggressive, requiring the FCC to raise $550 million a year in fees by 2015, a public interest group official said. Even the NAB is likely to be concerned because, while the bill exempts TV broadcasters, it does not exempt radio broadcasters, the official said.

Senators supporting D-block reallocation view the Jobs Act as one of several options to pass for public safety legislation (CD Sept 14 p6). Senate Homeland Security Committee Chairman Joe Lieberman, I-Conn., said Tuesday that the public safety issue is so urgent he is open to “any vehicle” to attach it to. Commerce Committee Chairman Jay Rockefeller, D-W.Va., praised the Jobs Act’s inclusion of proposals from his spectrum bill (S-911). And, a GOP Commerce Committee aide said “all options are on the table.” But David Redl, counsel to the House Commerce Committee’s Republican majority, said at an ITIF event this week that Congress made the decision to auction the D-block in 2005 and Commerce Republicans see no reason to reverse course. “This has been taken care of,” he said (CD Sept 14 p1).

One public safety official gives the D-block provisions little chance of approval. “I think what will happen is the House will authorize incentive auctions, but I don’t see them really pushing the D-block,” the official said. “That’s a political agenda item now, it’s not a public safety item. That’s the risk that folks have made by getting the White House involved. I don’t know why Republicans would run out and endorse it.”