Congress Clears Public Safety Network, Voluntary Incentive Auctions

The Senate voted 60-32 to approve the conference report on the payroll extension. Less than an hour earlier, the House had agreed 293 to 132. The payroll bill’s spectrum provisions were praised by Democrat and GOP leaders of the House Commerce Committee and Communications Subcommittee in floor statements before the House vote. Senate Commerce Committee leaders split on the conference report. Commerce Committee Chairman Jay Rockefeller, D-W.Va., and Communications Subcommittee Chairman John Kerry, D-Mass., voted yes. Their ranking members Kay Bailey Hutchison, R-Texas, and Jim DeMint, R-S.C., voted no. Hutchison co-sponsored the Senate spectrum bill S-911 and her objections to the payroll bill were unrelated to spectrum, a Senate GOP aide said.

Spectrum auctions ordered by the bill should raise more than $15 billion over the next ten years, the Congressional Budget Office said Thursday. The auctions will raise $8 billion in the first five years, CBO said.

The U.S. fulfilled an “overdue” 9/11 promise to public safety, Vice President Joe Biden said Friday. “First responders put their lives on the line to protect us every day, and the least we can do is ensure that they have the dedicated bandwidth they need to communicate with each other,” Biden said. “It’s going to save lives and help keep our neighborhoods safe.” President Barack Obama also praised the spectrum provisions in the payroll bill. “It includes a critical element in the plan I outlined in the State of the Union to out-innovate the rest of the world by unleashing mobile broadband, investing in innovation, and building a nationwide public safety network,” he said Thursday night.

The spectrum deal was a “huge win,” House Commerce Committee Chairman Fred Upton, R-Mich., said in a floor statement before the House vote. While full committee Ranking Member Henry Waxman, D-Calif., objected to some aspects of the broader payroll bill, he said he had no “similar reservations” about spectrum provisions. Communications Subcommittee Chairman Greg Walden, R-Ore., said his only complaint was that the governance provision was “not exactly” what he wanted. Ranking Member Anna Eshoo, D-Calif., said the spectrum provisions will help the U.S. to “lead the world."

"We struck a fine balance to make more efficient use of the airwaves while also providing necessary protections for broadcasters,” said a joint statement by Upton and Walden. Upton and Walden applauded the bill’s auction eligibility rules, saying it would prevent the FCC from picking winners and losers. “We will be watching closely, ensuring the FCC follows the law,” they said.

House Homeland Security Committee Chairman Peter King, R-N.Y., applauded the bill for reallocating the 700 MHz D-block to public safety and providing enough funding to construct and maintain the network. “These important public safety provisions will be of tremendous assistance to our nation’s first responders as they carry out their critical mission of protecting and saving lives here in the homeland,” King said.

FCC Chairman Julius Genachowski was “pleased that Congress has recognized the vital importance of freeing up more spectrum for mobile broadband, both licensed and unlicensed, although the legislation could limit the FCC’s ability to maximize the amount and benefits of recovered spectrum,” Genachowski said Thursday. “The legislation also includes key provisions on public safety, laying the groundwork for a much-needed nationwide public safety broadband network, and advancing the deployment of Next Generation 9-1-1."

The spectrum language received less love from former FCC Chairman Reed Hundt. “By insisting on changing the admirable spectrum auction authority granted the FCC in 1993, this Congress has put a stick in a spoke in the wheel of the wireless industry,” Hundt said. “Hopefully, the FCC can somehow transcend this needless interference and continue to offer plenty of spectrum to all firms so that we can see robust, unregulated, innovative competition in the American wireless industry."

Many industry associations supported the spectrum provisions, even with the compromises stuck by House and Senate legislators. “Passing incentive auctions is a win for everyone -- government, business and individuals,” said Information Technology Industry Council CEO Dean Garfield. Congress’s vote Friday “represents an important step toward meeting the industry’s spectrum needs,” said CTIA President Steve Largent, representing the wireless industry. NAB, representing broadcasters, praised the bill on Thursday.

"It’s a tremendous step forward,” TIA President Grant Seiffert said in an interview Friday. “We have been caught in a political cycle here with the election. I think everyone is very excited that we now have certainty in the marketplace, at least a step forward to a more certain market. There’s still going to be a lot of work, but industry is ready to engage and take on the challenge, and the consumers win ultimately.” Incentive auctions present many complicated questions, Seiffert said. “There are major decisions to be made, choices to be made,” he said. “Different stakeholders are going to all position themselves and fight for their current turf or new turf. This is not going to be easy by any means."

Rural Cellular Association President Steve Berry was pleased that under the legislation the FCC would retain the ability to impose auction rules restricting who could participate in incentive auctions. “Inclusion of this language is a huge win for the competitive marketplace, and it is clear Congress has recognized the important role of getting additional spectrum to the market through the FCC in ways that support competitive policies,” Berry said. Berry told us Friday the final language in the legislation “makes clear the FCC can fashion successful auctions that promote competitive policies -- every consumer will benefit and it is a win for competitive carriers.” The language is “unambiguous,” he said. “Congress supports the idea that competitive policies are a priority for the FCC when designing future auctions."

"This legislation doesn’t solve the spectrum crunch, but it’s clearly a step in the right direction,” said Wireless Broadband Coalition Executive Director David Taylor. Voluntary incentive auctions will provide “the wireless industry access to spectrum needed to meet consumer demand for robust wireless broadband services,” he said. “The auctions will stimulate billions in private sector capital investment and create over 300,000 jobs."

Sascha Meinrath, director of the New America Foundation’s Open Technology Initiative, was sharply critical of the legislation. “Congress is poised to both undermine the utility of unused television spectrum for unlicensed use while simultaneously creating a labyrinthine process for auctioning these bands that is unlikely to achieve its stated purposes and certainly won’t be implemented for years and years to come,” Meinrath said Friday. “At the very least, if Congress were serious about deficit reduction, they shouldn’t be spending auction revenues years before they're likely to even come in -- especially when there are real questions about whether the amount they claim they're going to raise is, in fact, correct."

Public Knowledge Legal Director Harold Feld said in a blog Friday that public interest groups scored a number of key wins late in the process as the bill was being developed (http://xrl.us/bmskyp). Congress did away with a proposed provision prohibiting net neutrality conditions in future auctions and preserved the use of the TV white spaces for “Super Wi-Fi,” he said. On FCC auction authority, “We got a partial win,” Feld said. “The law does take away the FCC’s ability to prevent anybody who meets the financial, technical, and character rules from participating in ‘any system of competitive bidding.’ But it includes a clause that the FCC can still make ‘rules of general applicability, including rules concerning spectrum aggregation that promote competition.'”