Spectrum auctions could be a major part of Commerce committees’ savings plans to meet goals set by a deficit reduction plan released Tuesday by the bipartisan “Gang of Six” senators. The proposal, endorsed Tuesday by President Barack Obama, would direct the committees to find $11 billion for deficit reduction within six months, according to an executive summary of the plan. The proposal set up a two-step legislative process, in which there would be immediate cuts totaling $500 billion, followed by a process in which Commerce and other congressional committees would find further savings.
Spectrum is figuring in debt reconciliation talks, as was expected, but with a twist -- an unexpected tie-in to health care spending, industry sources closely tracking budget negotiations said last week. Republicans hope that under an eventual deal with President Barack Obama they will divvy up major budget cuts that have to be made to the chairmen of the various congressional committees, officials said.
A draft spectrum bill similar to S-911 is circulating in the House courtesy of Commerce Committee Democrats. By proposing reallocation of the 700 MHz D-block to public safety, the bill stands in opposition to a Republican draft bill (CD July 14 p2) released Wednesday. With a legislative hearing scheduled for Friday morning, Democrats have told staff to continue talks with Republicans.
House Republicans are thinking about using the Universal Service Fund to help pay down the budget deficit, Congressional documents show and Hill and industry officials told us. Majority Leader Eric Cantor, R-Va., circulated a slide presentation among his colleagues Tuesday that contained cuts and savings proposed in talks with Vice President Joe Biden, including between $20 billion and $25 billion in “spectrum/USF” savings.
House and Senate Democrats objected to draft spectrum legislation floated Wednesday by House Commerce Committee Republicans. The draft bill, which will be the subject of a House Communications Subcommittee hearing Friday, does not give the 700 MHz D-block to public safety, unlike the Senate’s bipartisan spectrum bill. Like S-911, the House draft would authorize the FCC to conduct voluntary incentive auctions, but it limits the FCC to a single auction of broadcaster spectrum. Rep. Doris Matsui, D-Calif., introduced a separate spectrum bill Friday related to unlicensed use.
Spectrum legislation could become part of the budget deal for fiscal-year 2012, Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., told us Tuesday. Senate Majority Leader Harry Reid, D-Nev., has mentioned that as a possibility, so Rockefeller hasn’t talked to Reid about separate floor time for his legislation S-911, Rockefeller said. Congress has been trying to make a deal on debt ceiling legislation that must pass before Aug. 2 or the U.S. will default on its obligations. Meanwhile, Sen. Mark Begich, D-Alaska, said he’s hoping the FCC will work on 700 MHz interoperability.
Vulcan Wireless officials warned of an increasingly muddied outlook for 700 MHz A-block licensees trying to negotiate voluntary relocation agreements with Channel 51 stations, in an FCC meeting with Chief William Lake and others in the Media Bureau. The possibility of a voluntary auction of broadcast spectrum “has made it much more difficult, if not impossible, for A Block licensees to enter into voluntary relocation agreements with Channel 51 broadcasters,” Vulcan said in an ex parte filing. “Sharply escalated Channel 51 licensing activity” since the 700 MHz auction closed in 2008 “is complicating interference issues and impeding A Block network planning and design,” the company said. Vulcan supports a March petition by CTIA and the Rural Cellular Association asking the FCC to prohibit future licensing of TV stations on Channel 51 and freeze all applications for new or modified broadcast facilities seeking to operate on the channel. “If not addressed, these problems will cause even further harm to A Block licensees and consumers and negatively impact participation in, as well as revenues from, future spectrum auctions,” Vulcan said.
Congress might add spectrum auction authority to legislation raising the debt ceiling, MF Global analyst Paul Gallant wrote clients Tuesday. The legislation might authorize the FCC to auction broadcast and government spectrum, he said. Congress must pass a debt ceiling bill before Aug. 2 or the U.S. will default on its obligations. “The way this would happen is Senate and House leadership would give each committee a financial target to either reduce federal spending or find new revenue,” Gallant said. “We expect the Commerce Committees would focus on FCC spectrum auctions, which are expected to raise billions of dollars."
BRUSSELS -- Europe got it right by coordinating wireless standards for 3G, but 10 years later has lost its dominance because of a lack of spectrum, U.S. Ambassador to the EU William Kennard said Tuesday at the annual European spectrum management conference. Europe’s information and communications technology market is about the same size as the U.S.’s, but with 200 million more people, it’s underperforming, he said. He floated the idea of pan-European spectrum auctions but said political pressures must be surmounted before that can happen. Others questioned whether Europe-wide auctions are the answer.
The FCC and Department of Justice should clear the AT&T/T-Mobile merger and also allow the combined company to buy more spectrum after the deal is complete, BTIG analyst Walter Piecyk said in a note Friday. AT&T’s top official made clear in a meeting with investors Thursday night that the company will remain a bidder in future spectrum auctions, Piecyk said. “CEO Randall Stephenson remarked that he has yet to regret any spectrum purchases and would be interested in acquiring more spectrum even after the T-Mobile acquisition,” the note said. “That view makes sense to us based both on the growth in data traffic and because AT&T has no clear near term path to cleaning a 40 MHz block of contiguous spectrum on which to deploy a fat channel (20x20) version of LTE."