The Aug. 4 FCC meeting agenda includes a reconsideration order revising an Oct. 2003 advanced wireless services (AWS) spectrum band plan, according to an agency source. The order, originally set for the July meeting (CD June 20 p1), was held off by the Chmn. Martin’s office due mainly to complications from designated entity (DE) issues raised by Council Tree Communications in late filings, several sources said.
The Senate Commerce Committee’s DTV hearing today (Tues.) is a long-awaited public airing of complex issues befogged in political uncertainty. The committee is seen as balancing the immediate need to raise revenue from spectrum auctions against a potential public backlash if the analog TV signal cutoff stumbles. The panel is holding the hearing despite lack of a draft bill, expected to be ready by the July 4 recess but is still in development, according to committee staffers.
Spectrum policy is getting more scrutiny in Congress in light of the 2007 expiration of auction authority, Congressional Research Service analyst Linda Moore said in a report for Congress. Some have questioned the system’s efficacy. Despite the FCC’s conclusion that auctioning spectrum licenses has sped deployment of new wireless technologies, many ask if the FCC shouldn’t augment auction policy “more aggressively” with other market- driven solutions such as licensing fees.
A scaled-back DTV provision setting a hard transition date of Jan. 1, 2009, and authorizing spectrum auction authority will be part of the budget bill to be voted on in mid-Sept., Hill sources say. The budget vote is expected to be close, due to discord over President Bush’s tax cuts -- the budget resolution passed 52-47 in the Senate and 214-211 in the House. Should it not pass, Congress would enact a continuing resolution with a specific time frame to keep the budget operating at the same level as the previous year until a new budget is approved, sources say.
FCC hopes to circulate a draft order this week revising an Oct. 2003 advanced wireless services (AWS) spectrum band plan, an FCC source said. The new 1710-1755 MHz and 2110-2155 MHz band plan urged by the Wireless Bureau incorporates parts of proposals by T-Mobile and the Rural Telecom Group (RTG), and Verizon Wireless, the source said. The order, expected to be scheduled for the July 14 FCC meeting, also would resolve other issues raised in reconsideration petitions.
Council Tree Communications urged the FCC to “repair, improve and ultimately preserve” designated entity (DE) incentives in advanced wireless services (AWS) spectrum auctions. Council Tree asked the Commission to: (1) Raise from 25% to 35% the maximum DE bidding credit offered in AWS auctions. (2) Provide an additional 10% bidding credit for DEs that serve underserved populations. (3) Not allow large incumbent wireless carriers to have any material investment, financial or operating relationship with a DE if they have licenses with material geographic overlap. (4) Not allow individuals with a net worth exceeding $3 million to have a controlling interest in a DE. “These proposals will ensure that DE benefits are limited and applied only where needed, and will provide meaningful entry points for new competition in the wireless industry,” Council Tree said, adding the proposals can be implemented “on a non-disruptive basis well in advance of the first AWS auction” expected in mid- 2006.
The Senate Commerce Committee announced Thurs. it plans a hearing June 29 on DTV spectrum auctions, but it isn’t certain whether a draft bill will be completed and introduced as legislation before that date, a committee spokeswoman said. “We expect a draft bill by the end of the month,” the spokeswoman said.
Incumbent providers operating in the 900 MHz band urged the FCC to ensure “sufficient” protection for their systems from harmful interference if the Commission moves forward with a proposal to facilitate the band’s more flexible use. They want the agency to ensure that licensees don’t face interference such as that which required the remedies adopted in the 800 MHz interference proceeding. The incumbents, which are site-specific licensees, generally opposed the geographic market area licensing the FCC proposed. They said it would cause commercial systems to proliferate at the expense of continued licensing of critical infrastructure, industrial and land transportation systems.
Congress passed the 2006 budget resolution late last week. The $2.6 trillion spending outline calls on the House and Senate Commerce committees to produce $4.8 billion more for the federal treasury between now and 2010. Senate Commerce Committee Chmn. Stevens (R-Alaska) has said he sees spectrum auctions as a way to raise that revenue. Since FCC spectrum auction authority expires Sept. 30, 2007, Stevens has said the auction program could be extended and should be reformed, but hasn’t outlined specifics. Medley Global Advisors said Congress would likely focus on 2 revenue sources: (1) Continuing the spectrum auction program, which the Congressional Budget Office has said could produce $1.7 billion revenue. The Office of Management & Budget puts the figure even higher. (2) Setting a hard DTV transition deadline, which would free some 88 MHz of prime spectrum for auction. The spectrum’s value has been estimated at $30-$60 billion.
The FCC revised its auction attribution rules, saying the determination of a bona fide co-op shouldn’t be based on the co-op’s tax exempt status. It also allowed rural telecom co-ops to demonstrate their co-op status either under Sec. 501(c)(12) of the IRS Code or by adhering to the co-op principles enumerated in Puget Sound Plywood v. Comr. of Internal Revenue. The FCC action was in response to an NTCA petition seeking to clarify a rule that determined how co-ops were granted a limited exemption from the auction attribution rules. The FCC had revised its rules so affiliates of a co-op’s officers and directors wouldn’t count against the co-op to determine whether it was eligible for auction bidding credits. But the exemption was only available to co-ops that satisfied all components of a “3-part test,” including procession of tax-exempt status. “The problem with that is that cooperatives can provide service to non-members [and] can also set up subsidiaries,” NTCA Senior Regulatory Counsel Jill Canfield told us: “Those things don’t really affect the cooperative, but… could make the cooperative no longer tax-exempt.” In its Jan. 31 order, the FCC granted a petition for reconsideration filed by NTCA and other rural carriers, admitting that the tax-exempt element of its 3-part test could prevent legitimate telephone co-ops from taking advantage of bidding credits. NTCA applauded the decision, which it said eliminated “an anomaly” in its competitive bidding rules that “threatened the ability of rural telephone cooperatives to provide new and advanced wireless telecommunications services to rural areas.” It said the ruling would help ensure NTCA member co-ops have access to bidding credits at future spectrum auctions. FCC Comr. Adelstein said in a statement he was “very pleased” with the decision, which he said would “promote the interests of cooperatives in expanding the scope of their telecommunications services while still ensuring that the benefits of this important exemption are limited to bona fide cooperatives.”