WASHINGTON-Congress’ desire to raise $14 billion over the next seven years from expanded spectrum auctions has turned into a fierce debate about whether that goal can be attained without auctioning digital TV broadcast channels.
The controversy has major economic and a competitive implications for the wireless telecommunications industry. And it has drawn the cellular telephone industry into a nasty fight with broadcasters.
Digital TV and public-safety spectrum are exempted from future auctions in the budget reconciliation plan approved by the House Commerce Committee last week.
The plan, which will be incorporated into a massive bill that the Republican majority hopes will eliminate the budget deficit by 2002, calls on the Federal Communications Commission to sell at least 100 megahertz of spectrum below the 3 GHz band. The National Telecommunications and Information Administration is directed to make available 20 megahertz for sale to the public.
The House initiative also shortens the voluntary negotiating period for relocating non-public safety microwave from the 2 GHz personal communications services band to higher frequencies from two years to one, thanks to an amendment by Rep. Ralph Hall, D-Texas.
Senate Commerce Committee Chairman Larry Pressler, R-S.D., meanwhile, wants to auction broadcast licenses in the top 25 markets. “A gift to broadcasters will be very difficult for us to explain to constituents,” said Pressler.
A more immediate difficulty for Pressler is garnering bipartisan support for his plan. Sen. Ernest Hollings, D-S.C., ranking minority member of the Commerce Committee, criticized the digital TV auction scheme and accused Republicans of letting GOP budget policy-which he disdains-drive telecommunications policy.
“This committee is not a money-making committee,” said Hollings.
Moreover, it’s unclear whether enough Republicans are willing to take on the powerful broadcast lobby in view of the immense influence television has in politics. In fact, there is a possibility the Pressler plan will be scrapped and replaced by a plan offered this week by Sen. John McCain, R-Ariz., that resembles the House measure. “We have no alternative but to raise this money,” said Ted Stevens, R-Alaska, a senior member of the Senate Commerce Committee.
Stevens said without revenues from digital TV auctions, Congress would be forced to levy spectrum user fees, a scenario that becomes even more distasteful to the wireless telecommunications industry when combined with the likelihood that broadcasters will have flexibility to offer paging and other services.
Broadcasters argue they need a second channel (six megahertz) during the conversion from analog to digital TV. If forced to pay for spectrum on top of build-out expenses, they warn, digital TV will die.
However, skeptics doubt the FCC will be able to recover the second channel from TV station owners at the end of a 15-year transition period established in 1992 by federal regulators who envisioned analog-based High Definition Television would replace the current TV standard. Digital technology, which enables six channels to fit within today’s six megahertz TV allocation, has leapfrogged HDTV technology. There are indications, however, small broadcasters are reluctant to go digital because of the hefty investment required.
On a related front, the Senate Appropriations Committee restored $18 million to the FCC’s fiscal 1996 budget that had been reduced to $148 million, or 20 percent below this year’s $185.2 million spending level, by an appropriations subcommittee. The House already voted to freeze FCC funding for next fiscal year, which begins Oct. 1, at $185.2 million.
