WASHINGTON-House and Senate budget leaders are at odds over President Bush’s plan to delay auctions of valuable broadcast spectrum, a dispute that arises at a time when the mobile-phone industry desperately wants to secure additional frequencies for third-generation wireless systems.
The Senate budget resolution embraces the Bush plan, which directs the Federal Communications Commission to postpone the auction of TV spectrum in the 747-762 MHz and 777-792 MHz bands from 2001 to 2004 and push back the auction of broadcast frequencies in the 698-746 MHz band from 2002 to 2006.
In contrast, the House budget resolution-which sets general parameters for government spending-would stick with auction dates already written into law. A spokeswoman for the House Budget Committee said keeping auction dates intact reflects Chairman Jim Nussle’s (R-Iowa) desire to put a realistic budget on the table and to move away from using budgets to make political statements.
The Bush administration, seeking to remove bidding uncertainty in a way that also could increase government revenues from license sales, wants to hold the auctions closer to the time when the spectrum actually will become available. The president laid out the spectrum plan in his detailed fiscal 2002 budget proposal released last week. RCR Wireless News first reported on the Bush spectrum initiative in early March, after the White House released its budget blueprint.
Broadcasters-which now hold two TV channels to facilitate the transition from analog to digital technology-are supposed to return the extra 700 MHz channel by Jan. 1, 2007, if 85 percent of homes are capable of receiving digital TV signals by that date. So far, the rollout of digital TV and consumer acceptance of it is severely lagging.
In hopes of encouraging TV broadcasters to move off the 700 MHz band, the Bush budget calls for spectrum lease fees-totaling $200 million a year-to be imposed on broadcasters as long as they hold analog channels.
Travis Larson, a spokesman for the Cellular Telecommunications & Internet Association, said the trade group supports administration and Senate efforts to delay the auction of TV broadcast spectrum.
At the same time, mobile-phone carriers do not want the September 2000 auction of other frequencies identified for 3G delayed. The 1700 MHz and 2500 MHz bands sought by mobile-phone operators are heavily occupied by military, religious, education and broadband Internet licensees.
The Pentagon says military users and wireless operators cannot share the 1700 MHz band, while the industry and the Commerce Department’s National Telecommunications and Information Administration claim that some sharing is possible.
The Federal Communications Commission recently concluded that fixed carriers and 3G mobile-phone carriers cannot share the 2500 MHz band. In addition, the agency said it could not find alternative spectrum on which fixed wireless licensees could be relocated.
House Commerce Committee Chairman Billy Tauzin (R-La) gave the Bush budget high marks, but took issue with a couple of telecom provisions in the $1.96 trillion spending package.
“The president’s decision to postpone certain spectrum auctions makes a lot of sense to me, and I will support his efforts. But penalizing America’s broadcasters-who are struggling to make the move to digital-with punitive spectrum fees is a terrible idea, and I will fight it every inch of the way,” said Tauzin.
Supporting the president’s spectrum proposal puts Tauzin at odds with House budget leaders.
Tauzin also raised concerns about FCC funding.
“I am … deeply concerned that the president has ignored recommendations to upgrade the Federal Communications Commission’s outdated engineering capabilities,” said Tauzin. “FCC Chairman Michael Powell has made a compelling case to Congress for the need for additional money. Given the FCC’s enormous responsibilities in the digital age, I will personally ask the White House to reconsider the agency’s recommended funding level.”
The Bush budget would increase FCC spending to $248.5 million. That is $18.5 million more than the agency’s current budget. The additional money for the FCC will not come from general appropriations, but rather from increased regulatory user fees paid by wireless carriers and others.
Overall, the Bush budget projects receipt of $7.5 billion from spectrum auctions between 2002 and 2011 and expects to generate $1.4 billion in broadcast lease fees during the transition to digital TV. The Congressional Budget Office estimates spectrum auction revenues of $28 billion during the next decade.
Elsewhere, the Bush budget reduces spending on NTIA telecom infrastructure grants from $45.5 million to $15.5 million. House telecommunications subcommittee Chairman Fred Upton (R-Mich.) has written to the White House to protest cutting the high-tech program by two-thirds.
Meanwhile, funding for Commerce’s Advanced Technology Program and the Agriculture Department’s Rural Telephone Bank would cease.
Having completed meeting funding obligations in the fiscal 2001 budget, the president’s 2002 spending package offers no new money to implement the digital wiretap act. But there are questions about whether the $500 million appropriated under the Communications Assistance for Law Enforcement Act will be enough to compensate mobile-phone carriers that have to make digital wiretap upgrades.
While the Bush administration has retreated from trying to convert carrier-subsidized Internet discounts for schools and libraries into a block grant program overseen by the Education Department, the proposed budget calls for the FCC to write new E-rate rules by September 30, 2002.
The Bush budget would make the research and development tax credit permanent. Bush’s 10-year, $1.6 trillion tax cut assumes revenues of $5 billion to $8 billion a year from the 3-percent federal excise tax on telephone service. But House and Senate lawmakers are poised to repeal the tax this year.
