Ten-years-old now, the Omnibus Budget Reconciliation Act of 1993 still casts a long shadow over the wireless telecom industry and remains a powerful symbol philosophically dividing Republicans and Democrats over an economic landscape increasingly influenced by the high-tech sector.
OBRA, a tax-hike bill written by Democrats that happened to include transformational wireless provisions, changed everything. The results have been mixed. The benefits today are equaled only by the controversy that has followed since the law’s enactment Aug. 10, 1993.
OBRA authorized spectrum auctions, a licensing tool emulated worldwide that generated billions of dollars for a government suffering in the early 1990s from a then-record $290 billion budget deficit. Auctions, previously considered heretical by the political left, were the stuff of New Democrats. Auctions caught fire and took off on what would become a wild roller-coaster ride for the next 10 years.
Congress in OBRA sought to foster racial and gender diversity in the wireless industry-realizing very little existed elsewhere in the telecom business-by offering incentives to minorities, women, small businesses and rural telecos. Much of that went by the wayside after the Supreme Court curbed affirmative action in a contentious 1995 decision. Today policy-makers still toy with ideas to achieve social goals in OBRA without running afoul of Adarand Constructors v. Pena.
OBRA set a precedent by directing the federal government to transfer at least 200 megahertz to the private sector.
The new paradigm in OBRA, establishing who pays and who doesn’t pay for wireless licenses, remains fertile ground for dispute. Indeed, the industry’s top priority on Capitol Hill this fall is getting an amendment stripped from relocation fund legislation that’s key to securing Defense Department spectrum for 3G services. The rider would enable Northpoint Technologies Ltd. to use satellite frequencies for land-based wireless service. Wireless carriers-which continue to feud with cellular pioneer and ICO investor Craig McCaw on this issue-point to OBRA by arguing terrestrial-use spectrum must be auctioned. OBRA exempted satellite spectrum from auctions.
Another thing conspiring against the relocation fund is the budget deficit, which has nearly doubled in size since OBRA came into being. OBRA has been superceded by tax-cut and costly homeland security politics. Appropriators in the GOP-led Congress will be scrambling to find dollars when lawmakers return Tuesday. It’ll be a game of winners and losers.
OBRA also created a new regulatory category for commercial mobile radio services encompassing mobile phone, paging, two-way dispatch and other services not yet invented. Wireless carriers are now subjected to a myriad of regulations common to monopoly landline telephone companies. Wireless firms have grown weary of and hostile to federal mandates, and they say so regularly.
The wireless industry believed OBRA took care of states by eviscerating most of their jurisdiction over carriers. That hasn’t panned out so well either.
