Seybold's Take: Spectrum auctions locked in Congress

Andrew Seybold
The FCC has committed in its Broadband Plan it submitted to Congress a couple of years ago that it would "find" 500 MHz of spectrum for broadband use within the next 10 years. Further, that within five years it would free up 300 MHz of that total for auction to those wishing to add to their spectrum holdings or new companies that might want to enter the wireless network business.

Today the FCC is sitting on some spectrum that could be auctioned right away--the AWS-2 and AWS-3 bands and some other spectrum that has been turned over to the FCC for various reasons. Even if this spectrum and more were auctioned this year, it is doubtful that the FCC could meet its five-year goal of freeing up 300 MHz of spectrum. It takes months to prepare for such an auction, then it takes a few years to relocate those already on the spectrum, first finding a place to move them and then to pay for the move out of the proceeds of the auction or perhaps require the successful bidders to move the incumbents. After all that is done, the auction winners must build out the spectrum and the device vendors must build smartphones and other devices that will work on the new spectrum. This entire process is likely to take another five years or more.

But it is not the FCC's fault that these auctions are not already underway. The hold-up is that the auction authorization bill is sitting in Congress and is not moving. In the Senate, S.911 is the bill that authorizes the auctions and lists the spectrum that can be auctioned right away, and it sets the stage for incentive auctions of additional TV spectrum that is to be voluntarily given up by TV broadcasters in return for a portion of the auction proceeds. This same bill also allocates the 700 MHz D Block to public safety as part of the public safety nationwide interoperable broadband network. S.911 passed the commerce committee in the Senate by a 21-4 bipartisan vote but it has never been brought to the floor for a vote. Instead, it has been attached to several tax bills in order to offset some of the tax revenue with auction revenue.

In the House, a different bill was introduced and attached to the recent tax relief bill. That bill, you will recall, passed the House but was not considered by the Senate. In a last-minute effort to extend the tax relief bill, the spectrum portion of the bill (Title IV) was removed. The House bill, while authorizing spectrum auctions, would be detrimental to public safety and there is an effort in Washington to have the Senate bill attached to any tax relief legislation. The tax relief bill must be voted on and passed by Feb. 29, 2012, and it is doubtful at this time that the spectrum auctions will be included, so where do we go from here?

The National Association of Broadcasters is lobbying hard against the incentive auction portion of the spectrum bill saying that commercial networks don't need more spectrum (while demand for broadband services continues to double year over year). On the other side are the CITA, CEA, and network operators as well as the Public Safety Alliance, all trying to get the spectrum auctions passed and signed into law. I have been involved in this process for more than two years now and we are coming down to the wire. One of the lessons I have learned about our Congress is that for the most part our elected members are not the ones who are making decisions.

Working the "Hill," as it is called, with the Public Safety Alliance for the past two and-a-half years I have found that it is very rare to be able to sit down with an elected senator or representative. Instead, you sit down with one or more staffers. These people are the 20-somethings who work for the elected officials or in some cases for one of the committees. Sometimes there is a specific staffer who is supposed to be a telecommunications expert and sometimes not. In most cases, the staffers must be educated by those spending time with them. In the case of the spectrum auctions, they are often being given false information by one side or the other in order to make their case stronger .

It is my opinion that the educational efforts by the PSA, the network operators, and organizations such as the CTIA helped in the writing of S.911 and moving it out of committee with a large bipartisan majority. In the House of Representatives however, the bill that was introduced was influenced more by the NAB and other organizations that oppose the incentive auctions, and by those who want all of the proceeds of the auctions to go toward reducing the national debt. The reality is that passing a fair spectrum auction bill will bring billions to the U.S. Treasury and it will create new jobs and an infusion of new spending at a time when we are facing mass unemployment in the United States.

How it will end is anyone's guess. If logic were applied to the situation new spectrum would be made available quickly and public safety would be allocated its needed spectrum and funding to build the network. New jobs would be created and network operators would know that more spectrum was on the way to help them meet the demand for wireless broadband services. But in Washington D.C. it is not logic that wins the day but rather those who have the clout to convince the staffers to convince their bosses how to vote on an issue.

I hope Congress will move forward with the spectrum auction authorization bill as quickly as possible. The executive branch and most Democrats support the auction bill as do some Republicans, but those that oppose the bill seem to have the clout to hold it up, at least for now. Their pushback is not about spectrum nor, for the most part, is it about public safety. Rather, it is about how the money from the auctions should be allocated: all to reduce the debt or some to pay for other things that are vital to the United States? If the auctions that are planned were held today, the Congressional Budget Office believes they would raise $24 billion. This, by the way, would pay for exactly 5 and 1/3 days of the interest on our current national debt. But using some of this money to gain additional spectrum from the TV stations and provide the spectrum and funding public safety needs would result in enough new jobs and revenue to more than match this figure.

Watching all of this happen in real time has been educational, and many times the decision about what to put in a bill or what to drop from a bill is made in the last 30 minutes before a vote. The point is that it is the staffers who are running things on the Hill and not our elected officials, which I find to be somewhat ludicrous.

Andrew M. Seybold is an authority on technology and trends shaping the world of wireless mobility. A respected analyst, consultant, commentator, author and active participant in industry trade organizations, his views have influenced strategies and shaped initiatives for telecom, mobile computing and wireless industry leaders worldwide. www.andrewseybold.com.

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