House Passes Spectrum Auction Bill

WASHINGTON: The House last night passed legislation authorizing the Federal Communications Commission to hold incentive auctions for broadcast spectrum. It was included in the Middle Class Tax Relief and Job Creation Act, which also extends the payroll tax cut, authorizes the Keystone pipeline expansion, allocates the D-Block of spectrum for public safety and mandates flood insurance reform. It passed the House 234-193 late Tuesday.

Sec. 4103 of the bill “grants the FCC authority to conduct incentive auctions under which it shares some of the proceeds with licensees who return spectrum.” It limits authority to auctions were there is competition on the “reverse” side that sets the buy-out price.

The bill restricts the auctions to broadcasters who voluntarily relinquish spectrum, but curtails administrative remedies for those who do not and who protest their relocation. It provides up to $3 billion for TV stations and cable headends for channel repacking, and ensures that sufficient spectrum remains for those broadcasters who want to stay in the business of broadcasting.

The bill says the FCC will be required to auction spectrum as it clears, while retaining discretion to “add to the approximately 675 MHz of unlicensed spectrum currently available below 6 GHz by allowing secondary, shared use of this spectrum, or primary, dedicated use of other spectrum.” It instructs the FCC and the National Telecommunications and Information Administration to pursue more secondary allocations for unlicensed use within government operations in the 5 GHz band.

The legislation specifically prohibits the FCC from using the authority to impose network neutrality or “mandatory wholesaling” the wireless companies that buy the TV spectrum. The auction authority is extended through 2021.

President Obama has threatened to veto the bill if it reaches his desk.

“This Congress needs to do its job and stop the tax hike that’s scheduled to affect 160 million Americans in 18 days,” the White House responded. “This is not a time for Washington Republicans to score political points against the President. It’s not a time to refight old ideological battles. And it’s not a time to break last summer’s bipartisan agreement and hurt the middle class by cutting things like education, clean energy, and veterans’ programs without asking the wealthiest Americans to pay their fair share.”

FCC Chairman Julius Genachowski issued a statement that went on at some length about the necessity of the incentive auctions for promoting nationwide broadband:

“Incentive auction authority, which has broad bipartisan support, needs to become law. Unless we free up new spectrum for mobile broadband, the looming spectrum crunch risks throttling our mobile economy and frustrating mobile consumers.”

He also said certain provisions would “tie the agency’s hands” with regard to the uses of unlicensed spectrum. He also took aim at the way it required the FCC to structure the auctions.

Ensuring that the Commission retains the flexibility to determine the optimal band plan for new spectrum that becomes available, including the creation of guard bands and other interference safeguards, will enhance the value of the new commercial mobile licenses, as will ensuring that the Commission can conduct auctions in ways that will best further innovation, investment, and competition in the wireless space.

~ Deborah D. McAdams, Television Broadcast