Voluntary TV spectrum auctions

Efforts are continuing on Capitol Hill to give the FCC the authority it needs to share spectrum auction proceeds with TV licensees that are willing to give up the spectrum to broadband interests through auctions. Last month, S. 6310, the Kerry-Snowe bill, was introduced in the Senate. The bill includes a provision for proceeds sharing. Since then, Reps. Rick Boucher, D-VA, and Cliff Stearns, R-FL, have introduced the “Voluntary Incentive Auctions Act of 201” (H.R. 5947), which would accomplish the same purpose, in the House. Sen. Jay Rockefeller, D-WV, has offered S. 3756, a new proceeds-sharing bill on the Senate side. Unlike the Kerry-Snowe bill, neither the Boucher-Stearns bill nor the Rockefeller bill contains any language about spectrum fees.

Inside the new bills

H.R. 5947 would give the FCC the authority, which it currently lacks, to share spectrum auction proceeds with any licensee that agrees “to participate in relinquishing voluntarily” its rights to the spectrum. While the bill leaves the precise mechanism for the sharing, as well as the amount or percentage of auction proceeds to be shared, to the commission's discretion, the Boucher-Stearns proposal makes one thing clear: Any relinquishment of spectrum must be voluntary. The bill includes “voluntary” in its title as well as in the heading of the new one-paragraph section that would be inserted into the Communications Act.

The House bill contains a section that prohibits the FCC from “reclaiming” for auction purposes any TV spectrum “directly or indirectly on an involuntary basis” and which emphasizes that nothing in the bill “shall permit, or be construed as permitting” the FCC to do so.

Boucher explained that, in his view, imposition of “a spectrum fee that would make some licensees financially unable to keep their spectrum would make the surrender of spectrum constructively involuntary and would be impermissible under the terms of our legislation.”

Sen. Rockefeller's bill does not mention spectrum taxes. Its primary goal is to provide first responders and public safety officials with additional wireless resources through the deployment of a nationwide public safety interoperable broadband network in the 700MHz band. But in a brief section, the drafters of the bill provide that, “If the commission determines that it is consistent with the public interest in utilization of the spectrum for a licensee to relinquish voluntarily some or all of its licensed spectrum usage rights in order to permit the assignment of new initial licenses subject to new service rules, the commission may disburse to that licensee a portion of the auction proceeds related to the new use that the commission determines, in its discretion, are attributable to the licensee's relinquished spectrum usage.”

Later in the bill, the drafters include this rule of construction: “Nothing in this Act or in the amendments made by this Act shall be construed to permit the commission to reclaim frequencies of broadcast television licensees or any other licensees directly or indirectly on an involuntary basis for the purpose that section.”

Thus, like the Boucher-Stearns bill, Rockefeller's approach is to make sure the FCC can divide auction proceeds to give broadcasters an incentive to give up their spectrum for auction, with the commission enjoying broad discretion as to how that might be accomplished. The bill goes out of its way (like Boucher-Stearns) to emphasize that any reclamation of broadcast spectrum must be voluntary on the part of the broadcaster.

One thing is apparent from Boucher's statement: Use of a spectrum fee, such as the one proposed in the Kerry-Snowe bill in the Senate, is under active consideration as a way to force TV broadcasters to turn over the spectrum to the broadband industry through “voluntary” auctions.

Send questions and comments to: harry.martin@penton.com

Harry C. Martin is a member of Fletcher, Heald and Hildreth, PLC.


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