White House Jobs Bill Includes Spectrum Auction Plan

By Marc Martin and Marty Stern

After being abandoned during the Congressional debate over the debt ceiling, the proposal to free up broadcast spectrum through “incentive auctions” is now part of the American Jobs Act announced by President Obama on Thursday and sent to Congress yesterday. Incentive auctions allow broadcast spectrum licensees to cede portions of their spectrum for auction by the FCC in return for a portion of the auction revenue. According to the Obama Administration’s estimates, the auctions will raise approximately $28 billion, which, under the proposed legislation, would be used to fund the creation of a nationwide, interoperable wireless network dedicated to public safety – bringing front and center the long simmering D Block controversy that has stymied earlier efforts to pass incentive auction legislation.

The current incentive auction proposal borrows from legislation introduced earlier this year by Sen. Jay Rockefeller (D-WV) and Sen. Kay Bailey Hutchinson (R-TX), and approved by the Senate Commerce Committee. The Senate bill would allocate, without auction, an additional swath of 700 MHz band “D Block” spectrum for public safety use and provide $7 billion to a new quasi-governmental entity named the “Public Safety Broadband Corporation” to fund and oversee the a new public safety network. This plan conflicts with draft legislation introduced by House Republicans of the House Energy and Commerce Committee. The House bill would not allocate the additional D Block spectrum but rather would auction this additional spectrum to commercial wireless companies that would construct nationwide networks for use by the public safety community. House Republicans contend that auctioning the D Block to private industry would save taxpayers from having public safety entities construct the networks and would likely result in the networks becoming operational much more rapidly. The House Republican draft legislation would have also allowed successful spectrum auction bidders to remain exempt from certain transparency rules imposed by the FCC's 2010 Net Neutrality Order, a provision omitted from the new jobs bill.

The White House bill authorizes the FCC to hold incentive auctions for non-D Block broadcast spectrum. In addition, it directs the agency to recover a substantial portion of the value of terrestrial broadband deployment rights originally set aside for satellite services through new spectrum fees on certain non-broadcast television and public safety licensees. In addition to receiving auction revenue, broadcast licensees may also be eligible for reimbursement of the costs incurred in “repacking” their licenses from their current allocations in order to make contiguous spectrum blocks available for auction. The Commission would also be given authority to adopt rules that allow public safety entities to roam and receive priority access on commercial networks during emergencies. The FCC would be required to make regular reports to Congress on the use of public safety spectrum and provide suggestions on how to increase spectrum efficiency. 

Wireless industry organizations, such as Mobile Future, quickly praised the auction proposal, stating that the additional spectrum freed under the proposal could produce half a million new jobs. A group of computer and software developers asked the FCC to “accelerate” the reassignment of spectrum to mobile broadband use if the agency receives auction authorization from Congress. Democratic leaders also called for prompt consideration of the President’s plan to avoid the delays, party conflicts, and broadcast industry opposition which hampered consideration of earlier spectrum auction proposals.

But some telecom observers suggest that the Obama Administration may be courting criticism from former allies through the new legislation. Specifically, the proposed legislation does not contain any language preserving the use of unassigned spectrum for unlicensed use. Major Internet companies, such as Google, which previously supported the Administration’s efforts regarding auctions, hoped to use this “white space” spectrum to expand broadband network coverage. The observers further contend that the bill could undermine the goodwill the administration cultivated with television broadcasters over the past few months on establishing auctions with sufficient protections for incumbent television licensees.

Even if opponents manage to strike incentive auctions from the new jobs legislation, the bipartisan “supercommittee” created during the debt debate could separately push broadcast spectrum auctions through debt reduction legislation. Public safety advocates have already lobbied many lawmakers on the supercommittee to include funding for a public safety network in any plan it sends to Congress later this year.

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