[Senate Report 108-168]
[From the U.S. Government Publishing Office]
Calendar No. 314
108th Congress Report
SENATE
1st Session 108-168
_______________________________________________________________________
Calendar No. 314
COMMERCIAL SPECTRUM ENHANCEMENT ACT
__________
R E P O R T
of the
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
H.R. 1320
DATE deg.October 17, 2003.--Ordered to be printed
?
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred eighth congress
first session
JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii
TRENT LOTT, Mississippi JOHN D. ROCKEFELLER IV, West
KAY BAILEY HUTCHISON, Texas Virginia
OLYMPIA J. SNOWE, Maine JOHN F. KERRY, Massachusetts
SAM BROWNBACK, Kansas JOHN B. BREAUX, Louisiana
GORDON SMITH, Oregon BYRON L. DORGAN, North Dakota
PETER G. FITZGERALD, Illinois RON WYDEN, Oregon
JOHN ENSIGN, Nevada BARBARA BOXER, California
GEORGE ALLEN, Virginia BILL NELSON, Florida
JOHN E. SUNUNU, New Hampshire MARIA CANTWELL, Washington
FRANK LAUTENBERG, New Jersey
Jeanne Bumpus, Staff Director and General Counsel
Ann Begeman, Deputy Staff Director
Robert W. Chamberlin, Chief Counsel
Kevin D. Kayes, Democratic Staff Director and Chief Counsel
Gregg Elias, Democratic General Counsel
(ii)
Calendar No. 314
108th Congress Report
SENATE
1st Session 108-168
======================================================================
COMMERCIAL SPECTRUM ENHANCEMENT ACT
_______
October 17, 2003.--Ordered to be printed
_______
Mr. McCain, from the Committee on Commerce, Science, and
Transportation, submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany H.R. 1320]
The Committee on Commerce, Science, and Transportation, to
which was referred the Act (H.R. 1320) TITLE deg. an
Act to amend the National Telecommunications and Information
Administration Organization Act to facilitate the reallocation
of spectrum from government to commercial users, having
considered the same, reports favorably thereon with an
amendment and recommends that the Act (as amended) do pass.
Purpose of the Bill
The purpose of this legislation is to streamline the current
process for reimbursing Federal agencies that must relocate
from spectrum that has been reallocated to commercial use.
Under existing law, spectrum auction winners must negotiate
with the Federal entity currently occupying the spectrum, and
reimburse the entity directly for its relocation costs. The
bill is intended to instill additional certainty into this
process for both the auction winner and the Federal entity
being relocated. The bill would create a central spectrum
relocation fund (SRF) with the proceeds of spectrum auctions,
and would grant authority to the relocated Federal entities to
use the fund to pay their relocation costs without further
appropriation. The bill also would make a technical correction
to the statutory treatment of the Telecommunications
Development Fund (TDF), which would benefit small businesses by
making it easier for the TDF to make loans to such businesses.
Background and Needs
Spectrum is a vital resource in the information and digital
age. Today, there are ever-greater spectrum demands for both
commercial and government uses. Policymakers have struggled to
strike a balance between finding and allocating spectrum for
new advanced services, and ensuring that our military forces
and other public users have enough spectrum for current and
future needs. The Federal government has decided to reallocate
certain spectrum from Federal to commercial use. In order to
complete this process, the displaced Federal user must relocate
to another spectrum band or find an alternative technology to
carry out its functions. H.R. 1320 would streamline the current
process for reimbursing Federal entities that must relocate
from spectrum that has been reallocated to commercial use.
The Omnibus Budget Reconciliation Act of 1993 (OBRA '93)
required the Federal government to relinquish at least 100
megahertz (mhz) below 3 gigahertz (ghz) for commercial use (at
least 200 mhz overall below 5 ghz). The Balanced Budget Act of
1997 (BBA '97) required the Federal government to reallocate
another 20 mhz for commercial use. BBA '97 also accelerated the
reallocation of the 1710-1755 mhz band, which had been
designated for reallocation in accordance with OBRA '93.
At the 1998 World Radio Conference (WRC) in Istanbul, Turkey,
the WRC, an intergovernmental body, voted to locate broadband,
third-generation (or 3G) wireless services in certain spectrum
bands, including the 1710-1755 mhz band. In the United States,
the Department of Defense (DOD) uses much of the spectrum in
this band for battlefield communications, aircraft-to-aircraft
communications, and other communications-related functions.
The Strom Thurmond National Defense Authorization Act for
Fiscal Year 1999 (Strom Thurmond Act) reduced the overall
amount of spectrum initially reallocated to 112 mhz below 3 ghz
(212 mhz overall below 5 ghz). In addition, the Strom Thurmond
Act also required companies that win the commercial licenses
for this spectrum at auction to negotiate directly with
government agencies over the terms and costs of relocating the
government users to a different spectrum band. Under the
current rules, the funds paid by the auction winner are
deposited in the United States Treasury as miscellaneous
receipts. The relocated agency must then be appropriated the
money to pay for its relocation costs.
The current rules create uncertainty for both the relocated
Federal entity and the successful bidder for the spectrum. The
Federal entities currently face uncertainty, because they must
seek funds for relocation through the appropriations process.
H.R. 1320 seeks to establish a sustainable and predictable
funding mechanism to ensure that DOD and other government users
can relocate to new spectrum bands. Likewise, commercial
bidders currently face substantial uncertainty about timing and
total cost of licenses for the spectrum they seek to use,
because of the negotiations they must begin upon winning an
auction. This system provides potential licensees with
diminished incentive to participate in auctions of reallocated
government spectrum.
Legislative History
Senators McCain, Dorgan, Brownback, and Ensign introduced S.
865, a bill that is nearly identical to H.R. 1320, on April 10,
2003. S. 865 was cosponsored by Senator Burns. On June 11,
2003, the House of Representatives passed H.R. 1320 by a vote
of 408-10. On June 26, 2003, the Senate Committee on Commerce,
Science, and Transportation (the Committee) held an executive
session at which H.R. 1320 was considered. The bill was
approved by voice vote and was ordered reported with an
amendment offered by Senators Sununu and Cantwell regarding the
Federal Communication Commission's ability to auction certain
terrestrial spectrum, which was passed by a vote of 13-8.
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
July 11, 2003.
Hon. John McCain,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1320, the
Commercial Spectrum Enhancement Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Kathleen
Gramp.
Sincerely,
Douglas Holtz-Eakin,
Director.
Enclosure.
H.R. 1320--Commercial Spectrum Enhancement Act
Summary: H.R. 1320 would amend the procedures used to pay
for the cost of relocating federal telecommunications systems
that use electromagnetic spectrum that will be licensed for
commercial use. It would simplify the process companies use to
reimburse the government for relocation costs and would allow
agencies to spend those funds without further appropriation.
Under current law, such spending is subject to appropriation.
In addition, the act would exempt certain licenses from being
auctioned and would amend existing law regarding loans made by
the Telecommunications Development Fund (TDF).
CBO estimates that implementing H.R. 1320 would increase
net direct spending by $1.5 billion over the 2006-2008 period
and by $2.6 billion over the next 10 years. Allowing agencies
to directly spend some auction proceeds would eliminate the
need to appropriate funds for relocation costs. Consequently,
the increase in direct spending for relocation costs could be
largely offset by a reduction in discretionary spending if the
total amounts appropriated in future years are reduced
correspondingly.
H.R. 1320 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 1320 is shown in the following table.
The costs of this legislation fall primarily within budget
functions 050 (national defense) and 950 (undistributed
offsetting receipts).
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in billions of dollars--
--------------------------------------------------------------------------------------------------
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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CHANGES IN DIRECT SPENDING
Spectrum auction receipts under current law:
Estimated budget authority....................... -0.1 -0.3 -8.0 -8.0 -2.8 -2.5 0 0 0 0 0
Estimated outlays................................ -0.1 -0.3 -8.0 -8.0 -2.8 -2.5 0 0 0 0 0
Proposed changes:
Delay of spectrum auctions:
Estimated budget authority................... 0 0 7.5 -7.5 0 0 0 0 0 0 0
Estimated outlays............................ 0 0 7.5 -7.5 0 0 0 0 0 0 0
Spending for relocation costs: \1\
Estimated budget authority................... 0 0 0 2.5 0 0 0 0 0 0 0
Estimated outlays............................ 0 0 0 0.3 0.5 0.6 0.6 0.3 0.1 0.1 0
Auction exemption for certain licenses:
Estimated budget authority................... 0 0 0.1 0 0 0 0 0 0 0 0
Estimated outlays............................ 0 0 0.1 0 0 0 0 0 0 0 0
Total proposed changes:
Estimated budget authority................... 0 0 7.6 -5.0 0 0 0 0 0 0 0
Estimated outlays............................ 0 0 7.6 -7.2 0.5 0.6 0.6 0.3 0.1 0.1 0
Net spectrum auction receipts under H.R. 1320:
Estimated budget authority....................... -0.1 -0.3 -0.4 -13.0 -2.8 -2.5 0 0 0 0 0
Estimated outlays................................ -0.1 -0.3 -0.4 -15.2 -2.3 -1.9 0.6 0.3 0.1 0.1 0
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\1\ Implementing H.R. 1320 could result in a reduction in discretionary spending, similar to the estimated $2.5 billion increase in direct spending for
relocation costs if the total amounts appropriated in future years are reduced accordingly.
Basis of estimate
H.R. 1320 would amend current law that governs auctions of
the electromagnetic spectrum in three ways. First, it would
change the process used to pay for the cost of relocating
government operations when spectrum that is used by agencies is
going to be reallocated andlicensed for commercial services.
Second, the bill would preclude the FCC from auctioning licenses for
terrestrial services that use the 500 megahertz extending from 12.2
gigahertz to 12.7 gigahertz. Finally, the act would change the
treatment of loans made by the Telecommunications Development Fund. The
cost of these changes is described below.
Federal Relocation Costs
CBO estimates that implementing provisions that would allow
agencies to spend some of the proceeds from spectrum auctions
without further appropriation would increase net direct
spending by $2.5 billion over the next 10 years. Spending for
agencies' spectrum relation expenses is subject to
appropriation under current law. By providing this direct
spending authority, the act could lead to lower discretionary
spending in the future if the funds appropriated are reduced by
corresponding amounts.
Relocation Costs Under Current Law. Some of the
electromagnetic spectrum now used by federal agencies is being
reallocated from government to commercial use. Relocating
agency operations to new frequencies or services typically
involves buying new equipment and facilities. Under current
law, those costs will be paid by the companies that win the
commercial licenses at auctions held by the Federal
Communications Commission (FCC). Agencies will notify bidders
of estimated relocation costs before the auction begins, but
final payment will be negotiated and made after the winning
bidder has obtained--and paid for--the license. Funds paid by
the commercial licensees for relocation costs will be deposited
in the Treasury as miscellaneous receipts, but agencies cannot
spend the proceeds until they are appropriated. How well the
current relocation process would work is unknown because no
auctions of such frequencies have occurred since the
requirements were enacted in 1998.
Proposed Changes. H.R. 1320 would make two key changes in
the agency location process. First, costs for relocation would
be paid from the total auction proceeds rather than by
individual licensees. The act would direct the FCC to set a
minimum bid for an auction equal to 110 percent of the
estimated relocation costs. If auction proceeds exceed that
minimum bid, then all of the proceeds from the auction of the
federal frequencies would be deposited in a Spectrum Relocation
Fund. Auctions that fail to at least match the minimum bid
would be canceled. Under the act, all auction proceeds in the
fund could be spent by agencies without further appropriation
on eligible relocation costs. Agency expenditures and
relocation progress would be subject to review by the Office of
Management and Budget (OMB), the National Telecommunications
and Information Administration (NTIA), various Conressional
committees, and the General Accounting Office (GAO). Unspent
auction proceeds would remain in the Treasury. The Act also
would require the FCC to notify NTIA of an upcoming auction at
least 18 months in advance, giving agencies a year to prepare
estimates of relocation costs that must be given to the FCC at
least six months prior to the start of the auction.
Budgetary Effects Related to Auctioning the 1710-1755
Megahertz Band. The relocation procedures, both in current law
and under H.R. 1320, apply only to certain frequencies. Among
the bands eligible for reimbursement are the 1710-1755
megahertz band, three small bands covered by existing law, and
any frequencies reallocated from government to commercial use
after January 1, 2003.
Most of the estimated cost of this act would result from
applying the new process to the 1710-1755 megahertz band, which
is scheduled to be paired with 45 megahertz of commercial
spectrum and auctioned for use by advanced, third-generation
wireless services in the next few years. Under current law, CBO
anticipates that licenses for this 90 megahertz will be
auctioned near the beginning of fiscal year 2005 and that
proceeds totaling about $15 billion would be collected over the
2005-2006 period. This estimate reflects our expectation that
companies will discount their bids by about $2 billion to $3
billion because of the uncertainty associated with the time and
cost of relocating federal and commercial users.
CBO estimates that implementing the new relocation
procedures would affect the budget in three ways.
Requiring the FCC to give NTIA at least 18-
months notice would delay the start of the auction
relative to CBO's baseline assumption, thereby shifting
about $7.5 billion in offsetting receipts from 2005 to
2006. CBO assumes that the 18-month period would not
begin until after the NTIA and FCC identify alternative
frequencies for federal operations, which will be a key
determinant of relocation costs.
Agencies would spend about $2.5 billion,
without further appropriation, to relocate federal
systems that now use this band. This estimate reflects
the preliminary estimate prepared by NTIA in 2001 on
the cost of moving all federal systems out of this
band. Most of this expense will be incurred by the
Department of Defense (DoD).
The estimated increase in direct spending
could be largely offset by a reduction in discretionary
spending if the amounts appropriated in future years
are reduced correspondingly. However, CBO anticipates
that total spending probably would be higher under H.R.
1320 than under current law because agencies'
relocation plans would not be subject to negotiations
with winning bidders or the appropriation process.
It is possible that the net effect of the act on direct
spending could be higher or lower than estimated by CBO. On the
one hand, agency spending could exceed $2.5 billion because the
NTIA study was based on preliminary data and did not include
all systems or all allowable expenditures. Recent statements by
DoD have suggested that its costs alone cold exceed $4 billion.
On the other hand, simplifying the reimbursement process
could reduce some of the uncertainty for bidders, which could
result in higher auction proceess. Under current law, companies
may underbid or overbid for spectrum licenses depending on how
the amount they ultimately pay agencies for relocation expenses
compares to the amount assumed in their bidding strategy.
Likewise, under the act, agencies might have access to funds
more quickly than under the current process, but CBO has no
basis for determining whether this would have a material effect
on when the spectrum would be available for commercial service.
On balance, CBO expects that simplifying the process for
bidders might lead to higher proceeds, but we estimate that the
magnitude of any change would be small relative to other
factors that will affect the market value of these frequencies.
Budgetary Effects Related to Other Bands. Based on
information from NTIA and other agencies, CBO expects that
implementing this act would have no significant effect on the
net proceeds from other auctions likely to be held before the
FCC's auction authority expires in 2007.
Auction Exemption for Certain Licenses
The FCC is required by law to use competitive bidding
procedures to assign most licenses for commercial uses of the
radio spectrum. H.R. 1320 would exempt certain licenses--those
using the 12.2-12.7 gigahertz band for terrestrial services--
from this auction requirement. It also would prohibit the FCC
from licensing those frequencies for mobile telephony. CBO
estimates that enacting this exemption would result in a loss
of about $60 million in auction proceeds that would otherwise
occur in 2005.
The 12.2-12.7 gigahertz band is currently used for two
different satellite-based services. Licenses for direct
broadcast satellite services (DBS), which use geostationary
satellites, were assigned by competitive bidding in 1996 and
generated auction proceeds totaling $735 million. (Those
licenses currently are held by Echostar, which markets its
satellite television services through the DISH Network). The
FCC also allocated those frequencies for use by
nongeostationary satellites that provide international
telecommunication services. Under current law, licenses for
international services are assigned administratively rather
than by auction, with international protocols.
The FCC recently determined that it is also technically
feasible to use the 12.2-12.7 gigahertz band for certain
terrestrial services. Companies such as Northpoint Technology
have proposed using those frequencies to provide multichannel
video distribution and data services that would compete with
existing DBS and cable television services. Other firms have
expressed interest in using the band to provide high-speed data
and broadband services. The FCC initially planned to begin
auctioning licenses for terrestrial services for this band in
June 2003, but the auction was postponed in response to
industry proposals to change the geographic areas covered by
each license. Although a new date has not yet been announced,
CBO expects that the auction will now begin in 2004, with
auction proceeds deposited in the Treasury in 2005.
CBO estimates that proceeds from the auction of this 500
megahertz band could range from $14 million (the minimum bid
set by the FCC) to over $100 million, with an expected value of
about $60 million. Auction proceeds are difficult to predict,
and are especially uncertain in cases where the technology and
markets are untested. For example, Nextel recently paid $144
million to buy worldcom spectrum licenses and equipment in the
2.5 gigahertz band, which may be used for broadband services.
(Worldcom originally paid about $1 billion for those licenses.)
Furthermore, some analysts have suggested that the new services
in the 12.2-12.7 gigahertz band could capture between 10
percent and 40 percent of the $14 billion DBS market. If
auction participants were to base their bids on such marketing
scenarios, CBO estimates that auction proceeds could exceed
$100 million. Alternatively, auction proceeds could be at the
lower end of this range if the potential services or
technologies to be offered are considered financially risky.
Telecommunications Development Fund
The TDF was established by law in 1996 to spend the
interest earned on certain proceess collected by the FCC as
part of the spectrum auction process. Those interest earnings
are used as venture capital for small businesses and spent on
other activities related to telecommunications services. The
fund is administered by a seven-member board appointed by the
FCC and is governed by certain statutory criteria. H.R. 1320
would remove one of those requirements, namely that loans made
by the TDF are subject to the Federal Credit Reform Act.
Since its creation, CBO has suggested that the TDF be
included in the budget as a federal activity because its
leadership, purpose, and funding are controlled by the
government. OMB, however, treats the TDF as a nonfederal
entity. Because the TDF currently is treated as a nonfederal
entity, CBO estimates that enacting this provision would have
no budgetary impact.
Intergovernmental and private-sector impact: H.R. 1320
contains no intergovernmental or private-sector mandates as
defined in the UMRA and would impose no costs on state, local,
or tribal governments.
Previous CBO estimate: On May 13, 2003, CBO transmitted a
cost estimate for H.R. 1320 as ordered reported by the House
Committee on Energy and Commerce on April 30, 2003. The House
version did not include provisions exempting the 12.2-12.7
gigahertz band from auction requirements and our cost estimates
reflect that difference.
Comparison with other estimates: In February 2003, the
Administration recommended enacting legislation that included
provisions similar to those in H.R. 1320 regarding federal
relocation costs. The Office of Management and Budget estimated
that enacting its proposed legislation would increase direct
spending by $2.5 billion over the 2005-2013 period.
Estimate prepared by: Federal Costs: Kathleen Gramp; impact
on state, local, and tribal governments: Victoria Heid Hall;
impact on the private sector: Paige Piper/Bach.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
director for Budget Analysis.
Regulatory Impact Statement
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
NUMBER OF PERSONS COVERED
H.R. 1320 would streamline the process for reimbursing
Federal agencies that must relocate from spectrum that has been
reallocated to commercial use. Because existing law requires
auction winners to negotiate with the Federal entity currently
occupying the spectrum, the number of persons affected by this
legislation should be consistent with current levels.
ECONOMIC IMPACT
The legislation would expedite the introduction of new
commercial wireless services, and would likely have a
beneficial impact on the nation's economy.
PRIVACY
H.R. 1320 would not have any adverse impact on the personal
privacy of the individuals affected.
PAPERWORK
H.R. 1320 would require the National Telecommunications and
Information Administration (NTIA) to submit an annual report to
the House of Representatives Committee on Appropriations, the
House of Representatives Committee on Energy, the Senate
Committee on Appropriations, the Senate Committee on Commerce,
Science, and Transportation, and the Comptroller General on (1)
the progress made in adhering to the timelines applicable to
relocation, and (2) the relocation costs incurred and paid from
the spectrum relocation fund established by the legislation.
The bill also would require NTIA and the Office of Management
and Budget (OMB) to prepare various estimates and detailed
plans related to the costs of relocation and the use of funds
to pay for those costs. Any increase in paperwork requirements
would be commensurate with the benefits gained by Congressional
oversight.
Section-by-Section Analysis
Section 1. Short title
Section 1 would establish the short title of the bill as the
``Commercial Spectrum Enhancement Act''.
Section 2. Relocation of eligible federal entities for the reallocation
of spectrum for commercial purposes
Section 2 of the bill would amend section 113(g) of the
National Telecommunications and Information Administration
Organization Act (47 U.S.C. 923(g)) by striking the existing
provisions governing the compensation of Federal entities for
costs incurred for relocating spectrum operations and by
replacing those provisions as described in this section.
New sections 113(g)(1) and 113(g)(2) would define which
Federal entities would be eligible to receive compensation for
relocation expenses. Any Federal entity that has spectrum
operations in certain frequencies that incurs relocation costs
because of the reallocation of eligible frequencies from
Federal use to non-Federal use would be eligible. Eligible
bands include the 216-220 mhz band, the 1432-1435 mhz band, the
1710-1755 mhz band, and the 2385-2390 mhz band. Also included
as an eligible band is any other band of frequencies
reallocated from Federal to non-Federal use after January 1,
2003, that the Commission assigns by auction, except for the
1390-1400 mhz band, the 1427-1432 mhz band, the 1670-1675 mhz
band, the 2300-2305 mhz band, the 2305-2310 mhz band, the 2390-
2450 mhz band, the 3650-3700 mhz band, and the 4940-4990 mhz
band. Section 113(g)(1) also would permit Federal Power
Agencies (FPAs) that voluntarily relocate from spectrum bands
reallocated from government to non-government use to receive
compensation for relocation costs from the SRF.
New section 113(g)(3) would define reimbursable relocation
costs as such costs incurred by a Federal entity to achieve
comparable capability of systems by relocating spectrum
operations to a different frequency band or by utilizing an
alternative technology.
New sections 113(g)(4) and 113(g)(5) would require the
Federal Communications Commission (FCC or Commission) to notify
NTIA at least 18 months prior to the commencement of an auction
of spectrum used by a Federal agency. NTIA would then be
required to notify the Commission of estimated relocation costs
and timelines for relocation at least 6 months prior to the
auction. NTIA would make this estimate on behalf of the
affected agency, and after review by the OMB. NTIA also would
be required to submit this estimate to the House of
Representatives Committee on Appropriations, the House of
Representatives Committee on Energy and Commerce, the Senate
Committee on Appropriations, and the Senate Committee on
Commerce, Science, and Transportation (relevant Congressional
committees), and the Comptroller General. In order to assist an
agency in calculating its estimated relocation costs, NTIA
would be required to provide the agency with information
regarding an alternative frequency assignment it could use when
relocated to the extent that it is consistent with national
security and if it is practicable to do so.
New section 113(g)(6) would require NTIA to take such actions
as are necessary to ensure the timely relocation of Federal
entities' spectrum operations from eligible frequencies to
frequencies or facilities of comparable capability. Once NTIA
has determined that a Federal entity has achieved comparable
capability of systems, new section 113(g)(6) would require NTIA
to terminate the entity's authorization to operate on the
reallocated frequency band, and to notify the Commission that
the entity's relocation is complete. New section 113(g)(6) also
would require NTIA to terminate a Federal entity's
authorization if it determines that the entity has unreasonably
failed to comply with the timeline for relocation submitted by
OMB to Congress after the completion of the auction.
Section 3. Minimum auction receipts and disposition of proceeds
Sections 3 would amend section 309(j)(3) of the
Communications Act of 1934 (47 U.S.C. 309(j)(3)) by requiring
an auction of eligible frequencies described in section
113(g)(2) to yield at least 110 percent of the estimated
relocation costs. This section also would permit the FCC to
grant a license for commercial use prior to the termination of
a Federal entity's authorization if the licensee did not cause
harmful interference to the Federal entity. Section 3 would
require that proceeds from an auction of eligible frequencies
be deposited in the SRF.
Section 4. Establishment of fund and procedures
Section 4 would create a new section 118 of the National
Telecommunications and Information Organization Act. New
section 118(a) would establish the SRF as a separate Treasury
account, which would be administered by OMB in consultation
with NTIA. New sections 118(b) and 118(c) would provide that
the SRF be credited with the proceeds from auctions of eligible
frequencies.
New section 118(d) would appropriate from the SRF such sums
as required to pay the relocation costs of eligible Federal
entities upon certain conditions. This section would prohibit
the transfer of monies from the SRF unless OMB, in consultation
with NTIA, has determined the appropriateness of the relocation
costs and the timeline for relocation. Moreover, the monies
would not be available until 30 days after OMB submits a
detailed plan describing how the funds will be spent for
relocation and the timeline for relocation to the relevant
Congressional committees, and the Comptroller General. This
section also would provide that any auction proceeds remaining
in the SRF after the payment of relocation costs shall revert
to the general fund of the Treasury no later than 8 years after
the date of the deposit of the respective auction proceeds in
the SRF.
New section 118(e) would govern the transfer of monies to the
Federal entity. This section would permit more than 1 transfer
to be made to an eligible Federal entity. However, if a
subsequent transfer (or transfers) exceeds 10 percent of the
first transfer to an entity, such subsequent transfer would not
be permitted without the prior approval of OMB, in consultation
with NTIA, and would not be permitted until 45 days after OMB
notified the relevant Congressional committees and the
Comptroller General. This notice would include a detailed plan
describing how the funds will be spent for relocation and the
timeline for relocation, as well as an explanation of the need
for the subsequent transfer. Within 30 days after receiving the
plan, the Comptroller General would be required to review the
plan and submit to the relevant committees an assessment of the
explanation for the subsequent transfer. The transferred
amounts would be credited to the Federal entity's
appropriations account, and would remain available until
expended. Any funds in excess of actual relocation costs would
have to be transferred back to the SRF immediately after the
entity's relocation is complete or after the entity
unreasonably fails to complete the relocation in accordance
with the timeline submitted to Congress, as determined by NTIA.
Eligible Federal entities that receive amounts from the SRF
would be required to report their expenditures to OMB.
Section 5. Telecommunications development fund
Section 5 would amend section 714(f) of the Communications
Act of 1934 (47 U.S.C. 614(f)) to clarify that the
Telecommunications Development Fund (TDF) would not be subject
to the requirements of the Federal Credit Reform Act of 1990,
which requires government entities making loans to get budget
authority to cover the costs of loans, and to provide for those
loans in advance in an appropriations act. TDF is not a
government agency; it is a private entity funded by the
interest on auction bids.
Section 6. Construction
Section 6 would provide that H.R. 1320 does not modify
section 1062(b) of the National Defense Authorization Act for
Fiscal Year 2000 (Public Law 106-65), which prohibits, with
certain exceptions, the surrender of spectrum by the DOD unless
comparable spectrum is made available, in advance, for the
relevant operations.
Section 7. Section annual report
Section 7 would require NTIA to submit an annual report to
the relevant Congressional committees and the Comptroller
General regarding (1) the progress made in adhering to the
timelines presented by OMB to Congress under new section
118(d), and (2) the estimated relocation costs, the actual
costs incurred, and the amount of such costs paid from the SRF.
Section 8. Preservation of authority; NTIA report required
Section 8 would clarify that, with the exception of the
certain specified bands, nothing in H.R. 1320 is intended to
limit the Commission's authority to allocate spectrum
reallocated from government to non-government use for
unlicensed, public safety, shared, or non-commercial purposes.
This section also would require NTIA to submit, within 1 year
after the date of enactment, a report to the House of
Representatives Committee on Energy and Commerce and the Senate
Committee on Commerce, Science, and Transportation regarding
policy options to compensate Federal entities for relocation
costs when such entities' spectrum bands are reallocatedfrom
government to non-government use and the Commission allocates the
spectrum for unlicensed, public safety, shared, or non-commercial
purposes.
Section 9. Exempt auctions
Section 9 would amend section 647 of the Open-market
Reorganization for the Betterment of International
Telecommunications (ORBIT) Act (47 U.S.C. 765f) by exempting
from auction the provision of fixed terrestrial services in the
12.2-12.7 ghz band. The section also would prohibit the use of
terrestrial licenses in this band for mobile terrestrial
telephony services.
ROLLCALL VOTES IN COMMITTEE
In accordance with paragraph 7(c) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following description of the record votes during its
consideration of H.R. 1320:
Senator Sununu (for himself and Senator Cantwell) offered an
amendment regarding the FCC's ability to auction certain
terrestrial spectrum. By rollcall vote of 13 yeas and 8 nays as
follows, the amendment was adopted:
YEAS--13 NAYS--8
Mr. Stevens Mr. Brownback
Mr. Burns \1\ Mr. Fitzgerald
Mr. Lott Mr. Ensign \1\
Ms. Snowe \1\ Mr. Hollings
Mr. Smith Mr. Rockefeller \1\
Mr. Sununu Mr. Wyden
Mr. Inouye \1\ Mrs. Boxer \1\
Mr. Kerry \1\ Mr. McCain
Mr. Breaux
Mr. Dorgan \1\
Mr. Nelson \1\
Ms. Cantwell
Mr. Lautenberg
\1\ By proxy
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the Committee states that the
bill as reported would make no change to existing law. deg.
In compliance with paragraph 12 of rule XXVI of the Standing
Rules of the Senate, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be
omitted is enclosed in black brackets, new material is printed
in italic, existing law in which no change is proposed is shown
in roman):
COMMUNICATIONS ACT OF 1934
SEC. 309. APPLICATION FOR LICENSE
[47 U.S.C. 309]
(a) Considerations in Granting Application.--Subject to the
provisions of this section, the Commission shall determine, in
the case of each application filed with it to which section 308
applies, whether the public interest, convenience, and
necessity will be served by the granting of such application,
and, if the Commission, upon examination of such application
and upon consideration of such other matters as the Commission
may officially notice, shall find that public interest,
convenience, and necessity would be served by the granting
thereof, it shall grant such application.
(b) Time of Granting Application.--Except as provided in
subsection (c) of this section, no such application--
(1) for an instrument of authorization in the case of
a station in the broadcasting or common carrier
services, or
(2) for an instrument of authorization in the case of
a station in any of the following categories:
(A) industrial radio positioning stations for
which frequencies are assigned on an exclusive
basis,
(B) aeronautical en route stations,
(C) aeronautical advisory stations,
(D) airdrome control stations,
(E) aeronautical fixed stations, and
(F) such other stations or classes of
stations, not in the broadcasting or common
carrier services, as the Commission shall by
rule prescribe, shall be granted by the
Commission earlier than thirty days following
issuance of public notice by the Commission of
the acceptance for filing of such application
or of any substantial amendment thereof.
(c) Applications not Affected by Subsection (b).--Subsection
(b) of this section shall not apply--
(1) to any minor amendment of an application to which
such subsection is applicable, or
(2) to any application for--
(A) a minor change in the facilities of an
authorized station,
(B) consent to an involuntary assignment or
transfer under section 310(b) or to an
assignment or transfer thereunder which does
not involve a substantial change in ownership
or control,
(C) a license under section 319(c) or,
pending application for or grant of such
license, any special or temporary authorization
to permit interim operation to facilitate
completion of authorized construction or to
provide substantially the same service as would
be authorized by such license,
(D) extension of time to complete
construction of authorized facilities,
(E) an authorization of facilities for remote
pickups, studio links and similar facilities
for use in the operation of a broadcast
station,
(F) authorizations pursuant to section 325(c)
where the programs to be transmitted are
special events not of a continuing nature,
(G) a special temporary authorization for
nonbroadcast operation not to exceed thirty
days where no application for regular operation
is contemplated to be filed or not to exceed
sixty days pending the filing of an application
for such regular operation, or
(H) an authorization under any of the proviso
clauses of section 308(a).
(d) Petition To Deny Application; Time; Contents; Reply;
Findings.--
(1) Any party in interest may file with the
Commission a petition to deny any application (whether
as originally filed or as amended) to which subsection
(b) of this section applies at any time prior to the
day of Commission grant thereof without hearing or the
day of formal designation thereof for hearing; except
that with respect to any classification of
applications, the Commission from time to time by rule
may specify a shorter period (no less than thirty days
following the issuance of public notice by the
Commission of the acceptance for filing of such
application or of any substantial amendment thereof),
which shorter period shall be reasonably related to the
time when the applications would normally be reached
for processing. The petitioner shall serve a copy of
such petition on the applicant. The petition shall
contain specific allegations of fact sufficient to show
that the petitioner is a party in interest and that a
grant of the application would be prima facie
inconsistent with subsection (a)(or subsection (k) in
the case of renewal of any broadcast station license).
Such allegations of fact shall, except for those of
which official notice may be taken, be supported by
affidavit of a person or persons with personal
knowledge thereof. The applicant shall be given the
opportunity to file a reply in which allegations of
fact or denials thereof shall similarly be supported by
affidavit.
(2) If the Commission finds on the basis of the
application, the pleadings filed, or other matters
which it may officially notice that there are no
substantial and material questions of fact and that a
grant of the application would be consistent with
subsection (a)(or subsection (k) in the case of renewal
of any broadcast station license), it shall make the
grant, deny the petition, and issue a concise statement
of the reasons for denying the petition, which
statement shall dispose of all substantial issues
raised by the petition. If a substantial and material
question of fact is presented or if the Commission for
any reason is unable to find that grant of the
application would be consistent with subsection (a)(or
subsection (k) in the case of renewal of any broadcast
station license), it shall proceed as provided in
subsection (e).
(e) Hearings; Intervention; Evidence; Burden of Proof.--If,
in the case of any application to which subsection (a) of this
section applies, a substantial and material question of fact is
presented or the Commission for any reason is unable to make
the finding specified in such subsection, it shall formally
designate the application for hearing on the ground or reasons
then obtaining and shall forthwith notify the applicant and all
other known parties in interest of such action and the grounds
and reasons therefor, specifying with particularity the matters
and things in issue but not including issues or requirements
phrased generally. When the Commission has so designated an
application for hearing the parties in interest, if any, who
are not notified by the Commission of such action may acquire
the status of a party to the proceeding thereon by filing a
petition for intervention showing the basis for their interest
not more than thirty days after publication of the hearing
issues or any substantial amendment thereto in the Federal
Register. Any hearing subsequently held upon such application
shall be a full hearing in which the applicant and all other
parties in interest shall be permitted to participate. The
burden of proceeding with the introduction of evidence and the
burden of proof shall be upon the applicant, except that with
respect to any issue presented by a petition to deny or a
petition to enlarge the issues, such burdens shall be as
determined by the Commission.
(f) Temporary Authorization of Operations Under Subsection
(b).--When an application subject to subsection (b) has been
filed, the Commission, notwithstanding the requirements of such
subsection, may, if the grant of such application is otherwise
authorized by law and if it finds that there are extraordinary
circumstances requiring temporary operations in the public
interest and that delay in the institution of such temporary
operations would seriously prejudice the public interest, grant
a temporary authorization, accompanied by a statement of its
reasons therefor, to permit such temporary operations for a
period not exceeding 180 days, and upon making like findings
may extend such temporary authorization for additional periods
not to exceed 180 days. When any such grant of a temporary
authorization is made, the Commission shall give expeditious
treatment to any timely filed petition to deny such application
and to any petition for rehearing of such grant filed under
section 405.
(g) Classification of Applications.--The Commission is
authorized to adopt reasonable classifications of applications
and amendments in order to effectuate the purposes of this
section.
(h) Form and Conditions of Station Licenses.--Such station
licenses as the Commission may grant shall be in such general
form as it may prescribe, but each license shall contain, in
addition to other provisions, a statement of the following
conditions to which such license shall be subject:
(1) The station license shall not vest in the
licensee any right to operate the station nor any right
in the use of the frequencies designated in the license
beyond the term thereof nor in any other manner than
authorized therein;
(2) neither the license nor the right granted
thereunder shall be assigned or otherwise transferred
in violation of this Act;
(3) every license issued under this Act shall be
subject in terms to the right of use or control
conferred by section 706 of this Act.
(i) Random Selection.--
(1) General authority.--Except as provided in
paragraph (5), if there is more than one application
for any initial license or construction permit, then
the Commission shall have the authority to grant such
license or permit to a qualified applicant through the
use of a system of random selection.
(2) No license or construction permit shall be
granted to an applicant selected pursuant to paragraph
(1) unless the Commission determines the qualifications
of such applicant pursuant to subsection (a) and
section 308(b). When substantial and material questions
of fact exist concerning such qualifications, the
Commission shall conduct a hearing in order to make
such determinations. For the purpose of making such
determina-tions, the Commission may, by rule, and
notwithstanding any other provision of law--
(A) adopt procedures for the submission of
all or part of the evidence in written form;
(B) delegate the function of presiding at the
taking of the evidence to Commission employees
other than administrative law judges; and
(C) omit the determination required by
subsection (a) with respect to any application
other than the one selected pursuant to
paragraph (1).
(3)(A) The Commission shall establish rules and
procedures to ensure that, in the administration of any
system of random selection under this subsection used
for granting licenses or construction permits for any
media of mass communications, significant preferences
will be granted to applicants or groups of applicants,
the grant to which of the license or permit would
increase the diversification of ownership of the media
of mass communications. To further diversify the
ownership of the media of mass communications, an
additional significant preference shall be granted to
any applicant controlled by a member or members of a
minority group.
(B) The Commission shall have authority to require
each qualified applicant seeking a significant
preference under subparagraph (A) to submit to the
Commission such information as may be necessary to
enable the Commission to make a determination regarding
whether such applicant shall be granted such
preference. Such information shall be submitted in such
form, at such times, and in accordance with such
procedures, as the Commission may require.
(C) For purposes of this paragraph:
(i) The term ``media of mass communications''
includes television, radio, cable television,
multipoint distribution service, direct
broadcast satellite service, and other
services, the licensed facilities of which may
be substantially devoted toward providing
programming or other information services
within the editorial control of the licensee.
(ii) The term ``minority group'' includes
Blacks, Hispanics, American Indians, Alaska
Natives, Asians, and Pacific Islanders.
(4)(A) The Commission shall, after notice and
opportunity for hearing, prescribe rules establishing a
system of random selection for use by the Commission
under this subsection in any instance in which the
Commission, in its discretion, determines that such use
is appropriate for the granting of any license or
permit in accordance with paragraph (1).
(B) The Commission shall have authority to amend such
rules from time to time to the extent necessary to
carry out the provisions of this subsection. Any such
amendment shall be made after notice and opportunity
for hearing.
(C) Not later than 180 days after the date of
enactment of this subparagraph, the Commission shall
prescribe such transfer disclosures and antitrafficking
restrictions and payment schedules as are necessary to
prevent the unjust enrichment of recipients of licenses
or permits as a result of the methods employed to issue
licenses under this subsection.
(5) Termination of authority.--
(A) Except as provided in subparagraph (B),
the Commission shall not issue any license or
permit using a system of random selection under
this subsection after July 1, 1997.
(B) Subparagraph (A) of this paragraph shall
not apply with respect to licenses or permits
for stations described in section 397(6) of
this Act.
(j) Use of Competitive Bidding.--
(1) General authority.--If, consistent with the
obligations described in paragraph (6)(E), mutually
exclusive applications are accepted for any initial
license or construction permit, then, except as
provided in paragraph (2), the Commission shall grant
the license or permit to a qualified applicant through
a system of competitive bidding that meets the
requirements of this subsection.
(2) Exemptions.--The competitive bidding authority
granted by this subsection shall not apply to licenses
or construction permits issued by the Commission--
(A) for public safety radio services,
including private internal radio services used
by State and local governments and non-
government entities and including emergency
road services provided by not-for-profit
organizations, that--
(i) are used to protect the safety of
life, health, or property; and
(ii) are not made commercially
available to the public;
(B) for initial licenses or construction
permits for digital television service given to
existing terrestrial broadcast licensees to
replace their analog television service
licenses; or
(C) for stations described in section 397(6)
of this Act.
(3) Design of systems of competitive bidding.--For
each class of licenses or permits that the Commission
grants through the use of a competitive bidding system,
the Commission shall, by regulation, establish a
competitive bidding methodology. The Commission shall
seek to design and test multiple alternative
methodologies under appropriate circumstances. The
Commission shall, directly or by contract, provide for
the design and conduct (for purposes of testing) of
competitive bidding using a contingent combinatorial
bidding system that permits prospective bidders to bid
on combinations or groups of licenses in a single bid
and to enter multiple alternative bids within a single
bidding round. In identifying classes of licenses and
permits to be issued by competitive bidding, in
specifying eligibility and other characteristics of
such licenses and permits, and in designing the
methodologies for use under this subsection, the
Commission shall include safeguards to protect the
public interest in the use of the spectrum and shall
seek to promote the purposes specified in section 1 of
this Act and the following objectives:
(A) the development and rapid deployment of
new technologies, products, and services for
the benefit of the public, including those
residing in rural areas, without administrative
or judicial delays;
(B) promoting economic opportunity and
competition and ensuring that new and
innovative technologies are readily accessible
to the American people by avoiding excessive
concentration of licenses and by disseminating
licenses among a wide variety of applicants,
including small businesses, rural telephone
companies, and businesses owned by members of
minority groups and women;
(C) recovery for the public of a portion of
the value of the public spectrum resource made
available for commercial use and avoidance of
unjust enrichment through the methods employed
to award uses of that resource;
(D) efficient and intensive use of the
electromagnetic spectrum; [and]
(E) ensure that, in the scheduling of any
competitive bidding under this subsection, an
adequate period is allowed--
(i) before issuance of bidding rules,
to permit notice and comment on
proposed auction procedures; and
(ii) after issuance of bidding rules,
to ensure that interested parties have
a sufficient time to develop business
plans, assess market conditions, and
evaluate the availability of equipment
for the relevant [services.] services;
and
(F) for any auction of eligible frequencies
described in section 113(g)(2) of the National
Telecommunications and Information
Administration Organization Act (47 U.S.C.
923(g)(2)), the recovery of 110 percent of
estimated relocation costs as provided to the
Commission pursuant to section 113(g)(4) of
such Act.
(4) Contents of regulations.--In prescribing
regulations pursuant to paragraph (3), the Commission
shall--
(A) consider alternative payment schedules
and methods of calculation, including lump sums
or guaranteed installment payments, with or
without royalty payments, or other schedules or
methods that promote the objectives described
in paragraph (3)(B), and combinations of such
schedules and methods;
(B) include performance requirements, such as
appropriate deadlines and penalties for
performance failures, to ensure prompt delivery
of service to rural areas, to prevent
stockpiling or warehousing of spectrum by
licensees or permittees, and to promote
investment in and rapid deployment of new
technologies and services;
(C) consistent with the public interest,
convenience, and necessity, the purposes of
this Act, and the characteristics of the
proposed service, prescribe area designations
and bandwidth assignments that promote (i) an
equitable distribution of licenses and services
among geographic areas, (ii) economic
opportunity for a wide variety of applicants,
including small businesses, rural telephone
companies, and businesses owned by members of
minority groups and women, and (iii) investment
in and rapid deployment of new technologies and
services;
(D) ensure that small businesses, rural
telephone companies, and businesses owned by
members of minority groups and women are given
the opportunity to participate in the provision
of spectrum-based services, and, for such
purposes, consider the use of tax certificates,
bidding preferences, and other procedures;
(E) require such transfer disclosures and
antitrafficking restrictions and payment
schedules as may be necessary to prevent unjust
enrichment as a result of the methods employed
to issue licenses and permits; and
(F) prescribe methods by which a reasonable
reserve price will be required, or a minimum
bid will be established, to obtain any license
or permit being assigned pursuant to the
competitive bidding, unless the Commission
determines that such a reserve price or minimum
bid is not in the public interest.
(5) Bidder and licensee qualification.--No person
shall be permitted to participate in a system of
competitive bidding pursuant to this subsection unless
such bidder submits such information and assurances as
the Commission may require to demonstrate that such
bidder's application is acceptable for filing. No
license shall be granted to an applicant selected
pursuant to this subsection unless the Commission
determines that the applicant is qualified pursuant to
subsection (a) and sections 308(b) and 310. Consistent
with the objectives described in paragraph (3), the
Commission shall, by regulation, prescribe expedited
procedures consistent with the procedures authorized by
subsection (i)(2) for the resolution of any substantial
and material issues of fact concerning qualifications.
(6) Rules of construction.--Nothing in this
subsection, or in the use of competitive bidding,
shall--
(A) alter spectrum allocation criteria and
procedures established by the other provisions
of this Act;
(B) limit or otherwise affect the
requirements of subsection (h) of this section,
section 301, 304, 307, 310, or 706, or any
other provision of this Act (other than
subsections (d)(2) and (e) of this section);
(C) diminish the authority of the Commission
under the other provisions of this Act to
regulate or reclaim spectrum licenses;
(D) be construed to convey any rights,
including any expectation of renewal of a
license, that differ from the rights that apply
to other licenses within the same service that
were not issued pursuant to this subsection;
(E) be construed to relieve the Commission of
the obligation in the public interest to
continue to use engineering solutions,
negotiation, threshold qualifications, service
regulations, and other means in order to avoid
mutual exclusivity in application and licensing
proceedings;
(F) be construed to prohibit the Commission
from issuing nationwide, regional, or local
licenses or permits;
(G) be construed to prevent the Commission
from awarding licenses to those persons who
make significant contributions to the
development of a new telecommunications service
or technology; or
(H) be construed to relieve any applicant for
a license or permit of the obligation to pay
charges imposed pursuant to section 8 of this
Act.
(7) Consideration of revenues in public interest
determinations.--
(A) Consideration prohibited.--In making a
decision pursuant to section 303(c) to assign a
band of frequencies to a use for which licenses
or permits will be issued pursuant to this
subsection, and in prescribing regulations
pursuant to paragraph (4)(C) of this
subsection, the Commission may not base a
finding of public interest, convenience, and
necessity on the expectation of Federal
revenues from the use of a system of
competitive bidding under this subsection.
(B) Consideration limited.--In prescribing
regulations pursuant to paragraph (4)(A) of
this subsection, the Commission may not base a
finding of public interest, convenience, and
necessity solely or predominantly on the
expectation of Federal revenues from the use of
a system of competitive bidding under this
subsection.
(C) Consideration of demand for spectrum not
affected.--Nothing in this paragraph shall be
construed to prevent the Commission from
continuing to consider consumer demand for
spectrum-based services.
(8) Treatment of revenues.--
(A) General rule.--Except as provided in
subparagraph (B) or subparagraph (D), all
proceeds from the use of a competitive bidding
system under this subsection shall be deposited
in the Treasury in accordance with chapter 33
of title 31, United States Code.
(B) Retention of revenues.--Notwithstanding
subparagraph (A), the salaries and expenses
account of the Commission shall retain as an
offsetting collection such sums as may be
necessary from such proceeds for the costs of
developing and implementing the program
required by this subsection. Such offsetting
collections shall be available for obligation
subject to the terms and conditions of the
receiving appropriations account, and shall be
deposited in such accounts on a quarterly
basis. Such offsetting collections are
authorized to remain available until expended.
No sums may be retained under this subparagraph
during any fiscal year beginning after
September 30, 1998, if the annual report of the
Commission under section 4(k) for the second
preceding fiscal year fails to include in the
itemized statement required by paragraph (3) of
such section a statement of each expenditure
made for purposes of conducting competitive
bidding under this subsection during such
second preceding fiscal year.
(C) Deposit and use of auction escrow
accounts.--Any deposits the Commission may
require for the qualification of any person to
bid in a system of competitive bidding pursuant
to this subsection shall be deposited in an
interest bearing account at a financial
institution designated for purposes of this
subsection by the Commission (after
consultation with the Secretary of the
Treasury). Within 45 days following the
conclusion of the competitive bidding--
(i) the deposits of successful
bidders shall be paid to the Treasury;
(ii) the deposits of unsuccessful
bidders shall be returned to such
bidders; and
(iii) the interest accrued to the
account shall be transferred to the
Telecommunications Development Fund
established pursuant to section 714 of
this Act.
(D) Disposition of cash proceeds.--Cash
proceeds attributable to the auction of any
eligible frequencies described in section
113(g)(2) of the National Telecommunications
and Information Administration Organization Act
(47 U.S.C. 923(g)(2)) shall be deposited in the
Spectrum Relocation Fund established under
section 118 of such Act, and shall be available
in accordance with that section.
(9) Use of former government spectrum.--The
Commission shall, not later than 5 years after the date
of enactment of this subsection, issue licenses and
permits pursuant to this subsection for the use of
bands of frequencies that--
(A) in the aggregate span not less than 10
mhz; and
(B) have been reassigned from Government use
pursuant to part B of the National
Telecommunications and Information
Administration Organization Act.
(10) Authority contingent on availability of
additional spectrum.--
(A) Initial conditions.--The Commission's
authority to issue licenses or permits under
this subsection shall not take effect unless--
(i) the Secretary of Commerce has
submitted to the Commission the report
required by section 113(d)(1) of the
National Telecommunications and
Information Administration Organization
Act;
(ii) such report recommends for
immediate reallocation bands of
frequencies that, in the aggregate,
span not less than 50 mhz;
(iii) such bands of frequencies meet
the criteria required by section 113(a)
of such Act; and
(iv) the Commission has completed the
rulemaking required by section
332(c)(1)(D) of this Act.
(B) Subsequent conditions.--The Commission's
authority to issue licenses or permits under
this subsection on and after 2 years after the
date of the enactment of this subsection shall
cease to be effective if--
(i) the Secretary of Commerce has
failed to submit the report required by
section 113(a) of the National
Telecommunications and Information
Administration Organization Act;
(ii) the President has failed to
withdraw and limit assignments of
frequencies as required by paragraphs
(1) and (2) of section 114(a) of such
Act;
(iii) the Commission has failed to
issue the regulations required by
section 115(a) of such Act;
(iv) the Commission has failed to
complete and submit to Congress, not
later than 18 months after the date of
enactment of this subsection, a study
of current and future spectrum needs of
State and local government public
safety agencies through the year 2010,
and a specific plan to ensure that
adequate frequencies are made available
to public safety licensees; or
(v) the Commission has failed under
section 332(c)(3) to grant or deny
within the time required by such
section any petition that a State has
filed within 90 days after the date of
enactment of this subsection; until
such failure has been corrected.
(11) Termination.--The authority of the Commission to
grant a license or permit under this subsection shall
expire September 30, 2007.
(12) Evaluation.--Not later than September 30, 1997,
the Commission shall conduct a public inquiry and
submit to the Congress a report--
(A) containing a statement of the revenues
obtained, and a projection of the future
revenues, from the use of competitive bidding
systems under this subsection;
(B) describing the methodologies established
by the Commission pursuant to paragraphs (3)
and (4);
(C) comparing the relative advantages and
disadvantages of such methodologies in terms of
attaining the objectives described in such
paragraphs;
(D) evaluating whether and to what extent--
(i) competitive bidding significantly
improved the efficiency and
effectiveness of the process for
granting radio spectrum licenses;
(ii) competitive bidding facilitated
the introduction of new spectrum-based
technologies and the entry of new
companies into the telecommunications
market;
(iii) competitive bidding
methodologies have secured prompt
delivery of service to rural areas and
have adequately addressed the needs of
rural spectrum users; and
(iv) small businesses, rural
telephone companies, and businesses
owned by members of minority groups and
women were able to participate
successfully in the competitive bidding
process; and
(E) recommending any statutory changes that
are needed to improve the competitive bidding
process.
(13) Recovery of value of public spectrum in
connection with pioneer preferences.--
(A) In general.--Notwithstanding paragraph
(6)(G), the Commission shall not award licenses
pursuant to a preferential treatment accorded
by the Commission to persons who make
significant contributions to the development of
a new telecommunications service or technology,
except in accordance with the requirements of
this paragraph.
(B) Recovery of value.--The Commission shall
recover for the public a portion of the value
of the public spectrum resource made available
to such person by requiring such person, as a
condition for receipt of the license, to agree
to pay a sum determined by--
(i) identifying the winning bids for
the licenses that the Commission
determines are most reasonably
comparable in terms of bandwidth, scope
of service area, usage restrictions,
and other technical characteristics to
the license awarded to such person, and
excluding licenses that the Commission
determines are subject to bidding
anomalies due to the award of
preferential treatment;
(ii) dividing each such winning bid
by the population of its service area
(hereinafter referred to as the per
capita bid amount);
(iii) computing the average of the
per capita bid amounts for the licenses
identified under clause (i);
(iv) reducing such average amount by
15 percent; and
(v) multiplying the amount determined
under clause (iv) by the population of
the service area of the license
obtained by such person.
(C) Installments permitted.--The Commission
shall require such person to pay the sum
required by subparagraph (B) in a lump sum or
in guaranteed installment payments, with or
without royalty payments, over a period of not
more than 5 years.
(D) Rulemaking on pioneer preferences.--
Except with respect to pending applications
described in clause (iv) of this subparagraph,
the Commission shall prescribe regulations
specifying the procedures and criteria by which
the Commission will evaluate applications for
preferential treatment in its licensing
processes (by precluding the filing of mutually
exclusive applications) for persons who make
significant contributions to the development of
a new service or to the development of new
technologies that substantially enhance an
existing service. Such regulations shall--
(i) specify the procedures and
criteria by which the significance of
such contributions will be determined,
after an opportunity for review and
verification by experts in the radio
sciences drawn from among persons who
are not employees of the Commission or
by any applicant for such preferential
treatment;
(ii) include such other procedures as
may be necessary to prevent unjust
enrichment by ensuring that the value
of any such contribution justifies any
reduction in the amounts paid for
comparable licenses under this
subsection;
(iii) be prescribed not later than 6
months after the date of enactment of
this paragraph;
(iv) not apply to applications that
have been accepted for filing on or
before September 1, 1994; and
(v) cease to be effective on the date
of the expiration of the Commission's
authority under subparagraph (F).
(E) Implementation with respect to pending
applications.--In applying this paragraph to
any broadband licenses in the personal
communications service awardedpursuant to the
preferential treatment accorded by the Federal
Communications Commission in the Third Report and
Order in General Docket 90-314 (FCC 93-550,
released February 3, 1994)--
(i) the Commission shall not
reconsider the award of preferences in
such Third Report and Order, and the
Commission shall not delay the grant of
licenses based on such awards more than
15 days following the date of enactment
of this paragraph, and the award of
such preferences and licenses shall not
be subject to administrative or
judicial review;
(ii) the Commission shall not alter
the bandwidth or service areas
designated for such licenses in such
Third Report and Order;
(iii) except as provided in clause
(v), the Commission shall use, as the
most reasonably comparable licenses for
purposes of subparagraph (B)(i), the
broadband licenses in the personal
communications service for blocks A and
B for the 20 largest markets (ranked by
population) in which no applicant has
obtained preferential treatment;
(iv) for purposes of subparagraph
(C), the Commission shall permit
guaranteed installment payments over a
period of 5 years, subject to--
(I) the payment only of
interest on unpaid balances
during the first 2 years,
commencing not later than 30
days after the award of the
license (including any
preferential treatment used in
making such award) is final and
no longer subject to
administrative or judicial
review, except that no such
payment shall be required prior
to the date of completion of
the auction of the comparable
licenses described in clause
(iii); and
(II) payment of the unpaid
balance and interest thereon
after the end of such 2 years
in accordance with the
regulations prescribed by the
Commission; and
(v) the Commission shall recover with
respect to broadband licenses in the
personal communications service an
amount under this paragraph that is
equal to not less than $ 400,000,000,
and if such amount is less than $
400,000,000, the Commission shall
recover an amount equal to $
400,000,000 by allocating such amount
among the holders of such licenses
based on the population of the license
areas held by each licensee. The
Commission shall not include in any
amounts required to be collected under
clause (v) the interest on unpaid
balances required to be collected under
clause (iv).
(F) Expiration.--The authority of the
Commission to provide preferential treatment in
licensing procedures (by precluding the filing
of mutually exclusive applications) to persons
who make significant contributions to the
development of a new service or to the
development of new technologies that
substantially enhance an existing service shall
expire on the date of enactment of the Balanced
Budget Act of 1997.
(G) Effective date.--This paragraph shall be
effective on the date of its enactment and
apply to any licenses issued on or after August
1, 1994, by the Federal Communications
Commission pursuant to any licensing procedure
that provides preferential treatment (by
precluding the filing of mutually exclusive
applications) to persons who make significant
contributions to the development of a new
service or to the development of new
technologies that substantially enhance an
existing service.
(14) Auction of recaptured broadcast television
spectrum.--
(A) Limitations on terms of terrestrial
television broadcast licenses.--A television
broadcast license that authorizes analog
television service may not be renewed to
authorize such service for a period that
extends beyond December 31, 2006.
(B) Extension.--The Commission shall extend
the date described in subparagraph (A) for any
station that requests such extension in any
television market if the Commission finds
that--
(i) one or more of the stations in
such market that are licensed to or
affiliated with one of the four largest
national television networks are not
broadcasting a digital television
service signal, and the Commission
finds that each such station has
exercised due diligence and satisfies
the conditions for an extension of the
Commission's applicable construction
deadlines for digital television
service in that market;
(ii) digital-to-analog converter
technology is not generally available
in such market; or
(iii) in any market in which an
extension is not available under clause
(i) or (ii), 15 percent or more of the
television households in such market--
(I) do not subscribe to a
multichannel video programming
distributor (as defined in
section 602) that carries one
of the digital television
service programming channels of
each of the television stations
broadcasting such a channel in
such market; and
(II) do not have either--
(a) at least one
television receiver
capable of receiving
the digital television
service signals of the
television stations
licensed in such
market; or
(b) at least one
television receiver of
analog television
service signals
equipped with digital-
to-analog converter
technology capable of
receiving the digital
television service
signals of the
television stations
licensed in such
market.
(C) Spectrum reversion and resale.--
(i) The Commission shall--
(I) ensure that, as licenses
for analog television service
expire pursuant to subparagraph
(A) or (B), each licensee shall
cease using electromagnetic
spectrum assigned to such
service according to the
Commission's direction; and
(II) reclaim and organize the
electromagnetic spectrum in a
manner consistent with the
objectives described in
paragraph (3) of this
subsection.
(ii) Licensees for new services
occupying spectrum reclaimed pursuant
to clause (i) shall be assigned in
accordance with this subsection.
(D) Certain limitations on qualified bidders
prohibited.--In prescribing any regulations
relating to the qualification of bidders for
spectrum reclaimed pursuant to subparagraph
(C)(i), the Commission, for any license that
may be used for any digital television service
where the grade A contour of the station is
projected to encompass the entirety of a city
with a population in excess of 400,000 (as
determined using the 1990 decennial census),
shall not--
(i) preclude any party from being a
qualified bidder for such spectrum on
the basis of--
(I) the Commission's duopoly
rule (47 C.F.R. 73.3555(b)); or
(II) the Commission's
newspaper cross-ownership rule
(47 C.F.R. 73.3555(d)); or
(ii) apply either such rule to
preclude such a party that is a winning
bidder in a competitive bidding for
such spectrum from using such spectrum
for digital television service.
(15) Commission to determine timing of auctions.--
(A) Commission authority.--Subject to the
provisions of this subsection (including
paragraph (11)), but notwithstanding any other
provision of law, the Commission shall
determine the timing of and deadlines for the
conduct of competitive bidding under this
subsection, including the timing of and
deadlines for qualifying for bidding;
conducting auctions; collecting, depositing,
and reporting revenues; and completing
licensing processes and assigning licenses.
(B) Termination of portions of auctions 31
and 44.--Except as provided in subparagraph
(C), the Commission shall not commence or
conduct auctions 31 and 44 on June 19, 2002, as
specified in the public notices of March 19,
2002, and March 20, 2002 (DA 02-659 and DA 02-
563).
(C) Exception.--
(i) Blocks excepted.--Subparagraph
(B) shall not apply to the auction of--
(I) the C-block of licenses
on the bands of frequencies
located at 710-716 mhz, and
740-746 mhz; or
(II) the D-block of licenses
on the bands of frequencies
located at 716-722 mhz.
(ii) Eligible bidders.--The entities
that shall be eligible to bid in the
auction of the C-block and D-block
licenses described in clause (i) shall
be those entities that were qualified
entities, and that submitted
applications to participate in auction
44, by May 8, 2002, as part of the
original auction 44 short form filing
deadline.
(iii) Auction deadlines for excepted
blocks.--Notwithstanding subparagraph
(B), the auction of the C-block and D-
block licenses described in clause (i)
shall be commenced no earlier than
August 19, 2002, and no later than
September 19, 2002, and the proceeds of
such auction shall be deposited in
accordance with paragraph (8) not later
than December 31, 2002.
(iv) Report.--Within one year after
the date of enactment of this
paragraph, the Commission shall submit
a report to Congress--
(I) specifying when the
Commission intends to
reschedule auctions 31 and 44
(other than the blocks excepted
by clause (i)); and
(II) describing the progress
made by the Commission in the
digital television transition
and in the assignment and
allocation of additional
spectrum for advanced mobile
communications services that
warrants the scheduling of such
auctions.
(D) Return of payments.--Within one month
after the date of enactment of this paragraph,
the Commission shall return to the bidders for
licenses in the A-block, B-block, and E-block
of auction 44 the full amount of all upfront
payments made by such bidders for such
licenses.
(15) Special auction provisions for eligible
frequencies.--
(A) Special regulations.--The Commission
shall revise the regulations prescribed under
paragraph (4)(F) of this subsection to
prescribe methods by which the total cash
proceeds from any auction of eligible
frequencies described in section 113(g)(2) of
the National Telecommunications and Information
Administration Organization Act (47 U.S.C.
923(g)(2)) shall at least equal 110 percent of
the total estimated relocation costs provided
to the Commission pursuant to section 113(g)(4)
of such Act.
(B) Conclusion of auctions contingent on
minimum proceeds.--The Commission shall not
conclude any auction of eligible frequencies
described in section 113(g)(2) of such Act if
the total cash proceeds attributable to such
spectrum are less than 110 percent of the total
estimated relocation costs provided to the
Commission pursuant to section 113(g)(4) of
such Act. If the Commission is unable to
conclude an auction for the foregoing reason,
the Commission shall cancel the auction, return
within 45 days after the auction cancellation
date any deposits from participating bidders
held in escrow, and absolve such bidders from
any obligation to the United States to bid in
any subsequent reauction of such spectrum.
(C) Authority to issue prior to
deauthorization.--In any auction conducted
under the regulations required by subparagraph
(A), the Commission may grant a license as-
signed for the use of eligible frequencies prior
to the termination of an eligible Federal entity's
authorization. However, the Commission shall
condition such license by requiring that the
licensee cannot cause harmful interference to such
Federal entity until such entity's authorization
has been terminated by the National Telecommunications
and Information Administration.
(k) Broadcast Station Renewal Procedures.--
(1) Standards for renewal.--If the licensee of a
broadcast station submits an application to the
Commission for renewal of such license, the Commission
shall grant the application if it finds, with respect
to that station, during the preceding term of its
license--
(A) the station has served the public
interest, convenience, and necessity;
(B) there have been no serious violations by
the licensee of this Act or the rules and
regulations of the Commission; and
(C) there have been no other violations by
the licensee of this Act or the rules and
regulations of the Commission which, taken
together, would constitute a pattern of abuse.
(2) Consequence of failure to meet standard.--If any
licensee of a broadcast station fails to meet the
requirements of this subsection, the Commission may
deny the application for renewal in accordance with
paragraph (3), or grant such application on terms and
conditions as are appropriate, including renewal for a
term less than the maximum otherwise permitted.
(3) Standards for denial.--If the Commission
determines, after notice and opportunity for a hearing
as provided in subsection (e), that a licensee has
failed to meet the requirements specified in paragraph
(1) and that no mitigating factors justify the
imposition of lesser sanctions, the Commission shall--
(A) issue an order denying the renewal
application filed by such licensee under
section 308; and
(B) only thereafter accept and consider such
applications for a construction permit as may
be filed under section 308 specifying the
channel or broadcasting facilities of the
former licensee.
(4) Competitor consideration prohibited.--In making
the determinations specified in paragraph (1) or (2),
the Commission shall not consider whether the public
interest, convenience, and necessity might be served by
the grant of a license to a person other than the
renewal applicant.
(l) Applicability of Competitive Bidding to Pending
Comparative Licensing Cases.--With respect to competing
applications for initial licenses or construction permits for
commercial radio or television stations that were filed with
the Commission before July 1, 1997, the Commission shall--
(1) have the authority to conduct a competitive
bidding proceeding pursuant to subsection (j) to assign
such license or permit;
(2) treat the persons filing such applications as the
only persons eligible to be qualified bidders for
purposes of such proceeding; and
(3) waive any provisions of its regulations necessary
to permit such persons to enter an agreement to procure
the removal of a conflict between their applications
during the 180-day period beginning on the date of
enactment of the Balanced Budget Act of 1997.
* * * * * * *
SEC. 714. TELECOMMUNICATIONS DEVELOPMENT FUND.
[47 U.S.C. 614]
(a) Purpose of Section.--It is the purpose of this section--
(1) to promote access to capital for small businesses
in order to enhance competition in the
telecommunications industry;
(2) to stimulate new technology development, and
promote employment and training; and
(3) to support universal service and promote delivery
of telecommunications services to underserved rural and
urban areas.
(b) Establishment of Fund.--There is hereby established a
body corporate to be known as the Telecommunications
Development Fund, which shall have succession until dissolved.
The Fund shall maintain its principal office in the District of
Columbia and shall be deemed, for purposes of venue and
jurisdiction in civil actions, to be a resident and citizen
thereof.
(c) Board of Directors.--
(1) Composition of board; chairman.--The Fund shall
have a Board of Directors which shall consist of 7
persons appointed by the Chairman of the Commission.
Four of such directors shall be representative of the
private sector and three of such directors shall be
representative of the Commission, the Small Business
Administration, and the Department of the Treasury,
respectively. The Chairman of the Commission shall
appoint one of the representatives of the private
sector to serve as chairman of the Fund within 30 days
after the date of enactment of this section, in order
to facilitate rapid creation and implementation of the
Fund. The directors shall include members with
experience in a number of the following areas: finance,
investment banking, government banking, communications
law and administrative practice, and public policy.
(2) Terms of appointed and elected members.--The
directors shall be eligible to serve for terms of 5
years, except of the initial members, as designated at
the time of their appointment--
(A) 1 shall be eligible to service for a term
of 1 year;
(B) 1 shall be eligible to service for a term
of 2 years;
(C) 1 shall be eligible to service for a term
of 3 years;
(D) 2 shall be eligible to service for a term
of 4 years; and
(E) 2 shall be eligible to service for a term
of 5 years (1 of whom shall be the Chairman).
Directors may continue to serve until their
successors have been appointed and have
qualified.
(3) Meetings and functions of the Board.--The Board
of Directors shall meet at the call of its Chairman,
but at least quarterly. The Board shall determine the
general policies which shall govern the operations of
the Fund. The Chairman of the Board shall, with the
approval of the Board, select, appoint, and compensate
qualified persons to fill the offices as may be
provided for in the bylaws, with such functions,
powers, and duties as may be prescribed by the bylaws
or by the Board of Directors, and such persons shall be
the officers of the Fund and shall discharge all such
functions, powers, and duties.
(d) Accounts of Fund.--The Fund shall maintain its accounts
at a financial institution designated for purposes of this
section by the Chairman of the Board (after consultation with
the Commission and the Secretary of the Treasury). The accounts
of the Fund shall consist of--
(1) interest transferred pursuant to section
309(j)(8)(C) of this Act;
(2) such sums as may be appropriated to the
Commission for advances to the Fund;
(3) any contributions or donations to the Fund that
are accepted by the Fund; and
(4) any repayment of, or other payment made with
respect to, loans, equity, or other extensions of
credit made from the Fund.
(e) Use of Fund.--All moneys deposited into the accounts of
the Fund shall be used solely for--
(1) the making of loans, investments, or other
extensions of credits to eligible small businesses in
accordance with subsection (f);
(2) the provision of financial advice to eligible
small businesses;
(3) expenses for the administration and management of
the Fund (including salaries, expenses, and the rental
or purchase of office space for the fund);
(4) preparation of research, studies, or financial
analyses; and
(5) other services consistent with the purposes of
this section.
[(f) Lending and Credit Operations.--Loans or other
extensions of credit from the Fund shall be made available in
accordance with the requirements of the Federal Credit Reform
Act of 1990 (2 U.S.C. 661 et seq.) and any other applicable law
to an eligible small business on the basis of--
[(1) the analysis of the business plan of the
eligible small business;
[(2) the reasonable availability of collateral to
secure the loan or credit extension;
[(3) the extent to which the loan or credit extension
promotes the purposes of this section; and
[(4) other lending policies as defined by the Board.]
(f) Lending and Credit Operations.--Loans or other extensions
of credit from the Fund shall be made available to an eligible
small business on the basis of--
(1) the analysis of the business plan of the eligible
small business;
(2) the reasonable availability of collateral to
secure the loan or credit extension;
(3) the extent to which the loan or credit extension
promotes the purposes of this section; and
(4) other lending policies as defined by the Board.
(g) Return of Advances.--Any advances appropriated pursuant
to subsection (d)(2) shall be disbursed upon such terms and
conditions (including conditions relating to the time or times
of repayment) as are specified in any appropriations Act
providing such advances.
(h) General Corporate Powers.--The Fund shall have power--
(1) to sue and be sued, complain and defend, in its
corporate name and through its own counsel;
(2) to adopt, alter, and use the corporate seal,
which shall be judicially noticed;
(3) to adopt, amend, and repeal by its Board of
Directors, bylaws, rules, and regulations as may be
necessary for the conduct of its business;
(4) to conduct its business, carry on its operations,
and have officers and exercise the power granted by
this section in any State without regard to any
qualification or similar statute in any State;
(5) to lease, purchase, or otherwise acquire, own,
hold, improve, use, or otherwise deal in and with any
property, real, personal, or mixed, or any interest
therein, wherever situated, for the purposes of the
Fund;
(6) to accept gifts or donations of services, or of
property, real, personal, or mixed, tangible or
intangible, in aid of any of the purposes of the Fund;
(7) to sell, convey, mortgage, pledge, lease,
exchange, and otherwise dispose of its property and
assets;
(8) to appoint such officers, attorneys, employees,
and agents as may be required, to determine their
qualifications, to define their duties, to fix their
salaries, require bonds for them, and fix the penalty
thereof; and
(9) to enter into contracts, to execute instruments,
to incur liabilities, to make loans and equity
investment, and to do all things as are necessary or
incidental to the proper management of its affairs and
the proper conduct of its business.
(i) Accounting, Auditing, and Reporting.--The accounts of the
Fund shall be audited annually. Such audits shall be conducted
in accordance with generally accepted auditing standards by
independent certified public accountants. A report of each such
audit shall be furnished to the Secretary of the Treasury and
the Commission. The representatives of the Secretary and the
Commission shall have access to all books, accounts, financial
records, reports, files, and all other papers, things, or
property belonging to or in use by the Fund and necessary to
facilitate the audit.
(j) Report on Audits by Treasury.--A report of each such
audit for a fiscal year shall be made by the Secretary of the
Treasury to the President and to the Congress not later than 6
months following the close of such fiscal year. The report
shall set forth the scope of the audit and shall include a
statement of assets and liabilities, capital and surplus or
deficit; a statement of surplus or deficit analysis; a
statement of income and expense; a statement ofsources and
application of funds; and such comments and information as may be
deemed necessary to keep the President and the Congress informed of the
operations and financial condition of the Fund, together with such
recommendations with respect thereto as the Secretary may deem
advisable.
(k) Definitions.--As used in this section:
(1) Eligible small business.--The term ``eligible
small business'' means business enterprises engaged in
the telecommunications industry that have $50,000,000
or less in annual revenues, on average over the past 3
years prior to submitting the application under this
section.
(2) Fund.--The term ``Fund'' means the
Telecommunications Development Fund established
pursuant to this section.
(3) Telecommunications industry.--The term
``telecommunications industry'' means communications
businesses using regulated or unregulated facilities or
services and includes broadcasting, telecommunications,
cable, computer, data transmission, software,
programming, advanced messaging, and electronics
businesses.
ORBIT ACT
SEC. 647. SATELLITE AUCTIONS.
[47 U.S.C. 765F]
Notwithstanding any other provision of law, the Commission
shall not have the authority to assign by competitive bidding
orbital locations or spectrum used for the provision of
international or [global satellite communications services.]
global satellite communications services or for the provision
of fixed terrestrial services in the 12.2-12.7 GHz band. The
President shall oppose in the International Telecommunication
Union and in other bilateral and multilateral fora any
assignment by competitive bidding of orbital locations or
spectrum used for the provision of such services. No license
for fixed terrestrial services in the 12.2-12.7 GHz band may be
used for the provision of mobile terrestrial telephony
services.
NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION ORGANIZATION
ACT
SEC. 113. IDENTIFICATION OF REALLOCABLE FREQUENCIES.
[47 U.S.C. 923]
(a) Identification Required.--The Secretary shall, within 18
months after the date of the enactment of the Omnibus Budget
Reconciliation Act of 1993 and within 6 months after the date
of enactment of the Balanced Budget Act of 1997, prepare and
submit to the President and the Congress a report identifying
and recommending for reallocation bands of frequencies--
(1) that are allocated on a primary basis for Federal
Government use;
(2) that are not required for the present or
identifiable future needs of the Federal Government;
(3) that can feasibly be made available, as of the
date of submission of the report or at any time during
the next 15 years, for use under the 1934 Act (other
than for Federal Government stations under section 305
of the 1934 Act);
(4) the transfer of which (from Federal Government
use) will not result in costs to the Federal
Government, or losses of services or benefits to the
public, that are excessive in relation to the benefits
to the public that may be provided by non-Federal
licensees; and
(5) that are most likely to have the greatest
potential for productive uses and public benefits under
the 1934 Act if allocated for non-Federal use.
(b) Minimum Amount of Spectrum Recommended.--
(1) Initial reallocation report.--In accordance with
the provisions of this section, the Secretary shall
recommend for reallocation in the initial report
required by subsection (a), for use other than by
Federal Government stations under section 305 of the
1934 Act (47 U.S.C. 305), bands of frequencies that in
the aggregate span not less than 200 mhz, that are
located below 5 gigahertz, and that meet the criteria
specified in paragraphs (1) through (5) of subsection
(a). Such bands of frequencies shall include bands of
frequencies, located below 3 gigahertz, that span in
the aggregate not less than 100 mhz.
(2) Mixed uses permitted to be counted.--Bands of
frequencies which a report of the Secretary under
subsection (a) or (d)(1) recommends be partially
retained for use by Federal Government stations, but
which are also recommended to be reallocated to be made
available under the 1934 Act for use by non-Federal
stations, may be counted toward the minimum spectrum
required by paragraph (1) or (3) of this subsection,
except that--
(A) the bands of frequencies counted under
this paragraph may not count toward more than
one-half of the minimums required by paragraph
(1) or (3) of this subsection;
(B) a band of frequencies may not be counted
under this paragraph unless the assignments of
the band to Federal Government stations under
section 305 of the 1934 Act (47 U.S.C. 305) are
limited by geographic area, by time, or by
other means so as to guarantee that the
potential use to be made by such Federal
Government stations is substantially less (as
measured by geographic area, time, or
otherwise) than the potential use to be made by
non-Federal stations; and
(C) the operational sharing permitted under
this paragraph shall be subject to the
interference regulations prescribed by the
Commission pursuant to section 305(a) of the
1934 Act and to coordination procedures that
the Commission and the Secretary shall jointly
establish and implement to ensure against
harmful interference.
(3) Second reallocation report.--In accordance with
the provisions of this section, the Secretary shall
recommend for reallocation in the second report
required by subsection (a), for use other than by
Federal Government stations under section 305 of the
1934 Act (47 U.S.C. 305), a band or bands of
frequencies that--
(A) in the aggregate span not less than 12
mhz;
(B) are located below 3 gigahertz; and
(C) meet the criteria specified in paragraphs
(1) through (5) of subsection (a).
(c) Criteria for Identification.--
(1) Needs of the federal government.--In determining
whether a band of frequencies meets the criteria
specified in subsection (a)(2), the Secretary shall--
(A) consider whether the band of frequencies
is used to provide a communications service
that is or could be available from a commercial
provider or other vendor;
(B) seek to promote--
(i) the maximum practicable reliance
on commercially available substitutes;
(ii) the sharing of frequencies (as
permitted under subsection (b)(2));
(iii) the development and use of new
communications technologies; and
(iv) the use of nonradiating
communications systems where
practicable; and
(C) seek to avoid--
(i) serious degradation of Federal
Government services and operations;
(ii) excessive costs to the Federal
Government and users of Federal
Government services; and
(iii) excessive disruption of
existing use of Federal Government
frequencies by amateur radio licensees.
(2) Feasibility of use.--In determining whether a
frequency band meets the criteria specified in
subsection (a)(3), the Secretary shall--
(A) assume that the frequency will be
assigned by the Commission under section 303 of
the 1934 Act (47 U.S.C. 303) within 15 years;
(B) assume reasonable rates of scientific
progress and growth of demand for
telecommunications services;
(C) seek to include frequencies which can be
used to stimulate the development of new
technologies; and
(D) consider the immediate and recurring
costs to reestablish services displaced by the
reallocation of spectrum.
(3) Analysis of benefits.--In determining whether a
band of frequencies meets the criteria specified in
subsection (a)(5), the Secretary shall consider--
(A) the extent to which equipment is or will
be available that is capable of utilizing the
band;
(B) the proximity of frequencies that are
already assigned for commercial or other non-
Federal use;
(C) the extent to which, in general,
commercial users could share the frequency with
amateur radio licensees; and
(D) the activities of foreign governments in
making frequencies available for
experimentation or commercial assignments in
order to support their domestic manufacturers
of equipment.
(4) Power agency frequencies.--
(A) Applicability of criteria.--The criteria
specified by subsection (a) shall be deemed not
to be met for any purpose under this part with
regard to any frequency assignment to, or any
frequency assignment used by, a Federal power
agency for the purpose of withdrawing that
assignment.
(B) Mixed use eligibility.--The frequencies
assigned to any Federal power agency may only
be eligible for mixed use under subsection
(b)(2) in geographically separate areas, but in
those cases where a frequency is to be shared
by an affected Federal power agency and a non-
Federal user, such use by the non-Federal user
shall not cause harmful interference to the
affected Federal power agency or adversely
affect the reliability of its power system.
(C) Definition.--As used in this paragraph,
the term ``Federal power agency'' means the
Tennessee Valley Authority, the Bonneville
Power Administration, the Western Area Power
Administration, the Southwestern Power
Administration, the Southeastern Power
Administration, or the Alaska Power
Administration.
(5) Limitation on reallocation.--None of the
frequencies recommended for reallocation in the reports
required by this subsection shall have been
recommended, prior to the date of enactment of the
Omnibus Budget Reconciliation Act of 1993, for
reallocation to non-Federal use by international
agreement.
(d) Procedure for Identification of Reallocable Bands of
Frequencies.--
(1) Submission of preliminary identification to
Congress.--Within 6 months after the date of the
enactment of the Omnibus Budget Reconciliation Act of
1993, the Secretary shall prepare, make publicly
available, and submit to the President, the Congress,
and the Commission a report which makes a preliminary
identification of reallocable bands of frequencies
which meet the criteria established by this section.
(2) Public comment.--The Secretary shall provide
interested persons with the opportunity to submit,
within 90 days after the date of its publication,
written comment on the preliminary report required by
paragraph (1). The Secretary shall immediately transmit
a copy of any such comment to the Commission.
(3) Comment and recommendations from commission.--The
Commission shall, within 90 days after the conclusion
of the period for comment provided pursuant to
paragraph (2), submit to the Secretary the Commission's
analysis of such comments and the Commission's
recommendations for responses to such comments,
together with such other comments and recommendations
as the Commission deems appropriate.
(4) Direct discussions.--The Secretary shall
encourage and provide opportunity for direct
discussions among commercial representatives and
Federal Government users of the spectrum to aid the
Secretary in determining which frequencies to recommend
for reallocation. The Secretary shall provide notice to
the public and the Commission of any such discussions,
including the name or names of any businesses or other
persons rep-resented in such discussions. A
representative of the Commission (and of the Secretary at
the election of the Secretary) shall be permitted to attend
any such discussions. The Secretary shall provide the public
and the Commission with an opportunity to comment on the
results of any such discussions prior to the submission of
the initial report required by subsection (a).
(e) Timetable for Reallocation and Limitation.--
(1) Timetable required.--The Secretary shall, as part
of the reports required by subsections (a) and (d)(1),
include a timetable that recommends effective dates by
which the President shall withdraw or limit assignments
of the frequencies specified in such reports.
(2) Expedited reallocation.--
(A) Required reallocation.--The Secretary
shall, as part of the report required by
subsection (d)(1), specifically identify and
recommend for immediate reallocation bands of
frequencies that in the aggregate span not less
than 50 mhz, that meet the criteria described
in subsection (a), and that can be made
available for reallocation immediately upon
issuance of the report required by subsection
(d)(1). Such bands of frequencies shall include
bands of frequencies, located below 3
gigahertz, that in the aggregate span not less
than 25 mhz .
(B) Permitted reallocation.--The Secretary
may, as part of such report, identify and
recommend bands of frequencies for immediate
reallocation for a mixed use pursuant to
subsection (b)(2), but such bands of
frequencies may not count toward the minimums
required by subparagraph (A).
(3) Delayed effective dates.--In setting the
recommended delayed effective dates, the Secretary
shall--
(A) consider the need to reallocate bands of
frequencies as early as possible, taking into
account the requirements of paragraphs (1) and
(2) of section 115(b);
(B) be based on the useful remaining life of
equipment that has been purchased or contracted
for to operate on identified frequencies;
(C) consider the need to coordinate frequency
use with other nations; and
(D) take into account the relationship
between the costs to the Federal Government of
changing to different frequencies and the
benefits that may be obtained from commercial
and other non-Federal uses of the reassigned
frequencies.
(f) Additional Reallocation Report.--If the Secretary
receives a notice from the Commission pursuant to section
3002(c)(5) of the Balanced Budget Act of 1997, the Secretary
shall prepare and submit to the President, the Commission, and
the Congress a report recommending for reallocation for use
other than by Federal Government stations under section 305 of
the 1934 Act (47 U.S.C. 305), bands of frequencies that are
suitable for the licensees identified in the Commission's
notice. The Commission shall, not later than one year after
receipt of such report, prepare, submit to the President and
the Congress, and implement, a plan for the immediate
allocation and assignment of such frequencies under the 1934
Act to incumbent licensees described in the Commission's
notice.
(g) Relocation of Federal Government Stations.--
[(1) In general.--
[(A) Authority of federal entities to accept
compensation.--In order to expedite the
commercial use of the electromagnetic spectrum
and notwithstanding section 3302(b) of title
31, United States Code, any Federal entity
which operates a Federal Government station may
accept from any person payment of the expenses
of relocating the Federal entity's operations
from one or more frequencies to another
frequency or frequencies, including the costs
of any modification, replacement, or reissuance
of equipment, facilities, operating manuals, or
regulations incurred by that entity. Any such
Federal entity which proposes to so relocate
shall notify the NTIA, which in turn shall
notify the Commission, before the auction
concerned of the marginal costs anticipated to
be associated with such relocation or with
modifications necessary to accommodate
prospective licensees. The Commission in turn
shall notify potential bidders of the estimated
relocation or modification costs based on the
geographic area covered by the proposed
licenses before the auction.
[(B) Requirement to compensate federal
entities.--Any person on whose behalf a Federal
entity incurs costs under subparagraph (A)
shall compensate the Federal entity in advance
for such costs. Such compensation may take the
form of a cash payment or in-kind compensation.
[(C) Disposition of payments.--
[(i) Payment by electronic funds
transfer.--A person making a cash
payment under this paragraph shall make
the cash payment by depositing the
amount of the payment by electronic
funds transfer in the account of the
Federal entity concerned in the
Treasury of the United States or in
another account as authorized by law.
[(ii) Availability.--Subject to the
provisions of authorization Acts and
appropriations Acts, amounts deposited
under this subparagraph shall be
available to the Federal entity
concerned to pay directly the costs of
relocation under this paragraph, to
repay or make advances to
appropriations or funds which do or
will initially bear all or part of such
costs, or to refund excess sums when
necessary.
[(D) Application to certain other
relocations.--The provisions of this paragraph
also apply to any Federal entity that operates
a Federal Government station assigned to used
electromagnetic spectrum identified for
reallocation under subsection (a) if before
August 5, 1997, the Commission has not
identified that spectrum for service or
assigned licenses or otherwise authorized
service for that spectrum.
[(E) Implementation procedures.--The NTIA and
the Commission shall develop procedures for the
implementation of this paragraph, which
procedures shall include a process for
resolving any differences that arise between
the Federal Government and commercial licensees
regarding estimates of relocation or
modification costs under this paragraph.
[(F) Inapplicability to certain
relocations.--With the exception of the band of
frequencies located at 1710-1755 mhz, the
provisions of this paragraph shall not apply to
Federal spectrum identified for reallocation in
the first reallocation report submitted to the
President and Congress under subsection (a).
[(2) Process for relocation.--Any person seeking to
relocate a Federal Government station that has been
assigned a frequency within a band that has been
allocated for mixed Federal and non-Federal use, or
that has been scheduled for reallocation to non-Federal
use, may submit a petition for such relocation to NTIA.
The NTIA shall limit or terminate the Federal
Government station's operating license within 6 months
after receiving the petition if the following
requirements are met:
[(A) the person seeking relocation of the
Federal Government station has guaranteed to
pay all relocation costs incurred by the
Federal entity, including all engineering,
equipment, site acquisition and construction,
and regulatory fee costs;
[(B) all activities necessary for
implementing the relocation have been
completed, including construction of
replacement facilities (if necessary and
appropriate) and identifying and obtaining new
frequencies for use by the relocated Federal
Government station (where such station is not
relocating to spectrum reserved exclusively for
Federal use);
[(C) any necessary replacement facilities,
equipment modifications, or other changes have
been implemented and tested to ensure that the
Federal Government station is able to
successfully accomplish its purposes; and
[(D) NTIA has determined that the proposed
use of the spectrum frequency band to which the
Federal entity will relocate its operations
is--
[(i) consistent with obligations
undertaken by the United States in
international agreements and with
United States national security and
public safety interests; and
[(ii) suitable for the technical
characteristics of the band and
consistent with other uses of the band.
In exercising its authority under
clause (i) of this subparagraph, NTIA
shall consult with the Secretary of
Defense, the Secretary of State, or
other appropriate officers of the
Federal Government.
[(3) Right to reclaim.--If within one year after the
relocation the Federal entity demonstrates to the
Commission that the new facilities or spectrum are not
comparable to the facilities or spectrum from which the
Federal Government station was relocated, the person
who filed the petition under paragraph (2) for such
relocation shall take reasonable steps to remedy any
defects or pay the Federal entity for the expenses
incurred in returning the Federal Government station to
the spectrum from which such station was relocated.]
(1) Eligible federal entities.--Any Federal entity
that operates a Federal Government station assigned to
a band of frequencies specified in paragraph (2) and
that incurs relocation costs because of the
reallocation of frequencies from Federal use to non-
Federal use shall receive payment for such costs from
the Spectrum Relocation Fund, in accordance with
section 118 of this Act. For purposes of this
paragraph, Federal power agencies exempted under
subsection (c)(4) that choose to relocate from the
frequencies identified for reallocation pursuant to
subsection (a), are eligible to receive payment under
this paragraph.
(2) Eligible frequencies.--The bands of eligible
frequencies for purposes of this section are as
follows:
(A) the 216-220 mhz band, the 1432-1435 mhz
band, the 1710-1755 mhz band, and the 2385-2390
mhz band of frequencies; and
(B) any other band of frequencies reallocated
from Federal use to non-Federal use after
January 1, 2003, that is assigned by
competitive bidding pursuant to section 309(j)
of the Communications Act of 1934 (47 U.S.C.
309(j)), except for bands of frequencies
previously identified by the National
Telecommunications and Information
Administration in the Spectrum Reallocation
Final Report, NTIA Special Publication 95-32
(1995).
(3) Definition of relocation costs.--For purposes of
this subsection, the term ``relocation costs'' means
the costs incurred by a Federal entity to achieve
comparable capability of systems, regardless of whether
that capability is achieved by relocating to a new
frequency assignment or by utilizing an alternative
technology. Such costs include--
(A) the costs of any modification or
replacement of equipment, software, facilities,
operating manuals, training costs, or
regulations that are attributable to
relocation;
(B) the costs of all engineering, equipment,
software, site acquisition and construction
costs, as well as any legitimate and prudent
transaction expense, including outside
consultants, and reasonable additional costs
incurred by the Federal entity that are
attributable to relocation, including increased
recurring costs associated with the replacement
facilities;
(C) the costs of engineering studies,
economic analyses, or other expenses reasonably
incurred in calculating the estimated
relocation costs that are provided to the
Commission pursuant to paragraph (4) of this
subsection;
(D) the one-time costs of any modification of
equipment reasonably necessary to accommodate
commercial use of such frequencies prior to the
termination of the Federal entity's primary
allocation or protected status, when the
eligible frequencies as defined in paragraph
(2) of this subsection are made available for
private sector uses by competitive bidding and
a Federal entity retains primary allocation or
protected status in those frequencies for a
periodof time after the completion of the
competitive bidding process; and
(E) the costs associated with the accelerated
replacement of systems and equipment if such
acceleration is necessary to ensure the timely
relocation of systems to a new frequency
assignment.
(4) Notice to commission of estimated relocation
costs.--
(A) The Commission shall notify the NTIA at
least 18 months prior to the commencement of
any auction of eligible frequencies defined in
paragraph (2). At least 6 months prior to the
commencement of any such auction, the NTIA, on
behalf of the Federal entities and after review
by the Office of Management and Budget, shall
notify the Commission of estimated relocation
costs and timelines for such relocation.
(B) Upon timely request of a Federal entity,
the NTIA shall provide such entity with
information regarding an alternative frequency
assignment or assignments to which their
radiocommunications operations could be
relocated for purposes of calculating the
estimated relocation costs and timelines to be
submitted to the Commission pursuant to
subparagraph (A).
(C) To the extent practicable and consistent
with national security considerations, the NTIA
shall provide the information required by
subparagraphs (A) and (B) by the geographic
location of the Federal entities' facilities or
systems and the frequency bands used by such
facilities or systems.
(5) Notice to congressional committees and gao.--The
NTIA shall, at the time of providing an initial
estimate of relocation costs to the Commission under
paragraph (4)(A), submit to the Committees on
Appropriations and Energy and Commerce of the House of
Representatives, the Committees on Appropriations and
Commerce, Science, and Transportation of the Senate,
and the Comptroller General a copy of such estimate and
the timelines for relocation.
(6) Implementation of procedures.--The NTIA shall
take such actions as necessary to ensure the timely
relocation of Federal entities' spectrum-related
operations from frequencies defined in paragraph (2) to
frequencies or facilities of comparable capability.
Upon a finding by the NTIA that a Federal entity has
achieved comparable capability of systems by relocating
to a new frequency assignment or by utilizing an
alternative technology, the NTIA shall terminate the
entity's authorization and notify the Commission that
the entity's relocation has been completed. The NTIA
shall also terminate such entity's authorization if the
NTIA determines that the entity has unreasonably failed
to comply with the timeline for relocation submitted by
the Director of the Office of Management and Budget
under section 118(d)(2)(B).
(h) Federal Action To Expedite Spectrum Transfer.--Any
Federal Government station which operates on electromagnetic
spectrum that has been identified in any reallocation report
under this section shall, to the maximum extent practicable
through the use of the authority granted under subsection (g)
and any other applicable provision of law, take action to
relocate its spectrum use to other frequencies that are
reserved for Federal use or to consolidate its spectrum use
with other Federal Government stations in a manner that
maximizes the spectrum available for non-Federal use.
(i) Definition.--For purposes of this section, the term
``Federal entity'' means any department, agency, or other
instrumentality of the Federal Government that utilizes a
Government station license obtained under section 305 of the
1934 Act (47 U.S.C. 305).
* * * * * * *
SEC. 118. SPECTRUM RELOCATION FUND.
(a) Establishment of Spectrum Relocation Fund.--There is
established on the books of the Treasury a separate fund to be
known as the ``Spectrum Relocation Fund'' (in this section
referred to as the ``Fund''), which shall be administered by
the Office of Management and Budget (in this section referred
to as ``OMB''), in consultation with the NTIA.
(b) Crediting of Receipts.--The Fund shall be credited with
the amounts specified in section 309(j)(8)(D) of the
Communications Act of 1934 (47 U.S.C. 309(j)(8)(D)).
(c) Used To Pay Relocation Costs.--The amounts in the Fund
from auctions of eligible frequencies are authorized to be used
to pay relocation costs, as defined in section 113(g)(3) of
this Act, of an eligible Federal entity incurring such costs
with respect to relocation from those frequencies.
(d) Fund Availability.--
(1) Appropriation.--There are hereby appropriated
from the Fund such sums as are required to pay the
relocation costs specified in subsection (c).
(2) Transfer conditions.--None of the funds provided
under this subsection may be transferred to any
eligible Federal entity--
(A) unless the Director of OMB has
determined, in consultation with the NTIA, the
appropriateness of such costs and the timeline
for relocation; and
(B) until 30 days after the Director of the
OMB has submitted to the Committees on
Appropriations and Energy and Commerce of the
House of Representatives, the Committees on
Appropriations and Commerce, Science, and
Transportation of the Senate, and the
Comptroller General a detailed plan describing
how the sums transferred from the Fund will be
used to pay relocation costs in accordance with
such subsection and the timeline for such
relocation.
(3) Reversion of unused funds.--Any auction proceeds
in the Fund that are remaining after the payment of the
relocation costs that are payable from the Fund shall
revert to and be deposited in the general fund of the
Treasury not later than 8 years after the date of the
deposit of such proceeds to the Fund.
(e) Transfer to Eligible Federal Entities.--
(1) Transfer.--
(A) Amounts made available pursuant to
subsection (d) shall be transferred to eligible
Federal entities, as defined in section
113(g)(1) of this Act.
(B) An eligible Federal entity may receive
more than one such transfer, but if the sum of
the subsequent transfer or transfers exceeds 10
percent of the original transfer--
(i) such subsequent transfers are
subject to prior approval by the
Director of OMB as required by
subsection (d)(2)(A);
(ii) the notice to the committees
containing the plan required by
subsection (d)(2)(B) shall be not less
than 45 days prior to the date of the
transfer that causes such excess above
10 percent;
(iii) such notice shall include, in
addition to such plan, an explanation
of need for such subsequent transfer or
transfers; and
(iv) the Comptroller General shall,
within 30 days after receiving such
plan, review such plan and submit to
such committees an assessment of the
explanation for the subsequent transfer
or transfers.
(C) Such transferred amounts shall be
credited to the appropriations account of the
eligible Federal entity which has incurred, or
will incur, such costs, and shall, subject to
paragraph (2), remain available until expended.
(2) Retransfer to fund.--An eligible Federal entity
that has received such amounts shall report its
expenditures to OMB and shall transfer any amounts in
excess of actual relocation costs back to the Fund
immediately after the NTIA has notified the Commission
that the entity's relocation is complete, or has
determined that such entity has unreasonably failed to
complete such relocation in accordance with the
timeline required by subsection (d)(2)(A).
ADDITIONAL VIEWS OF SENATORS McCAIN, HOLLINGS, AND BROWNBACK
We strongly support the bill as originally considered by
the Committee. We ardently oppose section 9 of the bill, which
was added as an amendment at the Committee's executive session.
Section 9 would reverse long-standing Congressional spectrum
policy, reaffirmed by an FCC decision last year, by prohibiting
the FCC from holding a competitive spectrum auction for the
terrestrial use of this valuable taxpayer resource. Section 9
is opposed by the Bush Administration, the satellite
broadcasting industry, the wireless industry, and other
potential bidders in this planned spectrum auction. In 1993,
Congress put its faith in the auction process for the licensing
of spectrum. We found that consumer benefit is maximized when
spectrum is auctioned, because auctions ensure that spectrum is
assigned to those who value it most highly.
The provision of ORBIT that this section seeks to modify
prohibits the use of competitive bidding to award licenses for
spectrum used for international or global satellite
communications services. The original ORBIT limitation follows
from the logic that the auction of international satellite
spectrum may create uncertainty for a bidder that is sure to
face sequential auctions in other countries after succeeding in
the United States. Such an auction would create an incentive
for other countries to demand exorbitant license fees of the
American licensee knowing that the licensee needs to obtain
such rights to avoid interference and to make use of its
American license. Failure to create certainty in this area
could have an adverse effect on investment in satellite
technology.
Clearly none of these factors applies to the terrestrial
use of spectrum contemplated by section 9. Bidders in an
auction for terrestrial use rights would not face the
uncertainty of a sequential auction, because the spectrum would
be used to provide domestic services. In this sense, the award
of such a license is similar to the FCC's award of a domestic
license for the use of spectrum to provide direct broadcast
satellite services, which the Commission has determined should
be awarded via competitive bidding. Section 9 serves only to
create a government handout of free spectrum to special
interests.We are not now prepared to open the door to
exceptions to our auction policy. The FCC believes a
competitive auction is the right answer. We agree.
The Administration has opposed a similar provision in the
Agriculture Appropriations Bill for FY 2002, stating, ``The
Administration would strongly oppose any amendment that would
restrict the FCC's ability to assign, via competitive bidding,
spectrum licenses that could be used by terrestrial (i.e., non-
satellite) services. Such a provision would interfere with the
efficient allocation of Federal spectrum licenses, provide a
windfall to certain users, and reduce Federal revenues.''
The Cellular Telecommunications and Internet Association
(CTIA) agrees that this proposal would ``give away valuable
spectrum to certain private entities without recovering for the
taxpayer any portion of the value of that spectrum'' and
``would stand in fundamental conflict to wise spectrum
management policy.''