House pushes spectrum sale

The House overwhelmingly passed a bill earlier this month that would accelerate the process of selling portions of the federal government's radio waves to the private sector.

The bill would require some agencies, primarily the Defense Department, to change the wireless frequencies they use, and it simplifies the process for doing so. It also would simplify the process for reimbursing agencies for the airwaves they lose.

The Commercial Spectrum Enhancement Act (H.R. 1320) passed June 11 by a 408-10 vote. It was sponsored by Rep. Fred Upton (R-Mich.), chairman of the House Energy and Commerce Committee's Telecommunications and the Internet Subcommittee.

Upton said the legislation will allow federal agencies to relocate to comparable wavelengths while allowing private industry to further develop wireless technology.

The act creates a spectrum relocation fund that would be created by money generated when the Federal Communications Commission auctions off the spectrum. That fund would be used to reimburse federal agencies that are relocated along the radio spectrum as a result of the auction.

Currently, the winning bidder must negotiate with the incumbent to determine proper reimbursement costs, which the fund would help simplify and streamline, according to a spokesman for the Commerce Department's National Telecommunications and Information Administration (NTIA).

The FCC manages the nation's nonfederal telecommunications spectrum, including users in the commercial broadcast, public safety, and state and local government sectors. NTIA is responsible for the federal space — including DOD, which is the federal government's largest user of it. The majority of the telecommunications spectrum is shared between federal and nonfederal users, which requires the FCC and NTIA to coordinate spectrum policy.

The House bill guarantees that federal incumbents receive adequate compensation for expenditures related to relocating to other spectrum bands. Auction proceeds, which would be deposited in the spectrum relocation fund, must equal at least 110 percent of the total estimated relocation expenses.

Assistant Commerce Secretary Nancy Victory said she was pleased by the House legislation's progress and is looking forward to working with the Senate. Sen. John McCain (R-Ariz.), chairman of the Commerce, Science and Transportation Committee, introduced the Senate version of the bill, Commercial Spectrum Enhancement Act (S. 865), in April.

The government already has identified 1710-1755 MHz band for relocation from the government to the private sector. This spectrum, mostly encumbered by DOD, is considered valuable due to its suitability for commercial, mobile advanced wireless services.

Upton called the act a "win-win-win" for government, industry and taxpayers.

"That is good news for the private sector, which craves certainty in the process, and the consumer, who craves the benefits which new services enabled by additional spectrum will afford them," he said. "That is good news for government agencies, who know that they will be made whole when they relocate to comparable spectrum, and the taxpayer, who will not have to pay a dime to government agencies and will know that there is tight fiscal oversight in that regard."

The Bush administration strongly supported the passage of H.R. 1320 because it believes the fund will serve as an important spectrum management tool to streamline the process for reimbursing government users, facilitate their relocation to comparable spectrum and provide greater certainty to auction bidders and incumbents.

James Lewis, senior fellow at the Center for Strategic and International Studies, noted that the three advocates Upton touted would not need to be relocated and said the legislation's only potential weakness is "whether the fund will actually match the real [relocation] costs" for government agencies.

Lewis said DOD is one of the primary agencies that will be relocated, and the legislation must answer two key questions to satisfy the department: Will there be enough money to physically relocate and buy new equipment, and if not, "do we keep it?" But as long as all "costs are covered, everyone's happy," he said.