House Subcommittee Holds Hearing On Commercial Spectrum Enhancement Act

3/25. The House Commerce Committee's Subcommittee on Telecommunications and the Internet held a hearing on HR 1320, the Commercial Spectrum Enhancement Act. This bill would facilitate the relocation of spectrum from federal users, such as the Department of Defenese (DOD), to commercial users, such as Third Generation (3G) wireless service providers. 3G is intended to provide broadband internet access for portable devices. The bill would create a "Spectrum Relocation Fund", funded out of auction proceeds, to pay for relocation costs of federal entities whose spectrum is reallocated.

Rep. Fred Upton (R-MI) (at right) and others introduced the bill on March 18, 2003. Although, it is very similar to a bill introduced late in the 107th Congress -- HR 5638.

The bill would provide that any federal entity that uses a frequency band covered by the bill "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 ..."

The bill would apply to the 1710-1755 MHz band, which has been identified by the National Telecommunications and Information Administration (NTIA) and Federal Communications Commission (FCC) for reallocation for 3G use, and "any other band of frequencies reallocated from Federal use to non-Federal use after January 1, 1995, that is assigned by competitive bidding pursuant to section 309(j) of the Communications Act of 1934 (47 U.S.C. 309(j))."

Rep. Billy Tauzin (R-MA), Chairman of the full Committee, and an original cosponsor of the bill, issued a statement in which he explained the reason for the bill. He wrote that "Congress needs to pass H.R. 1320 to facilitate the deployment of advanced mobile data services to consumers. Last year, the Bush administration and the FCC reached a landmark decision to make the 1710-1755 MHz band and the 2110-2155 MHz band available for so-called third-generation wireless use."

He continued, "However, there is one catch. Federal government agencies, especially the Pentagon, currently use the 1710-1755 MHz band for important and, often, national security-related operations. So relocating the government agencies from this band to an equally vibrant spectrum band is critical. But the current system for relocating government spectrum users is fatally flawed. Under this system, a commercial entity has to win a license at auction. And then the commercial entity has to negotiate with the affected agency regarding the price and the timeline for the agency to move its spectrum operations to another band."

Nancy Victory, Director of the NTIA, testified that "I therefore enthusiastically support legislative action authorizing the creation of a spectrum relocation fund". However, she prefers the Bush administration's proposal to HR 1320. See, prepared testimony.

She elaborated that "the President's Fiscal Year 2004 Budget contains a similar initiative and the Administration recently re-transmitted the legislative language to Congress. Although there are differences in the details of H.R. 1320 and the Administration’s proposal, they both are designed to streamline the mechanism for compensating incumbent users, while providing more certainty to private sector auction participants about the actual costs of accessing the spectrum on which they are bidding. I look forward to working actively with the Committee as it resolves these differences and crafts legislation embodying the most workable and beneficial relocation fund mechanism."

Stephen Price, Deputy Assistant Secretary of Defense for Spectrum, Space, Sensors and C3 Policy, stated that "spectrum is the lifeblood of our military". He reviewed the various applications of spectrum in the ongoing war in Iraq. He stated that "We look forward to working with the Committee in crafting legislation to create a Spectrum Relocation Fund". See, prepared testimony.

He emphasized three items in his oral testimony that the DOD wants from legislation providing for a spectrum relocation fund -- full reimbursement for all relocation costs, respect for DOD timelines, and relocation to comparable spectrum. In his prepared testimony, he elaborated on these points, and added several others.

He wrote that "DoD must be fully reimbursed for all relocation costs for a Spectrum Relocation Fund to be viable. Under the Administration's proposal and under H.R. 1320, an auction would be invalidated if the proceeds were less than 110% of the estimated relocation costs."

He also argued that "A broad definition of relocation costs, such as the definition of relocation costs in the Administration's proposal and in H.R. 1320, is necessary for reimbursement legislation to protect our spectrum dependent national security systems."

Price also stated that "over time, DOD believes, we will need more spectrum, not less".

See also, prepared testimony of Thomas Wheeler, P/CEO of the Cellular Telecommunications Industry Association (CTIA); however, Steven Berry, CITA's SVP for Government Affairs, testified in person. He said that "the wireless industry fully supports HR 1320". See also, prepared testimony of Lawrence Grossman of the Digital Promise Project.

Rep. Ed Markey (D-MA), the ranking Democrat on the Subcommittee, also participated in the hearing. He is the sponsor of a competing bill, HR 1396 [20 pages in PDF], the Spectrum Commons and Digital Dividends Act of 2003. This bill would require the FCC to reallocate more spectrum for unlicensed use, which the bill calls a "Spectrum Commons". The bill would also provide for a trust fund, funded by auction sales, that would apply to relocation costs of government users. It would also create a trust fund that would support various public interest initiatives, such as teacher training, worker training, and after school programs. The bill call this a "Digital Dividends Trust Fund". The trust fund for relocation of federal users would be capped at $5 Billion. Addition costs would be funded through the appropriations process.

Rep. Bart Stupak (D-MI), a former police officer, suggested that there perhaps should also be a "public safety trust fund".