Senate Appropriations Committee Marks Up CJS Bill

September 4, 2003. The Senate Appropriations Committee met to mark up several appropriations bills for fiscal year 2004, including the Commerce, Justice, State, and the Judiciary (CJS) appropriations bill. This bill includes appropriations for most of the technology related agencies, including the Federal Communications Commission (FCC), Federal Trade Commission (FTC), U.S. Trade Representative (USTR), Department of Justice (DOJ), U.S. Patent and Trademark Office (USPTO), National Telecommunications and Information Administration (NTIA), National Institute of Standards and Technology (NIST), and other Department of Commerce entities.

The Committee released a short summary of the dollar amounts contained in the bill. This release states that the bill provides $6.3 Billion for the DOC, including $85.5 Million for the NTIA, $835.2 Million for the NIST, and $1.2 Billion for the USPTO. The bill includes $189 Million for the FTC, $277.8 Million for the FCC, $841.5 for the SEC, and $18.6 Billion for the DOJ and related agencies.

However, most of the debate and discussion by the Committee at the meeting pertained to several amendments to the bill that legislate substantive provisions with appropriations clauses.

First, the Committee approved a manager's amendment that includes a provision that prohibits the use of funds to grant licenses for a commercial TV broadcast station if the granting of that license would result in such party having an aggregate national audience reach exceeding 35%. This has the effect, during fiscal year 2004, of reversing the FCC's recently announced change to the national TV ownership cap. See, related story, below, titled "Senate Appropriations Bill Prevents FCC From Implementing New National TV Ownwership Rule".

Second, the Committee approved an amendment that, in effect, provides that Northpoint will not have to obtain its spectrum at auction. See, related story, below, titled "Senate Appropriations Bill Includes Northpoint Spectrum Amendment".

Third, the Committee approved an amendment that prohibits the USTR, during fiscal year 2004, from negotiating immigration provisions in free trade agreements. See, related story, titled "Senate Appropriations Bill Limits Negotiating Authority of USTR" in TLJ Daily E-Mail Alert No. 733, September 5, 2003.

Senate Appropriations Bill Prevents FCC From Implementing New National TV Ownership Rule

9/4. The Senate Appropriation Committee approved the appropriations bill for fiscal year 2004 for the Departments of Commerce, Justice, and State, for the the federal judiciary, and for related agencies, at a mark up meeting on September 4, by unanimous roll call vote. The Committee approved a lengthy manager's amendment offered by Sen. Judd Gregg (R-NH), the Chairman of the CJS Subcommittee, and supported by Sen. Ernest Hollings (D-SC), the ranking Democrat on the Subcommittee, that includes language identical to the House CJS appropriations bill regarding the national TV ownership cap.

That is, it prohibits the use of funds to grant licenses for a commercial TV broadcast station if the granting of that license would result in such party having an aggregate national audience reach exceeding 35%.

The House bill provides, at Section 624, that "None of the funds in this Act may be used to grant, transfer or assign a license for a commercial TV broadcast station to any party (including all parties under common control) if the grant, transfer or assignment of such license would result in such party or any of its stockholders, partners, members, officers or directors, directly or indirectly, owning, operating or controlling, or having a cognizable interest in TV stations which have an aggregate national audience reach, as defined in 47 C.F.R. 73.3555, exceeding thirty-five (35) percent." (Parentheses in original.)

This section has the effect of preventing the Federal Communications Commission (FCC) from fully implementing, during FY 2004, the national TV ownership provisions of its June 2, 2003 Report and Order and Notice of Proposed Rulemaking [257 pages in PDF] amending its media ownership rules. See, story titled "FCC Announces Revisions to Media Ownership Rules" in TLJ Daily E-Mail Alert No. 672, June 3, 2003.

On July 23, 2003, the House passed HR 2799, the "Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act for Fiscal Year 2004", by a vote of 400-21. See, Roll Call No. 422. See, story titled "House Passes CJS Bill With Media Ownership Section" TLJ Daily E-Mail Alert No. 705, July 28, 2003.

Sen. Byron Dorgan (D-ND) offered no further amendments at this meeting. However, he announced that he intends to offer an amendment regarding the newspaper broadcast cross ownership provisions of the FCC's new media ownership rules when the full Senate considers the CJS appropriations bill.

Sen. Dorgan (at left) stated that "I was intending to offer an amendment to that that would repeal the provision that the FCC has developed allowing cross ownership between newspapers and broadcast properties. I will not offer that amendment to the provision that Mary has packaged now. I will rather do that on the floor of the Senate."

He continued that "it is very likely that before this bill gets to the floor of the Senate, before we deal with this on the floor of the Senate, we will have under expedited procedures, the Congressional Review Act, and a vote on a resolution of disapproval of the entire FCC rule. My expectation is that that will happen very shortly. There are 35 signatures having been filed at the desk, and the resolution of disapproval is now on the calendar. I have been talking to Sen. Frist and Sen. Daschle about that. So, I will not offer the amendment on cross-ownership today, but we will have that as an amendment on the floor, as well, when this appropriations bill comes to the floor."

Sen. Ted Stevens (R-AK) (at right), the Chairman of the Committee, stated that "with the Circuit Court decision, that decision has the effect of your amendment. I am pleased that you will not offer it here. I want to tell you that I intend to oppose that amendment on the floor, because I believe that the Circuit Court's opinion sort of puts a whole new aspect to this."

On September 3, the U.S. Court of Appeals (3rdCir) issued an order [3 page PDF scan] in Prometheus Radio Project v. FCC, staying the Federal Communications Commission's (FCC) new media ownership rules, pending resolution of the proceeding. See, story titled "3rd Circuit Stays FCC's Media Ownership Rule Changes" in TLJ Daily E-Mail Alert No. 732, September 4, 2003.

Sen. Stevens added that "we are going forward on the cap provision, and that is in the House bill, that will take this FCC provision, really, out of conference, unless another amendment is adopted."

"We don't need to be involved in a moratorium, or any decision concerning cross-ownership", said Sen. Stevens.

Sen. Sam Brownback (R-KS) announced his opposition to the section CJS appropriation bill regarding the national TV ownership cap.

Sen. John McCain (R-AZ), the Chairman of the Senate Commerce Committee, which has jurisdiction over the FCC and regulation of broadcast media, released a statement after the meeting. He said that "I am greatly dismayed that the Senate Appropriations Committee has chosen to usurp the jurisdiction of the Senate Commerce Committee today by including authorizing language on its Commerce, Justice, State Appropriations bill. I have never supported the use of the appropriations process to legislate policy, and it is especially disappointing to see this misuse of the appropriations process when the Commerce Committee has sent a bill to the floor that would address the precise issue added to today's appropriations bill."

"With respect to the substance of today's action, I continue to be mystified by the inconsistency of separating the national television broadcast ownership cap from the local broadcast limits in legislation -- an action that seems only to serve the members of the National Association of Broadcasters", said Sen. McCain.

Sen. Dianne Feinstein (D-CA) spoke with reporters after the meeting. She said that "Most of us just sort of arrived at the fact that 35% is a fairer number. The cap issue was sort of an easy issue. The other issue, on the cross ownership, is a much more difficult issue. ... It depends on whether you have large media markets, or small media markets."

She added, regarding cross ownership, "It is really not the jurisdiction of this Committee".

Senate Appropriations Bill Includes Northpoint Spectrum Amendment

9/4. The Senate Appropriation Committee approved the appropriations bill for fiscal year 2004 for the Departments of Commerce, Justice, and State, for the the federal judiciary, and for related agencies, at a mark up meeting on September 4, by unanimous roll call vote. The Committee also approved by voice vote an amendment offered by Sen. Mary Landrieu (D-LA) and Sen. Kay Hutchison (R-TX) pertaining to fixed terrestrial services in the 12.2-12.7 GHz band, that would enable Northpoint to obtain spectrum without going to auction.

Previously, on June 26, 2003, the Senate Commerce Committee amended and approved HR 1320, the Commercial Spectrum Enhancement Act, with an amendment pertaining to Northpoint. See, story titled "Senate Commerce Committee Approves Commercial Spectrum Enhancement Act" in TLJ Daily E-Mail Alert No. 689, June 27, 2003.

Specifically, the June 26 amendment, which was offered by Sen. John Sununu (R-NH) and Sen. Maria Cantwell (D-WA), provides that "Section 647 of the ORBIT Act (47 U.S.C. 765f) is amended (1) by striking ``global satellite communications services.´´ and inserting ``global satellite communications services or for the provision of fixed terrestrial services in the 12.2-12.7 GHz band.´´; and (2) by adding at the end the following: ``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.´´." That is, it amends the ORBIT Act to exempt from auction spectrum fixed terrestrial services in the 12.2-12.7 GHz band.

The House passed its version of the bill on June 11 by a vote of 408-10, without the Northpoint language. See, Roll Call No. 260.

NorthPoint describes its technology as follows: "Northpoint is a patented, digital, wireless, cell based, terrestrial transmission technology that reuses radio frequency spectrum previously reserved for satellite systems. Northpoint can reuse this spectrum by keeping the terrestrial signal below the level to cause interference to the satellite signal, but above the level required to provide reliable terrestrial service. This is accomplished through several means, one of which is directional transmission. The Northpoint system consists of directional broadcast antennas located on towers, poles, buildings or mountains. The transmissions are oriented in a limited azimuth range, based upon the look angles to the satellite systems with which the Northpoint system will share frequencies, allowing harmonious simultaneous co-channel transmissions between satellite and terrestrial services." See, NorthPoint paper [9 pages in PDF]. See also, story titled "FCC Acts on Northpoint Application" in TLJ Daily E-Mail Alert No. 417, April 24, 2003.

Sen. Landrieu (at right) stated that her amendment "has to do with with leveling the playing field between the technologies that are in the video and broadband service sector. Mr. Chairman, many of the members are familiar with this issue. The Commerce Committee has considered it, held a hearing on it, considered it, and approved what I am asking for our Committee to add to the underlying bill. It is, in my opinion, a free enterprise amendment. It is a pro-consumer amendment. It levels the playing field between the between cable, satellite, and the MVDDS, which is the multi-channel video distribution and data service new technology."

"It will do many things. Importantly, it will reach rural areas. Mr. Chairman, you have been supportive of this because Alaska is one of those areas that is very difficult to reach through the standard technologies. It will improve our emergency alert systems. It will provide amber alerts", said Sen. Landrieu.

She concluded that "I generally support auctions, and would not normally support something without an auction process. But, because we exempted satellite technology from auctions three years ago, we should either require all applicants for a particular spectrum band to go to auction, or none at all. So, this amendment levels the playing field, clarifies it, is in line with what the Commerce Committee did."

Sen. Conrad Burns (R-MT), Sen. Ted Stevens (R-AK), and Sen. Kay Hutchison (R-TX) also spoke in favor of the amendment.

Sen. Hollings spoke in opposition to the amendment. He stated that it replaces auctions with Congressional allocation of spectrum, and sets a precedent for not holding spectrum auctions. Sen. Feinstein also opposed the amendment.

Sen. Dianne Feinstein (D-CA) spoke with reporters after the hearing. She said that "this is a public resource. If people are going to use it, they have got to pay something for it. And, you know, these companies are not in there for non-profit. I mean, they make huge profits."

Northpoint issued a release after the meeting in which it stated that the amendment "will pave the way for rapid deployment of a new wireless communications service called MVDDS." It added that the CJS language "is identical to the Sununu-Cantwell Amendment to H.R. 1320, which the Senate Commerce Committee adopted on June 26."