House and Senate Pass Spectrum Bill
February 17, 2012. The House and Senate passed the conference report [270 pages in PDF] on HR 3630 [LOC | WW], the "Middle Class Tax Relief and Job Creation Act of 2012". The House passed the bill by a vote of 293 to 132. See, Roll Call No. 72. The Senate passed the bill by a vote of 60 to 36. See, Roll Call No. 22.
This bill gives the Federal Communications Commission (FCC) authority to conduct incentive auctions. It also reallocates the D Block for an interoperable public safety broadband network, and provides for the creation, governance, and funding of such a public safety network. It also includes the "Next Generation 9-1-1 Advancement Act" and other provisions.
The spectrum and other communications provisions are in Title VI, at pages 118-266.
In the House, Republicans voted 146 to 91. Democrats voted 147 to 41.
Democratic members of the House Commerce Committee (HCC) voted unanimously for the bill.
HCC Republicans were divided. While Rep. Fred Upton (R-MI), Rep. Greg Walden (R-OR), and many others voted yes, many voted no, including Rep. Joe Barton (R-TX), Rep. Marsha Blackburn (R-TN), Rep. Michael Burgess (R-TX), Rep. Phil Gingrey (R-GA), Rep Mike Pompeo (R-KS), Rep. Bill Cassidy (R-LA), Rep. David McKinley (R-WV), Rep. Cory Gardner (R-CO), Rep. Pete Olson (R-TX), and Rep. Morgan Griffith (R-VA) voted no. Rep. Mary Mack (R-CA) did not vote.
In the Senate, voting correlate more strongly with party. Only fourteen Republicans voted for the bill. However, five of twelve Republicans on the Senate Commerce Committee (SCC) voted for the bill: Sen. Kelly Ayotte (R-NH), Sen. Dean Heller (R-NV), Sen. Olympia Snowe (R-ME), Sen. Roger Wicker (R-MS), and Sen. Mark Rubio (R-FL).
Only six Democrats voted no, including Sen. Mark Warner (D-VA), a member of the SCC.
However, the spectrum provisions are just one part of this huge bill, which also dealt with many significant and controversial tax issues. Senators' and Representatives' voting decisions were also affected by these other provisions.
For example, Sen. Warner gave a speech in the Senate in which he explained his reasons for voting no. None pertained to the spectrum provisions.
Similarly, Rep. Barton explained his opposition in a release: "We should shoot straight with the American people. We are taking money away from the Social Security Trust Fund and we are substituting an IOU that may or may not ever be repaid. This is nothing more than a quick fix". See also, YouTube video of floor speech, in which he did not mention spectrum.
Interoperable Public Safety Broadband Network. This bill provides for reallocation of the D Block (10 megahertz of paired spectrum at 758-763 MHz and 788-793 MHz) for an interoperable public safety broadband network. It provides $7 Billion in funding.
The bill provides for the public safety network to be created and run by a new First Responder Network Authority (FRNA), which would be governed by a board largely appointed by Secretary of Commerce. Nominally, it would be a part of the Department of Commerce's (DOC) National Telecommunications and Information Administration (NTIA).
Vice President Joe Biden released a statement regarding the public safety network component of the bill: "After 9/11, we pledged that our cops, firefighters and EMTs would have the technology they need to stay safe and do their jobs. Part of that promise included deploying a nationwide, interoperable broadband network for our first responders. Today we made good on that overdue promise. First responders put their lives on the line to protect us every day, and the least we can do is ensure that they have the dedicated bandwidth they need to communicate with each other. It’s going to save lives and help keep our neighborhoods safe."
Who Participates in Auctions. The bill gives the FCC authority to conduct incentive auctions. An incentive auction provides for the sharing of spectrum auction proceeds with the licensees, such as TV broadcasters, who voluntarily relinquish that spectrum.
One of the contentious issues in the Congress has been how the FCC might auction such spectrum. The bill limits the FCC's ability to limit participation in these spectrum auctions.
The key but vague language is in Section 6404, at pages 196-197. It provides that the FCC "may not prevent a person from participating in a system of competitive bidding under this subsection if such person" meet certain enumerated requirements.
These requirements are that the bidder "complies with all the auction procedures and other requirements to protect the auction process" and "meets the technical, financial, character, and citizenship qualifications".
But, the bill adds that this does not prevent the FCC from adopting and enforcing "rules of general applicability, including rules concerning spectrum aggregation that promote competition".
FCC Chairman Julius Genachowski had wanted broader discretion than this bill allows. House Republicans and large carriers had wanted to further restrict the FCC.
AT&T did not want to be excluded from bidding in these auctions. Jim Cicconi of AT&T stated in a release that "there has been much focus in recent weeks on whether the FCC should or should not be able to exclude qualified wireless carriers from bidding in these spectrum auctions."
He wrote that "The final legislation speaks clearly on this point: the FCC may not do so as part of any auction proceeding. Instead, it could only make such a decision through a separate public rulemaking with general industry applicability, and not through the backdoor of special auction rules. This provides procedural safeguards, and also an opportunity for a court challenge. We take the FCC Chairman at his word when he says there is no intent to have closed auctions that deny AT&T and other carriers the ability to fairly and fully participate, but we also feel it important that Congress has now made its views clear as well."
Matt Wood of the Free Press stated in a release that "Parts of the bill the House passed in December would all but ensure that AT&T and Verizon lock up all the most valuable spectrum in any future auction, further tightening the effective duopoly these companies already hold." He wrote that the final bill preserves "at least some of the tools the FCC needs to assign licenses in the public interest and prevent further erosion of competition among wireless providers".
Harold Feld of the Public Knowledge (PK) stated in a release that "We got a partial win. The law does take away the FCC's ability to prevent anybody who meets the financial, technical, and character rules from participating in ``any system of competitive bidding.´´ But it includes a clause that the FCC can still make ``rules of general applicability, including rules concerning spectrum aggregation that promote competition.´´"
He offered an interpretation. This language "means the FCC could do any of the following. It could impose an absolute limit on how much spectrum anyone could have (called a ``spectrum cap´´). A company could still participate in an auction, but if it went over the limit it would need either to get rid of some other spectrum or not get the new licenses. Also, the FCC could set a rule for any specific auction that prevents any one company from winning too much (as happened in the 700 MHz auction, where Verizon and AT&T won most of the licenses). For example, the FCC could say ``No one bidder is allowed to win more than 20% of the licenses.´´ That would be a rule of general applicability, and would still prevent the largest companies from getting everything." (Parentheses in original.)
Vonya McCann of Sprint stated in a release that "all wireless carriers -- small, regional and large -- should have a meaningful chance to participate in wireless spectrum auctions. While we didn't see the need to amend the statute, the compromise language approved by the conferees preserves the FCC's ability to promote competition as it conducts future wireless spectrum auctions."
Unlicensed Spectrum Use. The House Commerce Committee (HCC) Democrats released a summary that states that the bill, first, "gives the FCC the authority to preserve existing TV white spaces".
Second, the bill "gives the FCC the authority to optimize these white spaces for unlicensed use by consolidating them into more optimal configurations through band plans".
Third, the bill "gives the FCC the authority to use part of the spectrum relinquished by TV broadcasters in the incentive auction to create nationwide guard bands that can be used for unlicensed use, including in high-value markets that currently have little or no white spaces today. Nationwide, unlicensed access to guard bands will enable innovation, promote investment in new wireless services, and enhance the value of licensed spectrum by protecting against harmful interference and allowing carriers to ``off-load´´ data to alleviate capacity concerns."
Dan Reed of Microsoft stated in a release that the spectrum provisions of the bill give the FCC "flexibility to enable unlicensed use in the TV bands as it auctions spectrum for licensed use. The agreement ensures that the FCC has the authority to preserve existing vacant channels in the TV band, the ``TV white spaces,´´ implement guard bands and allow unlicensed use there, implement the FCC's previous white spaces order, and reconfigure the spectrum in order to maximize unlicensed use of the band. The FCC must now build on its 2008 and 2010 decisions promoting unlicensed broadband use in the television bands".
He concluded that "As the FCC prepares to auction spectrum for licensed use, it must now seize the opportunity at hand and make sufficient unlicensed spectrum available as well."
Harold Feld of the Public Knowledge stated in a release that the meaning of the relevant provisions "will depend a lot on implementation by the FCC when the auctions finally happen. But the critical thing this means is that there will absolutely be unlicensed TV white space everywhere in the country, which is what we needed to keep developers investing in the technology."
What the legislation does is set up a "white spaces for white spaces" swap. The bill makes it clear that the FCC can have "gaurd bands" when it designs the new wireless service from reclaimed broadcast spectrum, and that it can put unlicensed spectrum in the guard bands. The bill also makes it clear that nothing is meant to affect the use of TV white spaces in the remaining broadcast band. If a lot of broadcasters cash out, that will eliminate a lot of existing TV white space (because the bands empty channels will either be filled by the surviving broadcasters or combined with other stuff to be auctioned off), but it will create more guardband space. If broadcasters like staying broadcasters and don't cash out, then we will still have the TV white space we have now.
What this means is that all the people building and deploying the new Superwifi devices can keep doing so, knowing that one way or another they will still work. Meanwhile, because the gaurd band use doesn't count against the budget score as spectrum "given away," the folks who wanted to auction everything can claim (as they are doing) that they stopped the FCC from "giving awayspectrum." (We will pause to consider the peculiar world view that says letting the public use the public airwaves for free, it's a "give away," but when you pay broadcasters billions of dollars to give back the licenses to use the public airwaves they got for free, that's being "fiscally responsible.")
Mary Brown of Cisco stated in a
release that "Cisco is very pleased that Congress has asked the National
Telecommunications and Information Administration and the Federal Communications
Commission to evaluate whether additional shared spectrum could be made
available for Wi-Fi technologies at 5 GHz. Wi-Fi is shouldering
increasing responsibility for delivering traffic. In addition to the huge role Wi-Fi plays at the edge of fixed networks, offloading of mobile traffic to Wi-Fi networks is increasing. By 2016, 22% of global mobile traffic will be offloaded to Wi-Fi at the edge."