YOU ARE AT:Archived ArticlesBALANCED BUDGET BILL WILL FORBID FUTURE LICENSES ISSUED BY LOTTERY

BALANCED BUDGET BILL WILL FORBID FUTURE LICENSES ISSUED BY LOTTERY

WASHINGTON-Congress, in the face of an impending veto and resumed fighting with the White House over government spending that could lead to another government shutdown next week, approved a Republican balanced budget bill that would raise $14 billion over the next seven years by expanding spectrum auctions and outlawing free licenses issued by lottery.

Though there is a temporary cease fire in the nasty budget battle between the G0P-led Congress and the Democratic Clinton administration, enabling the federal government-following a six-day government shutdown last month-to operate through Dec. 15 on a new stop-gap funding measure, the war is far from over.

In fact, government operations could come to a screeching halt after next Friday. Congress has passed, and President Clinton has signed, only a handful of the 13 appropriations bills for the new fiscal year that began Oct. 1. Moreover, the United States had to take special steps to avoid defaulting on interest payments due last month when the two sides could not agree on a bill to raise the debt ceiling.

Clinton has promised to veto the Republicans’ seven-year balanced budget measure as well as several of those annual appropriations bills, including one that funds the Federal Communications Commission and the National Telecommunications and Information Administration. Republican efforts to dismantle the Commerce Department, meanwhile, appear to be waning. Both sides renewed budget talks last week.

The Office of Management and Budget estimates last month’s government shutdown (Nov. 14-19), which pushed back the 900 MHz specialized mobile radio and C-block PCS auctions to Dec. 5 and Dec. 18, respectively, cost taxpayers $700 million. A total of 2,000 FCC employees were among the 800,000 civil servants furloughed.

Broadening the FCC’s auction authority, which would enable the agency to sell private mobile radio licenses in addition to commercial wireless licenses, is one of the few budget reforms supported by both political parties. Auctions, which have generated $8 billion from the sale of next-generation paging and pocket telephone licenses since Congress legalized competitive bidding in 1993, are caught in the middle of a pre-presidential and congressional election year feud between Congress and the White House over how to erase the crippling federal budget deficit.

The real fight is over how to limit the growth of Medicaid, Medicare and other social programs.

Before passing landmark budget reconciliation legislation last month, House and Senate conferees stripped language out of the bill to shorten by one year the time personal communications services operators are obligated to negotiate the financial terms and conditions for moving fixed microwave users from the 2 GHz PCS band to higher frequencies.

Allegations of extortion against microwave licensees by pocket telephone firms continue to produce fiery rhetoric from both sides.

“While, indeed, many responsible microwave incumbents do appear to be willing to negotiate, other incumbents, encouraged by Keller and Heckman and others, are attempting to exploit this process to reap unconscionable premiums for themselves and their consultants,” Cellular Telecommunications Industry Association President Thomas Wheeler said in a recent letter to Senate Commerce Committee Chairman Larry Pressler, R-S.D.

Jack Richards, an attorney at the Washington, D.C., law offices of Keller and Heckman, shot back that microwave users “are indeed negotiating, not simply accepting the initial low-ball offer typically put on the table by PCS licensees.”

The FCC is trying to stay out of the crossfire, while addressing the related issue of microwave relocation cost-sharing among PCS operators.

The balanced budget bill exempts public-safety and digital TV spectrum from auctions, but directs the FCC to report back to Congress in six months with a study on the feasibility of selling broadcast licenses. In order that lawmakers have time to study the agency’s findings, no advanced television (ATV) licenses could be issued before Nov. 15 next year.

The language is a major blow to TV broadcasters and a partial victory for the wireless telecommunications industry, which opposes giving away digital broadcast spectrum for free and permitting its use for nonvideo purposes, like paging.

In addition, there is concern that unless TV licensees pay for digital channels, the federal government may decide to levy spectrum fees on all telecommunications providers-including wireless-to make up any revenue shortfall from auctions.

The FCC projects $37 billion can be generated by selling digital TV channels, something Chairman Reed Hundt-without explicitly endorsing that course of action-apparently finds appealing.

“I believe the issue of expanding our auction authority to include, possibly, digital broadcast spectrum deserves serious dispassionate study,” stated Hundt in prepared written remarks to be delivered to the International Radio and Television Society in New York late last month.

For now, federal regulators are looking at satellite-based digital audio radio and electronic news-gathering spectrum to bring in most of the $14 billion counted on by Congress.

Under the current plan, TV broadcasters have 15 years to convert from analog to digital technology. During that span, broadcast licensees would simulcast programming over the old and new six megahertz TV channels and be allowed to use excess capacity on the second channel for ancillary services as long as they pay a market-based fee for such purposes. Some skeptics, though, question whether broadcasters will give the second channel back after the transition period, and the FCC is giving its original plan a second look.

House provisions to codify C-block PCS auction rules and to require bidding to begin by Dec. 11 were dropped in the House-Senate budget bill.

The budget conference report calls for the FCC to consider costs to firms of having to bid for spectrum in different countries for global satellite systems.

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