WASHINGTON-The Federal Communications Communication’s auction program could suffer a huge setback if the GOP-led Congress and the Clinton administration fail to reach a compromise on a seven-year balanced budget plan.

Budget talks are due to resume this week between congressional Republican leaders and White House officials, following last week’s break in negotiations that prompted House Speaker Newt Gingrich (R-Ga.) to express pessimism about reaching a deal this year, setting off losses on Wall Street.

The GOP budget plan vetoed by Clinton would raise $15.3 billion by giving the FCC more leeway in the kinds of wireless licenses it can sell. Despite the veto, Clinton supports giving the FCC greater ability to auction the airwaves.

“I’m not very hopeful we’re going to get a budget agreement and that would simply mean that we’d have to find some other ways to keep the government open, to take care of the debt ceiling [and] to manage the process,” said Gingrich. “I don’t think that’s a catastrophe, but I think it is sad and I think it is unfortunate.”

Republicans are considering two strategies to deal with the budget impasse. One is to recruit enough conservative Democrats to override a presidential veto of the GOP budget. Another option is making the budget a referendum in this presidential campaign.

President Clinton played down the gloomy outlook, but did not discount altogether Gingrich’s assessment about putting the budget before the voters.

“We are closer together than we were, by far, when these talks began,” said Clinton at Thursday’s press conference held before his weekend trip to Bosnia.

Clinton said the budget can be balanced, but “in order to do that, some of the differences between me and the Congress over some of these issues will have to be taken out of the budget agreement and deferred for the elections. But that is what elections are for.”

The implications of Congress and the White House failing to agree on erasing the federal budget deficit by 2002 are enormous for the FCC.

FCC auction authority passed by Congress in 1993 limits competitive bidding to new commercial wireless licenses. The agency has raised nearly $9 billion to date from the sale of narrowband and broadband personal communications services. The sizable proceeds have yielded huge political dividends for FCC Chairman Reed Hundt, a Democratic Clinton appointee, and brought the agency much acclaim.

But without a budget bill, Hundt’s plan to sell private wireless spectrum and TV licenses will be foiled.

Although public safety frequencies would be shielded from auctions, frequencies used by utilities, railroads, construction companies and other businesses-big and small alike-are headed to the auction block unless the budget bill sinks.

Private wireless interests oppose auctions, arguing the airwaves support the nation’s industrial infrastructure. They’ve lobbied Congress and offered to pay spectrum fees instead. Some progress was made in that regard, but the FCC is said to have countered those efforts so that most private wireless channels would be for sale.

It is still possible that even if the budget negotiations collapse, lawmakers could find another vehicle to get expanded auction authority through Congress this year.


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