WASHINGTON-A major fracas erupted in the House telecommunications subcommittee last week when lawmakers rebelled against congressional budget instructions to raise $26.3 billion from spectrum auctions during the next five years.
Markup of a bill to expand the Federal Communications Commission’s auction authority began late last Thursday and will resume tomorrow morning, with the remainder of 11 amendments to be offered.
Rep. Billy Tauzin (R-La.), chairman of the telecommunications subcommittee, tried to quell the uprising by offering an amendment to void all auctions that do not produce two-thirds of minimum aggregates of $7.5 billion, $4.5 billion and $1.9 billion during three auction cycles.
Tauzin said the bill represents good policy, noting a provision to reserve 24 megahertz for public safety communications.
Sen. Bob Kerrey (D-Neb.) also has introduced a bill to require minimum auction bids.
Tauzin wants to kill an amendment by Rep. John Dingell (D-Mich.), ranking minority member of the Commerce Committee, to rein in spectrum auctions. Another motivation behind the Tauzin amendment, according to an industry lobbyist, is to put the issue back on the plate of the House Budget Committee once auctions fail to draw the two-thirds minimum.
Sparks flew on both sides from the moment Tauzin introduced the expanded auction measure, which will get rolled into a massive budget reconciliation bill in late summer.
“This is a farce,” declared Michael Oxley (R-Ohio), vice chairman of the parent House Commerce Committee. “The auction process has been bastardized.”
House Commerce Committee Chairman Thomas Bliley (R-Va.) said that while spectrum auctions have served as an efficient licensing tool to the benefit of taxpayers, wireless bids “have caused some people in Washington to see spectrum through a rosy colored prism. Spectrum auction revenues have become a reason for holding a spectrum auction rather than what serves the public interest.”
“We lie to ourselves and to the people for the benefit of saying we had a good budget deal,” Dingell said. “This is an outrage.”
The balanced budget deal negotiated between GOP congressional leaders and the Clinton administration anticipates $26.3 billion in auctions through the year 2002.
But few expect the government to raise anything close to that amount for the U.S. Treasury. The Wireless Communications Service auction in April pulled in $13.6 million in bidding that budgeteers scored at $1.8 billion, $3 billion originally.
To date, the FCC has raised about $23 billion from paging, pocket telephone, dispatch radio and alternative video broadcast auctions since competitive bidding became legal in 1993.
But the government may not receive all the money as winning bidders face financial problems on Wall Street, some even bankruptcy. The infusion of 120 megahertz of new spectrum and adoption of competing wireless policies have tended to depress spectrum value.
The FCC is scrambling to revamp the payment schedule for government loans to winning bidders in the C- and F-block broadband personal communications services auctions.
The Justice Department, meanwhile, is investigating allegations of bid rigging in FCC auction.
