WASHINGTON-The House Commerce Committee approved expanded spectrum auction legislation last week amid an uproar over signs the bill falls well short of the five-year, $26.3 billion target negotiated by congressional and Clinton administration budgeteers.
The controversial auction legislation, which will be rolled into a massive budget reconciliation bill aimed at balancing the budget by 2002, has turned into an embarrassing, finger-pointing mess for Congress, the White House and the Federal Communications Commission.
In the middle is the Congressional Budget Office, which is being pressured to score auction legislation at or near the $26.3 billion mark. But sources predict the legislation will not come close to that figure, even with a generous CBO score. One Democratic congressional staffer said the legislation could be as much as $10 billion off the mark.
The White House, citing problems with the House bill-ranging from omitting toll-free 888 telephone numbers to including spectrum that cannot be auctioned-is pushing Congress to impose a broad-based spectrum fee on wireless licensees to make up for any revenue shortfall.
The fee, if adopted, would likely apply to cellular, paging, dispatch radio, broadcast and other licensees that did not pay for spectrum via auctions.
Senate Commerce Committee Chairman John McCain (R-Ariz.), facing the same daunting challenge of raising $26.3 billion in a companion auction bill scheduled for markup tomorrow, is said to be considering broad-based spectrum fees given the unlikelihood he can generate that much money from auctions alone.
“I think the leader of the Senate committee is concerned about this and hopefully will agree that it doesn’t make sense,” said Thomas Wheeler, president of the Cellular Telecommunications Industry Association.
While House GOP and Democratic telecom lawmakers disagreed with each other on auction legislation, both sides blamed budgeteers for coming up with an auction revenue figure they believe is unrealistic.
“Spectrum money is every budgeteer’s favorite cash cow, but it never was and never will be the answer to balancing the budget,” said Rep. Mike Oxley (R-Ohio), a senior member of the House Commerce Committee, in a comment reflecting the prevailing sentiment of telecom lawmakers.
Still, partisan sniping persisted.
“The minority staff was invited to each and every drafting session to ensure that they were included in the process. I am disappointed the subcommittee members from the minority party did not see fit to join us in doing what was right,” said Rep. Billy Tauzin (R-La.), chairman of the House telecommunications subcommittee.
Tauzin won approval of an amendment that would void auction results if bidding failed to raise two-thirds of various revenue targets.
Reps. John Dingell (D-Mich.) and Edward Markey (D-Mass.) sharply criticized the Republican auction bill. The measure passed the subcommittee and full committee on party-line votes.
FCC Chairman Reed Hundt, in a letter to Dingell, called the House auction plan unworkable. He blamed budget-driven pressure for lower-than-expected receipts from the wireless communications services auction in April. However, some observers fault Hundt for dumping too much spectrum, too soon, on the market. Financial woes of start-up personal communications services licensees also are cited as contributing to sagging license values.
The White House itself got in a jab during the debate.
“I understand that several members of the subcommittee have expressed their concern that the budget agreement is generating bad telecommunications policy,” said Franklin Raines, director of the Office of Management and Budget. “The administration strongly disagrees.”
Congressional budgeteers, for their part, insist the $26.3 billion is attainable if telecom lawmakers would stand up to the powerful broadcast lobby and mandate a firm date for analog TV channels to be returned to the government after the digital transition is completed. The analog broadcast spectrum is likely to be among the most valuable, but it may not be freed up until years after the 2002 auction.
Uncertainty over when (or whether) TV broadcasters will relinquish analog channels will depress auction license values, a House budget committee staffer said. But, he added, telecom lawmakers have it within their power to remove that uncertainty.
House legislation includes a 24 megahertz set-aside for public-safety communications. The Senate bill is expected to have a provision authored by Sen. John Breaux (D-La.) to impose spectrum lease fees in lieu of auctions on new private wireless licensees.
