Over the past couple years, telecom lawmakers were known to have taken a shot or two at budgeteers if the subject of spectrum auctions happened to come up. The quips were cutting, but mostly harmless. Whatever criticism there was lacked the rhetorical passion typically reserved for the serious business of the day.
The volume cranked up after the Federal Communications Commission raised $13.6 million in the wireless communications service auction in April. The budgeteers wanted $1.8 billion. Initially, they hoped for $3 billion.
In addition to the regular suspects, lawmakers without telecom oversight, like Bob Kerrey (D-Neb.), demanded answers and volunteered solutions to the auction crisis.
Last week, it worsened when House Commerce Committee members came face to face with a bill seeking to raise $26.3 billion from wireless license sales during the next five years. “They (the budgeteers) like to play with monopoly money. We deal with real money,” said Ken Johnson, press secretary for House telecommunications subcommittee Chairman Billy Tauzin (R-La.).
Reality had set in. Congressional and Clinton administration budgetmeisters agreed bidders would contribute $26.3 billion to balancing the budget by 2002. It was for the House and Senate Commerce panels to decide how.
There were lots of ideas: minimum bids, nullifying anemic auctions, reauctions, mandating digital TV production, banning auction monies for FCC auction administration, imposing broad-based spectrum fees and increasing the capital gains tax to make up for auction revenue shortfall and so on.
The Congressional Budget Office, the legislative branch’s official number cruncher, was under the gun to make the best of a bad situation.
Capitol Hill realists knew better, and soberly conceded auction legislation was at least $10 billion short.
Lawmakers, for their part, realized they could feign it no longer. The auction budget reconciliation process had turned into a charade. “Flim flam … a scam,” said Rep. John Dingell (D-Mich.).
Reed Hundt, chairman of the Federal Communications Commission and top auction advocate, turned to playing good-cop, bad-cop and joined Dingell in bashing Tauzin’s amendment to void auctions that fail to meet revenue targets.
Hundt faulted the budgeteers for problems in his prized auction program. Yet it is the FCC chairman himself who has dumped loads of spectrum on the market and held one auction after another during the last three years. The budgeteers made him do it, Hundt seemed to be saying. Official Washington knows better. Pocket Communications Inc. and MobileMedia Corp. know, too.
Moreover, Hundt’s failure to address paralyzing antenna siting problems has added to financial problems of wireless firms and fueled the downward spiral of license values. Meanwhile, with the auction house of cards coming down, Hundt has decided it’s time to leave 1919 M Street.
Telecom lawmakers had been outdone; spectrum policy had been morphed into budget policy. Everyone in town who ever had anything to do with spectrum auctions (that is, all those who took credit for auctions when the first $23 billion rolled in), was running for cover. Finger pointing began.
The heat and humidity had returned to Washington and blame-game politics were in full swing.
Ruling Republicans bickered with Democrats on the House Commerce Committee over the auction-budget bill. Both sides lashed out at budgeteers for treading on their turf. Budgeteers returned the fire, saying House Commerce members lacked the spine to mandate a date certain for the return of analog TV spectrum from digital broadcasters. Why? Commerce Committee members are afraid of the broadcast lobby, budgeteers replied. And then there is broadcast PAC money.
Speaking for the administration, Franklin Raines, director of the Office of Management and Budget, took offense at the notion that the congressional-White House budget deal made for bad telecom policy. Of course, there are those who say the budget deal makes for bad budget policy.
As long as there is uncertainty over the return of analog TV channels the value of broadcast spectrum will be peanuts, budgeteers point out. In addition, they note the crisis atmosphere leading to legislative efforts to hold spectrum back from the market works well for broadcasting, cellular, paging, personal communications services, dispatch and other established wireless licensees. Why? They don’t want more competition, budgeeters say.
“I wouldn’t spend a nickel on this (broadcast spectrum),” said Rep Ed Markey (D-Mass.).
Then there were those who tried to find meaning in the chaos. Tauzin, some observers speculated, was setting the auction bill up for failure. Instead of writing spectrum fees into the legislation and exacting the wrath of wireless users, as Senate Commerce Committee Chairman John McCain (R-Ariz.) was contemplating, Tauzin would let the budgeteers deal with the auction revenue shortfall when CBO came back with a low score.
Of course, as one top wireless lobbyist observed, that would simply let the budgeteers make more telecom policy. Precisely the thing telecom lawmakers want to halt.
It will be a tough act for the Senate Commerce Committee to follow this week.
