WASHINGTON-Democrats will meet this week in Chicago to launch President Clinton’s re-election campaign and try to take away the bounce that the Republican national conventional gave to the Dole-Kemp ticket earlier this month. Both major political parties are playing to middle-class voters with proposals funded by spectrum auctions, despite highly speculative assumptions about revenue projections and availability of radio frequencies.
Republican presidential nominee Bob Dole, the skilled Kansan legislator of 35 years who resigned as Senate majority leader in June to devote his full attention to the presidential race, has proposed to offset part of his half-trillion tax-cut plan with $34 billion from spectrum auctions.
The Dole economic package, which critics predict will balloon the federal deficit instead of erasing it by 2002, does not specify what spectrum would be sold.
Dole in the past has called for digital TV auctions. He put a hold on the telecommunications reform bill in January before relenting after key Republican lawmakers promised not to issue next-generation broadcast licenses until after spectrum reform legislation is considered.
But Dole’s successor, Trent Lott (R-Miss.), and a group of key GOP and Democratic lawmakers voided that deal in June when they urged Federal Communications Commission Chairman Reed Hundt to finalize digital TV rules by next April.
One of those lawmakers, Senate Commerce Committee Chairman Larry Pressler (R-S.D.)-author of the telecommunications rewrite and a draft spectrum reform bill in that chamber-refused to endorse Lott’s policy repeal.
Moreover, the House recently overwhelmingly rejected Rep. Barney Frank’s (D-Mass.) amendment to require digital TV auctions.
“There are some questions about auctioning of the spectrum,” said Ann Lewis, deputy campaign manager of the Clinton-Gore campaign. “So I think there may be some discussion that has to go on in the Republican Party on the extent to which those kind of dollars from television will be available.”
Lewis declined to explain, though, how Clinton is going to find the money for his own spectrum auction proposals other than the one for selling analog TV channels returned by broadcasters who convert to digital technology. All told, Clinton’s fiscal 1997 budget anticipates $32 billion in auction receipts during the next five years. One and a half billion dollars is expected to come from the sale of 888 toll free numbers, a proposal that has drawn sharp criticism.
Both the fact that auction authority has not been extended to broadcast and private wireless services and the uncertainty tied to the two candidates’ auction-related proposals tend to skew their spectrum revenue projections as well as the programs themselves.
Besides quashing Dole’s digital TV auction aspirations, the June 19 letter signed by Lott, House Speaker Newt Gingrich (R-Ga.), House Commerce Committee Chairman Thomas Bliley (R-Va.), Senate Commerce Committee ranking minority member Ernest Hollings (D-S.C.) and House Commerce Committee ranking minority member John Dingell (D-Mich.) may also put a crimp in two election-year initiatives offered by the White House.
Clinton wants to fund school reconstruction with $5 billion from the sale of TV channels 60-69. But congressional auction authority does not extend to broadcast airwaves, though the administration and some in Congress think it should. Thus, the Federal Communications Commission would have to reallocate broadcast spectrum to a commercial, subscriber-based wireless service that is subject to competitive bidding.
Lott and the other lawmakers, however, warned Hundt not to pursue a reallocation plan in the upper UHF band where TV channels 60-69 are located.
Clinton also offered to pay for a $1,500 college tuition tax credit in part with $2.1 billion from the sale of digital audio radio licenses, despite the fact those frequencies are mired in controversy over Dingell’s opposition to awarding a pioneer’s preference in that service. The FCC reform bill in the House would end the FCC pioneer’s preference program.
In addition to doubts about the targeted frequencies being available for auction is the issue about their value.
The FCC initially projected TV broadcast spectrum could raise between $11 billion and $70 billion, a range based partially on the sale of digital paging and pocket telephone licenses that to date have brought the U.S. treasury nearly $20 billion.
The FCC has since lowered its estimate to a figure comparable to the $34 billion Dole expects to generate from spectrum auctions. Because the wireless telecommunications industry had to pay for next-generation digital licenses, it believes TV broadcasters should have to do the same.
The Congressional Budget Office is far more conservative in its outlook, forecasting $11 billion from analog TV channels (subject to recalculation because there are fewer channels for sale than originally anticipated) and $12.5 billion from digital TV license sales. Yet, from the beginning, CBO has underestimated the revenues produced by spectrum auctions.
CBO this fall will issue a major report on spectrum management options requested by House Budget Committee Chairman John Kasich (R-Ohio).
