WHITE HOUSE STANDS BY SPECTRUM POLICY, FACES TOUGH HILL FIGHT

That’s not going to happen, Administration official told us. In addition to giving more details about plan, White House will submit to Congress proposed legislation authorizing FCC to delay current 2002 deadline for auctioning spectrum currently used for TV analog channels 52-59, Administration official confirmed. “We proposed shifting [auction] to 2006,” official said. “We believe it makes more sense to auction the spectrum when it’s closer to use.” Broadcasters aren’t obligated to give up those channels until 2006, when DTV transition is presumed by current law to be complete. Current 2002 deadline was set by 1997’s balanced budget act, when Congress needed those assumed auction revenues to make numbers add up, official said, and “the budgeting situation has changed since then,” with surpluses expected this year and for foreseeable future. Official defended changes against accusation that they were motivated by tax cut needs: “We believe it to be rational policy.”

Administration also will propose plan to promote quicker clearing of analog channels 60-69 for wireless companies, official said, “while making sure broadcasters are compensated.” Official promised plan would “make the situation clearer [for companies] than under the FCC’s rules now,” but declined to give further details. Commission would gain authority to push auction deadline for channels 60-69 back as far as 2004, official said, but wouldn’t necessarily be required to do so.

Official defended Administration’s proposal to charge broadcasters “lease fee” to keep analog spectrum during transition: “This will spur broadcasters to give up the spectrum sooner rather than later.” Plan is slightly different from one offered by Clinton Administration (and quickly killed by Congress) in that $200 million taken in from broadcasters no longer was scheduled to go directly to agencies to upgrade public safety communications equipment. Money would go into general revenues instead, official said.

Hill leaders torpedoed idea of charging broadcasters “lease fee” when it was promoted by Clinton Administration, and they said they had every intention of being consistent. Lease fees “are still a bad idea under the Bush Administration,” Johnson said. He said Commerce Committee was giving much attention right now to why DTV transition wasn’t happening on schedule, and “the last thing we need to do is begin penalizing broadcasters who are already experiencing difficulties trying to make digital work.” Johnson said it wasn’t clear that some broadcasters ever would be able to give up analog spectrum: “Right now there simply isn’t a business plan that makes sense for a small television station.”

Hill staffers were even more critical of process by which policy was reached without consulting them. “We're a little chagrined to have learned about this plan from the press and not the Administration itself,” Johnson said. “We're going to dismiss it as part of the learning process.” We contacted several leading telecom staffers, and none of them had been consulted or even fully understood what was contemplated by slim line in budget. “I'm not sure they can just do that,” said one. Bush people “don’t understand how relationships work on the Hill,” said another. “That has been communicated.” Staffer said it still wasn’t clear “who’s calling the shots over there… It’s probably some junior staffer saying, ‘I know how'” to raise money for tax cuts.

“Anything that can be done to speed the clearance of spectrum is a step in the right direction,” CTIA Pres. Thomas Wheeler said after panel discussion at Precursor Group Washington conference. Aside from timing of auctions proposed in budget, one significant detail is extent to which it appears to deal with plan to clear broadcast incumbents from 700 MHz spectrum. Asked about extent to which Washington insiders were surprised by specifics of budget numbers, Wheeler said: “We have to cut them [new Administration] a little slack because they've only been in office for 30 days.” Industry insiders still were gathering details Thurs. on what numbers meant. If plan is to find way to clear spectrum of 1.7 GHz band now occupied by military users to make way for 3G services, “that’s interesting,” one source said. While policymakers and lobbyists were scratching their heads on exact meaning of language, FCC officials said OMB had been in touch with agency beforehand with questions on auction and other issues.

Rural lawmakers in particular were upset that Bush team was trying to eliminate Agriculture Dept.’s Rural Telephone Bank loan program, and it didn’t help that they perceived as “flippant” how OMB Dir. Mitch Daniels discussed program this week. “He created a little firestorm up here,” staffer said, adding that Bush team was getting lesson in how rural politics dominated telecom policy. “My voice mail has been filling up with calls from people who are upset.” National Telephone Co-op Assn. CEO Michael Brunner said Bush team was mistaken in thinking that there no longer was need for program: “The need for the program has never been greater, with policymakers everywhere demanding the full deployment of broadband communications throughout rural America. Such an expensive endeavor will never be completed without the assistance” of the loan program.