House Commerce Upbeat on Spectrum Agreement Despite D-Block Fight

"The competing discussion drafts are a welcome addition to the process,” said subcommittee Chairman Greg Walden, R-Ore. “Despite the differences on paper, the reality is we are not as far apart as it might seem and we are personally committed to doing all within our power to write a bipartisan bill in the end.” Other unresolved issues include unlicensed spectrum, interoperability requirements and conditions on licenses, Walden said. Ranking Member Anna Eshoo, D-Calif., said more work is needed, but she remains “optimistic” that the parties can come together on one bill. The parties disagree on D-block, but are “not too far apart” on other areas, said committee Ranking Member Henry Waxman, D-Calif.

Walden said Congress would be “much further along” if President Barack Obama hadn’t supported D-block reallocation. “Absent the president’s proposal, D-block would not be quite the stumbling block it has become,” Walden said. A D-block auction is required by law, recommended by the National Broadband Plan, supported by FCC Chairman Julius Genachowski and written into a Waxman bill last year, Walden said. Commerce Committee Chairman Fred Upton, R-Mich., asked in a written statement why Waxman and other Democrats have changed their position. “Our starting point ought to be the policy on which we last agreed,” Upton said.

Reallocating the D-block “is the best chance we have to pass legislation into law,” since it has support from Obama and support from Democrats and Republicans in the House and Senate, Waxman said. “Reallocation is the best way to ensure that public safety has the leverage to incentivize the public-private partnerships and network sharing arrangements that are essential to constructing the nationwide broadband networks.” It also “allows us to plan for public safety’s transition to broadband,” he said.

The parties also disagree on governance for the public safety network. The Democrats’ proposal, based on S-911 by Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., sets up a federal entity to manage the network. Eshoo called the plan “a carefully developed, effective and efficient national governance mechanism with sufficient oversight and accountability.” Upton said he’s “skeptical about the idea of creating a large, federal bureaucracy to manage this network when we would largely be duplicating the systems and expertise already in place in the commercial, government and public safety communities."

If enacted, the GOP draft “would leave public safety worse off than it is today,” said San Jose Police Chief Christopher Moore. The Public Safety Alliance disagrees with several pieces of the GOP bill, including D-block auction, multiple state licensing, the governance structure, “the lack of specified funding as the top priority of any auction proceeds,” he said. Public safety prefers the reallocation and governance provisions of the House Democrats’ draft, he said.

Co-chairs of the 9/11 Commission urged D-block reallocation in a letter Friday to Upton and Waxman. “Using this spectrum, public safety agencies will be able to build a nationwide interoperable broadband network, allowing diverse agencies to communicate with each other, and supporting mission critical voice, video, text, and other data transmissions,” wrote Chairman Tom Kean and Vice Chairman Lee Hamilton. The committee should also examine interoperability between public safety and commercial networks so public safety has a backup should the D-block “go down in an emergency,” they said.

"There will be blackouts” without adequate protections for broadcasters in voluntary incentive auctions, said NAB President Gordon Smith. He told Rep. John Dingell, D-Mich., that not one of Detroit’s 14 stations will survive if Canadian channel reservations aren’t taken into account. Smith praised provisions in the GOP draft restricting the FCC from forcing broadcasters to move from UHF to VHF, allowing only one voluntary incentive auction of broadcast spectrum and reimbursing stations’ relocation costs. He said lawmakers should ensure stations that don’t participate in auctions are held harmless. Legislators also should strengthen a provision requiring the FCC to replicate broadcasters’ existing service areas “to the maximum extent possible,” Smith said. NAB is not seeking a mandate requiring all cellphones to carry mobile DTV chips, he said.

Eshoo doesn’t want an “overly prescriptive” approach to incentive auctions, she said. Peter Cramton, economics professor at the University of Maryland, said the committee should kill “a number of clauses” in the GOP draft that would limit how the FCC sets up incentive auctions. “The reality is that this is an extremely complicated auction, and no one -- not even the best experts -- knows right at this instant how all the questions should be resolved,” he said. Legislation can provide “broad principles” to protect auction participants, the economist said.

The GOP draft’s handling of unlicensed spectrum took fire from Rep. Doris Matsui, D-Calif., and witness Michael Calabrese, a New America Foundation director representing the Wireless Innovation Alliance. The Republicans would require that no spectrum be given away without an auction, including spectrum for unlicensed use. That approach would put “American innovators … at a competitive disadvantage,” said Matsui. HR-2520 would make 5 GHz spectrum available for unlicensed use. The language of her bill is also part of the Democratic draft. The Republican proposal is “unstudied, untested, unworkable” and likely to prevent any new spectrum for unlicensed use, Calabrese said.

Rep. John Shimkus, R-Ill., said spectrum may be “too valuable to give away for free, especially in this economy.” That includes less-desirable spectrum wanted for unlicensed use, he said. “If you really need money that badly, you can always put in a device certification fee,” said Calabrese. “But an auction is the worst idea."

To maximize revenue, don’t condition auctions, CTIA Vice President Christopher Guttman-McCabe said. The association supports a provision in the GOP draft prohibiting the FCC from making conditions related to net neutrality and other areas, he said. The government would have made more money on the 700 MHz C-block were it not for open-access conditions, he said.

Momentum in support of a public safety spectrum bill has grown considerably just in the past year, Jeffrey Johnson, immediate past president of the International Association of Fire Chiefs, said in an interview. White House support has been critical, he said. Johnson represented public safety during a Congressional High Tech Task Force Forum late Thursday.

"There’s a lot of work to be done, and I think the further apart the positions are on any issue, the longer it takes to work through it,” Johnson said. “But I think we've finally got the attention of the full Senate and the House on how important this is.” Johnson conceded public safety doesn’t want to have to start over with the next Congress making a new round of lobbying calls if this Congress fails to act. “The one thing that’s happening that’s clear is that, Republican or Democrat, regardless of the committee or the position, people realize something has to be done for public safety,” he said. “We don’t have a national architecture and we will not ever solve the interoperability problem until we have a single national architecture, a single technology and a single license."

Lawmakers at the hearing appeared willing “to compromise in order to move spectrum legislation in the near term,” MF Global analyst Paul Gallant said in a note Friday. “The overall tone from the members was constructive.”