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Rip and Replace Uncertainty

Strong Chance CR Includes Short FCC Spectrum Authority Renewal Amid Talks

Additional money to fully fund the FCC’s Secure and Trusted Communications Networks Reimbursement Program and a short-term extension of the FCC’s expiring spectrum auction authority both remain under consideration as additions to a planned continuing resolution to extend federal appropriations past Sept. 30, but talks remain highly fluid, lawmakers and lobbyists told us last week. Senate Commerce Committee ranking member Roger Wicker, R-Miss., Communications Subcommittee Chairman Ben Ray Lujan, D-N.M., and other committee leaders left open the possibility of a short-term auction authority renewal as a stopgap, telling us they hadn’t reached a deal during the August recess on a broader spectrum legislative package.

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Senate talks last week appeared to coalesce around a CR that would extend federal appropriations through Dec. 16, pushing the prospect of a government shutdown past the Nov. 8 midterm elections. Senate leaders hope the stopgap will provide enough time to reach a deal on an omnibus FY 2023 appropriations package so Congress can pass it during the lame-duck session. The CR’s scope remained fluid Friday amid GOP opposition to Democratic interest in attaching additional aid to address the COVID-19 pandemic, monkeypox outbreak and Russia’s invasion of Ukraine.

There’s “not a deal” yet on overall spectrum legislation, but there was “a lot of conversation” during the August recess, Senate Commerce Chair Maria Cantwell, D-Wash., told us. Senators had been hopeful talks during the break would yield a fleshed-out deal on a spectrum package aimed at bridging disagreements about the approach in the House-passed Spectrum Innovation Act (HR-7624), which would renew the FCC’s authority for 18 months (see 2208090001).

People see the benefit of a longer” reauthorization period, but it’s “always hard to get an agreement on” wider-ranging packages “because there’s so many aspects to them,” Cantwell said: Negotiators “haven’t gotten to” any sort of agreement on including an extension of the FCC’s authority through year-end as part of a CR either.

Everyone’s working towards” reaching a deal by Sept. 30 “and I still have hope that this can be done” before that deadline, Lujan said: “There are ramifications” to letting the FCC’s authority expire, and “while I believe some work can continue even if” Congress can’t pass something by Sept. 30, “I do not want to see” anything happen “that would deter what’s happening with” implementing the Infrastructure Investment and Jobs Act. “It seems to me that when there’s more certainty on spectrum auctions and other issues, then we will see more work being done across the country” to improve connectivity, he said: “I don’t want to see anything detract against that.”

I do not feel that a deal” on spectrum legislation “is in the offing in the next few days” and it’s unlikely the divide among Senate Commerce leaders on a larger package “can be bridged this month,” Wicker told us. “Right now, everything” is focused on “whatever things the Democrats want to consider” including in the CR, said Senate Communications ranking member John Thune, R-S.D. Some things expire Sept. 30 and the FCC’s spectrum authority “is one of them, but I don’t know where that rides. If we can find a path forward, it would be nice to do that” as part of must-pass legislation.

Shortfall Push

Lujan, Wicker and 14 other Commerce members were part of a 34-senator group that urged chamber leaders Thursday night to fully fund the rip and replace program amid the current $3.08 billion shortfall the commission currently faces (see 2207220052). The senators want leaders to find “legislative solutions to promptly provide the financial resources necessary” to fully pay for rip and replace reimbursements but didn’t mention specific measures. Congress will be “jeopardizing vital communications networks nationwide and our national security” if lawmakers don’t agree to funding beyond the $1.9 billion included in the FY 2021 appropriations and COVID-19 aid omnibus law (see Ref:[2012210055]), the senators wrote Majority Leader Chuck Schumer, D-N.Y., and Minority Leader Mitch McConnell, R-Ky.

The senators emphasized the implications of the FY21 omnibus’ requirement that the FCC pro rate reimbursements to requested levels in the case of a funding shortfall. “The highest priority class of telecommunications providers in the Reimbursement Program serve the most rural areas” of the U.S., “where wireless connectivity is a vital lifeline to accessing telehealth services, receiving emergency notifications, and participating in the 21st century economy,” they said: “Due to significant national security risks to U.S. communications infrastructure, the FCC has already prohibited” USF money “from supporting the maintenance or expansion of any wireless network that has covered equipment from Huawei and ZTE present. While these actions are necessary, small rural wireless telecommunications providers rely upon USF funds.”

Hill leaders are likely to agree to put a short-term auction authority extension in the CR, but there’s less clarity about the chances they will include the rip and replace money, lobbyists told us. There remains “a desire to get to a longer-term deal” on spectrum legislation, but the reality is “that’s not going to happen” by Sept. 30, one communications sector lobbyist said: Extending the authority “in parallel” with the CR’s end-date would “give some breathing room for further discussions while still having an action-forcing event coming up” to prevent lawmakers from “kicking the can” down the road again. Discussions on placing rip and replace money in the resolution weren’t “advanced enough” as of Friday to make a path forward clear, the lobbyist said.

The length of the renewal timeline remains a major “challenge” in reaching an agreement on a broader spectrum measure, said Public Knowledge Government Affairs Director Greg Guice. “If you can get past how much time to reauthorize” the FCC’s authority, “once you get down to the next part of the potential legislation” to issues like specifying auctions of specific bands, “there’s a lot more willingness and flexibility.” Competitive Carriers Association Senior Vice President-Legislative Affairs Tim Donovan noted the talks in both houses continued throughout the recess and said the group’s “goal is that some action can be taken to make sure” the FCC’s authority “doesn’t lapse.”

The CR remains “a really great opportunity” to fully fund rip and replace “to make sure there isn’t further delay” in participants “being able to move forward” with replacing suspect telecom equipment, Donovan told us: “It’s a little early with the House coming back” Tuesday “to know what is solidifying in terms of how clean the CR will be,” but the 34 senators’ letter “does send a really strong message” to Schumer and McConnell “that there is robust support for finding a way to make sure that the program is fully funded.”