Senate Sends Reconciliation Package Back to House With 800 MHz Pipeline, No AI Moratorium
The Senate narrowly passed an amended version Tuesday of the HR-1 budget reconciliation package, formerly named the One Big Beautiful Bill Act, with a proposal for an 800 MHz spectrum auction pipeline but without a controversial Commerce Committee proposal for a voluntary freeze on enforcing state-level AI rules. The chamber voted 99-1 to strip out that language after a deal between Commerce Chairman Ted Cruz, R-Texas, and Sen. Marsha Blackburn, R-Tenn. (see 2506300072), collapsed Monday night.
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Vice President JD Vance voted to break a 50-50 tie in favor of the Senate’s version of HR-1, sending it back to the House with major changes from the version that the lower chamber passed in May (see 2505220064), which could still imperil the package. The House Rules Committee was meeting Tuesday afternoon to set up floor debate on the revised HR-1 text in hopes that representatives could still agree to the Senate’s changes in time to get it to President Donald Trump by the July Fourth holiday.
Cruz joined 98 other senators Tuesday morning to vote for an amendment that Blackburn and Commerce ranking member Maria Cantwell, D-Wash., led to jettison his AI language from HR-1, which, in its final form, required jurisdictions seeking a cut of a proposed $500 million in AI-related additional funding for NTIA’s BEAD program funding to freeze enforcement of their laws for five years. The Blackburn-Cantwell amendment also killed the $500 million AI BEAD funding. Sens. Susan Collins, R-Maine, and Ed Markey, D-Mass., co-sponsored the proposal.
“Our deal would have passed easily, but a couple of hours ago, the other side backed out,” Cruz said on the floor. “The agreement protected kids and protected the rights of creative artists, but outside interests opposed that deal, [including Democrats] who are all eager to aggressively regulate AI, all hated the moratorium.”
Blackburn said on the floor that she broke from her erstwhile deal with Cruz on Monday night after determining there were still “problems with the language, [and] I regret that we weren't able to come to a compromise that would protect our governors, our legislators, state legislators, our attorney generals and … House members who have expressed” concerns.
Blackburn sought the amendment after Cantwell and Markey filed their own bid to remove the AI language. Cantwell and other Democrats had repeatedly insisted that the AI proposal threatened states’ eligibility for funding from the BEAD program’s general $42.5 billion funding pool, despite Cruz’s claims that revisions meant that money was no longer in jeopardy (see 2506230043).
“The Senate came together tonight to say that we can't just run over good state consumer protection laws,” Cantwell said in a statement. “States can fight robocalls, deepfakes and provide safe autonomous vehicle laws.” Markey’s office argued that the AI proposal “would have forced states to make an impossible choice between enforcing AI consumer protections or accepting federal BEAD funding to expand broadband access.”
Spectrum Deal Intact
Meanwhile, Cruz hailed the Senate for passing its HR-1 version with his proposal for “the largest commercial spectrum pipeline in history, paving the way for faster and cheaper Internet, billions in private sector investment, and massive job creation.” The Senate Commerce language would restore the FCC’s lapsed spectrum auction authority through Sept. 30, 2034, and exempts the 3.1-3.45 GHz and 7.4-8.4 GHz bands from potential reallocation during that period (see 2506250054).
The office of Senate Communications Subcommittee Chair Deb Fischer of Nebraska, an Armed Services Committee member who was among the Republicans most vocally opposed to Cruz’s initial spectrum proposal, highlighted the airwaves language changes she pushed for during negotiations with Cruz. She and other Republicans argued that the House’s lower 3 GHz carve-out in the original HR-1 was too weak (see 2505120058).
Cantwell unsuccessfully sought a series of amendments to expand or alter the spectrum carve-outs. One proposal would have also exempted the 3.55-3.7 GHz citizens broadband radio service and 5.9-7.1 (6) GHz bands. The House-passed HR-1 had included a 6 GHz band carve-out. Cantwell's other proposals would have exempted frequencies on which the Coast Guard, NASA and NOAA are the primary users. Cantwell also sought to jettison language in the Senate-passed HR-1 that would require the FCC to sell at least 100 MHz from the 3.98-4.2 GHz band.
House Commerce Committee Chairman Brett Guthrie, R-Ky., appeared to be fully supportive of the Senate’s HR-1 spectrum language during a House Rules Committee meeting Tuesday to set up floor consideration of the amended measure. It “raises $85 billion of new revenue through a historic agreement reauthorizing the FCC’s spectrum auction authority, while protecting U.S. national security,” Guthrie said. CTIA CEO Ajit Pai also praised the Senate-passed HR-1 spectrum language and urged “swift action to pass this legislation.”
House Commerce ranking member Frank Pallone, D-N.J., said during the Rules meeting that congressional Republicans are “taking $80 billion from a spectrum auction, which traditionally we have used to [fund telecom priorities like] next-generation 911 [tech upgrades] or to make high-speed internet more affordable for American families. That's what spectrum auction should be used for. It shouldn't be used to give tax cuts for billionaires and large corporations.”