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March 16 House Hearing?

Lawmakers Eye 2-Year FCC Spectrum Auction Authority Renewal Ahead of Expiration

Telecom-focused lawmakers are trying to beat the legislative clock as they seek a way to renew the FCC’s spectrum auction authority, currently set to expire when FY 2022 ends Sept. 30. The House Communications Subcommittee is eyeing a March 16 hearing on auction authority reauthorization and potential ways to spend revenue from additional auctions, Hill aides and lobbyists told us. FCC Chairwoman Jessica Rosenworcel recently asked Congress to authorize the agency to use proceeds to pay for next-generation 911 tech upgrades (see 2202220057). Congress last extended the FCC’s auction authority via the 2012 spectrum law.

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Congressional staffers already eyed including spectrum reauthorization language in the FY 2022 appropriations omnibus currently under negotiation but dropped that approach because they ran out of time, wireless industry lobbyists said. The leaders of the House and Senate Appropriations committees were still working through the contours of an omnibus package Friday. Senate Appropriations ranking member Richard Shelby, R-Ala., told reporters Thursday another continuing resolution to extend appropriations past March 11 would be necessary if negotiations don’t produce a deal by Tuesday. One potential hurdle to quick action is that the Congressional Budget Office has to score renewal language and now it can base it only on the upcoming 2.5 GHz auction.

House Commerce Committee Democratic leaders have been floating a two-year reauthorization extension before the potential March 16 Communications hearing, telecom lobbyists said. The 2.5 GHz auction is expected to start in July (see 2203010070), before the Sept. 30 expiry. The FCC appears to have few other auctions in the works that could occur during a two-year extension timeline. Congress authorized a 3.1 GHz auction as part of the Infrastructure Investment and Jobs Act, but that auction is more than three years in the future (see 2111120050).

House Commerce hasn’t decided who will testify at the March 16 hearing, wireless lobbyists said. Lawmakers are likely looking for direction from Rosenworcel, who could play a major role in getting Congress to act, lobbyists said. Commissioner Brendan Carr also repeatedly stressed the importance of the issue (see 2202180054). The FCC didn’t comment Friday.

'Front and Center'

We’re looking to see” FCC auction authority attached to must-pass legislation “in any way we possibly can” before Sept. 30, said House Communications Vice Chair Doris Matsui, D-Calif., in an interview. “This is the time to be talking about” renewal options. “I don’t have an answer” of how to do that yet, but “we’ve been talking about what we can do,” she said.

House Commerce leaders would prefer not to set a later sunset date because that could hinder the amount of potential revenue they can use to pay for telecom policy priorities, especially if the FCC sets up additional future auctions that stakeholders aren’t already aware of, lobbyists said. The March 16 hearing may explore public interest and consumer groups’ proposal that the FCC allocate revenue from future auctions to endow a Digital Equity Foundation to help close the digital divide (see 2202230058), lobbyists said.

We need to keep” the spectrum “pipeline filled,” but it “would probably be even better to think longer term than” a two-year extension, Senate Communications Subcommittee ranking member John Thune, R-S.D., told us. It’s an issue that “should be front and center” in the Senate Commerce Committee’s agenda in the coming months. “We’ve got to start anticipating the fact that we’re going need a lot more spectrum in the years ahead and start planning for it,” he said.

Thune noted he and Senate Commerce ranking member Roger Wicker, R-Miss., pressed Rosenworcel Thursday for more information on the FCC’s plans for future spectrum auction opportunities and related policy overhauls. They want Rosenworcel to identify “specific frequencies” that “could be good candidates for auction that the FCC does not currently have the authority to conduct” following Sept. 30. “It is imperative that we continue to focus our efforts on creating a sustainable and predictable pipeline of spectrum for commercial and federal use in our country,” Wicker and Thune wrote Rosenworcel. “This is a pivotal time in the development of next generation communications networks and the applications and use cases that will result.”

It’s important we get this done” soon because “we’re running out of time” before the authority expiration date, said House Communications ranking member Bob Latta, R-Ohio. “We need to have committee hearings” to gauge how long an extension Congress should enact now and “make sure we have everything in line as we go forward.” Lawmakers can’t take too long deliberating the issue, because once the current authorization expires “what are we going to do?” he said.

Timing Concerns

Some wireless lawyers said two years would give the FCC a comfort zone to complete the 2.5 GHz auction, but other observers questioned whether a shorter timeline would be effective. “The spectrum auction program is one of the most successful, on every metric, policy innovations of the last half century, so I don't know why it requires constant reauthorization,” said New Street’s Blair Levin: “Given the calendar of auctions in the years ahead, it is not clear what a two-year authorization, as opposed to a 10-year authorization, would mean.”

"The FCC's spectrum auction authority has never lapsed,” said Cooley’s Robert McDowell, a former commissioner: “Some kind of legislation reauthorizing it could be a lower profile but good-government bill that should garner a large bipartisan majority of Congress.” Both parties “have loved spectrum auctions for a variety of reasons, not the least of which is that they generate revenue for the U.S. Treasury without raising taxes,” he said: The U.S. “cannot let this auction authority lapse as we are in the midst of an intense global 5G competition, and we are starting to lay the groundwork for 6G. One would hope that the partisans on all sides would pause their election year conflicts to come together on this one."

Most experts aren’t too worried,” said American Action Forum Technology and Innovation Policy Director Jeffrey Westling. “If Congress does decide to do a relatively short-term fix, that could just be due to the nature of the upcoming midterms and relatively limited time available to work through the details with other pressing issues on the agenda,” he said. Democrats and Republicans “understand the effectiveness of the FCC’s auctions, both to get operating rights into the hands of the entities that value them the most and to generate revenue,” he said: “With so much going on in the world and with elections later this year, lawmakers shouldn’t lose sight of this important aspect of telecom regulation.”

If Congress decided to do a two-year reauthorization strategy, then I would expect it makes things more difficult for the FCC to open up more mid-band spectrum for 5G, especially as we get closer into DOD territory,” said Digital Progress Institute President Joel Thayer. “If Congress only gives the FCC two years, the agency would need to decide fast as to which bands it wants to auction off to ensure carrier participation and perform the proper vetting for interference.” The FCC most likely “won’t get anything done under that pressed timeline and will hold off on opening up more controversial bands until the next reauthorization which are important to 5G,” he said: “Limiting the FCC’s auction authority to two years is a bad idea.”

A short-term reauthorization “makes more work for Congress with the added complication of someone inevitably dropping the ball and everyone scrambling,” said Recon Analytics’ Roger Entner: “Spectrum and spectrum auctions have always had bipartisan support. I don’t think anyone will ever use the spectrum auction authorization as a bargaining chip because that’s like holding a gun to your own head to get your way.”

Reauthorizing the FCC’s auction authority with a clear, Congressionally-mandated pipeline of licensed spectrum auctions is critical to maintain America’s wireless leadership, and we look forward to working closely with Congress and the FCC to achieve that goal," CTIA said in a statement.