Estimated receipts from FCC spectrum auctions “are projected to be $1.2 billion lower in 2002 and $1 billion higher in 2004” than it had estimated in April, Office of Management & Budget (OMB) said. OMB, which released midsession federal spending report Wed., said revised estimate was part of several “technical changes” in April projections. Change in projected spectrum auction receipts “reflects regulatory actions taken by [FCC], which shifts the expected receipts from two major auctions.” OMB couldn’t tell us immediately what FCC actions report involved. OMB also said universal service fund spending estimates for fiscal year 2001 had declined by $1.1 billion. It said change in projected universal service spending reflected “decrease in expected collections in various programs and a slower rate of spending from obligated balances within the schools and libraries program than had been previously assumed.”
Senate Commerce Committee’s communications subcommittee took first run on Senate side Tues. on difficult spectrum allocations decisions that remain unresolved for 3rd generation wireless. Panel members questioned govt. officials closely on how efficiently both military and commercial operators are using existing spectrum allocations. Echoing Pentagon concerns raised at House hearing last week (CD July 25 p1), Linton Wells, acting asst. secy. of defense for command, control, communications and intelligence, continued to outline obstacles to relocation of military users before 2010 for terrestrial systems and 2017 for satellite systems. Without choosing sides between whether incumbent commercial or military users should be moved, Subcommittee Chmn. Inouye (D-Hawaii) stressed need for compromise. “If the only option is to relocate the Defense Department, we must find comparable spectrum, develop a migration time frame that allows the Defense Department to maintain its operations as it vacates the spectrum and ensure that the Department’s costs are reimbursed,” Inouye said. Like other panel members, he emphasized need to reach solution that wouldn’t degrade military readiness.
Members of House Telecom Subcommittee urged Defense Dept. and wireless industry Tues. to work out differences on 3rd generation wireless spectrum, although military top brass continued to raise red flags on relocation, reimbursement, timing. Verizon Wireless CEO Denny Strigl used hearing to call on Congress to weigh in on settlement solution for C-block spectrum returned by U.S. Appeals Court, D.C., to NextWave. On 3G front, Rep. Pickering (R-Miss.) said he planned to introduce bill “as soon as possible,” quipping that all spectrum was “on the table” except for bands occupied by MMDS and Instructional TV Fixed Services licensees. Subcommittee Chmn. Upton (R-Mich.) said he foresaw markup in Oct. time frame, despite differences that appeared to be keeping cellular operators and Pentagon apart. While much of panel appeared to be interested in finding ways to use DoD-occupied spectrum at 1.7 GHz for mobile Internet applications, several members questioned impact on national security and continuing military operations. Rep. Harman (D- Cal.), addressing Pentagon “skepticism” about ability of military to move, said, “I would not agree that the right answer is ‘We just can’t.'” She said: “I would suggest that more attention needs to be paid to how to make that transition effective.” Nearly 3-hour hearing, first this year on 3G, also focused on Enhanced 911 progress and need for lifting spectrum cap.
Corrections: FCC Chmn. Michael Powell told House Appropriations Subcommittee he “takes seriously that Congress wants” Commission to complete Northpoint spectrum-sharing proceeding by end of year, possibly as early as fall (CD May 23 p 7). We referred incorrectly to ultra-wideband proceeding in Powell’s 5 reasons why “more specific time frame” wasn’t possible. Reference to possible spectrum auctions involved Northpoint, but not UWB, proceeding… In our interview with FCC Chmn. Powell (CD May 23 p4), one of his comments was transcribed erroneously. In answer to question whether some companies depended too much on arbitrage, he said FCC now had to take tough actions on issues such as CLEC access charges and colocation remand. Transcript said “collect access charges and call locations remand.”
CTIA asked President Bush to give Commerce Secy. Donald Evans “sufficient time” to complete 3rd-generation wireless spectrum assessment by delaying pending auctions. Govt. has been working toward July 31 deadline that FCC faces for spectrum allocation decision under timelines set out by President Clinton in executive memorandum last Oct. Request to Bush came as speculation has grown that Commerce Dept. wouldn’t necessarily be prepared to craft 3G decisions within tight schedule of executive memorandum anyway. Last week, House Telecom Subcommittee Chmn. Upton (R- Mich.) said panel’s hearings on issue were delayed because department wasn’t ready to unveil its “game plan” (CD May 14 p1). “Previous Administrations ignored this [3G] issue until it finally reached crisis proportions, leaving your Administration to inherit the crisis and make the tough decisions,” CTIA wrote Bush.
FCC unanimously approved Deutsche Telekom’s (DT) merger with VoiceStream and Powertel, imposing no special conditions on $34 billion deal and provoking renewed commitment from Sen. Hollings (D-S.C.) to seek restrictions on foreign govt. ownership in U.S. telecom companies. FCC adopted order 4-0, with Comr. Furchtgott- Roth dissenting in part on separate deal on national security issues between federal agencies and companies. Order, approved Tues., is expected to be released as early as today (Thurs.) Commission said in news release it found DT would “have neither the incentive nor the ability to engage in unfair competition, specifically predatory pricing, in the U.S. domestic mobile telephony market.”
“Unintended outcome” of high prices paid in recent wireless spectrum auctions has been to force carriers to curtail infrastructure investment, Gartner Dataquest said in new report. “Because the telecommunications sector is so large, the investment slowdown has actually slowed the U.S. economy,” said Ron Cowles, Gartner analyst for telecom and networking. “The government should consider using a portion of the auction revenue to apply financial incentives for infrastructure development to build advanced networks,” Cowles said. Other steps that govt. could take to stimulate telecom sector investment include investment tax credits, streamlining of rules that inhibit infrastructure deployment and modifying rules that stymie competition, report said. It also said govt. must redefine universal access to include broadband equal access “allowing bandwidth connectivity for advanced services to all areas, business and residential alike.”
Bush Administration’s fiscal year 2002 budget proposal would increase funds for FCC, but White House’s long term strategy is to level off agency’s spending over the next 4 years. According to govt. budget details released Mon., Bush would increase FCC’s FY 2002 budget to $248.5 million from current $230 million. Total proposed outlays, or “amount the [FCC] actually spends in a given fiscal year,” would increase to $320 million from $301 million. Spending in FY 2003 and 2004 would drop to $302 million, then increase by $1 million in FY 2005 and FY 2006, respectively, under plan.
Creation of “a multibillion-dollar” Digital Opportunity Investment Trust -- with much of proceeds earmarked for public broadcasting -- is recommended in 2-year study to be released today (Thurs.). Fund would be financed by proceeds from future spectrum auctions, which Congressional Budget Office estimated would produce $18 billion over next several years. Authors of report are Newton Minow, FCC chmn. in Kennedy Administration, and Lawrence Grossman, former pres. of PBS and NBC News. Recommendations in report would require approval by Congress for use of federal money before fund could be established.
LAS VEGAS - Govt. should consider rebates or other restructuring of spectrum auction fees in order to create available capital to continue buildout of wireless networks, Motorola CEO Chris Galvin said in keynote session at CTIA convention here Wed. Galvin said rebates could be as large as 50% of auction fees paid by wireless carriers, and govt. also should restructure way future spectrum was allocated: “As any new technology is created, the rules and regulations need to be modified.”