Business and Deals

New Senate Bill Drops Spectrum Auction Language

Sen. Reid modifies bill, including scrapping incentive auction section that had troubled broadcasters 7/29/2011 11:40:50 PM Eastern

Senate Majority Leader Harry Reid (D-Nev.) has crafted a new version of his debt-ceiling bill that no longer includes spectrum auction language.

According to a copy of a July 29 letter from the Congressional Budget Office outlining the new bill's impact on the deficit, among the differences in Friday's (July 29) version of the bill was that it "removes provisions governing spectrum auctions and related spending." A check of a draft copy of the bill confirmed the spectrum language is gone.

The Senate is scheduled to return Saturday at 1 p.m. to take up the Reid bill and vote by early Sunday morning so there would still be time to get it through the House and to the President before the Aug. 2 default deadline. If the Senate won't pass the new Reid bill or the House rejects it, then all bets are off, though it is unlikely the auction language would be reinserted into a bill attempting to reach a compromise.

The spectrum auction issue had been tied to the debt-ceiling bill because spectrum auctions raise billions of dollars, some of which--between $5.5 billion and $13.5 billion depending on who was doing the estimating--was earmarked for deficit reduction.

Reid's previous bill had authorized the FCC to compensate broadcasters for giving up spectrum for wireless broadband, but did not contain language directing the FCC to replicate their coverage areas or interference protections, protections broadcasters have said any incentive auction legislation needs to have. Instead, it essentially gave the FCC free reign to move and repack stations, or to hold multiple auctions. Broadcasters only want to go through the process once, having already given up spectrum in the DTV transition.

Broadcasters were worried that the incentive auction language might remain in the bill and get propelled to the President's desk by the momentum of the looming credit default.

The National Religious Broadcasters Friday had issued a statement cautioning about that lack of protection (http://www.broadcastingcable.com/article/471724-NRB_Cautions_Against_Auc...). National Religious Broadcasters President Frank Wright said Reid's initial plan would put many of his noncommercial broadcast station members "in a very precarious spot as it could auction away their future."

The National Association of Broadcasters had not been happy with the language in Reid's initial bill, either. "NAB is deeply concerned about provisions currently in Senate Majority Leader Reid's legislation that would threaten the future of a great American institution -- free and local television," NAB had said in a statement. An NAB spokesperson was not available to comment on the latest bill.

But now broadcasters can breathe a little easier. With no spectrum auctions in the debt-ceiling bill from House Speaker John Boehner (R-Ohio), which the Senate tabled Friday, it now looks like incentive auctions are back on the stand-alone legislation track. That will give broadcasters more to push for those protections. If the House and Senate exit in August it will be tough to get a bill done by the tenth anniversary of 9/11.

In addition to raising money to pay broadcasters for exiting spectrum, and pay down some of the deficit, the incentive auction proceeds will go toward creating and maintaining an interoperable broadband communications network. Some legislators from both parties have been working to get legislation to the President before that date rather than explain why, 10 years after 9/11, one of the 9/11 Commission recommendations had not been adopted.

Sen. Jay Rockefeller (D-W. Va.) has been pushing hard for his incentive auction bill, which broadcasters have issues with as well.

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