Kerry-Snowe Introduce Incentive Auction Bill

FCC, NTIA would have to do spectrum occupancy survey and cost-benefit analysis

Sen. John Kerry (D-Mass.), chairman of the Senate
Communications Subcommittee, and Rep. Olympia Snowe
(R-Me) have introduced a bill that would authorize incentive auctions and
require the FCC and NTIA to conduct a
spectrum inventory. It would allow the FCC to determine how much to
compensate broadcasters for giving up spectrum, but would also try to prevent
speculation in those licenses.

The legislators said Wednesday that special interests should
not be driving spectrum policy. That could include broadcasters trying to
protect their turf, or wireless companies trying to expand their spectrum
holdings, or arguably even the FCC, whose special interest is in getting
broadband deployed as swiftly and elegantly as possible.

An inventory and incentive auctions are two things
broadcasters have been pushing for, including in meetings on Capitol Hill this
week as part of an annual lobbying fly-in.

Congress has to give the FCC permission to conduct incentive
auctions, which would compensate broadcasters for moving off their spectrum and
could raise funds for an interoperable emergency communications network. That
network and funding have been proposed by Sen. Jay Rockefeller (D-W. Va.),
chairman of the full Commerce Subcommittee.

Senator Mark Warner (D-Va.), who in another life co-founded
Nextel, has also introduced an incentive auction bill to free up wireless
spectrum. The bill authorizes payments to broadcasters who voluntarily give up
spectrum, but also directs the FCC to "establish a maximum revenue sharing
threshold applicable to all licensees within any auction." There is a
caveat that the threshold could be upped if, as a result, the government got
more money or more spectrum.

Kerry and Snowe outlined their comprehensive spectrum
reform bill (the "Reforming Airwaves by Developing Incentives and
Opportunistic Sharing Act" or the RADIOS Act) in a letter to Rockefeller
and ranking committee member Kay Bailey Hutchison (R-Tex.), saying it
dovetailed with that emergency communications network effort.

Broadcasters have argued the FCC should have first
inventoried the spectrum it had before concluding that it needed to reclaim
120 Mhz more from broadcasters. Kerry and Snowe said in the letter
that the bill would be supplemental to that legislation. It would, among other
things, require the FCC and the NTIA
(which oversees government spectrum use)determine actual use and occupancy rate
to provide a relative value to the public of various uses and users.

Broadcasters have also argued that their public interest
value as a vital source of news and emergency info should be part of any such
equation.

"Our legislative proposal is rooted in the common sense
principle that proper spectrum policy and management must be data-centric and
guided by maximizing the full economic value of the spectrum to customers,
industry and the taxpayers.

The bill, according to a copy supplied to
B&C/Multi, would provide for "voluntary incentive auctions,"
and extend that authority through 2017, though the key for broadcasters
will be how that term is interpreted. It would allow the FCC to determine how
much to compensate broadcasters and others, but also asks the FCC and NTIA
to study an incentive auction pricing regime. The bill would also attempt
to prevent spectrum speculation by "prohibiting the acquisition of
licenses by a third party with the sole intent of relinquishing such licenses
so that such party may participate in an incentive auction." It is unclear
how that would be determined. It would also insure that whatever spectrum was auctioned
would continue to be shared with nonlicensed devices. The FCC is in the
process of authorizing unlicensed devices to share the broadcast band with TV
stations.

It would also set receiver standards to allow for more
spectrum sharing by reducing the chance of interference.