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CBO Says Incentive Auctions Will Produce $6.5B for Treasury - Broadcasting & Cable

CBO Says Incentive Auctions Will Produce $6.5B for Treasury

Rockefeller bill cost estimate includes $1 billion for broadcast/cable relocation expenses
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The Congressional Budget Office (CBO) estimates that the incentive auctions in the Rockefeller bill will yield $6.5 billion toward deficit reduction out of a total estimated take of $24.5 billion after compensating licensees for exiting.

It is not clear exactly how much the CBO thinks broadcasters will have to be paid for their spectrum. But it did say that $1 billion would probably cover the payments to broadcasters who don't sell for any repacking and moving, and cable operators for any changes they have to make to continue to receive the signals.

That is according to a just-released cost estimate of the bill. Broadcasters and others were still vetting it at press time, but the $24.5 billion appeared to be the estimate of proceeds from the auction after broadcasters got their take.

"That [$24.5 billion] estimate reflects the expected value of offsetting receipts (based on the outcomes of various scenarios regarding the quantity and quality of frequencies likely to be auctioned over this period), net of direct spending to compensate existing licensees affected by the auction," the CBO wrote.

The CBO also said the amount of the incentive auction would also depend on "the willingness of two satellite licensees and dozens of television broadcasters to sell their existing spectrum rights at a price that is below the market value of their licenses."

The estimate came the same day Sen. Jay Rockefeller (D-W. Va.) pressed for his bill in a Hill press conference. The bill would pay for a broadband interoperable emergency communications network with proceeds from the auction of broadcast and other spectrum for wireless broadband.  There are other bills that have stronger protections for relocated broadcasters and that would auction the spectrum for the interoperable network rather than allocate it to first responders, but Rockefeller's is the highest profile legislation.

"The Congressional Budget Office's estimate reconfirms that our bill builds a robust public safety network, pays for itself, and still generates real deficit reduction," said Sen. Rcokefeller in a statement. "This is just another step along the path to final passage. S.911 has strong bipartisan support, and we look forward to getting it through the Senate."

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