White House Backs Spectrum Reallocation, Voluntary Auctions

Bills on spectrum reallocation are coming soon from Sens. John Kerry, D-Mass., and Olympia Snowe, R-Maine, and Rep. Ed Markey, D-Mass., they said after President Barack Obama committed to freeing up 500 MHz of spectrum over 10 years for wireless broadband. In a presidential memo Monday, Obama outlined a process to identify federal and commercial spectrum for reallocation, and use auction proceeds to support public safety. The effort will comprise administrative and legislative actions, and the White House plans to work with members of Congress, a senior administration official who refused to be named in stories told reporters on a conference call.

Kerry and Snowe plan to introduce comprehensive spectrum legislation soon that would complement the effort announced by the Obama memo, the senators said Monday. Legislation to be introduced “in the coming weeks” would modernize policy and improve the nation’s radio spectrum management and coordination activities,” they said. “I commend the Administration and the FCC and we intend to work as full partners to ensure that they get the Congressional authority necessary to make this proposal a reality,” said Kerry. Snowe added, “Securing this vital spectrum as well as implementing more robust spectrum management policies and fostering greater technical innovation will lead to additional wireless technologies, lower prices, and more reliable services for consumers and businesses alike."

Markey plans “soon” to introduce his own bill to legislate freeing up the 500 MHz of spectrum (CD June 1 p3), the House Commerce Committee member said Monday. Markey backs the Obama effort, and wants to work with the administration on the issue, he said.

"America’s future competitiveness and global technology leadership depend, in part, upon the availability of additional spectrum,” Obama wrote in the memo. “The world is going wireless, and we must not fall behind.” More wireless broadband will create new businesses, provide affordable connections in rural areas, enhance public safety and foster mobile telemedicine, telework and distance learning, he said. “This new era in global technology leadership will only happen if there is adequate spectrum available to support the forthcoming myriad of wireless devices, networks, and applications that can drive the new economy."

"Public action” on wireless broadband will lead to “private investment,” Lawrence Summers, director of the National Economic Council, said Monday at the New America Foundation. “Opening up spectrum will … create the foundation for new private sector investment and economic activity in mobile broadband and a range of other high-value uses that would not have been possible without the coordinating and organizing role of government.” The White House plan is based on the FCC National Broadband Plan and was developed by the council, the Office of Management and Budget (OMB), the Commerce Department and the Office of Science & Technology Policy (OSTP), said Summers.

The U.S. must address a national “spectrum crunch,” Summers said. “The United States has the edge in the ecosystem of networks, technologies, products and applications, but we can only keep that edge if we continue to develop our digital infrastructure.” The commitment to spectrum reallocation will help the economy right away, even before legislation authorizing auctions is finished, he said. “The knowledge that spectrum is going to be available and is going to be available on a larger scale will spur all kinds of innovation activity today … even before the spectrum becomes available."

The White House plan tracks with recommendations in the broadband plan, including an incentive auction allowing broadcasters to voluntarily give up excess spectrum. Most of the spectrum would be for licensed mobile broadband, but some will be made available for unlicensed use by startups and others, said Summers. The White House set an Oct. 1 deadline for the NTIA, working with the FCC, to determine whether any spectrum could be made available within five years for exclusive or shared use. The NTIA would also issue a plan and timetable for finding 500 MHz in 10 years. Interim reports would be due every 180 days afterward to be reviewed by OMB, the National Economic Council and the OSTP.

The White House “will work with the Congress to develop legislation that provides the FCC with the necessary authority to conduct” incentive auctions for commercial-owned spectrum and provide part of the proceeds to broadcasters who voluntarily give up spectrum, Summers said. “Our plan will allow all stations that currently broadcast the right to continue to broadcast,” he said. “But if a station decides to share its spectrum or give up its license to broadcast over air, and it is a choice, there is a tremendous potential for new and highly beneficial uses.” Government won’t decide how spectrum won in the auction is used, Summers said. “Our role is simply to set up a mechanism that will help make everybody better off by, with compensation, shift spectrum to its highest value use."

Public safety would have “first claim” to revenue generated by spectrum auctions, said Summers. The plan commits auction proceeds first to the development of a nationwide, interoperable public safety network, he said. Additional revenue could be used to build other infrastructure and reduce the U.S. deficit, he said. Infrastructure that could receive funding includes a next-generation air traffic control system, smart grid and high-speed rail, said the senior administration official. The White House has no estimate on how much revenue will be generated by spectrum auctions, but many analysts project it could be in the “tens of billions of dollars,” Summers said.

The administration isn’t taking a position on the D-block, the senior administration official said. “We're looking forward to continue to work with the public safety community [and] other stakeholders to address the broader set of questions on spectrum needs, governance, technology” and other issues, he said.

NTIA and the FCC are conducting an inventory of spectrum use, said Summers. Legislation pending in Congress would similarly require an NTIA inventory. The House passed an inventory bill (HR-3125), but a similar bill (S-649) is stalled in the Senate. The Obama administration backs the inventory legislation, but wants the agencies to proceed “with or without legislation,” said the senior administration official. An inventory is “complementary” to the spectrum effort, but not a prerequisite, the official said.

No decision has been made on how to divide the 500 MHz, the administration official said. The FCC proposed one way to split it up in the broadband plan, he noted. “That’s not an unreasonable way to break the numbers out."

The White House is more concerned about finding the best use for spectrum than cashing in on its value, said Summers, answering a question on the impact to TV white spaces. “We are very aware that what you might think of as frontier spectrum serves an enormously important purpose in catalyzing innovation, and we would not want to do anything that would … impair that process, and there will have to be a lot of judgments as to the pace and the scale of what’s allocated.” Summers deflected a question on whether nondiscrimination rules would be attached to auctioned spectrum. “Since the FCC sets nondiscrimination policies, I want to be careful about speaking for them, but we certainly are very mindful of the benefits that such nondiscrimination policies have generated in the past."

Also in the presidential memo, Obama told the OMB to work with the NTIA to provide funding, incentives and assistance to help the effort. Obama told the NTIA to create and act on a plan to allow for research and development on spectrum sharing, “including those that are secure and resilient.” He “strongly encouraged” the FCC to work closely with the NTIA on repurposing nonfederal government spectrum, among other things. Obama called for convening the Policy and Plans Steering Group to advise the NTIA.

Bills in the Works

The White House hasn’t submitted a specific legislative proposal to Congress, the administration official said. “But we're beginning a process of working really hard with Congress and with the relevant members of committees so that we could turn this into legislative language.” There is an administrative and legislative track to the effort, he said. “We understand that the legislative track is one that is complex.” Given the social benefits of freeing up spectrum, the White House is confident legislation will get done, he said. “But we recognize it is going to take time."

The public safety parts of the proposal are consistent with draft legislation considered earlier this month by the House Communications Subcommittee (CD June 18 p6), said Chairman Rick Boucher, D-Va. He applauded the Obama memo for endorsing voluntary auctions of broadcaster spectrum. The 500 MHz of spectrum “is needed imminently to support innovative new wireless services,” Boucher said.

FCC Chairman Julius Genachowski said “spectrum is the oxygen of wireless, and the future of our mobile economy depends on spectrum recovery and smart spectrum policies.” Acting on the broadband plan “requires exactly the kind of cross-government collaboration outlined by the Administration today,” he said in a written statement. “By taking these important steps, we can tackle the looming spectrum crunch, lead the world in mobile broadband, and drive our global competitiveness and innovative capacity. If we stand still, we run a real risk to our goals of supporting private investment and a thriving economy."

FCC Commissioner Robert McDowell reacted warily. “Memoranda announcing intentions to act can be helpful, but they should not be mistaken for real action,” he said. “While I appreciate the spirit of today’s White House announcement regarding long-term spectrum planning, for too long the FCC has not moved forward on a number of more immediate opportunities to put the power of key slices of the airwaves into the hands of America’s consumers.” The commission should act immediately on the D-block, the TV white spaces and AWS spectrum, he said.

The wireless industry backed the effort. “By making spectrum available for auction, the Administration will enable the wireless industry to invest billions of dollars to purchase the licensed spectrum, and billions more to build and upgrade the networks that fuel our ‘virtuous cycle’ of innovation,” said CTIA President Steve Largent. Wireless Communications Association CEO Fred Campbell called the effort “a critical step toward achieving universal broadband connectivity through the only broadband platform that is capable of providing access everywhere, all the time.” Manufacturers represented by the Telecommunications Industry Association also backed Obama’s effort.

The Communications Workers of America sought investment in wired networks in addition to wireless. “Wireless internet is critical, particularly in rural areas, if we are ever to close the global broadband gap,” said President Larry Cohen. “However, we still need the right mix of public incentives to encourage wired build out as reflected in the FCC’s National Broadband Plan.” More “alone will not fix a broken market,” said Chris Riley, Free Press policy counsel. He said the White House, FCC and Congress must take steps to promote competition, including dedicating more unlicensed spectrum, reinstating spectrum caps and stopping handset exclusivity agreements.