Attractive for Both Parties

Hutchison Confident of Enough Support for Joint Spectrum Bill

May 23, 2011 by Mike Feazel|Top News

DALLAS -- Sen. Kay Bailey Hutchison, R-Texas, is “confident” that her joint spectrum bill with Commerce Committee Chairman Jay Rockefeller, D-W.Va., will get through both houses of Congress and be signed this year, she said in response to our question after a speech at the TIA convention. Hutchison said the bill has “changed enormously” since Rockefeller initially introduced it, making it more appealing to both parties.

Rockefeller “has been good at negotiating” the terms of the bill, Hutchison told us, resulting in a “balanced bill.” Hutchison acknowledged that she and Rockefeller “may have to continue negotiating to attract more sponsors.” The bill should be attractive to both parties, Hutchison said, because it will contribute to deficit reduction, improve public safety and make spectrum available for new commercial uses: “I think the Republicans will work with us on this."

Asked if broadcasters will have adequate incentives to be willing to give up spectrum, Hutchison said they will because they “will get a percentage of the revenue.” She wouldn’t say what percentage, saying that may be subject to additional negotiations. In her speech, Hutchison said freeing up additional wireless spectrum will allow up to $400 billion in new economic activity, as well as allocate spectrum more efficiently. She said she and Rockefeller agreed on the framework of the bill Thursday (CD May 20 p11). An aide told us the markup is scheduled for June 8.

Hutchison “has a proven track record of getting big bills through Congress,” said another aide, David Quinalty, during a TIA panel. He said if the senators can get the bill passed, it will be a major legislative accomplishment.

One roadblock is that the spectrum crisis isn’t seen as imminent enough, said Charla Rath, Verizon vice president-wireless policy development, on the same panel. She said the crisis may be five years out, and many don’t consider it a real crisis until it’s less than a year. She said it will take several years for the spectrum to actually enter use, even after the legislative approval.

The wireless industry needs spectrum “sooner rather than later,” said Mark Stachiw, MetroPCS executive vice president. The industry needs “definite timelines,” he said, as well as a definite amount of spectrum to be available and assurances that all players will get access to spectrum. The bill “is a very good start,” Stachiw said, but he would like it to include the timelines and clear auction rules.

The bill will only work if there are enough willing spectrum sellers, Rath said, and that means only “if broadcasters have the proper types of incentives” to turn over their spectrum.

The spectrum auctions will generate “at least $10 billion, and possibly significantly more, for debt reduction,” Quinalty said. He said it also would benefit first responders, free up commercial spectrum, make government more accountable for the spectrum it uses -- including putting dollar values on the spectrum -- and “foster” a secondary spectrum market.

TIA Convention Notebook

The fairness doctrine still lives, despite FCC action against it in 1987, said Commissioner Robert McDowell, and the agency should act immediately to kill it. He said his staff found the fairness doctrine, which has been the subject of conservative fears that it would be revived, when it was reviewing the Code of Federal Regulations. McDowell said that, instead of eliminating it, the commission apparently decided in 1987 just not to enforce it, and the FCC should “act immediately” to kill it. McDowell said the regulator should review all of its rules every two years, as required by Congress, and actively eliminate many of them, particularly as competition grows. He said the number of FCC-related pages in the Code has grown nearly exponentially in the last 50 years, despite the increasing competition, and most could be eliminated. McDowell did say he thinks intercarrier compensation reform “could get done” now, after then-FCC Chairman Kevin Martin blocked it in 2008.

The “spectrum crunch debate has been put to rest,” FCC Chairman Julius Genachowski said. He repeated his argument that incentive auctions “grounded in strong free market principles” are the solution and said momentum for that “is growing.” He noted that the proposed budgets of both President Obama and Rep. Paul Ryan, R-Wis., call for the spectrum auctions, and said action on auctions, as well as issues like Universal Service Fund reform, are “tests of whether the U.S. can make the right strategic decisions."

The chances of legislation actually killing FCC net neutrality rules are “actually fairly good,” Rep. Marsha Blackburn, R-Tenn., said in Q-and-A after her speech at the TIA convention. She said the idea is getting “bipartisan and bicameral” support because legislators are “hearing from technology innovators” about their concerns about FCC “over-reaching.” As a result, she said, she was “cautiously optimistic.” In her speech, Blackburn said that if the industry doesn’t create a “credible structure of self-governance” on privacy issues, the FCC and FTC “will likely create one out of fresh air” and the result will be “new cumbersome regulations.” She didn’t say what the structure should look like but did say the FTC rather than the FCC should have government oversight of privacy issues.

China remains “one of our largest areas of tension” over international trade policy, largely because of its “indigenous innovation policy,” which heavily affects telecom manufacturers, said Michelle O'Neill, Commerce Department deputy undersecretary for international trade administration. She said she thinks the U.S. has “gotten some commitment” on easing the indigenous innovation policy, which favors locally developed technologies, but “the important thing is the followup.”

Verizon Wireless’s LTE in Rural America program has revealed 10 agreements with local telcos to provide LTE in rural areas, and “others that are unannounced,” said Philip Junker, executive director-business development. The program allows the local telcos to use Verizon spectrum to provide LTE in areas that Verizon wouldn’t be able to serve, let’s them connect to the Verizon network, and includes roaming agreements. Junker said he had had more than 270 inquiries from entities seeking such agreements and more are in the works. The agreements so far cover 84 counties in eight states.

The AT&T/T-Mobile deal is not a real new threat to Verizon, said Verizon Chief Technology Officer Anthony Melone. During a news briefing, he said AT&T had been “a formidable competitor” even without T-Mobile, so Verizon has “had to compete regardless.” Melone said Verizon “feels very good about our position” in spectrum, on LTE and other factors: “Mergers by themselves don’t make a difference. … It depends on how you integrate and leverage."

State regulators still have the primary responsibility for overseeing smart grid network security, said George Arnold, National Institute of Standards and Technology national coordinator for smart grid interoperability. He said the smart grid is not monolithic, and it’s now primarily IP-based. But he said it’s increasingly vulnerable to cyber attacks because it’s “increasingly interconnected at all levels.” There are some “insecure connections,” Arnold said, and its “greater complexity increases its exposure” both to attacks and to unintentional errors. Privacy also is a growing concern, he said.