FCC Spectrum Auction Authority to Expire Thursday Night Amid Negotiations Deadlock

The FCC’s spectrum auction authority was careening toward expiration late Thursday night, after the Senate gaveled out for the week without acting on dueling proposals to extend the mandate. Sen. Mike Rounds, R-S.D., earlier in the afternoon declared that an impasse between him and congressional leaders over the extension bills would continue into next week. Rounds failed Wednesday in his bid to pass his bill to lengthen a new renewal to last through Sept. 30 (S-650) by unanimous consent, as expected (see 2303080081). He also formally objected to advancing a House-passed measure to reauthorize the statute through May 19 (HR-1108). The deadlock will likely influence debate during a Friday House Communications Subcommittee hearing on spectrum legislative issues, lawmakers and lobbyists said in interviews.

The FCC declined comment on what plans it has in place for conducting spectrum operations if its authority lapsed Thursday.

Rounds told reporters negotiations Thursday boiled down to a feeling both sides were in the same situation as Wednesday night when the UC bids on HR-1108 and S-650 failed. Negotiators decided “let’s just wait until next week, and we’ll address it then,” Rounds said. “I think we all want” the FCC’s authority “to be able to move forward,” but extending it only until May 19, as the House proposes, means Congress will inevitably have to pass yet another renewal that will resurrect talk about modifying DOD's existing role in determining whether and how much of the 3.1-3.45 GHz band the FCC can repurpose for commercial use, Rounds said on the floor Wednesday.

It would be “better to go” until FY 2023 ends Sept. 30 to delay negotiations to modify the Infrastructure Investment and Jobs Act’s existing 3.1-3.45 GHz framework until DOD can complete an ongoing analysis on relocating its systems off the frequency, Rounds said. Delaying those talks would mean “we actually have the data available to make a good decision” about the band in a way that allows 5G use and assures it won’t “impact our national defense authorities.” His concern remains the “safety and national defense issues” surrounding efforts to modify the IIJA language. He said extending the FCC’s remit through Sept. 30 will give the department time to complete an ongoing analysis on relocating its systems off the frequency so there’s data to guide any legislative decisions.

Welch said, “It’s the judgment of many” on Capitol Hill that “sticking with” the May 19 deadline “is beneficial to achieve the goal of having the parties that are now negotiating come to a longer-term resolution” that lasts beyond FY23. “Every month that we stall on a comprehensive spectrum bill is more time for our rivals to get ahead of us.” The House “has made it clear they’re not going to take up any bill that moves the date to Sept. 30, so that’s just a reality we have to deal with,” he said. Not passing HR-1108 instead means the FCC’s authority will expire, which “sends the wrong signal … to our allies and competitors.” HR-1108’s proposal won’t “slow down or otherwise limit” DOD’s 3.1-3.45 GHz study, Welch said: “The extension doesn’t change the requirement that any reallocation decisions for the band must wait until after” that analysis’ conclusion.

Blame Game

Rounds “is the one holding this all up” since there was an existing “four corners” agreement among the leaders of the House and Senate Commerce committees to pursue HR-1108’s May 19 reauthorization, Senate Commerce Chair Maria Cantwell, D-Wash., told us before Rounds said negotiations were at a standstill. “I don’t know why he doesn’t want the four corners and the White House to keep talking.” There’s “always time” for a deal to come together before midnight, but “I don’t know” that’s possible given the current state of play, she said. A Senate Commerce spokesperson clarified comments Cantwell made to us Wednesday that suggested the FCC could still use its auction authority for another 60 days in the event of a lapse. Cantwell meant to say “there wouldn’t be any need furloughs or operating cuts for at least 60 days” because of the expiration, the spokesperson said.

“I’m certainly hoping” a reauthorization reprieve will come Thursday night, but the negotiations are now primarily between Cantwell and Rounds, said Senate Minority Whip John Thune, R-S.D., who’s also Senate Communications Subcommittee ranking member: “We’ll see if they come up with anything.”

What happens next “will be up to” congressional leaders, Rounds told us after leaving the floor Wednesday. “Hopefully we’ll have an opportunity over the next couple of days to take a look and see if there’s some common ground we can come up with,” he told reporters Thursday. Rounds told us he believes “the reason why” Hill leaders “want to do something” on a broader spectrum package before the DOD completes its 3.1-3.45 GHz analysis “is to modify the decision-making process,” which has “protections built in so that we have multiple individuals giving approval before they relinquish any part of that spectrum.” There's “a possibility that we very well might be able to share or move off of some of it, but it's going to be extremely challenging” and could take “more than 10 years” to complete, he said: “We simply cannot allow this move forward without” a complete analysis.

Rounds believes there’s more House interest in passing S-650 than HR-1108’s supporters claim. There appears to be “an interest” among House members who “would like to see both an extension but also clear protection with regard to national security,” he told us. Testimony by Assistant Defense Secretary-Space Policy John Plumb at a Wednesday House Armed Services Strategic Forces Subcommittee hearing indicating “this was a very serious issue that should not be taken” lightly has affected perception of the issue among some chamber leaders, Rounds said: “I don’t think a lot of people realized what was in the works here” when the House passed HR-1108 last week (see 2302280068).

Rounds also questioned the level of support within DOD leadership for a letter Defense Secretary Lloyd Austin and Commerce Secretary Gina Raimondo sent congressional leaders earlier this week endorsing a scuttled December spectrum legislative package’s proposal for handling reallocation of portions of the 3.1-3.45 GHz band (see 2212200077). “I have a great deal of respect” for Austin, but there wasn’t “consensus” support for the letter among DOD’s joint command staff, Rounds said. DOD didn’t immediately comment.

“I’m very concerned” that the FCC might be on the precipice of losing its auction authority, Senate Communications Chairman Ben Ray Lujan, D-N.M., said in an interview. “This should not expire, and I’m very worried about what expiration can mean. It’s just another reminder that there’s deadlines for a reason.” The current brinkmanship “really is an embarrassment to this authority” and “it’s a responsibility we all bear,” he said: “We all need to do better.”

Democratic S-650 co-sponsor Sen. Mazie Hirono of Hawaii disassociated herself from Rounds’ bid to halt HR-1108’s passage. “I don’t have any particular objection” to the May 19 extension, “but Sen. Rounds does, so you should go talk to him,” she told reporters. “I’d like the six-month extension because I think everybody needs time to figure this out” and “certainly don’t want” the military “to be left with whatever it is that’s coming down the pike.”

“What good’s it going to do us” to make the temporary reauthorization last until Sept. 30 as Rounds proposes, House Communications Chairman Bob Latta, R-Ohio, told us. “Everybody else has been in agreement” on the May 19 deadline with the expectation that they reach a deal on a broader spectrum package by that time, “so let’s get it done. You’ve got to” give the private sector some certainty that Capitol Hill won’t keep issuing endless short-term extensions.

The White House’s FY 2024 federal budget proposal, released Thursday, estimates renewing the FCC’s spectrum auction authority for a full 10 years, as Congress did in 2012, could reduce the U.S. government’s deficit by up to $54.4 billion through the end of FY 2033. “Ensuring the government can make efficient use of this valuable and finite resource will generate over $50 billion in savings,” the White House said. The Biden administration proposes $8 million for NTIA to upgrade its field-testing facilities “to support advanced research and more efficient” spectrum use. Outlines of the administration’s proposed allocations for the FCC, FTC, NTIA and other agencies weren’t available Thursday.

House Hearing

Latta said he intended House Communications’ Friday hearing to refresh the record on spectrum legislative issues that lawmakers will want to address in a broader package but cautioned it shouldn’t indicate interest in shifting significantly from what lawmakers included in the scuttled December proposal. The subpanel wants to emphasize “how important spectrum is to this country and why we’ve got to stay” in a leadership position on use of available bands given “our competitors in China and elsewhere are moving forward,” particularly on 5G, he said.

House Communications wanted to get a “renewed sense of what’s out there” on spectrum matters now given the last hearing on those matters happened nearly a year ago (see 2203160073), said panel ranking member Doris Matsui, D-Calif. “Given what’s going on” with the impending authority lapse, “people need to understand that spectrum is” important to “everything and we don’t know where it’s going right now.”

NCTA Executive Vice President James Assey and CTIA Executive Vice President Brad Gillen emphasized the importance of renewing the FCC’s authority in written testimony submitted before the full extent of the negotiations deadlock was clear, but also pressed for lawmakers to lay out a clear spectrum band pipeline and improved interagency coordination on related policy issues.

“NCTA supports the extension of the FCC’s auction authority, so that it has all the tools necessary to ensure that new spectrum is made available,” Assey wrote. He also urged “Congress to remove the implicit bias toward exclusive auctions that is reflected in budget scoring rules that over-indexes the value of auction receipts over the economic value and competition created by spectrum that is made available through the auctioned shared-licensed framework as well by unlicensed use.”

“We need to ensure the FCC has spectrum auction authority to secure U.S. international spectrum leadership,” Gillen wrote. “We should create a schedule of future spectrum auctions. Right now we have no planned spectrum auctions in the queue to help us meet the significant demand for mobile and fixed wireless services.” He called for “Congress to ensure that” DOD’s “ongoing review” of the 3.1-3.45 GHz band “is similarly comprehensive” to its review of the upper 3 GHz band before the FCC’s 2021 auction. Lawmakers should also “empower the nation’s spectrum experts -- the FCC and NTIA -- to enhance government-wide coordination and make interagency spectrum decisions in the best interests of our nation,” Gillen said.

CTIA President Meredith Baker adopted a more dire tone in a statement after it became clear the authority would expire. "Congress has never allowed the FCC’s spectrum auction authority to lapse until now," she said: "Without this authority and a pipeline of spectrum to meet accelerating demand for wireless broadband, the U.S. risks falling behind China and other nations to lead globally in new 5G innovations and the industries of the future.”