Senators Eye Floor Time for FCC Spectrum Auction Renewal Amid T-Mobile Troubles

Senate leaders acknowledged they’re beginning to consider using floor time to pass the House-approved bill to renew the FCC’s spectrum auction authority through May 19 (HR-1108) in case they can’t reach a deal with Sen. Mike Rounds, R-S.D., that would pave the way for enacting the measure via unanimous consent, but they insisted such a move isn’t their preference. An accord remained elusive Wednesday, with Rounds saying he's still opposed to the May 19 extension and leaders still resistant to his alternate bid to renew the authority through Sept. 30 (S-650). That impasse led to the FCC’s mandate lapsing just under two weeks ago (see 2303090074).

Officials are dubious lawmakers will feel any more motivation to reach a deal to bring the mandate back because the FCC informed T-Mobile the authority’s expiration means it won’t be able to issue the carrier spectrum licenses it bought in the 2.5 GHz band auction last year. Leaders on the Senate and House Commerce committees, meanwhile, told us they’re continuing to push for a broader legislative package to be as close as possible to what was in the Spectrum Auction Reauthorization Act proposal they failed to attach in December to the FY 2023 omnibus appropriations measure (see 2212190069).

“There have been some discussions” about whether HR-1108 or a similarly short reauthorization “could get up on the floor” because “at some point, if we can’t reach agreement” with Rounds to move an extension via UC, “there’s going to have to be some forcing mechanism,” said Senate Minority Whip John Thune, R-S.D., last week: “I don’t know that we’re at that point just yet” and he’s hopeful there will be a deal so “that won’t be necessary.”

Senate Commerce Committee Chair Maria Cantwell, D-Wash., said she’s continuing to negotiate with Rounds and “we’re still trying to get a deal” to restore the authority as soon as possible. Rounds told us he hasn’t spoken directly with Cantwell in recent days but remains willing to negotiate. He remains opposed to any extension that would give lawmakers an opportunity to modify the Infrastructure Investment and Jobs Act’s existing 3.1-3.45 GHz framework before DOD’s completion of an analysis on relocating its systems off the frequency.

Rounds is still working to get key House leaders on board with making Sept. 30 the new expiration date rather than what the lower chamber agreed to when it passed HR-1108 on a voice vote in February (see 2302280068). “Clearly there’s a reason” Hill leaders don’t want to let this extension last until Sept. 30 and “my suspicion gets stronger every day that their interest is in eliminating or changing” the IIJA 3.1-3.45 GHz framework before the DOD study’s completion, he said. “I think most members will figure out pretty quick that it’s important to wait for the study” in a way that they may not have realized when the House passed HR-1108. The House was to reconvene Wednesday night after a week-plus recess.

Senate leaders “would still have to get 60 votes” to invoke cloture on HR-1108 if they try to use floor time on the measure and the issue is “just not that valuable to anybody at this stage in the game” for leadership to seriously pursue that, Rounds said. “We’re working right now to inform” other senators “about the national security implications” of allowing changes to the 3.1-3.45 GHz framework so cloture won’t be achievable.

“I think people are close” to a deal on restoring the auction authority, said Senate Communications Subcommittee Chairman Ben Ray Lujan, D-N.M. “Even though I was very concerned with the lapse, the FCC still has many tools in place to operate with maybe the exception” of holding new auctions. "Everyone I’ve spoken to” in both parties “understands the urgency and they’re working to get an agreement," he said: That’s “encouraging to me” and “I’m hopeful that something will come sooner rather than later."

Senate leaders’ thinking as of a few weeks ago was that restoring the FCC’s authority could “be a difficult thing to spend floor time on,” unless “it’s a fairly substantial package” that includes a longer-term reauthorization and a spectrum pipeline framework, said Public Knowledge Government Affairs Director Greg Guice. “It would be odd” if Senate leaders were to allow floor time to pass a short extension because “almost anytime we get any” telecom-related bills through Congress “it’s as part of must-pass legislation.”

2.5 GHz Snafu

The FCC "paused the issuance of licenses arising out of auctions for which our authority has expired," a spokesperson emailed Wednesday. T-Mobile didn't comment. The FCC grants licenses using its Communications Act Section 309 (a) authority, which is separate from its 309 (j) authority, used to hold a competitive auction, industry officials said. T-Mobile filed a single application for the licenses after the auction and hasn’t received access to any of the spectrum.

T-Mobile’s trouble in getting the FCC to issue its 2.5 GHz licenses will hopefully “act as a catalyst for getting something done” to restore the remit, said Thune, who’s also Senate Communications ranking member. “The longer this thing sits around out there, the more issues like that are going to come up. I’m hoping that builds the necessary pressure to actually” reach a deal. T-Mobile dominated the auction, bidding $304.3 million in the $427.8 million auction to supplement its extensive 2.5 GHz holdings (see 2209010060).

Industry lawyers and others questioned the FCC’s rationale for now telling T-Mobile it can’t issue the 2.5 GHz licenses since the commission was assuring the wireless sector last year it had the legal underpinning, and legal theories, to continue issuing licenses even if auction authority expired. Lawyers emphasized licensing is different from auctioning spectrum.

The FCC was probably more accurate in its initial read that “auction authority is about the authority to hold the auction -- the expiration does not negate FCC authority to issue a license,” emailed New Street’s Blair Levin. “Who would even have legal standing to challenge the issuance?” The impasse is unlikely to “get resolved soon” and T-Mobile’s woes aren’t likely to be a strong motivator for Rounds or anyone else to waver, he said.

Levin believes the FCC isn’t using the snafu as a strategy to amplify industry pressure for restoring the auction authority. The “battle is part of a much bigger game that this doesn't affect,” and “doesn't this lessen the incentive for AT&T and Verizon to push for auction authority?” Levin asked: For T-Mobile “anytime a company has an asset it can't use, it has an impact.”

The FCC “issued licenses for decades before ever having an auction,” emailed Information Technology and Innovation Broadband and Spectrum Policy Director Joe Kane: “The 2.5 GHz case is complicated by the fact that the auction already occurred, but it seems unlikely that the commission is stuck without any options. Congress failing to do its job is no reason for the FCC to do the same.”

“It’s an annoyance for T-Mobile for now, but nobody else of size participated” in the 2.5 GHz auction, said Recon Analytics’ Roger Entner. Most of the licenses were in rural America so the development hurts rural populations the most with T-Mobile’s growing home internet offering. T-Mobile can still “build out the infrastructure and then wait for the license to come through to light it up,” he said. LightShed’s Walter Piecyk called the development “yet another sad example of how the declining functionality of our government is impacting corporate America.”

'Hope Springs Eternal'

Cantwell and others remain hopeful they can resurrect a longer-term spectrum package nearly identical to the scuttled December proposal, which would have renewed the FCC's remit through Dec. 31, 2025 (see 2212200077). The measure would have allocated up to $23.28 billion in potential proceeds from the 3.1-3.45 GHz auction and sales of frequencies identified under the 2015 Spectrum Pipeline Act to a Spectrum Auction Trust Fund to disburse for telecom priorities.

“I think people are still talking” about whether bringing back the December proposal is the right move, but the hope is to move on something that reflects “what we’ve agreed on thus far,” Cantwell said. The House is “trying to take the first steps” on moving a larger package and Senate leaders would move once the lower chamber clears a measure.

“Hope springs eternal” that Congress can pass something that’s close to the December proposal, said House Communications Subcommittee Chairman Bob Latta, R-Ohio, just before the recess. Including similar language that will set up a robust spectrum pipeline and allocate sales revenue will be important given “what we want to do not only with” fully funding the FCC's Secure and Trusted Communications Networks Reimbursement Program “but also dollars that go to the Treasury” to reduce the deficit.

“There was four-corners agreement” on the December deal, so there’s hope a similar proposal is possible now if Senate leaders can make progress with Rounds, said House Communications ranking member Doris Matsui, D-Calif. “I’m really hopeful that we can get” the Biden administration “more involved” in brokering a deal on a broader spectrum package. “There’s always going to be this tension” between the defense community and communications policy stakeholders on spectrum matters, but “as long as we can get together and sit at a table and not be in our corners,” compromise remains possible.