House subcommittee approves spectrum transfer bill

A U.S. House subcommittee has voted to approve a bill that would ease the transition of radio spectrum from government agencies to private companies, such as wireless carriers interested in providing third-generation (3G) services.

The House Energy and Commerce Committee's Subcommittee on Telecommunications and the Internet approved Wednesday an amended version of the Commercial Spectrum Enhancement Act, which would allow government agencies to recoup spectrum moving-costs from a newly created Spectrum Relocation Fund. Money for the fund would come from auctions of wireless spectrum to private companies.

The bill attempts to address wireless spectrum auctions on the horizon. In July 2002, the U.S. Department of Commerce announced that 90 MHz of wireless spectrum would be made available for 3G. Of that total, 45 MHz would come from commercial spectrum and 45 MHz from the Department of Defense and other federal agencies. The federal government plans to auction that spectrum to wireless vendors by early 2005, and estimates the spectrum will be available for wireless customers some time in 2008.

Two amendments proposed by Democrats to transfer the excess money in the proposed Spectrum Relocation Fund were withdrawn after Upton promised future hearings on those requests. Representative Ed Markey's Digital Dividends Fund would have dedicated the excess money to technology education and wireless equipment for emergency workers, such as police and firefighters.

"The public deserves to reap the benefits of the sale of licenses to its airwaves," said Markey, a Massachusetts Democrat, before withdrawing his amendment. "Those benefits should not only manifest themselves in the offering of new commercial services and a temporary infusion of cash in the treasury, as under current law, and I have proposed the public also enjoy the dividends that can be reaped by reinvesting auction money."

The bill will now head to the full committee, but subcommittee chairman Fred Upton said he's not sure when the committee will consider the bill. The bill may also face some opposition from members of the House Appropriations Committee, predicted Representative Billy Tauzin, because it bypasses their budgeting authority.

Tauzin, who chairs the full Energy and Commerce Committee, said the members of his committee need to "pull together as a team" to get the bill passed through the House. "Relocation will never occur if federal agencies are subjected to the appropriations process to relocate spectrum operations," added Tauzin, a Louisiana Republican. "By putting a guarantee that this money will be available, we make (relocation) possible. If we do it any other way, it doesn't work. We've got to sell that to some people as we go forward."

A spokesman for the House Appropriations Committee said the staff there doesn't yet have an opinion on the bill, and Upton said he hasn't spoken to Appropriations Committee chairman C.W. Bill Young about it yet. But with support from the Department of Defense and the Department of Commerce's National Telecommunications and Information Administration (NTIA), Upton predicted the bill would pass. "I feel pretty encouraged about getting this bill to the president's desk," Upton said.

During a subcommittee hearing on the bill in March, representatives of the U.S. Department of Defense and the NTIA expressed concerns over the pace that the bill would require agencies to determine the costs of moving from one part of the wireless spectrum to another. An amendment, offered by Upton, would give agencies an 18-month notification of a spectrum auction, instead of nine, and 12 months to determine their costs, instead of three.

Representative John Dingell, a Michigan Democrat, had also opposed the original bill for only giving the committee a 30-day notice before transferring funds. Upton's amendment, approved by voice vote, would give Congress a 45-day notification if an agency's actual relocation costs exceed its estimates by more than 10 percent. Dingell said he approved of the new timetable.

Mike Gallagher, deputy director of the NTIA, said because of the change in the auction timetable, the agency now supports the Upton bill. The subcommittee's vote is a "significant milestone" in the President George W. Bush administration's efforts to create a spectrum relocation fund, he said.

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