Incentive Spectrum Auctions Are Part of Payroll Package

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Incentive spectrum auctions have made it into the compromise payroll tax bill package hammered out by Republican and Democrat conferees late Wednesday night.

That means the auctions to reclaim broadcast spectrum for wireless broadband could be approved as soon as Friday, although the latest word from Hill watchers said there could be continued work on the payroll tax package that would push a vote to next week.

At a Federal Communications Commission hearing Thursday morning, Rep. Greg Walden (R-Ore.), backer of the House version of auction legislation, said it had been a late night Wednesday as they worked on the auction portion of the package. Sen. Jay Rockefeller's office said Thursday that "the outline" of Rockefeller's bill to create an interoperable broadband communications network, a bill that also created incentive auctions to pay for it, was part of the compromise payroll deal, with a vote likely on the package on Friday.

A Republican aide familiar with the negotiations confirms that auctions are in the package, calling it a big victory, but did not have details. Those include whether conditions limiting future unlicensed spectrum allocations and conditions on auction bidders, which House Republicans had favored and Democrats strongly opposed.

According to an industry source following the issue of auction conditions, the Republican bill prohibition on those conditions has morphed into a requirement that any restrictions or changes the FCC wants to use to limit specific providers' participation in the auction has to be done through a "notice and comment rulemaking/" and cannot simply apply subjective rules.

A broadcasting source said the Walden version of the bill was the baseline for the compromise legislation, including Northern border protections for broadcasters--a big victory for the National Association of Broadcasters--as well as language requiring the FCC to make "all reasonable efforts" to replicate the coverage areas and interference protections for the stations that remain after reclamation.

According to a draft copy of the bill, the transition fund to compensate broadcasters--and cable operators--for repacking has been cut from the $3 billion the House bill had proposed, with sources putting it at $1.75 billion. Commercial broadcasters had asked for agbout $2 billion, while noncoms had sought the higher figure.

Some broadcaster who do not relinquish spectrum for auction will have to be moved--repacked--to free up swaths of contiguous, cleared spectrum for auction. They will be compensated out of that transition fund for those moves, as will cable operators for costs associated with retransmitting the signals.

Broadcasters have to volunteer to participate, according to the bill, and UHF station owners who do not volunteer cannot be made to move to a less-desirable VHF channel as part of repacking. Stations that share channels each retain their must-carry rights.

"Today's action to make repurposed broadcast spectrum available for wireless broadband service is vital to ensuring America's wireless industry remains the world's leader in the deployment of 4G services," said a pleased Steve Largent, president of CTIA-The Wireless Association. "As the Administration, Members of Congress, the FCC and other policymakers have recognized, making additional spectrum available for wireless broadband services will spur infrastructure investment, encourage job creation and foster innovation."

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