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Planning for Spectrum Auctions

The Senate Subcommittee on Communications, Media, and Broadband will convene a hearing on the Future of Spectrum that will look at spectrum coordination challenges among federal regulators. (Avid readers of the Daily Dish may recall its recent breakdown of how federal regulators fumbled the rollout of C-band spectrum, largely due to the lack of coordination among the Federal Aviation Administration, the National Telecommunications and Information Administration (NTIA) and the Federal Communications Commission (FCC) as the spectrum was repurposed and auctioned.) While it is wise for Congress to seek improvements to the process, a better process alone will not solve the core problem: No one wants to give up their spectrum. What’s more, no one agency has the ultimate authority to resolve conflicts between federal and commercial interests. But Congress can.

The FCC’s spectrum auction authority is set to expire in two months, and Congress must reauthorize it. Theoretically, Congress could just grant a long-term blanket extension, perhaps for 10 years, and the FCC could continue to coordinate with the executive branch to free up valuable mid-band spectrum. But the FCC likely won’t make much progress as agencies will almost certainly fight any reallocation.

Rather than allow the 5G rollout to stall while carriers wait for more bandwidth, Congress could develop a spectrum pipeline that would specifically inform all interested parties which bands should be auctioned for 5G and which bands should stay in the hands of the federal government. But Congress likely can’t develop this pipeline if it grants a blanket reauthorization for the next 10 years.

When the Congressional Budget Office (CBO) scores a reauthorization, it considers all potential auctions during that timeframe, and it can’t count revenue twice. Once a 10-year reauthorization is factored into the baseline, any subsequent bills specifically designating bands for auction will not be considered new revenue because the auctions were already included during the initial scoring. In practical terms, this means a spectrum pipeline bill during the 10-year extension is politically dead on arrival because the revenue from the specific auctions cannot be used to offset new spending.

A recent report indicates that some in the Senate want to push for that 10-year reauthorization to use the revenue for next-generation 911 and “rip-and-replace” efforts (removing and replacing Huawei equipment from our telecom networks), and granting a 10-year reauthorization would undoubtedly score higher than a short-term reauthorization in terms of immediate funding. But this short-sighted approach will hurt these programs in the long run.

Granting a short-term authorization like that included in the Spectrum Innovation Act (which has passed the House) allows Congress to authorize next-gen 911 and rip-and-replace programs. Then, when Congress develops a concrete spectrum pipeline after the short-term extension expires, the CBO score would factor in the certainty from the legislation which will generate much more funding for these programs than they would have received under a blanket 10-year reauthorization.

Clearly, we need to improve coordination between the NTIA and the FCC. But the best way to clarify authority is to lay it out in statute, and a spectrum pipeline bill would do just that.

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Fact of the Day

The CHIPS and Science Act would add $270 billion to the deficit over the next decade.