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Spectrum Provisions in the Obama "Jobs Bill"

Jobs Act
The Obama Administration Jobs Bill, formally “The American Jobs Act”, includes several spectrum provisions. The trade press has picked up on the provision dealing with incentive auctions, loved by CTIA and despised by NAB. But the other provisions have gotten little press. (At a meeting at ITIF yesterday, Blair Levin revealed that he coined the original name for incentive auctions but that it was “awful” and thus replaced by the current jargon. He would not reveal the original name.)

The other spectrum provisions are nowhere as controversial as incentive auctions or the $300+ billion in spending or the tax provisions of the bill so are unlikely to get much attention in the general media. As a service to readers, here is a link to the spectrum provisions of the bill and White House analysis of these provisions.

The part of greatest interest to your blogger is Section 272 – “Clarification of Authorities to Repurpose Federal Spectrum for Commercial Purposes”. Current law allows auction revenues to reimburse federal agencies for relocation costs when they move out of a band to allow nonfederal use of the band. However, in practice the current provisions are too restrictive and lead to valid concerns by federal users and resistance to reallocations. In general costs can only be used for actual relocation to comparable facilities after the auction is completed. This prevents such spending for long range planning costs and purchase of equipment that has long lead times because it must be designed from scratch for a new band.

Here is the White House analysis of these provisions:

Subsections (a) and (b) permit Federal agencies to be fully reimbursed through the Spectrum Relocation Fund (SRF) for relocation costs (including planning costs that occur before an auction), to better enable agencies to evaluate the cost and scheduling implications of relocation activities, and thereby facilitate both an improved auction and relocation process while ensuring the continuity of agency missions. Also, subsection (b) allows for support of costs incurred by Federal agencies to allow shared and unlicensed use of spectrum assigned to agencies.

Subsection (c) permits Federal agencies to be reimbursed for costs incurred in accommodating additional non-Federal access to their frequencies, as well as for studies related to sharing bands among Federal users. Reimbursable costs to enable sharing are consistent with system modifications made in the context of relocation.

In addition, subsection (c) clarifies that the agencies are permitted to acquire state of the art replacement systems under the current-law standard of comparable capability of systems. Section 101(c) also permits agencies to hire term-limited civil servant and contractor support staff to implement relocation projects, and provides further authority for expenditures related to planning in advance of an auction. Subsection (c) furthermore clarifies that the SRF can be used to reimburse agencies for the cost of using commercial services, if these services are the most cost effective way of vacating Federal frequencies while maintaining agency missions. Subsection (d) allows Federal agencies to enter into sharing arrangements with non-Federal entities, upon approval of NTIA and the Office of Management and Budget (OMB).

Subsection (e) provides authority to the Director of OMB to transfer amounts from the SRF for the costs of activities (including planning) directly attributable to relocation of Federal systems. This section also extends the period of funds availability in the SRF from 8 to 15 years, and provides additional flexibility beyond that period upon notification of the Congress. Furthermore, subsection (e) provides that up to 20 percent of the revenue from the auction of licenses associated with frequencies vacated by Federal agencies, or made available through sharing, may be used to enhance agency communications, radar and other spectrum using capabilities; this funding availability for enhancements would be in addition to the relocation costs covered under the current authorities, which provide for maintaining comparable capability for agencies. Use of funds for enhancements, like current authorities for relocation cost reimbursement, would be subject to notification of the appropriate Congressional committees.

In addition to the above mentioned 2 provisions, the bill has the following interesting sections:
  • Section 274 – This section would require the FCC to recover a significant portion of the value of new terrestrial broadband deployment rights in certain spectrum frequencies that were originally set aside for satellite services either through competitive bidding procedures or spectrum fee authority. This appears to be aimed at ATC users such as LightSquared.
  • Section 277 – This section requires certain spectrum assigned to Federal agencies or in FCC inventories to be identified by NTIA and auctioned by the Commission.
  • Section 278 – This section provides the FCC with authority to assess fees for initial spectrum licenses and construction permits that were not assigned by auction and for modifications or renewals of initial licenses and other authorizations, whether granted through competitive bidding or not, based upon public interest principles (for example, if a modification increases the value of a license).
  • Section 281 – This section would reallocate the D block for use by first responders and other public safety uses.
  • Section 283 – This section would grant the Public Safety Broadband Corporation, created under the bill, the license for the D block of spectrum in addition to certain spectrum held for public safety use by broadband technologies.
  • Section 297 – This section establishes the Public Safety Trust Fund with proceeds from certain spectrum auctions. This section provides $7 billion to build and operate the nationwide public safety broadband network as well as conduct research to develop standards for the network.
It is somewhat puzzling why these provisions are in the very controversial Jobs Bill, but then again Congress doesn’t have a good track record with free standing spectrum bills either.

I will not go into the merits of the provisions in general, but I think the section on federal spectrum and the Spectrum Relocation Fund is a home run and addressees in a pragmatic ways some of the major problems in facilitating sharing and transfer of federal spectrum.