January 26, 2012 4:49 pm

Spectrum fight in final rounds on Capitol Hill

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The fight for Washington to make spectrum available to wireless companies enters a make-or-break phase this week as lawmakers signaled they want to fast-track the policy into law.

Leading mobile companies including AT&T (NYSE: T) and Verizon Communication (NYSE:VZ) want Congress to authorize “incentive auctions,” a contentious proposal that would allow wireless firms to buy airwaves from broadcast television stations through government auctions.

Lawmakers signaled this week that they want to begin serious, potentially final, negotiations on this policy, setting up a showdown between members of the House and Senate. The chambers have backed competing spectrum proposals that now need to be reconciled.

Lawmakers in both chambers want to tack the policy to a fast-moving legislative package that would also extend the payroll tax rate, unemployment insurance and other government programs before those laws expire at the end of February. Adding spectrum auctions to the bill is attractive because it can help offset the cost of other programs. The Congressional Budget Office has estimated the auctions can raise USD 25bn in total, and the government would get to keep a cut.

“Spectrum is on the table,” Rep. Greg Walden (R-Ore), one of the payroll negotiators and the author of the House spectrum bill, told dealReporter.

But reconciling the House and Senate spectrum measures before the payroll deadline could be dicey. The spectrum proposals are long bills that also take on the ambitious project of funding a network for public safety agencies--a divisive policy issue. Successful passage requires satisfying a handful of vocal constituencies who have big stakes on this issue, including such public safety groups as the New York Police Department, the National Association of Broadcasters, and tech giants such as Google (NASDAQ: GOOG).

Walden indicated Tuesday that he wants to include the public safety measure in the payroll bill, not just the incentive auctions.

“Everything is on the table,” he said. “But I’d like to keep it all together.” Walden also held a press conference on the issue Wednesday advocating his position.

A handful of other issues could also derail the effort to put spectrum in the payroll package. House and Senate lawmakers differ on key aspects of spectrum policy.

AT&T, for instance, is encouraging Congress to include language ensuring it is eligible to participate in the spectrum auctions, rather than be excluded at a later point in the process if regulators seek to advantage smaller carriers.

The Federal Communications Commission (FCC), which would eventually take the lead in organizing the auctions, made a strong push this month to ensure the eligibility language does not make it into the bill. It would prefer to structure the auctions as it sees fit.

House Republicans favor such “eligibility” language, but the Senate did not include those lines in its proposal.

Spectrum auctions are the top issue for the wireless industry on Capitol Hill. The advocacy group CTIA, which includes Verizon, AT&T and Sprint Nextel Corporation (NYSE:S), spent over USD 8m in lobbying fees last year promoting this and other issues, according to disclosure forms analyzed by the Center for Responsive Politics.

Lawmakers must also overcome disagreements on the governance structure for the public safety network and how to treat “unlicensed” spectrum—airwaves not assigned to a particular company.

“The chances [of passing spectrum auctions next month] are very good,” said a Senate aide who works on telecom policy. “But you never really know when it comes to these last-minute big brinkmanship deals.”


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