U.S. House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Communications and Technology Subcommittee Chairman Greg Walden (R-OR) today praised the inclusion of key spectrum reforms in legislation to extend payroll tax relief and address other key issues. Upton and Walden were two of 20 negotiators working on the conference committee, where they made spectrum reform a top priority because of its potential to create jobs, spur innovation and economic investment, and support public safety, all while maintaining strong protections for taxpayers. A summary of the spectrum provisions of the conference agreement is available online HERE.
"With 13 million Americans still seeking employment, job creation is a driving force behind efforts to expand wireless broadband. Spectrum auctions are not only good public policy for the communications and technology sector, they will produce meaningful job creation when we need it most. Estimates project that the new wireless build-out will result in billions of dollars in new investment. The hundreds of thousands of jobs that are created as a result will be an economic game-changer," said Upton and Walden.
On Wireless Broadband Development
"As Americans' reliance on wireless devices such as smartphones and tablets increases, so has the demand for additional wireless broadband. After years of discussion, negotiations, and hearings, this legislation provides the FCC the necessary authority to conduct these auctions. We struck a fine balance to make more efficient use of the airwaves while also providing necessary protections for broadcasters," said Upton and Walden.
On Fair and Open Auctions
"We're pleased that we were able to come to agreement on a provision we authored to ensure all interested bidders will be able to participate in future auctions. The legislation makes clear that any party that is able to meet specific, traditional qualifications to hold a spectrum license is entitled to participate in the auction, and cannot be excluded. This will ensure auctions produce the greatest revenue for taxpayers, while also making certain that the spectrum is used where and how it offers the greatest value, as determined by the market. Competition should determine winners and losers, not the FCC. Recent history has shown the Commission meddling in auctions and trying to "shape' the market not only reduces federal revenue, it harms competition and spectrum policy. The new law puts a stop to this subjective and arbitrary practice. Congress sets the policy, not independent agencies. We will be watching closely, ensuring the FCC follows the law," said Upton and Walden.
On Strong Protections for Taxpayers
"The spectrum auctions will bring in more than $15 billion in federal revenue, and we went to great lengths to ensure that taxpayers' investment to clear the spectrum for broadband use garners the maximum return on that investment. The legislation not only preserves the abundant amount of airwaves currently available for unlicensed uses like WiFi, it creates even more. At the same time, it ensures that if the FCC spends billions of Americans' hard-earned dollars to free-up other spectrum that's ideal for licensed use, it does not turn around and give that spectrum away for free," said Upton and Walden.
On Public Safety Network
"For more than a decade this country has committed to bringing our nation's first responders the interoperable communications they need. This bill seeks to provide an interoperable public safety broadband network to fill the current and future needs of the men and women who risk their lives for us every day. Importantly, the bill also brings public safety networks into the twenty-first century by adopting standards that bring the modern, agile, and innovative wireless technologies of the commercial wireless industry to bear on the communications challenges of first responders," said Upton and Walden.
Summary of Key Provisions
The Energy and Commerce Committee and its Communications and Technology Subcommittee made spectrum reform a top priority for the 112th Congress. The committee held six hearings and a markup last year, inviting the views of wireless providers, technology leaders, academics, economists and engineers to weigh in on the best policy to free up additional airwaves to fulfill growing demand for wireless broadband services. Subcommittee Chairman Walden unveiled spectrum legislation on July 13, 2011, and it was approved by the subcommittee as the Jumpstarting Opportunity with Broadband Spectrum (JOBS) Act on December 1, 2011.
One study projects that build-out of next generation wireless networks could generate between 371,000 and 771,000 jobs, $25-53 billion in investment, and $73-151 billion in GDP growth. But that requires making more spectrum available. This legislation does that by allowing the FCC to share proceeds with licensees, like broadcasters, who voluntarily return spectrum to be re-auctioned to meet the exploding demand for wireless Internet service.
A summary of the spectrum reforms included in the conference agreement is available on the House Energy and Commerce Committee website HERE.
The spectrum provisions in the House-Senate agreement will create jobs, spur investment and innovation in the growing technology sector, and support first responders. It does all of these things while offering strong protections for taxpayers and helping offset other costs within the bill.
Voluntary Incentive Auctions
A key component of the agreement is authority for the Federal Communications Commission to conduct voluntary incentive auctions.
By giving a portion of the auction proceeds to licensees who return spectrum, these voluntary incentive auctions allow us to make more efficient use of the airwaves and clear valuable blocks of spectrum to support next-generation wireless networks.
The agreement includes important protections for broadcasters sought by the House to ensure individuals who rely on over-the-air broadcasting will not lose access.
Strong Protections for Taxpayers
The agreement aims to produce a net $15 billion in auction proceeds -- more than double the amount initially proposed by the Senate -- that will help offset other costs within the legislation.
Like the original House-passed legislation, the agreement ensures that if the federal government spends money to clear spectrum, taxpayers will get a return on that investment by ensuring it is auctioned. Other proposals would have allowed the FCC to give away this spectrum, at a potential billion-dollar cost to taxpayers.
The agreement also supports fair and open auctions that will bring in the greatest revenue for taxpayers by including limitations on the FCC's ability to exclude bidders.
Major Job Creation
According to recent studies, investment in next-generation wireless broadband could produce an estimated 300,000 jobs or more.
FCC Chairman Genachowski even cites one study indicating spectrum legislation could create as many as 770,000 jobs, generate $25 to $53 billion in investment, and produce $73 to $151 billion in GDP growth.
Development of a Public Safety Network
Both the House and Senate had developed legislation to support build-out of a nationwide interoperable broadband public safety network, and the agreement unifies the framework that will be used to finally make this recommendation of the 9/11 Commission a reality.
The agreement reallocates the "D-Block," which -- combined with spectrum already given to public safety by Congress -- gives public safety the contiguous 20 MHz of spectrum they have sought for wireless broadband.
It also directs a share of future auction proceeds, up to $7 billion, to support development of the network.
Unlike legislation initially developed in the Senate that would have established an entirely new federal corporation to run the network, the agreement establishes a central governing authority within the National Telecommunications and Information Administration while permitting states that choose to build their own networks the opportunity to opt-out of the central network while maintaining interoperability.