FCC Still Needs Deeply Divided Congress to Act on Key NBP Provisions

The FCC made 37 recommendations to Congress in the National Broadband Plan, according to a list provided by the commission. The FCC could act on some of the issues without Congressional action, but suggested in the plan that additional clarity from Congress could help. For example, the FCC has maintained it can do comprehensive Universal Service Fund reform on its own. But the agency would need Congressional authorization before moving ahead on incentive auctions, spectrum license fees, and using proceeds from a D-block auction to fund a public safety network. The FCC also asked Congress to consider authorizing additional funds for the revamped USF, the Connect America Fund.

The recommendations tackle issues in a wide number of areas. They include, among other things, privacy, pole attachments, utility rights of way, smart grid, tribal broadband, telework, health IT and intellectual property. Of the most critical items on the list, industry officials said this week, Congress appears most likely to move forward on a proposal to give the FCC authority to conduct voluntary incentive auctions. Public safety funding could be a non-starter, given the current Hill focus on cutting the deficit.

"Anything requiring appropriations is unlikely,” said Media Access Project Senior Vice President Andrew Schwartzman. “It is conceivable that the stalemate on USF will be broken, but I doubt it. The reason that auction authority is the best prospect for action is obvious enough -- it generates revenue."

The FCC can implement most of the plan without help from Congress, said Blair Levin, who headed its development while at the commission. “There’s a lot of work the FCC can do on universal service without Congress doing anything,” he told us. “It would be better if Congress did something, no question about it, but there’s a lot of things the FCC can do to move the ball down the field."

There’s “considerable, bipartisan support” for incentive auctions, Levin said. “It’s similar to, say, immigration. There are certain things everyone agrees with, but you can’t get those things as part of a bigger package. The question is is there going to be a narrow bill on incentive auctions … or does it have to be tied to a number of other things such as the public safety part of the package.” He added, “As a legal matter and a political matter, I don’t know why you need to tie them.”

Scant Hill Time This Month

Congress won’t have much time this month to work on National Broadband Plan items. Because of Martin Luther King Day, the Senate is recessing from Jan. 10-21, while the House is off from Jan. 17-21. Committee assignments are still not finalized, and repealing the Obama healthcare law appears to be the House’s top priority right now.

Congress will have to write a spectrum bill soon to prevent the FCC’s auction authority from expiring at the end of fiscal-year 2012, said David Taylor, executive director of the Wireless Broadband Coalition. The FCC, Obama administration and Congress have made spectrum a priority, he added. “At some point, expiration of the FCC’s auction authority becomes an action-forcing event for the administration and Congress,” he said. “You can’t implement several of the spectrum recommendations in the FCC’s National Broadband Plan without it.” Taylor expects President Barack Obama’s FY 2012 budget to propose a permanent extension of that authority, and it may also contain some recommendations related to incentive auctions.

A bill to renew the FCC’s auction authority could be the vehicle for a comprehensive spectrum package, said a Senate aide. The package could include non-controversial bills from the 111th Congress on spectrum inventory, measurement and reallocation, as well as voluntary auctions, the aide said. It probably would not deal with controversial questions like what to do with the 700 MHz D-block, the aide said.

Homeland Security Committee Chairman Peter King, R-N.Y., plans to reintroduce his public safety bill “early in the 112th Congress,” King said Thursday. The bill disagrees with the FCC’s recommendation and proposes instead to give the 700 MHz D-block to public safety. “I remain committed to working on a bipartisan basis to strengthen communications for our nation’s first responders through the allocation of the D-block for public safety,” King said.

Former Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., is “deeply committed to his spectrum bill,” which would authorize incentive auctions and give the D-block to public safety, said a committee spokeswoman. “It’s a bill the Committee will work on in the 112th Congress.” Rockefeller also “recognizes the importance of universal service,” the spokeswoman said. “He supports the FCC’s efforts to update the [USF] and refocus it on the broadband and wireless services that are absent in too many places in West Virginia and other rural areas across the country."

USF could get Hill attention after the FCC issues expected USF rulemaking notices this February, said a wireline industry lobbyist. It’s possible that Rep. Lee Terry, R-Neb., will reintroduce his USF bill before then, the lobbyist said. Net neutrality likely will be a top priority for Congress in the early part of the year. The net neutrality debate has “sucked the wind out of much-needed universal service and intercarrier compensation reform,” said Paul Raak, vice president of the Independent Telephone & Telecommunications Alliance.

"The most important thing is for Congress to authorize incentive auctions, because making more spectrum available for wireless broadband is, in my view, the most important recommendation of the broadband plan,” said Tom Lenard, president of the Technology Policy Institute. “This is not a partisan issue. Although resolving the conflicting interests is not going to be easy, the need for additional revenues means Congress has a strong incentive to get it done."

MF Global analyst Paul Gallant said it’s not a slam dunk that Congress will pass any legislation sought by the FCC. “A spectrum bill certainly has a shot this year,” he said. “There are reasons for both sides to want to move it, but Congress’s track record on actually passing telecom bills is pretty spotty."

Still unclear is how partisan the new Congress will be on telecom issues, said Robert Atkinson, president of the Information Technology and Innovation Foundation. “I think incentive auctions have the best chance,” he added. “It’s something that relies on markets, property rights, and brings in money to the government. If you are a Republican, what’s not to like? Depending on how USF is structured, it’s possible House Republicans could support this change, assuming it was linked to some broader USF reforms and probably a reduction in the size of the fund.” There is significant Republican support for incentive auctions, USF reform and the public safety network, “but the FCC has severely antagonized the R’s with the net neutrality order and they're going to get their pound of flesh from the chairman before these issues can advance,” added ITIF Senior Research Fellow Richard Bennett.

Spectrum legislation is probably more likely to pass than USF legislation, said Free State Foundation President Randolph May. “Although nothing is easy on the Hill, I think there is some prospect that Congress might give the FCC the authority it needs to conduct incentive auctions to reclaim some broadcast spectrum,” he said. “Spectrum auctions are a pretty nonpartisan issue, and members from both sides of the aisle recognize that auction proceeds would help reduce the budget deficit,” May said. “But to the extent that any legislation gets cluttered up with provisions conditioning the auctions in certain ways, say, with net neutrality-like provisions, the chances of passage will go down dramatically."

"Legislation to expand access to spectrum is most likely to move with bipartisan support,” said Michael Calabrese, director of the New America Foundation’s Wireless Future Program. “The lure of auction revenue will drive it, but it’s also an opportunity to pass stalled bipartisan bills to do a spectrum inventory and to facilitate sharing of underutilized federal bands."

USF and public safety legislation would be the most difficult to get Congress to pass, agreed Jeff Silva, a Medley Global Advisors analyst. “There is widespread agreement on the need to address the looming spectrum crunch, particularly in major markets, facing the expanding mobile broadband sector,” he said. “Moreover, lawmakers on both sides of the aisle would probably welcome the chance to generate revenue to help reduce the budget deficit in a way that doesn’t involve spending cuts to existing programs. However, a lot will still depend on the degree to which broadcasters are or are not on board. Their political clout in the nation’s capital and at the local level is still considerable.”