FCC Reauthorization Hotline Effort Hinges on Resolving Spectrum Amendment Concerns

“With respect to Senator Rubio’s amendment, the national security and intelligence communities have expressed concerns,” said Commerce Committee ranking member Bill Nelson, D-Fla., at the April 27 markup of S-2644. “I appreciate Senator Rubio’s commitment to me to work to resolve these concerns as the bill moves forward.” Nelson, also a senior member of the Armed Services Committee, frequently approaches spectrum legislation cautiously due to national security issues, which largely delayed his backing of the latest Mobile Now text (S-2555) also awaiting action on the Senate floor.

National security agencies, primarily the DOD, worried the amendment’s proposed spectrum study wouldn't adequately account for the federal spectrum’s national security benefits, a Republican Senate aide told us. But she referred to tweaks made to the amendment at the 11th hour intended to address these concerns. Rubio’s office believes all national security concerns have been addressed, she said.

“Nothing has changed since the markup,” a Nelson spokesman countered. “Nelson’s comments stand as he was referring to the current amendment. He still hopes to have these concerns resolved before the bill goes to the floor.”

Commerce Committee Chairman John Thune, R-S.D., said he wants to hotline S-2644 for unanimous consent consideration on the Senate floor before the end of May. A GOP Commerce Committee aide expressed confidence to us that the issue will be resolved. A different Republican Senate staffer watching the dynamics said including the Rubio language would make floor passage of S-2644 much more difficult. That staffer pointed to an earlier version of the amendment rejected during the March 3 Mobile Now markup.

Longtime Rubio Priority

The Rubio provisions have resurfaced at least six times since 2014: in stand-alone legislation; in early abandoned drafts of Thune’s Mobile Now legislation; the unsuccessful amendment to Mobile Now; and now the successfully attached, revised amendment to the FCC Reauthorization Act. Rubio first included the provisions in 2014’s Wireless Innovation Act (S-2473), introduced with no co-sponsors but celebrated by CTIA. The language returned this Congress in Rubio’s latest Wireless Innovation Act (S-1618), introduced in June 2015 and this time backed by five other Republicans including Sen. Cory Gardner, R-Colo., who has since partnered with Rubio on this year’s amendments.

The April 27 amendment is substantially modified from the five previous versions. Rather than demand an NTIA framework, this Rubio/Gardner amendment simply proposes within two years of enactment and every two years after a GAO report on the annual opportunity cost that federal spectrum holders face. Those reports would have to “take into account the national security implications, including mission effectiveness, of the potential transfer of Federal spectrum and the ability of Federal entities to move to new bands or share existing bands, and any limitations on such moving or sharing” and “the time required to relocate and the cost of any potential relocation or sharing of spectrum.” It retained provisions calling for a spectrum technology study, to be conducted within two years of enactment and every five years after. It now includes a sunset provision killing the section 10 years after the first report is submitted.

Rubio’s office worked hard to accommodate the national security concerns in making these tweaks, the GOP Senate aide told us. The office is committed to working through any outstanding concerns and hopes that Senate colleagues will see value in the public transparency of the amendment, she said. She cited wireless industry support for the amendment due to the third-party unbiased review it would provide. A CTIA spokeswoman declined to comment. Rubio’s office hopes to resolve any concerns to allow for a hotline of the FCC Reauthorization Act with this language included, and is committed to working with Thune and Nelson to ensure that outcome, the staffer said. When asked if any further tweaks are necessary to accommodate concerns Nelson is raising, the GOP aide cited the hard work already done in making the recent edits to the language.

“To get Nelson’s buy-in, I would not be surprised if that provision gets struck in the end,” Recon Analytics analyst Roger Entner told us, lamenting the “very influential” role Nelson played in weakening the committee’s Mobile Now spectrum bill earlier this year. Entner thinks Rubio’s modified FCC Reauthorization Act amendment “has better chances than before, but Nelson would have to sign off on it,” he said.

“I guess the concern is one of flexibility,” said Armand Musey, president of Summit Ridge Group. He said if the military gives up spectrum without enough justification, it won't be able to use it if some unexpected need comes up in the future. Musey, a financial consultant, judged it “notoriously hard to translate non-economic needs” into an economic cost model. “On the other hand, it seems clear there is room for government rationalization of its spectrum use,” he added.

Different Versions

Earlier versions of Rubio’s legislation required developing an NTIA framework within one year of enactment, consulting with the FCC and the Office of Management and Budget, “for determining the annual economic opportunity cost of each specific Federal spectrum band assigned or otherwise allocated for use by Federal entities,” covering all federally allocated bands between 150 MHz and 6000 MHz, to be updated annually. Every federal entity with spectrum would have to report, “as an off-budget item, the opportunity cost borne by the entity” for its spectrum, and no later than within five years of enactment and every five years after, “shall engage in an analysis comparing the opportunity cost of that spectrum, as such cost is determined by the framework developed” by NTIA “to the projected costs of the entity relocating to other government spectrum holdings, co-locating with other government agencies, leasing other non-Federal spectrum, or contracting out for its spectrum activities.” It would have compelled a spectrum technology study to determine if federal spectrum technologies and equipment “are the most spectrum-efficient available” and call for the GAO to determine the costs for upgrading. The GAO would have to review the NTIA framework and make recommendations on how to revamp that framework and reporting.

Last fall, Gardner told us he hoped their Wireless Innovation Act could help provide a basis for the spectrum legislation that Thune was putting together, later known as Mobile Now. In Thune’s first two drafts of Mobile Now circulated in November, Thune included identical language to these spectrum value sections. Those early Mobile Now drafts provoked concerns from the DOD and the Senate Armed Services Committee, and following intense negotiation over several months, the language was stripped from Mobile Now in the version cleared by the Commerce Committee at its March 3 markup. Rubio and Gardner unsuccessfully sought to amend Mobile Now with the old version of the provisions but succeeded in amending the FCC Reauthorization Act April 27 with the modified version.

Public Knowledge contributed to the latest tweaks of the Rubio/Gardner amendment, Government Affairs Counsel Phillip Berenbroick told us. Congressional offices asked what Public Knowledge thought of the language, and PK helped ensure the change to Section 3(a) that now mentions unlicensed spectrum, he said. That part of the text says the GAO reporting must define opportunity cost as “the value of the spectrum, in dollar terms, as if such spectrum were to be reallocated on a licensed or unlicensed basis to the highest commercial alternative use that currently does not have access to the spectrum.”

Public Knowledge believes the amendment overall “looks fine,” Berenbroick said, lauding Rubio's attention to unlicensed issues. He cited the Mobile Now markup earlier this year, where there had been “a ton of interest on both sides of the aisle in the unlicensed piece there.”