Spectrum Bill Still Best Rip-and-Replace Gap Fix Despite Slow Talks: Lawmakers

Senate Commerce Chair Maria Cantwell, D-Wash., and others are eyeing how to advance the House Commerce Committee-approved Spectrum Auction Reauthorization Act (HR-3565) in hopes that would jump-start negotiations with Cruz (see 2305240069) before a July 15 deadline for appropriating more money to the rip-and-replace program before the FCC has to start pro-rating reimbursements to participants. Leaders also face resistance from Sen. Mike Rounds, R-S.D., to advancing a package involving the sale of spectrum on the 3.1-3.45 GHz band until DOD can complete a study of its systems on the frequency (see 2305170037).

House Commerce Chair Cathy McMorris Rodgers, R-Wash., told us she’s “working with leadership” to figure out when to have a floor vote on HR-3565, in part citing the July 15 deadline (see 2305040085). HR-3565 mirrors major parts of the scuttled December spectrum proposal, including allocations for rip and replace, next-generation 911 technology upgrades and middle-mile projects previously included in the 2021 Infrastructure Investment and Jobs Act. Hopes for getting a House vote on HR-3565 during the 12 scheduled legislative days left before July 15 now depend in part on the chamber’s GOP leaders resolving a dispute with some of the caucus’ most conservative members that derailed floor proceedings for much of last week, lobbyists said.

Cantwell confirmed to us that she endorsed HR-3565 before Rodgers and House Commerce ranking member Frank Pallone, D-N.J., first filed it last month (see 2305230067) but emphasized she wants “to see that bill move out of the House” before she will consider how to move it through Senate Commerce if Cruz refuses to back it. “We’ll figure out any way we can to get” spectrum issues the bill addresses “resolved,” particularly reinstating the FCC’s auction authority that lapsed in March (see 2303090074), she said.

Cruz, Thune Objections

Cruz appears to be “more of an outlier” on spectrum policy and “wants to go further … than most of our colleagues are willing to do,” Cantwell said. “Tensions” remain “between NTIA and DOD” over the lower 3 GHz band “and we want everyone’s issues to be aired.” Cruz “is more ready today to give” parts of that spectrum to the wireless industry for commercial 5G use than others are because of the defense community’s concerns, she said: “You’d have to ask [Cruz], but I think he’s on the side that” Rounds and Sen. Deb Fischer, R-Neb., “would be against.”

“There’s a whole bunch of stuff” contained in the December proposal and HR-3565 “that has to be worked through” before Cruz is likely to agree to a deal, but the lower 3 GHz band is one major flashpoint, said Senate Communications Subcommittee ranking member John Thune, R-S.D. How future auction “proceeds get used is certainly one of those things” too and “I don’t think there’s consensus about that” despite the unanimous backing Rodgers and other House Commerce Republicans gave HR-3565 (see 2305240069). Cruz’s office didn’t comment.

“We made a commitment” to fully fund the rip-and-replace program, so “that needs to be done” whether via HR-3565’s proposal to give the FCC the additional $3.08 billion upfront and use the spectrum proceeds to pay that loan off or by some other means, Thune said. “There’s bipartisan consensus about that. Some of these other things that they’re talking about funding, including up to $5 billion for middle-mile, could be more problematic. I think House Commerce added the middle-mile stuff as a concession to Cantwell.”

“We’ve got to get this back over to the Senate,” said House Communications Subcommittee Chairman Bob Latta, R-Ohio. “We’re nearly halfway through this year and we have nothing” on either reauthorizing the FCC’s spectrum authority or bridging the rip-and-replace funding gap despite the December agreement. “We’re getting calls from people” who are rip-and-replace participants “asking, ‘What do we do?’” he said. “I wish I could” give them some certainty, because “they’re in a catch-22” situation right now.

Unlikely Alternative

The Defend Our Networks Act (S-1245) remains a potential alternative for giving the FCC the extra rip-and-replace money, but it faces major hurdles, lawmakers and lobbyists said. S-1245 would reallocate 3% of unspent and unobligated funding from the FY 2021 appropriations omnibus, the 2021 American Rescue Plan Act and other COVID-19 aid packages to make up the rip-and-replace program’s deficit (see 2304210069).

“I support my bill, but that doesn’t mean there aren’t different solutions to a problem,” said S-1245 lead sponsor Sen. John Hickenlooper, D-Colo. “I wouldn’t pick a winner” among the potential legislative options “at this point,” particularly given the spectrum bill talks.

“It would depend on where we are” in talks, Cantwell told us. “If it was the last minute and” S-1245 “was the only thing we could do, I would certainly look at it as an option. But trying to get this spectrum package over the goal line is still very important because” it would lead to “more certainty and predictability” in terms of “building out the system.”

"I'm not sure there would be the will” inside the House GOP caucus to use remaining unobligated COVID-19 money on rip and replace in the wake of the debt limit debate, Latta said. But “we just can't keep going like this" with program participants facing the prospect of only a partial FCC reimbursement. President Joe Biden’s recent signing of the Fiscal Responsibility Act (see 2306050059) may hinder S-1245’s prospects because the debt limit measure rescinded at least some of the unobligated money the legislation would’ve slated for rip and replace, lobbyists said.

“We’re thinking of every possible way” to fully fund rip and replace, but “we need to” prioritize negotiations on the spectrum package and emphasize the “national security implications” of not funding the FCC’s program as part of those talks, said House Communications ranking member Doris Matsui, D-Calif.

The Competitive Carriers Association is emphasizing the July 15 prorating deadline in its push for more rip-and-replace funding, CEO Tim Donovan said in an interview. The uncertainty has made this a “very sensitive time” for program participants because they may not “be able to fully replace” targeted equipment if they don’t get full reimbursement from the FCC, he said: That can easily “spiral from there” by making any future replacement work even more expensive. Participants also automatically begin a one-year shot clock for completing the replacement process once they receive their first commission funding, Donovan said.

Donovan acknowledged Cruz’s concerns about the current spectrum bill language but said lawmakers are discussing how to move forward. The “strong” House Commerce vote to advance HR-3565 will hopefully create sufficient momentum for a swift floor vote and the start of Senate action on the measure, he said: CCA is pushing “towards getting something through before the end of July.” That’s “an ambitious timeline,” but fully funding rip and replace is “a national security priority,” Donovan said.

“In prior versions of spectrum legislation, the four corners” of House and Senate Commerce leadership “found that pay-fors for rip and replace, NG-911 and other things were important as part of” a broad package, said Public Knowledge Government Affairs Director Greg Guice. “It’s our understanding that using those resources to reinvest in the telecommunications sector remains a priority for most members.”