Statement of Administration Policy: H.R. 531 - Emerging Telecommunications Technologies Act

(SENT 7/8/91)
(House)
(Dingell (D) Michigan and 47 others)

The Administration has proposed making government frequencies available for commercial assignment to promote new telecommunications technologies, provided that the Federal Communications Commission (FCC) is authorized to assign new licenses through competitive bidding. H.R. 531 does not authorize competitive bidding; therefore, if H.R. 531 were presented to the President in its current form, the Secretary of Commerce would recommend a veto.

If Congress fails to authorize competitive bidding, Federal agencies will have no source of revenue for the billions of dollars it will cost to relocate to new frequencies. Although at this time it is not possible to determine which agencies will be affected by the reallocation, the Defense Department and the Federal Aviation Administration hold approximately 60 percent of all U.S. Government frequency assignments. The costs to these and other agencies of relocation to different frequencies should be defrayed by the private sector beneficiaries of the reallocation. If they are not, basic operating programs will suffer.

Competitive bidding would be in the public interest because it would:

• Encourage efficient use of a valuable and limited resource. The innovative users that return the highest economic good to society will offer the most attractive bids.
  
  
• Improve on the current license assignment system. The current system relies both on lotteries, which enable speculators to "get rich quick," and on comparative hearings, which are costly, time-consuming, and sometimes arbitrary in result.
  
  
• Help reduce the budget deficit. Spectrum is a valuable public resource. It should not be given away to commercial entities for free.
  
  
• Be consistent with the policy of competitive bidding for other valuable public resources, such as timber and oil and gas drilling permits.

The Administration also recommends that H.R. 531 be amended to:

• Establish a target for reallocation of 200 MHz but give the President or a designee flexibility to determine the exact amount of spectrum to be reallocated.
  
  
• Establish a 15-year timetable to distribute the designated 200 MHz in order to minimize the adverse effects of spectrum reallocation on Federal agencies. The timetable should allow for no less than 30 MHz to be distributed through competitive bidding between 1994 and 1996.
  
  
• Ensure that the incremental costs to the U.S. Government of moving Federal users from current frequencies would be reimbursed as provided in appropriations acts.