Momentum grows for U.S. wireless spectrum bill

Tue Sep 13, 2011 5:18pm EDT

* Public safety spurs push for incentive auction authority

* Industry sources optimistic about passing bill in 2011

* Lawmakers still have to compromise on "D Block" airwaves

By Jasmin Melvin

WASHINGTON, Sept 13 (Reuters) - Washington insiders have high hopes for legislation this year that would open up large swaths of spectrum to wireless companies desperate to meet the booming demand for data-heavy wireless devices.

Language giving the U.S. Federal Communications Commission authority to auction some airwaves currently held by TV broadcasters is popping up in bills in both chambers of Congress, as well as in President Barack Obama's jobs plan.

Analysts say these incentive auctions, where some of the proceeds would go to the broadcasters giving up spectrum, are also likely to be part of the debate for the bipartisan congressional "super committee" tasked with slashing at least $1.2 trillion from the U.S. deficit over 10 years.

The Congressional Budget Office estimated auctions of TV spectrum would generate $24.5 billion, while Obama's proposed jobs bill eyes some $28 billion in proceeds from the auctions.

"This is one of the rare instances where you see moving on an idea will actually generate revenues for the Treasury," said Rhod Shaw, executive director of the High Tech Spectrum Coalition that includes Apple Inc (AAPL.O), Nokia Corp (NOK1V.HE), Cisco Systems Inc (CSCO.O) and Qualcomm Inc (QCOM.O).

"The issue now becomes what is the final deal ... And I think there is a reason to believe this can actually get done."

The need for a national, common communications system for first responders has added momentum to the debate.

First responders still cannot easily talk to emergency personnel outside of their division or unit a decade after airliners hijacked by al Qaeda operatives killed nearly 3,000 people.

"Shame on the Congress," Representative Anna Eshoo, the top Democrat on the House Communications and Technology Subcommittee, told Reuters last week.

Auction proceeds not set aside for TV broadcasters giving up spectrum would help fund the construction and maintenance of a wireless public safety network. Any money left over after that would go toward reducing the U.S. budget deficit.

Although they failed to pass a bill before the symbolic Sept. 11 date, Democrats say the momentum is there to get a bill signed this year.

Eshoo said she is hopeful her subcommittee is on the threshold of introducing bipartisan legislation for a nationwide broadband network for first responders.

Republicans are also keen to usher in improved communications capabilities for emergency personnel while generating revenue for deficit reduction.

"The nice thing is this discussion has not been should we do incentive auctions, it's now how do we do incentive auctions," said David Redl, counsel for the Republican-led House Energy and Commerce Committee.

HURDLES ABOUND

Still, much of the talk about incentive auction authority is tied to the public safety network and lawmakers remain split on fundamental elements of its build-out.

Of particular contention is how to handle 10 megahertz of highly sought after airwaves called the D Block, which will provide the infrastructure for the network.

Generally, Democrats want to allocate the airwaves to public safety, while Republicans want to see it auctioned to a wireless company who would be required to give first responders priority access on its network during emergencies.

"It won't be easy to come to a meeting-of-the-minds because you're coming up on an election year," said Medley Global Advisors analyst Jeffrey Silva.

But the revenue-generating potential of the auctions, coupled with the super committee's need to find trillions of dollars in savings, left Silva believing there is a "decent chance" of passing public safety and incentive auction legislation this year.

"It's a very powerful legislative vehicle for that legislation to ride on," Silva added. (Reporting by Jasmin Melvin; editing by Andre Grenon)

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