Federal Payroll Tax Legislation Chock Full of Spectrum Policy Goodies

On Feb. 17, 2012, Congress passed the Middle Class Tax Relief and Job Creation Act of 2012, which fundamentally changes many aspects of national spectrum policy.  Members of Congress included the spectrum provisions in the legislation because they are expected to raise a net $15 billion for the Federal Treasury.

In the Conference Report that was sent to President Obama for his expected signature, Congress delegated the implementation of the new spectrum policy rules to the U.S. Department of Commerce’s National Telecommunications and Information Administration (NTIA) and the Federal Communications Commission (FCC) and we will monitor these processes for our members.

Here some highlights of the spectrum policy provisions that are intended to increase the deployment of advanced mobile wireless services and to enable the construction of a nationwide interoperable public safety wireless network:

FCC Auction Authority Extended

The FCC’s authority to auction spectrum licenses for the benefit of the U.S. Treasury was to expire in September 2012, but it was extended through 2022 in this legislation.

TV Band Licensees Encouraged to Give Back Spectrum

TV band licensees will be provided compensation for voluntarily relinquishing their spectrum and the FCC intends to later auction such spectrum for the purpose of providing additional advanced mobile wireless services in the commercial market.  The voluntary "incentive auction" of TV band spectrum would compensate broadcasters for giving up their TV band spectrum and this process is anticipated to take a few years.

The options for an interested broadcaster are to:

• relinquish its TV channel;
• relinquish a “UHF” channel in exchange for a “VHF” channel;
• share one TV channel with another TV station; or
• request an FCC rule waiver to provide mobile wireless services along with video programming via its TV channel (note: the broadcaster would retain its TV license).

All Licensees Permitted to Participate in Auctions

The FCC is required to permit all qualified bidders to participate in the auctions authorized by the legislation, but the FCC’s general auction authority is preserved and it can establish rules on spectrum aggregation in order to promote competition so as not to let the largest bidders use any inherent advantages to acquire the new licenses.

Nationwide Public Safety Network

Congress has established the First Responder Network Authority (FRNA) to oversee the new $7 billion nationwide public safety network.  FRNA will become an independent agency within NTIA and it will be governed by a Board of Directors appointed by the Secretary of Commerce, the Secretary of Homeland Security, the Attorney General, and the Office of Management and Budget.  In addition, the FCC will serve in an advisory capacity regarding the development of minimum technical requirements for interoperability.

There is also a new grant program funded at $135 million for local and states governments to coordinate efforts for implementing the national public safety network.  States could also opt out of the national public safety network if they build their own network subject to certain minimum requirements and FCC approval.

NTIA will oversee the Public Safety Trust Fund, which will be used to pay for the network buildout.  FNRA will not be able to offer commercial services directly to consumers, but it will be able to enter into wholesale agreements with commercial providers for the use of this spectrum on a secondary basis.

Next Generation 9-1-1 Advancement Act

Congress decided to facilitate the advancement of E-911 system with a grant program with a budget of $115 million that will be administered by NTIA and the National Highway Traffic Safety Administration.

More Unlicensed Spectrum

In an effort to promote innovation, the bill allows the FCC foster unlicensed use in the “guard bands” of the “reclaimed” TV spectrum for mobile and fixed wireless uses.  Regarding the 5 GHz band, the FCC will allow unlicensed “U-NII” devices to operate here if there is a way to protect federal users and commercial licensees.

Improved Access to Government-Owned Wireless Towers

State and local government entities are required to more quickly approve “eligible facilities requests” for access to government-owned towers and/or base stations where there is no “substantial change” to their physical dimensions.  The FCC is in charge of the implementation rulemaking and it will interpret what "substantial change" means.  In addition, the US General Services Administration is required to establish master contracts for wireless towers that are located on Federal government property.

Other Spectrum Auctions

Within three years, the FCC must reallocate and auction 65 MHz of spectrum from various bands:

• 1915-1920 MHz;
• 1995-2000 MHz (PCS H Block);
• 1675-1710 MHz band;
• 2155-2180 MHz (AWS-3 Block); and
• other contiguous spectrum as identified by the FCC.