[Congressional Record Volume 142, Number 64 (Thursday, May 9, 1996)]
[Senate]
[Pages S4928-S4936]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    SPECTRUM REFORM DISCUSSION DRAFT

  Mr. PRESSLER. Mr. President, I rise today to take another step in my 
overall telecommunications and information policy reform agenda. As I 
have stated many times, the historic enactment earlier this year of the 
Telecommunications Act of 1996 was only the first step in a new 
national telecommunications policy for 21st Century America.
  Today, I am putting out for public comment a discussion draft of 
spectrum reform legislation to institute comprehensive reforms in how 
the Federal Government uses--and fails to use--our most important 
valuable national resource, the radio frequency spectrum.


                       The Spectrum and Its Uses

  The radio spectrum is to the information age what oil and steel where 
to the Industrial Age. Like any resource, it is finite. Therefore it 
must be managed responsibly.
  This valuable resource is one of the principle building blocks for 
tomorrow's ``Information Economy.'' It also is critical to delivering 
new and valuable services to the American public.
  All of us have seen the contribution traditional radio-based 
services--such as public and commercial broadcasting--have made to our 
national life. We have seen the benefits of low-cost satellite 
communications, which have enormously expanded the range of news, 
information, and entertainment

[[Page S4929]]

choices. We have seen the proven value of cellular radiotelephones. In 
addition, there are an array of other critical radio-based 
communications services--everything from the radar systems so important 
to air traffic control, to the radios policemen, firemen, and 
ambulances use, to communications networks central to maintaining a 
strong national defense.
  From its very beginning, wireless communication has played a vital 
role in protecting lives and property. Through the development of radio 
and television broadcasting, it has delivered information and 
entertainment programming to the public at large. More recently, 
wireless, spectrum-based telecommunications services, products and 
technologies have proven indispensable enablers and drivers of 
productivity and economic growth, as well as international 
competitiveness.
  Wireless technology can deliver telecommunications and information 
services directly to individuals on the move. No longer is being away 
from the office desk or factory floor an impediment to doing business. 
Fixed locations that cannot be served economically by wireline 
facilities because of physical infeasibility or prohibitively high 
costs are made accessible. Wireless services also are critically 
important in bringing competition to the wireline telephone network--
one of the key goals of the Telecommunications Act.
  Today, there is an almost limitless demand for the use of this 
spectrum. In other words, the spectrum is an enormously valuable, yet 
finite natural resource. This is the crux of the problem with our 
current spectrum policy structure. Unless a reformation plan is 
developed to create a more effective and efficient use of the spectrum, 
a vast array of new spectrum-based products, services, and technologies 
will go unrealized for the American people.


                               The Future

  We are on the cusp of great change. Over the past couple of years, we 
in the Congress and the Federal Communications Commission [FCC] have 
accelerated the deployment of a whole new generation of pocket phones--
so-called ``Personal Communications Services.'' Just this spring, the 
FCC authorized a new generation of wireless computers--radio-based 
systems that may make it possible for us to interconnect our schools 
and provide our students with access to the Internet on a low-cost, 
highly, effective basis.
  America has pioneered the development of digital television. Later 
this year, actual digital broadcast operations may begin. By the turn 
of the century--less than 4 years from now--we could have the 
equivalent of a digital overlay network in the United States, relying 
on a new electronic infrastructure broadcasters hope to put in place.
  These and other accomplishments have been achieved despite a 
regulatory framework that dates to the days of Marconi. It is a policy 
designed for an environment characterized by stable technology and 
stable, predictable demand for very basic communications. Under this 
antiquated model, the Government--not consumers--largely decides who 
uses frequencies, what they are used for, and how they are used--a 
government-sponsored electronic industrial policy.
  This system is slow. It is anticompetitive. It is antifree speech.


                  Inefficiencies in the Current Policy

  As with other systems of central planning, the spectrum management 
system currently utilized in the United States tends to result in 
inefficient use of the spectrum resource. Federal regulators --rather 
than consumers--decide whether taxis, telephone service, broadcasters, 
or foresters are in greatest need of spectrum. Not surprisingly it is a 
highly politicized process. Most important, new services, products and 
technologies are delayed or, worse yet, denied. This obviously harms 
consumers.
  Consider cellular phones, the lengthy delay in making cellular 
telephone service available imposed tremendous cost on the economy. One 
study estimated the delay cost the economy $86 billion. As important, 
American consumers were denied a new productivity and security tool for 
many years.
  Equally troubling, the system constrains competition. One of the most 
important qualities of a competitive industry is the ability of new 
firms to enter the business. Yet, the bureaucratic allocation process 
typically provides for a set number of licenses for each service. This 
precludes additional competitors. Only two cellular franchises, for 
instance, are allowed in each market.
  Delays associated with the allocation and assignment processes, while 
perhaps acceptable in a slow changing world, are seriously out of step 
with the fast-changing, high-technology world of today. Pressures on 
the traditional radio frequency management structure are increasing. 
Demand for channels is outstripping supply.
  The current environment hobbles progress. It makes it hard for 
innovators to gain access to the radio spectrum resources they need to 
deliver technology's promise to the American people.
  Another problem with current policy is that the Federal Government 
alone claims nearly one-third of this critical resource for itself. 
Since 1992, there has been a bipartisan commitment to privatize some of 
the spectrum the Government has warehoused. Among the benefits of that 
bipartisan effort has been a series of spectrum auctions. Those 
auctions have produced more than $20 billion for the U.S. Treasury. 
Although spectrum auctions have provided significant revenues for the 
U.S. Treasury, the overriding policy reason for adopting a spectrum 
auction policy is not--I repeat not--to provide more money for the 
Government.
  Much more important, spectrum auctions have accelerated access to the 
resource by private sector entrepreneurs. The key policy goal achieved 
with auctions is placing the spectrum resource in the hands of those 
who value it most highly. Those who will put it to its best, highest 
valued use.
  The FCC's current auction authority expires in 1998. We need to 
address these issues before then. We then ought to make the FCC's 
auction authority permanent.
  But as I stated here on the Senate floor on March 13 much more 
definitely needs to be done.
  Under the comprehensive discussion draft of spectrum reform 
legislation I am unveiling today, a far reaching series of reforms 
would be initiated.


          Spectrum Auction Authority and Exhaustive Licensing

  The spectrum reform discussion draft would expand the FCC's spectrum 
auction authority. This change would, once and for all, place the 
spectrum issue outside of the budget context and squarely in the arena 
of communications policy.
  The FCC also would be required to exhaustively license all available 
spectrum by selecting bands of unallocated and unassigned frequencies 
to be auctioned. Any existing licensees in these bands would be 
protected and grandfathered. Indeed, they would gain flexibility in use 
within their actual or implied service area and spectrum block. The FCC 
is directed to maximize the value of spectrum licenses by selecting 
broad, low frequency bands of contiguous spectrum that are not fully 
assigned. The spectrum licensee seeking flexibility in use also may 
apply for any adjacent or cochannel spectrum contiguous to its existing 
license that is allocated but unassigned.


                          Spectrum Flexibility

  The key reform contained in this discussion draft is freedom in 
spectrum use. While important, auctions are not the most important 
reform contained in this legislation. Much more important is replacing 
the current Government mandated industrial policy system with a market-
based approach.
  Auctions only tell you who gets a license. We now need to discuss 
what the license allows you to do.
  Like land, the Government shouldn't tell people what they can do with 
frequencies. So long as they don't interfere with their neighbors, they 
should be able to use it for whatever consumers want.
  Like newspapers, the Government shouldn't tell broadcasters what they 
say or how they say it. That should be up to viewers.
  Simply put, frequencies should be treated more like private property.
  However, in making these policy changes we should build on the 
current system. Many licensees already have a great deal of flexibility 
in what they can do. Let's build on that and give them more freedoms.
  Mr. President, at the core of the spectrum reform I am today 
proposing is the concept of spectrum flexibility. Flexibility for a 
changing world.

[[Page S4930]]

  For instance, radio frequency management historically has limited the 
permissible uses of allocated bands and assigned channels. This, in 
part, has been a function of technology, as well as the characteristics 
associated with particular frequencies.
  For example, channels allocated to the Forest Products Service 
traditionally have been quite low frequencies. This is because those 
frequencies have been shown to have the greatest ability to penetrate 
underbrush, leaves, and other obstructions naturally occurring in a 
forest. New digital communications technologies have gone a long way 
toward changing this reality. Today's digital technology includes error 
correction and other features which lessen interference.
  Another good example of why today's technology requires increased 
spectrum flexibility occurs in spread spectrum and digital overlay. 
These techniques make it possible for multiple communications pathways 
to be established within the same radio frequency channel. In other 
words, using this technology, broadcasters could transmit 
communications in addition to video and sound signals. Radio broadcast 
channels today, for example, already provide local links for paging 
operations. Government policy must allow multiple, more intensive use 
of radio frequency resources where there is no perceptible adverse 
technical impact.
  Allowing radio frequency licensees greater flexibility also could 
facilitate equipment and systems modernization and upgrading in the 
public sector. This would enhance public safety. For example, many 
public communications systems today are in need of modernization, to 
meet the demand for more cost-effective and responsive law enforcement, 
fire safety, and emergency medical services. At the same time, the 
financial resources available to many public safety communications 
organizations are quite limited.
  If local police forces were permitted greater flexibility in use of 
their channels, however, this challenge would be less severe. Switching 
to new digital communications techniques typically achieves a 
significant increase in the total number of channels available--in some 
cases, by a factor of four or more. Thus, a local police department 
could increase the number of channels available to support its 
operations and, at the same time, have capacity available which it 
could lease or barter with private communications organizations. Such 
arrangements could generate the funds needed to finance modernization.
  Greater flexibility is a public interest win-win situation--an option 
that benefits all involved and affords the general public both better 
service and more communications options.
  The FCC already has taken steps to allow some radio licensees more 
flexible use. The Commission's cellular radiotelephone rules, for 
example, place few constraints on permissible communications. The same 
is true in the case of the new PCS services. What is needed, however, 
is far greater application of this fundamental principle of flexible 
spectrum use. My bill does just that.
  Under this discussion draft, each existing and future licensee would 
have increased flexibility in use including: The right to use assigned 
spectrum for any service, under any regulatory classification, and 
under any technical parameters. In addition, the licenses would have 
the right to freely transfer the license to others.
  The flexible use would have to be within the licensee's existing or 
implied service area and spectrum block and could not be inconsistent 
with international treaty obligations of the United States. The 
spectrum licensee also would bear the burden of showing any new use was 
within the existing or implied service area and spectrum block.


                         Spectrum Privatization

  Another major feature of the draft legislation is spectrum 
privatization. Simply put, under the discussion draft, the Federal 
Government would be obliged to relinquish one-quarter of its spectrum 
stockpile. Spectrum auctions would be held to place that spectrum into 
the hands of the public as quickly as possible. In addition, Government 
agencies would be required to rely, to the maximum extent possible, on 
the private sector to meet their radiocommunications needs. Taking into 
account the taxes paid, if nothing else, this would definitely help the 
public and strengthen the American information technology economy.


                   Spectrum Management Consolidation

  The discussion draft would place the responsibility for managing the 
spectrum in the United States solely with the FCC. The Commission would 
be required to factor in critical national defense, law enforcement, 
and national policy priorities. However, the current regime divides 
responsibility between the FCC and the Department of Commerce, would be 
streamlined. This would improve the overall management process. It also 
would increase accountability.


                        Self-Managed Regulation

  One of the more promising options for radio frequency management 
reform is expanded use of self-managed regulation--the use of private 
sector radio frequency coordinator groups to handle routine 
engineering, frequency coordination, and other functions which, in the 
past, typically had been undertaken by FCC staff.
  At present, the FCC relies on frequency coordinators to handle many 
of the routine chores associated with private mobile radio systems. 
Organizations such as the National Association of Business & 
Educational Radio [NABER], the Associated Public-Safety Communications 
Officers [APCO], and the Special Industrial Radio Service Association 
[SIRSA] process applications, conduct engineering surveys, and 
otherwise facilitate licensing and channel usage in these specific 
private radio services. The FCC does not generally rely on frequency 
coordinators, however, with regard to broadcast services, satellite 
communications, and other large frequency using services.
  The task of being a frequency coordinator depends, in large part, 
upon two things: Access to computerized data bases; and some expertise 
in radio frequency engineering. Access to data bases today, of course, 
is routine. At the same time the number of individuals with substantial 
radio frequency management expertise is growing. This is due in part to 
Federal Government and defense agency downsizing. There is, in short, 
no good reason to assume that multiple frequency coordinators could not 
be sanctioned by the FCC. This would have the effect of broadening 
users' options.
  Competition among frequency coordinator groups, moreover, should have 
the effect of ensuring efficient charges and effective, responsive 
operations. That has been true in virtually every market in which 
competition has been introduced. It should prove true in this case as 
well. That is why the discussion draft directs the FCC to expand 
substantially the agency's use of private sector frequency coordinator 
groups.


                         Public Safety Spectrum

  The draft legislation also directs the FCC to make spectrum block 
grants to States for public safety spectrum needs. In lieu of 
processing, issuing, and renewing tens of thousands of public safety 
communications licenses--at significant cost to licensees, as well as 
the FCC--the agency would issue 55 block grants to the chief executive 
officer of each State, Guam, Puerto Rico, the U.S. Virgin Islands, and 
the District of Columbia. It would then be the responsibility of State 
Governors to determine eligibility, to ensure compliance with standard 
FCC--and other--operating rules, and to resolve disputes among public 
safety licensees within their jurisdiction.

  This reform would reduce delays and heighten responsiveness to actual 
user requirements. It would lessen substantially the burdens of 
traditional regulation now borne by the FCC. Most important, it would 
tend to ensure more and better public safety communications for State 
residents.


                     Broadcast Television Spectrum

  Mr. President, this draft legislation also would resolve the 
controversy that has surrounded the digital--or high-definition--
television issue. It would speed up the migration of broadcast 
television to digital channels. At the same time, it would firm up the 
plans which have been announced regarding the retrocession of one 6 Mhz 
channel--assets which could be used for many purposes in addition to 
straight broadcast television.
  Spectrum in the VHF and UHF television bands has the potential of 
being extremely valuable for a variety of

[[Page S4931]]

uses. Current licensing policy, however, keeps this spectrum locked up 
in a single, narrowly defined use. The fundamental thrust of this 
alternative broadcast TV spectrum policy is to allow markets to guide 
the spectrum to its highest valued use, while preserving the current 
level of free television service, noncompetitively assigning an 
additional 6 MHz to each existing NTSC licensee, and ensuring the 
public is fairly compensated for the use of spectrum. This alternative 
proposal recognizes the equities of incumbent full power broadcast 
licensees in the band to fully and fairly compete in the digital era, 
most especially their desire to convert to digital technology. At the 
same time--and let me be very clear on this point--it will maintain the 
current level of free television service for American consumers.


                          The Need for Reform

  Mr. President, we enacted comprehensive telecommunications 
legislation earlier this year for one very simple reason. It became 
more and more apparent to all of us that the traditional, highly 
bureaucratized telecommunications regulatory system no longer served 
the public's best interest. There were unexplainable delays. New 
services were not being offered. New investment and job opportunities 
were not materializing fast enough.
  The oldtime telecommunications regulatory system, in short, had 
become the classical regulatory bottleneck. It was stalling forward 
progress. As a result--after nearly two decades of struggling with 
these issues--this Congress developed and enacted comprehensive reform 
legislation.
  The discussion draft I am unveiling today is very much the other side 
of that fundamental regulatory reform equation. It addresses issues and 
choices that Congress, the FCC, and the executive branch have wrestled 
with for years. The approach is fair and balanced--and, balanced very 
much in terms of helping the American public while strengthening 
national competitiveness. I believe it could usher in a dynamic, 
vibrant ``Wireless Era'' in which American entrepreneurial capitalism 
leads the world into a robust high-technology future that will benefit 
all Americans.
  Congress has spent years examining the way we manage other natural 
resources--from water, grazing, and timber issues so critical to my 
part of the country, to the fisheries vitally important to the 
Northeast, the Northwest, and, of course, Alaska. The natural resource 
this draft legislation focuses upon is just as important to America.
  This discussion draft was crafted in consultation with a wide range 
of engineering, economic, and public policy experts. It is based, in 
large part, upon the extensive open hearings which the Senate Committee 
on Commerce, Science, and Transportation has conducted over the past 
few years.
  This is a worthy regulatory reform initiative. It could pay enormous 
public policy dividends. Let me stress, however, that the unveiling of 
this discussion draft is merely the beginning of what I hope will be a 
spirited, robust debate. I look forward to continuing to work 
cooperatively with all of my colleagues in the Senate and the House to 
develop sound, consensus legislation that can be introduced in the near 
future. I also want to encourage all affected parties to provide 
comments to the committee regarding this proposal.
  Mr. President, the radio frequency management and use reforms 
contained in this spectrum reform discussion draft hold significant 
promise. They would reduce regulatory burdens. They would foster 
important public policies including advances in technology and 
innovation, greater choice and more customer options, and more 
effective, efficient, and responsive use of this valuable national 
resource.
  Mr. President, I ask unanimous consent that a summary of the 
discussion draft together with the draft legislative language itself be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

Summary of Pressler Spectrum Bill Discussion Draft: The Electromagnetic 
        Spectrum Management Policy Reform and Privatization Act


                       Spectrum Auction Authority

       Permanent Authority. FCC's spectrum auction authority is 
     extended and made permanent.
       Expanded Authority. FCC's spectrum auction authority to 
     make spectrum license assignments is expanded with the 
     following limited exceptions: non-mutually exclusive 
     applications; public safety services; digital television 
     licenses for broadcasters; and spectrum and associated orbits 
     within an international satellite system. FCC's auction 
     authority also expanded to include allocations, where 
     consistent with the Act.
       Exhaustive Licensing. FCC required to exhaustively license 
     all available spectrum by selecting bands of unallocated and 
     unassigned frequencies to be auctioned. Any existing 
     licensees in these bands will be protected and grandfathered 
     and gain flexibility in use within their actual or implied 
     service area and spectrum block. FCC is directed to maximize 
     the value of spectrum licenses by selecting broad, low 
     frequency bands of contiguous spectrum that are not fully 
     assigned.


              Voluntary Reallocation--Spectrum Flexibility

       Flexibility In Use. Each existing and future nonbroadcast 
     licensee will have flexibility in use which includes: the 
     right to use assigned spectrum for any service; under any 
     regulatory classification; under any technical parameters; 
     and the right to freely transfer this right to others.
       Limitations. The flexible use must be within the licensee's 
     existing or implied service area and spectrum block and 
     cannot be inconsistent with international treaty obligations 
     of the United States. The spectrum licensee bears the burden 
     of showing that any new use is within the existing or implied 
     service area and spectrum block.
       The spectrum licensee seeking flexibility in use may also 
     apply for any adjacent or cochannel spectrum contiguous to 
     its existing license that is allocated but unassigned.


                       Government Spectrum Users

       Flexibility In Use. Government spectrum users are also 
     granted spectrum flexibility rights, including the right to 
     transfer any spectrum rights now assigned to them to any 
     government or private sector entity and to receive 
     compensation for rights transferred.
       Privatization. The Federal government is required to make 
     an additional 25 percent of its exclusive or shared spectrum 
     below 5 GHz available to the FCC for allocation to private 
     sector spectrum licensees using spectrum auctions.
       BRAC-Like Commission. A Presidentially appointed Advisory 
     Committee On Withdrawal will be established to determine how 
     to make available the 25 percent of spectrum for 
     privatization and to determine what, if any, amount of 
     spectrum beyond the mandatory 25 percent which will be made 
     available to the private sector over a period of 10 years.
       Financial Incentives. To encourage government agency and 
     personnel cooperation, financial incentives will be developed 
     to reward them for opening more spectrum for private sector 
     use.
       Relocation Compensation. Federal government users are 
     allowed to accept compensation, including in-kind 
     reimbursement of costs, from any entity to defray the costs 
     of relocating the Federal entities operations from one set of 
     spectrum frequencies to another.
       Additional Privatization. The Act adopts as statutory law 
     OMB's Circular A-76 which requires Federal agencies to 
     undertake an extensive cost-benefit analysis prior to 
     vertically integrating or continuing to vertically integrate 
     to meet their needs, and to take into account taxes forgone 
     when the Government chooses to make rather than buy products 
     or services to meet its needs. A-76 analysis has simply not 
     been consistently--nor continuously--applied to Government 
     radio communications requirements. The new bill changes that 
     by obliging Federal agencies to systematically review their 
     communications systems and operations, and shift to private 
     sector suppliers wherever feasible.
       Technology Teaming. The number of communications channels 
     can be significantly multiplied if the analog communications 
     facilities used by many Federal agencies were changed to 
     digital. Federal agencies will be required to team with a 
     private company to install advanced, digital capability and 
     increased capacity, which in turn can be equitably 
     apportioned between agency and private partner.
       Multi-Agency Systems. Federal agencies will be required to 
     explore not only the availability of private sector suppliers 
     but also other government agency suppliers. Today each 
     Federal agency maintains--and jealously guards--its own 
     system. As a result, there are very few ``common user'' 
     systems.


         Consolidation of Federal Spectrum Management Function

       NTIA Eliminated. Management of spectrum for Federal 
     government agencies, together with the IRAC Secretariat and 
     associated support activities, is transferred from NTIA to 
     the FCC.
       National Security Safety Valve. The President may veto any 
     FCC action which limits the amount of spectrum available to 
     government users, limits the uses to which spectrum may be 
     put, or interferes with or compromises Federal use, if such 
     action substantially harms national security or public 
     safety.


                         Non-Exclusive Licenses

       For non-exclusive spectrum licenses not assigned by 
     spectrum auction, the FCC will

[[Page S4932]]

     have the authority to use other economic incentives, 
     including user fees, to ensure that spectrum is assigned and 
     used efficiently and that the public is fairly compensated 
     for the use of the spectrum.


                        Self Managed Regulation

       FCC is directed to substantially expand its use of private 
     sector frequency coordinator groups thus reducing need for 
     FCC in house engineering.


                  Public Safety Spectrum Block Grants

       Each State will assume responsibility as a block grant 
     licensee for managing the spectrum currently allocated to 
     public safety uses within its State boundaries.
       Each State may grant licensees the same flexibility in use 
     available to private FCC licensees.
       Interference disputes between the States will be resolved 
     by the FCC.


  Broadcast TV Spectrum--Deposit, Return and Overlay (A Market-Based 
  Alternative To A Government Mandated And Dictated Transition Policy)

       Purpose. Spectrum in the VHF and UHF television bands is 
     potentially extremely valuable for a variety of uses. Current 
     licensing policy, however, keeps this spectrum ``locked up'' 
     in a single, narrowly defined use. The fundamental thrust of 
     this alternative broadcast TV spectrum policy is to allow 
     markets to guide the spectrum to its highest valued use (as 
     up front spectrum auctions would) while preserving the 
     current level of free television service, noncompetitively 
     assigning an additional 6 MHz to each existing NTSC licensee, 
     and ensuring the public is fairly compensated for the use of 
     spectrum. This alternative proposal recognizes the equities 
     of incumbent full power broadcast licensees in the band to 
     fully and fairly compete in the digital era, most especially 
     their desire to convert to digital technology. At the same 
     time it will maintain the current level of free television 
     service for American consumers.
       No Standards Setting. FCC is specifically precluded from 
     mandating an HDTV or digital television (DTV) standard for 
     broadcast licensees or establishing a requirement that all TV 
     sets sold or imported must be digital compatible by a date 
     certain.
       Deposit. One 6 MHz DTV channel will be assigned non-
     competitively to each existing NTSC licensee. Each existing 
     NTSC licensee will have the choice of receiving a DTV license 
     for payment of a fee (Deposit) or to simply keep their 
     existing NTSC license and relinquishing their right to the 
     DTV license. The deposit will be based on the market value of 
     the license determined by the auction of the overlay licenses 
     (see below). Any DTV licenses not accepted will be auctioned 
     by the FCC as part of an overlay license.
       Return. The money deposited for the DTV license can be paid 
     in installments over a period of 15 years with the money 
     going into an escrow account. Interest accrued will go to the 
     U.S. Treasury for deficit reduction. After 15 years from the 
     date the FCC assigns a DTV license, the broadcast licensee 
     can relinquish a 6 MHz license and reclaim the full amount of 
     its deposit (Return), less interest accrued, or continue to 
     maintain NTSC and/or DTV license operations as outlined 
     below. The amount of the deposit returned to the broadcast 
     licensee will decrease 20 percent for each year that the 
     return of a 6 MHz channel is delayed past 15 years.
       DTV Flexibility/Transferability. DTV licensees will have 
     full flexibility, without imposition of economic fees as 
     required in the Telecommunications Act of 1996, to use their 
     assigned DTV channels within their designated service area 
     for any service consistent with the technical limits imposed 
     by the FCC to prevent interference to NTSC and other DTV 
     assignments. DTV licensees may voluntarily transfer their 
     license at any time, separate from or together with their 
     existing NTSC channel.
       No Mandates. DTV licensees will not be required to meet a 
     minimum service requirement or construction schedule.
       Protecting Consumer Investment. Existing full power NTSC 
     stations will be grandfathered indefinitely. An NTSC licensee 
     will be permitted to continue providing standard NTSC 
     television service or to transfer its license to another 
     party who will then become the NTSC licensee.
       NTSC Flexibility Subject To Replacement Of Free Service. An 
     NTSC licensee will also be given flexibility within its 
     assigned channel and service area to provide any services, 
     without imposition of economic fees as required in the 
     Telecommunications Act of 1996, other than standard NTSC 
     service subject to technical limits imposed by the FCC to 
     prevent interference to DTV and other NTSC assignments. 
     Before any NTSC service may be reduced or discontinued, 
     however, the NTSC licensee must have provided a comparable 
     free replacement for such service including necessary 
     receiving equipment to allow such service to be displayed on 
     standard NTSC receivers.
       Exhaustive Licensing. FCC will define overlay licenses 
     collectively covering all 402 MHz of spectrum in the current 
     VHF and UHF TV bands and covering the entire U.S. Each 
     overlay license will cover a block of one or more contiguous 
     6 MHz channels and a contiguous geographic area. The FCC will 
     determine the appropriate spectrum block and area size.
       Overlay Auction. Overlay licenses to exhaustively fill the 
     entire 402 MHz allotted for television broadcasting in each 
     market will be assigned by a simultaneous, multiple round 
     auction.
       Overlay Flexibility. Within its defined spectrum block and 
     service area, an overlay licensee will be permitted to 
     implement any service, subject to power limits defined by the 
     FCC at the boundaries of such spectrum block and service 
     area, and subject to additional technical restrictions as may 
     be imposed by the FCC to protect NTSC and DTV licensees from 
     harmful interference.
       Overlay licenses will be freely transferable.
       Overlay licenses may be aggregated to create larger service 
     areas and spectrum blocks.


                            Spectrum Report

       After 2 years the FCC will prepare a cost-benefit report on 
     the results of the legislation together with any 
     recommendations for additional legislation.

                                 S. --

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Electromagnetic Spectrum 
     Management Policy Reform and Privatization Act''.

     SEC. 2. FINDINGS.

       The Congress finds that--
       (1) New applications of wireless communications 
     technologies await access to the electromagnetic spectrum to 
     provide innovative services to the public.
       (2) The spectrum, however, is often characterized as 
     overcrowded and filled to capacity with current allocations.
       (3) Capacity may now be underutilized due to the use of 
     obsolete technologies, while bands with great promise for 
     delivering better quality communications products to 
     consumers fail to realize their potential.
       (4) This seeming paradox may be the result of a regulatory 
     structure that is increasingly inefficient in the dynamic 
     worlds of telecommunications and information technologies.
       (5) This inefficiency results from structural defects in 
     the system itself, not in the expertise of, or competence at, 
     the regulatory agencies.
       (6) Central allocation mechanisms provide insufficient 
     information with which to rank competing uses for spectrum, 
     or competing technologies for delivering those uses.
       (7) Approximately one-third of the usable spectrum is 
     allocated to government or otherwise unavailable for private 
     sector use. Innovations to help and encourage the government 
     to use spectrum more efficiently should be adopted.
       (8) The dramatic acceleration in the pace of technological 
     change and the increasing complexity of allocation and 
     assignment decisions make the case for an overhaul of the 
     current system more compelling than ever before.
       (9) Lack of capital and outmoded equipment have led to 
     inefficient utilization of the spectrum bands used by Federal 
     agencies and public safety users.
       (10) The management of spectrum can be substantially 
     reformed by giving most licensees the freedom and incentive 
     to use the spectrum more efficiently.
       (11) In particular, within its explicit or implicit service 
     area and spectrum block, a licensee should be given--
       (A) service and technical flexibility;
       (B) freedom to resell or sublease; and
       (C) freedom to pick regulatory classification.
       (12) To get the full benefit of liberalizing existing 
     licenses, currently unassigned or unallocated spectrum will 
     have to be made available in an efficient manner. The 
     Commission will have to exhaustively license this spectrum 
     expeditiously. These new assignments should--
       (A) be exclusive;
       (B) provide new licensees marketplace freedoms similar to 
     those enjoyed by existing licensees; and
       (C) be assigned through simultaneous multiple round 
     auctions where there are mutually exclusive applicants.
       (13) Similar incentive-based reforms should be adopted for 
     the spectrum used by the Federal government and by the public 
     safety community, including substantial privatization, 
     flexibility in use, financial incentives and compensation for 
     relocation and band clearing, consolidation of the Federal 
     spectrum management function, and spectrum block grants to 
     the States.
       (14) An alternative broadcast television spectrum policy is 
     needed to allow markets to guide the spectrum to its highest 
     valued use while preserving the current level of free 
     television service, noncompetitively and flexibly assigning 
     an additional 6 megahertz to each existing NTSC licensee, and 
     ensuring that the public is fairly compensated for the use of 
     spectrum.
       (15) All reforms should encourage private dispute 
     resolution and avoid prolonged administrative delays.

     SEC. 3. DEFINITIONS.

       When used in this Act--
       (1) Commission.--The term ``Commission'' means the Federal 
     Communications Commission.
       (2) Flexibility in use.--The term ``flexibility in use'' 
     means--
       (A) the right to use assigned spectrum for any service 
     (including but not limited to those defined by the 
     Commission), under any regulatory classification, and under 
     any technical parameters, if the use is within the licensee's 
     existing or implied service area and spectrum block and is 
     not inconsistent

[[Page S4933]]

     with international treaty obligations of the United States, 
     and
       (B) the right to freely transfer this right to others.
       (3) Implied service area.--The term ``implied service 
     area'' means the service area implied by the potential power 
     level and antenna height for a licensee, even if that area is 
     not expressly defined in a license.
       (4) Service area.--The term ``service area'' means the 
     geographic area over which a licensee may provide service and 
     is protected from interference.
       (5) Spectrum block.--The term ``spectrum block'' means the 
     range of frequencies over which the apparatus licensed by the 
     Commission is authorized to transmit signals.

     SEC. 4. SPECTRUM AUCTION AUTHORITY.

       (a) Spectrum Auction Authority Made Permanent.--Section 
     309(j) of the Communications Act of 1934 (47 U.S.C. 309(j)) 
     is amended--
       (1) by striking paragraph (11); and
       (2) by redesignating paragraphs (12) and (13) as paragraphs 
     (11) and (12).
       (b) Expansion of Spectrum Auction Authority.--
       (1) In general.--Section 309(j) of the Communications Act 
     of 1934 (47 U.S.C. 309(j)) is amended by striking paragraphs 
     (1) and (2) and inserting the following:
       ``(1) General Authority.--If mutually exclusive 
     applications are accepted for any initial license or 
     construction permit which will involve use of electromagnetic 
     spectrum, then the Commission shall grant such license or 
     permit to a qualified applicant through a system of 
     competitive bidding that meets the requirements of this 
     subsection. The Commission may also use auctions to allocate 
     spectrum where it determines that such an auction is 
     consistent with the purposes of this Act.
       ``(2) Exemptions.--The Commission may not apply the 
     competitive bidding authority granted by this subsection to 
     licenses or construction permits issued by the Commission--
       ``(A) for public safety radio services, including non-
     Government uses the sole or principal purpose of which is to 
     protect the safety of life, health, and property and which 
     are not made commercially available to the public;
       ``(B) for initial licenses or construction permits for new 
     terrestrial digital television services assigned by the 
     Commission to existing terrestrial broadcast licenses; or
       ``(C) for spectrum and associated orbits used in the 
     provision of any satellite within a global satellite 
     system.''.
       (2) Conforming amendment.--Section 309(j)(6) of such Act is 
     amended--
       (A) by striking subparagraph (E); and
       (B) by redesignating subparagraphs (F) through (H) as 
     subparagraphs (E) through (G), respectively.
       (c) Exhaustive Spectrum Licensing Policy.--
       (1) In general.--The Commission shall complete all actions 
     necessary to permit the allocation and assignment by 
     competitive bidding pursuant to section 309(j) of the 
     Communications Act of 1934 (47 U.S.C. 309(j)) of licenses for 
     the use of bands of frequencies that--
       (A) in the aggregate span not less than 250 megahertz and 
     that are located below 5 gigahertz, within 1 year after the 
     date of enactment of this Act; and
       (B) in the aggregate span not less than 5 gigahertz and 
     that are located between 5 gigahertz and 60 gigahertz, within 
     2 years after the date of enactment of this Act; and
       (C) have not, as of the date of enactment of this Act--
       (i) been assigned or designated by Commission regulation 
     for assignment pursuant to such section;
       (ii) been identified by the Secretary of Commerce pursuant 
     to section 113 of the National Telecommunications and 
     Information Administration Organization Act (47 U.S.C. 923); 
     or
       (iii) been reserved for exclusive Federal Government use 
     pursuant to section 305 of the Communications Act of 1934 (47 
     U.S.C. 305); and
       (D) may include spectrum exhaustively licensed throughout 
     the United States under the provisions of section 
     337(c)(4)(C) of the Communications Act of 1934.
       (2) Criteria for band selection.--In making available bands 
     of frequencies for competitive bidding pursuant to paragraph 
     (1), the Commission shall, to the greatest extent possible, 
     maximize the value of the spectrum licenses by--
       (A) selecting broad, low-frequency bands of contiguous 
     spectrum that are not fully assigned; and
       (B) exhaustively licensing it throughout the United States.
       (d) Effective Date.--The amendment made by subsection (b) 
     does not apply with respect to any license or permit for a 
     terrestrial radio or television broadcast station for which 
     the Commission has accepted mutually exclusive applications 
     on or before the date of enactment of this Act.

     SEC. 5. VOLUNTARY REALLOCATION; SPECTRUM FLEXIBILITY.

       (a) In General.--Part I of title III of the Communications 
     Act of 1934 (47 U.S.C. 301 et seq.) is amended by adding at 
     the end thereof the following new section:

     ``SEC. 337. SPECTRUM LICENSE USE FLEXIBILITY.

       ``(a) Flexibility in Use.--Notwithstanding any other 
     provision of this title to the contrary, each holder of a 
     nonbroadcast license granted under this title is hereby 
     granted flexibility in use. A licensee may change the use for 
     which the license was granted to provide any other use of 
     that license within its existing explicit or implied service 
     area and spectrum block, unless the Commission disapproves 
     the holder's application for such change under subsection 
     (c).
       ``(b) Additional Spectrum.--The holder of a nonbroadcast 
     license making application for a change of use under 
     subsection (a) may include in the application an application 
     for any adjacent or co-channel spectrum contiguous to its 
     nonbroadcast license to which the change of use application 
     relates that is allocated but unassigned.
       ``(c) Application; Procedure.--
       ``(1) Application.--An application for flexibility in use 
     under subsection (a), or for flexibility in use and for 
     additional spectrum under subsection (b), shall be made in 
     such form and at such time as the Commission may require and 
     shall include an adequate interference showing.
       ``(2) Public notification.--Within 10 days after receiving 
     an application under this section, the Commission shall 
     publish notice of the application in the Federal Register.
       ``(3) Approval of use flexibility application.--
       ``(A) In general.--The Commission shall approve an 
     application for flexibility in use under subsection (a) 
     unless it determines that--
       ``(i) the applicant fails to demonstrate that the new use 
     is within the licensee's existing explicit or implied service 
     area or spectrum block;
       ``(ii) the applicant fails to make an adequate interference 
     showing; or
       ``(iii) the new use is inconsistent with treaty obligations 
     of the United States.
       ``(B) Commission failure to act.--If no objection is filed 
     with the Commission and the Commission fails to act on the 
     application within 60 days, the application shall be deemed 
     approved.
       ``(C) Third party challenges.--A co-channel licensee or 
     adjacent channel licensee has standing to object to the 
     approval of an application under subsection (a) if the 
     objection is filed in writing with the Commission within 30 
     days after the date on which the notice of application is 
     published in the Federal Register.
       ``(D) Arbitration of interference disputes.--
       ``(i) If an objection based on interference cannot be 
     resolved to the satisfaction of the parties within 60 days 
     after the close of the comment cycle for the application, 
     then either the applicant or the person making the objection 
     may invoke binding arbitration to resolve any unresolved 
     issues by notifying the Commission in writing.
       ``(ii) Upon receipt of such notification, the Commission 
     shall appoint an arbitrator to resolve the dispute.
       ``(iii) An arbitrator appointed by the Commission under 
     clause (ii) shall resolve the dispute within 60 days after 
     appointment.
       ``(iv) The costs of arbitration shall be paid by the 
     applicant for license use flexibility or as assigned by the 
     arbitrator.
       ``(E) Interference guidelines.--The Commission shall 
     prepare interference guidelines similar to those now in use 
     for personal communications services bands for applications 
     affecting occupied bands that would provide a safe harbor for 
     any licensee seeking to change its license use.
       ``(4) Approval of additional spectrum requests.--
       ``(A) Filing window for competing applications.--Any person 
     may apply for spectrum requested by another person if the 
     application is filed within 30 days after notice of the other 
     person's application is first published in the Federal 
     Register.
       ``(B) Approval of noncontested applications.--The 
     Commission shall approve an application for additional 
     spectrum under subsection (b) if no other applicant applies 
     for that spectrum within 30 days after publication of notice 
     of the application in the Federal Register, unless it 
     determines that--
       ``(i) the applicant fails to demonstrate that the new use 
     is within the licensee's existing explicit or implied service 
     area or spectrum block;
       ``(ii) the applicant fails to make an adequate interference 
     showing; or
       ``(iii) the new use is inconsistent with treaty obligations 
     of the United States.
       ``(C) Commission failure to act.--If no objection is filed 
     with the Commission and the Commission fails to act on the 
     application within 60 days, the application shall be deemed 
     approved.
       ``(D) Third party challenges.--A co-channel licensee or 
     adjacent channel licensee has standing to object to the 
     approval of an application under subsection (a) if the 
     objection is filed in writing with the Commission within 30 
     days after the date on which the notice of application is 
     published in the Federal Register.
       ``(E) Arbitration of interference disputes.--
       ``(i) If an objection based on interference cannot be 
     resolved to the satisfaction of the parties within 60 days 
     after the close of the comment cycle for the application, 
     then either the applicant or the person making the objection 
     may invoke binding arbitration to resolve any unresolved 
     issues by notifying the Commission in writing.
       ``(ii) Upon receipt of such notification, the Commission 
     shall appoint an arbitrator to resolve the dispute.

[[Page S4934]]

       ``(iii) An arbitrator appointed by the commission under 
     clause (ii) shall resolve the dispute within 90 days after 
     appointment.
       ``(iv) The costs of arbitration shall be paid by the 
     applicant for license use flexibility or as assigned by the 
     arbitrator.
       ``(F) Interference guidelines.--The Commission shall 
     prepare interference guidelines similar to those now in use 
     for personal communications services bands for applications 
     affecting occupied bands that would provide a safe harbor for 
     any licensee seeking to change its license use.
       ``(G) Auction of contested spectrum.--If mutually exclusive 
     applications are accepted for spectrum under subsection (b), 
     then the Commission shall assign the spectrum through the use 
     of a system of competitive bidding.
       ``(H) Expansion of auctioned spectrum.--In auctioning 
     spectrum under subparagraph (G), the Commission may auction 
     larger blocks of spectrum encompassing the spectrum requested 
     by the applicant under subsection (b) if--
       ``(i) there are inconsistent and overlapping requests for 
     the unassigned spectrum; or
       ``(ii) it would enhance the efficient use of spectrum.''.

     SEC. 6. GOVERNMENT SPECTRUM USE REFORMS.

       (a) Minimum Reallocation of Government Frequencies.--
       (1) In general.--Section 114 of the National 
     Telecommunications and Information Administration 
     Organization Act (47 U.S.C. 924) is amended by adding at the 
     end thereof the following:
       ``(c) Minimum Withdrawal Schedule.--
       ``(1) In general.--Over a period of 10 years beginning with 
     fiscal year 1997, the President shall take action under 
     subsection (a) to withdraw or limit the assignment of not 
     less than 25 percent of the exclusive or shared spectrum 
     allocated for Federal government use below 5 gigahertz and 
     make available the spectrum withdrawn, or otherwise made 
     available, to the Commission for allocation to private sector 
     licensees using competitive bidding.
       ``(2) Advisory committee on withdrawal.--The President 
     shall appoint an advisory committee of 7 members to advise 
     the Commission and the President on the choice of spectrum 
     for withdrawal or limitation of assignment under paragraph 
     (1) of this subsection. The advisory committee shall also 
     advise the President and the Commission concerning the 
     potential for withdrawal or limitation of additional spectrum 
     beyond the 25 percent of frequencies that are required to be 
     privatized under paragraph (1) of this subsection, if any. 
     The advisory committee shall include 3 representatives of 
     affected Federal departments or agencies, 3 representatives 
     of the private sector with experience and expertise in 
     telecommunications, and 1 representative of the public, and 
     shall meet at such times and places as the President shall 
     require. The President shall designate a chairman and vice 
     chairman and provide for appropriate administrative support. 
     The members of the advisory committee shall serve at the 
     pleasure of the President.''.
       (b) Identification and Reallocation of Frequencies.--
     Section 113 of the National Telecommunications and 
     Information Administration Organization Act (47 U.S.C. 901 et 
     seq.) is amended by adding at the end thereof the following:
       ``(f) Relocation of Federal Government Stations.--
       ``(1) In general.--In order to expedite the efficient use 
     of the electromagnetic spectrum and notwithstanding section 
     3302(b) of title 31, United States Code, any Federal entity 
     which operates a Federal Government station may accept 
     payment in advance or in-kind reimbursement of costs, or a 
     combination of payment in advance and in-kind reimbursement, 
     from any person to defray entirely the expenses of relocating 
     the Federal entity's operations from one or more radio 
     spectrum frequencies to any other frequency or frequencies, 
     including, without limitation, the costs of any modification, 
     replacement, or reissuance of equipment, facilities, 
     operating manuals, regulations, or other expenses incurred by 
     that entity. Any such payment shall be deposited in the 
     account of such Federal entity in the Treasury of the United 
     States. Funds deposited according to this section shall be 
     available, without appropriation or fiscal year limitation, 
     only for the operations of the Federal entity for which such 
     funds were deposited under this section.
       ``(2) Process for relocation.--Any person seeking to 
     relocate a Federal Government station that has been assigned 
     a frequency within a band allocated for mixed Federal and 
     non-Federal use may submit a petition for such relocation to 
     the Commission. The Commission shall limit the Federal 
     Government station's operating license to secondary status 
     when the following requirements are met--
       ``(A) the person seeking relocation of the Federal 
     Government station has guaranteed to defray entirely, through 
     payment in advance, in-kind reimbursement of costs, or a 
     combination thereof, all relocation costs incurred by the 
     Federal entity, including all engineering, equipment, site 
     acquisition and construction, and regulatory fee costs;
       ``(B) the person seeking relocation completes all 
     activities necessary for implementing the relocation, 
     including construction of replacement facilities (if 
     necessary and appropriate) and identifying and obtaining on 
     the Federal entity's behalf new frequencies for use by the 
     relocated Federal Government station (where such station is 
     not relocating to other technology or to spectrum reserved 
     exclusively for Federal use);
       ``(C) any necessary replacement facilities, equipment 
     modifications, or other changes have been implemented and 
     tested to ensure that the Federal Government station is able 
     to accomplish its purposes successfully; and
       ``(D) the Commission has determined that the proposed use 
     of the spectrum frequency band to which the Federal entity 
     will relocate its operations is--
       ``(i) consistent with obligations undertaken by the United 
     States in international agreements and with United States 
     national security and public safety interests; and
       ``(ii) suitable for the technical characteristics of the 
     band and consistent with other uses of the band.

     In exercising its authority under this subparagraph with 
     respect to issues that have national security or foreign 
     relations implications, the Commission shall consult with the 
     Secretary of Defense or the Secretary of State, or both, as 
     appropriate.
       ``(3) Right to reclaim.--If within one year after the 
     relocation the Federal Government station demonstrates to the 
     Commission that the new facilities or spectrum are not 
     comparable to the facilities or spectrum from which the 
     Federal Government station was relocated, the person seeking 
     such relocation must take reasonable steps to remedy any 
     defects or pay the Federal entity for the costs of returning 
     the Federal Government station to the spectrum from which 
     such station was relocated.
       ``(g) Federal Action to Expedite Spectrum Transfer.--Any 
     Federal Government station which operates on electromagnetic 
     spectrum that has been identified for reallocation for mixed 
     Federal and non-Federal use in the Spectrum Reallocation 
     Final Report or by the President pursuant to recommendation 
     of the Advisory Committee on Withdrawal shall, to the maximum 
     extent practicable through the use of the authority granted 
     under subsection (f) and any other applicable provision of 
     law, take action to relocate its spectrum use to other 
     frequencies that are reserved for Federal use or to 
     consolidate its spectrum use with other Federal Government 
     stations in a manner that maximizes the spectrum available 
     for non-Federal use.
       ``(h) Definitions.--For purposes of this section--
       ``(1) Federal entity.--The term `Federal entity' means any 
     Department, agency, or other element of the Federal 
     Government that utilizes radio frequency spectrum in the 
     conduct of its authorized activities, including a Federal 
     power agency.
       ``(2) Spectrum reallocation final report.--The term 
     `Spectrum Reallocation Final Report' means the report 
     submitted by the Secretary to the President and Congress in 
     compliance with the requirements of subsection (a).''; and
       (2) by striking ``(a) or (d)(1)'' in section 114(a)(1) and 
     inserting ``(a), (d)(1), or (f)''.
       (c) Flexibility in Use of Government Spectrum Licenses.--
     Part B of title I of the Telecommunications Authorization Act 
     of 1992 (47 U.S.C. 921 et seq.) is amended by adding at the 
     end thereof the following:

     ``SEC. 118. FLEXIBILITY IN USE FOR GOVERNMENT LICENSE-
                   HOLDERS.

       ``(a) In General.--Notwithstanding any other provision of 
     law to the contrary, any department, agency, or 
     instrumentality of the United States that holds an exclusive 
     spectrum license may change the use of that license under 
     section 337 of the Communications Act of 1934 (47 U.S.C. 337) 
     in the same manner and to the same extent as any other holder 
     of an exclusive nonbroadcast license.
       ``(b) Incentives.--To the extent consistent with its 
     existing authority, each department, agency, or 
     instrumentality of the United States may establish financial 
     incentives to assist in providing more government-assigned 
     spectrum for reallocation or assignment beyond the percentage 
     allocated under section 114(c) of this Act (47 U.S.C. 
     924(c)).
       ``(c) Regulations.--The Commission shall promulgate 
     regulations to carry out the provisions of this section after 
     consultation with the heads of departments, agencies, and 
     instrumentalities of the United States that hold spectrum 
     licenses.''.
       (d) Federal Radiocommunications; Private Enterprise 
     Reliance.--It shall be the policy of the United States to 
     rely on competitive private enterprise to the maximum extent 
     possible to meet the radiocommunications requirements of the 
     Federal Government. This policy shall apply to all 
     radiocommunications systems first authorized after December 
     31, 1996, and shall be applied to all systems authorized as 
     of that date in accordance with regulations adopted pursuant 
     to this Act.
       (e) Business-government Radio- communications Partnerships; 
     Technology Teaming.--
       (1) The Commission, in consultation with the Director of 
     the Office of Management and Budget, within 6 months after 
     the date of enactment of this Act shall adopt rules 
     applicable to all departments, agencies, and 
     instrumentalities of the United States Government that--
       (A) encourage the utilization, to the greatest extent 
     possible, of previously conducted surveys of all 
     radiocommunications systems operated by such department, 
     agency, or instrumentality for the purpose of increasing the 
     efficiency of those systems; and
       (B) authorize the head of each department, agency, and 
     instrumentality of the United

[[Page S4935]]

     States Government to enter into contracts, leases, 
     partnerships, teaming agreements, and other cooperative 
     business-government arrangements, that will enable the 
     private sector to participate, in whole or significant part, 
     in the upgrading of government radiocommunications systems, 
     and permit an equitable apportionment of the use of such 
     upgraded systems to meet both government as well as private 
     sector needs.
       (2) Application to legislative and judicial branches.--
       (A) The congress.--As an exercise of the rulemaking power 
     of the Senate and the House of Representatives, respectively, 
     the regulations promulgated by the Commission under paragraph 
     (1) are deemed to have been adopted by each House of the 
     Congress, respectively, as rules applicable only to that 
     House. The rules so adopted supersede other rules of each 
     House of the Congress only to the extent that they are 
     inconsistent with those other rules, and they are enacted 
     with full recognition of the constitutional right of each 
     House to change them, to the extent that they relate to that 
     House, in the same manner and to the same extent as any other 
     rule of that House.
       (B) The federal judiciary.--The judicial branch of the 
     United States Government is authorized and requested to adopt 
     the regulations promulgated by the Commission under paragraph 
     (1) as applicable to the operations of that branch.
       (3) Competitive procurement techniques.--Each department, 
     agency, and instrumentality of the United States Government 
     is authorized and encouraged to employ competitive 
     procurement techniques in selecting private sector partners 
     for the purpose of mutually benefiting from the upgrading of 
     technology associated with Federal radiocommunications 
     systems, except that--
       (A) the head of any such department, agency, or 
     instrumentality may waive compliance with competitive 
     procurement techniques in whole or part, if it is in the 
     government's interests; and
       (B) business-government arrangements undertaken under this 
     Act shall not be subject to limitations regarding gifts and 
     bequests to Federal agencies.

     The provisions of this paragraph shall apply to the 
     legislative and judicial branches of the United States 
     Government to the extent that such branches adopt the same or 
     similar rules.
       (4) Report.--The President shall include as part of the 
     Budget of the United States for each fiscal year beginning 
     after the date of enactment of this Act, a report detailing 
     the number and scope of cooperative business-government 
     radiocommunications arrangements undertaken in accordance 
     with this Act for the preceding fiscal year.
       (f) Government Communications Systems; Multiple Use and 
     Application.--
       (1) It is the policy of the United States to encourage and 
     facilitate the multiple, shared use of Federal 
     radiocommunications systems to the maximum extent possible, 
     in order to foster more effective and efficient use of radio 
     spectrum resources.
       (2) To implement this policy, the Commission in 
     consultation with the Director of the Office of Management 
     and Budget, and the Administrator of the General Services 
     Administration and other appropriate officers or employees of 
     the United States Government, within 1 year after the date of 
     enactment of this Act shall adopt rules, regulations, and 
     budgetary guidelines which--
       (A) establish a Federal radiocommunications system 
     register, to be maintained by the Director, or his designee, 
     which register shall set forth capacity which could be 
     available for use by other Federal agencies;
       (B) require the heads of all Federal agencies seeking 
     additional radio spectrum licenses or assignments to certify 
     that they have fully considered the availability of private 
     sector radiocommunications alternatives; and, based upon 
     review of the register required by this Act, have also fully 
     considered the feasibility of shared use of other Federal 
     agency systems; and
       (C) require all Federal agencies holding radio spectrum 
     licenses or assignments promptly, and on a continuing basis, 
     to assess the feasibility and desirability of sharing the 
     capacity of their radiocommunications systems with other 
     Federal agencies, and to report their findings for inclusion 
     in the register required by this Act.
       (g) Consolidation of Frequency Management 
     Responsibilities.--The radio frequency management functions 
     of the National Telecommunications and Information 
     Administration (hereinafter referred to as ``NTIA''), 
     including the Interdepartmental Radio Advisory Committee 
     secretariat and associated support activities (including the 
     NTIA's electromagnetic compatibility analysis operations), 
     under the National Telecommunications and Information 
     Administration Organization Act are hereby transferred to the 
     Commission.
       (h) Presidential Invalidation.--The President may 
     invalidate any Commission action that--
       (1) limits the amount of spectrum available to departments, 
     agencies, or instrumentalities of the United States;
       (2) limits the uses to which such spectrum may be put; or
       (3) interferes with or compromises any use by any such 
     department, agency, or instrumentality

     if, after a hearing on the record, the President finds that 
     such action would substantially harm national security or 
     public safety.

     SEC. 7. NONEXCLUSIVE LICENSES.

       The Commission may use such other economic incentives as it 
     deems appropriate, including user fees, to ensure that 
     nonexclusive licenses and licenses not issued utilizing 
     competitive bidding are used efficiently and that the public 
     is fairly compensated for the use of the spectrum. In 
     establishing the amount of such fees, the Commission shall 
     consider such factors as spectrum bandwidth, frequency 
     location, area of operation, service area population, and the 
     value of the spectrum as determined by prices paid for 
     spectrum in Commission auctions.

     SEC. 8. SELF-MANAGED REGULATION; EXPANDED RELIANCE OF 
                   FREQUENCY COORDINATION.

       (a) Report.--Not later than 90 days after the date of the 
     date of enactment of this Act, the Commission shall report to 
     the Chairman of the Committee on Commerce, Science, and 
     Transportation of the Senate and the Chairman of the 
     Committee on Commerce of the House of Representatives 
     regarding the radio frequency management, recordskeeping, 
     coordination, and other functions undertaken by the 
     Commission that could be performed by private sector radio 
     frequency coordinator groups.
       (b) Assessment.--In preparing this report, the Commission 
     shall assess the feasibility and desirability of relying upon 
     nonprofit industry self-regulatory organizations as well as 
     for-profit organizations, and shall also assess and report on 
     the potential revenue which might inure to the Government by 
     selecting private sector radio frequency coordinator groups 
     through competitive bidding procedures, including auctions.
       (c) Rulemaking.--Following the transmittal of its report, 
     the Commission shall initiate a rulemaking or rulemakings 
     with a view toward implementing the report's findings, and 
     shall conclude such proceedings within 6 months.

     SEC. 9. BLOCK GRANTS OF PUBLIC SAFETY SPECTRUM TO STATES.

       The Commission shall delegate to the District of Columbia, 
     the Commonwealth of Puerto Rico, Guam, the United States 
     Virgin Islands, and each State responsibility for assigning 
     and managing radio frequency spectrum allocated for public 
     safety communications use. In making that delegation, the 
     Commission shall consider, among other matters--
       (1) a requirement that the polity to which the spectrum 
     responsibility is delegated notify the Commission of its 
     assignment of spectrum and its management activities;
       (2) permitting each such polity to exercise or to grant 
     licensees the same flexibility in use that is available to 
     private sector license holders whose license is granted by 
     the Commission;
       (3) providing for the binding resolution of interference 
     disputes between such polities by the Commission; and
       (4) a requirement that each polity manage its public safety 
     spectrum allocation to ensure efficient interoperability 
     between its own wireless communications systems and those of 
     Federal law enforcement, public safety, and disaster 
     assistance agencies, to the greatest extent feasible.

     SEC. 10. FLEXIBLE NTSC AND DTV LICENSES; DEPOSIT AND RETURN; 
                   FLEXIBLE OVERLAY VHF AND UHF BAND LICENSES.

       (a) In General--Part I of title III of the Communications 
     Act of 1934, as amended by section 5 of this Act, is amended 
     by adding at the end thereof the following:

     ``SEC. 338. BROADCAST TELEVISION SPECTRUM POLICY.

       ``(a) Assignment of Flexible DTV Licenses to Existing 
     Broadcasters.--
       ``(1) Assignment.--The Commission shall assign one 6 
     megahertz DTV channel, on a non-competitive basis, to each 
     existing NTSC licensee. An existing NTSC licensee to whom 
     such a channel is assigned may--
       ``(A) receive a DTV license for a deposit; or
       ``(B) decline to accept a DTV license.
     Any DTV license declined shall be auctioned by the Commission 
     as part of an overlay license. The amount of the deposit 
     shall be based on the market value of the license as shown by 
     the auction of the overlay licenses and adjusted for relevant 
     economic factors, such as the size and population of the area 
     served. The Commission may waive the deposit in whole or in 
     part for broadcasters in small markets and for small 
     broadcasters competing in large markets.
       ``(2) Use of dtv license.--A licensee to which a DTV 
     license is assigned under paragraph (1)--
       ``(A) shall enjoy flexibility in use (within the meaning of 
     that term as used in section 337(a)) of the license 
     consistent with technical limits imposed by the Commission to 
     prevent interference to NTSC and other DTV assignments;
       ``(B) may not be required to meet a minimum service 
     requirement or construction schedule; and
       ``(C) may transfer or relinquish its DTV license at any 
     time.
       ``(3) Reassignment of relinquished licenses.--Except as 
     provided in paragraph (1), the Commission may not reassign 
     any DTV license relinquished by the licensee to whom it was 
     assigned or transferred. Any spectrum that had been 
     previously encumbered by a relinquished DTV license shall be 
     available for use by overlay licensees (within the meaning of 
     subsection (c)).
       ``(4) Deposit and return.--

[[Page S4936]]

       ``(A) The amount to be paid as a deposit for a DTV license 
     under paragraph (1)--
       ``(i) may be paid to the Commission in installments over a 
     15-year period beginning on the date on which the license is 
     assigned; and
       ``(ii) shall be held in escrow and invested in interest-
     bearing obligations of the United States.
       ``(B) Amounts received as interest earned on deposits held 
     in escrow under subparagraph (A) shall be available to the 
     United States for tax reduction or deficit reduction 
     purposes.
       ``(C) Fifteen years after a DTV license is assigned to an 
     NTSC licensee under paragraph (1), the licensee may 
     relinquish its NTSC license or its DTV license. If an NTSC 
     licensee relinquishes either license under this subparagraph, 
     then the amount of the deposit paid by the licensee shall be 
     returned to the licensee, without interest, reduced by 20 
     percent for each year the licensee continues NTSC operations 
     in excess of the 15-year period beginning on the date on 
     which the DTV license is assigned to the licensee.
       ``(b) Existing NTSC Licenses.--
       ``(1) Grant of flexibility.--An NTSC licensee with a valid 
     NTSC license on the date of enactment of the Electromagnetic 
     Spectrum Management Policy Reform and Privatization Act--
       ``(A) may provide standard NTSC television service after 
     such date of enactment;
       ``(B) may transfer its NTSC license to any other person who 
     is qualified to be an NTSC licensee; and
       ``(C) shall enjoy flexibility in use (within the meaning of 
     that term as used in section 337(a)) of the license, subject 
     to technical limits imposed by the Commission to prevent 
     interference to DTV and other NTSC assignments.
       ``(2) Reduction or discontinuance of NTSC service.--An NTSC 
     licensee may not reduce or discontinue any NTSC service 
     unless the licensee provides comparable replacement for such 
     service free to viewers, as defined and approved by the 
     Commission, including necessary receiving equipment for all 
     such service to be displayed on standard NTSC receivers. An 
     NTSC license relinquished by a licensee who provides such 
     comparable free replacement service may not be reassigned by 
     the Commission.
       ``(3) Reassignment of abandoned or revoked licenses.--An 
     NTSC license that is--
       ``(A) abandoned by the licensee without providing 
     comparable free replacement service (within the meaning of 
     such term as it is used in paragraph (2) of this subsection); 
     or
       ``(B) revoked by the Commission,
     shall be reassigned by the Commission by auction for standard 
     NTSC service, with the same flexibility in use rights 
     provided to other NTSC licensees.
       ``(c) Assignment of New Overlay Licenses.--
       ``(1) In general.--The Commission shall assign overlay 
     licenses by a simultaneous, multiple round auction. Any 
     spectrum previously encumbered by NTSC or DTV licenses that 
     have been relinquished shall be available for use by overlay 
     licensees in accordance with such terms and conditions, 
     consistent with the other provisions of this section, as the 
     Commission may establish.
       ``(2) Use.--An overlay licensee--
       ``(A) shall enjoy flexibility in use (within the meaning of 
     that term as used in section 337(a)) of the license, subject 
     to--
       ``(i) power limits set by the Commission at the boundaries 
     of the spectrum block and service area; and
       ``(ii) such additional technical restrictions as may be 
     imposed by the Commission to protect NTSC and DTV licensees, 
     and authorized land mobile services, from harmful 
     interference;
       ``(B) may aggregate multiple overlay licenses to create 
     larger spectrum blocks and service areas; and
       ``(C) may transfer an overlay license to any other person 
     qualified to be an overlay licensee.
       ``(d) Definitions.--For purposes of this section--
       ``(1) DTV.--The term `DTV' means digital television.
       ``(2) NTSC.--The term `NTSC' means the National Television 
     Systems Committee.
       ``(3) NTSC licensee.--The term `NTSC licensee' means a 
     licensee assigned a television channel allotted for full 
     power television service under the Commission's rules.
       ``(4) Overlay license.--
       ``(A) In general.--The term `overlay license' shall be 
     defined by the Commission.
       ``(B) Individually.--As defined by the Commission, each 
     overlay license shall cover--
       ``(i) a block of one or more contiguous 6 megahertz 
     channels; and
       ``(ii) a contiguous geographic area,
     as determined by the Commission.
       ``(C) Collectively.--As defined by the Commission, overlay 
     licenses shall cover collectively--
       ``(i) all 402 megahertz of spectrum in the VHF and UHF 
     television bands; and
       ``(ii) the entire area of the United States.

     ``SEC. 339. COMMISSION MAY NOT ESTABLISH DTV STANDARDS OR DTV 
                   RECEPTION SET REQUIREMENTS.

       ``Notwithstanding any other provision of law to the 
     contrary, the Commission may not--
       ``(1) establish DTV (as defined in section 338(d)(1)) 
     standards; nor
       ``(2) require that television receivers manufactured in, or 
     imported into, the United States be capable of receiving and 
     decoding DTV signals.''.

     SEC. 11. REPEAL OF FEES IMPOSED ON BROADCASTERS FOR ANCILLARY 
                   AND SUPPLEMENTARY SERVICES.

       Section 336 of the Communications Act of 1934 (47 U.S.C. 
     336) is amended--
       (1) by striking subsection (e); and
       (2) by redesignating subsections (f) and (g) as subsections 
     (e) and (f).

     SEC. 12. SPECTRUM REPORT.

       Two years after the date of enactment of this Act, the 
     Commission shall report the results of implementation of this 
     Act, together with a cost-benefit analysis of such results, 
     and any recommendations for additional legislation related 
     thereto, to the Committee on Commerce, Science, and 
     Transportation of the Senate and to the Committee on Commerce 
     of the House of Representatives.

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