[Congressional Record Volume 145, Number 149 (Thursday, October 28, 1999)]
[Senate]
[Pages S13417-S13419]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BREAUX (for himself and Mr. Gorton):
  S. 1824. A bill to amend the Communications Act of 1934 to enhance 
the efficient use of spectrum by non-federal government users; to the 
Committee on Commerce, Science, and Transportation.


                   private wireless spectrum use act

 Mr. BREAUX. Mr. President, I am pleased to join the Senator 
from Washington, Mr. Gorton, in introducing the Private Wireless 
Spectrum Use Act. This legislation will help the more than 300,000 U.S. 
companies, both large and small, that have invested $25 billion in 
internally owned and operated wireless communications systems. It will 
provide these companies with critically needed spectrum and will do so 
through an equitable lease fee system.
  The private wireless communications community includes industrial, 
land transportation, business, educational, and philanthropic 
organizations that own and operate communications systems for their 
internal use. The top 10 U.S. industrial companies have more than 6,000 
private wireless licenses. Private wireless systems also serve 
America's small businesses in the utility, contracting, taxi, and 
livery industries.
  These internal-use communications facilities greatly enhance the 
quality of American life. They also support global competitiveness for 
American firms. For example, private wireless systems support: the 
efficient production of goods and services; the safe transportation of 
passengers and products by land and air; the exploration, production, 
and distribution of energy; agricultural enhancement and production; 
the maintenance and development of America's infrastructure; and 
compliance with various local, State, and Federal operational 
government statutes.
  Current regulatory policy inadequately recognizes the public interest 
benefits which private wireless licensees provide to the American 
public. Consequently, allocations of spectrum to these private wireless 
users have been deficient. Private wireless entities received spectrum 
in 1974 and 1986 when the FCC allocated channels in the 800 megahertz 
and 900 megahertz bands. Over time, however, the FCC has significantly 
reduced the number of channels available to industrial and business 
entities in those allocations. Private wireless entities now have 
access to only 299 channels, or 32 percent of the channels of the 
original allocation.
  Spectrum auctions have done a great job of speeding up the licensing 
of interpersonal communications services and have generated significant 
revenues for the U.S. Treasury. They have also unfortunately skewed the 
spectrum allocation process toward subscriber-based services and away 
from critical radio services such as private wireless which are 
exempted from auctions. Nearly 200 megahertz of spectrum has been 
allocated for the provision of commercial telecommunications services, 
virtually all of which has been assigned by the FCC through competitive 
bidding.
  Competitive bidding is not the proper assignment methodology for 
private wireless telecommunications users. Private wireless operations 
are site-specific systems which vary in size based on a user's 
particular needs, and are seldom mutually exclusive from other private 
wireless applicants. Auctions, which depend on mutually exclusive 
applications and use market areas based on population, simply cannot be 
designed for private wireless systems.
  Under this legislation, the FCC would allocate no less than 12 
megahertz of new spectrum for private wireless use as a measure to 
maintain our industrial and business competitiveness in the global 
arena, as well as to protect the welfare of the employees in the 
American workplace. Research indicates that private wireless companies 
are willing to pay a reasonable fee in return for use of spectrum. They 
recognize that their access to spectrum increases with their 
willingness to pay fair value for the use of this national asset.
  This bill grants the FCC legislative authority to charge efficiency-
based spectrum lease fees in this new spectrum allocation. These lease 
fees should encourage the efficient use of spectrum by the private 
wireless industry, generate recurring annual revenues as compensation 
for the use of spectrum, and retain spectrum ownership by the public. 
Furthermore, the fee should be easy for private frequency advisory 
committees to calculate and collect.
  Mr. President, there may be some who believe this bill does not 
adequately address all their concerns. I assure all interested parties 
that I will work with them through the legislative process to address 
their concerns. I urge my colleagues to join me in supporting this bill 
and ask that the full text of the bill be printed in the Record.
  The bill follows:

                                S. 1824

       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 ``Private Wireless Spectrum 
     Use Act.''.

     SEC. 2. FINDINGS.

       The Congress makes the following findings:
       (1) Competent management of the electromagnetic radio 
     spectrum includes continued availability of spectrum for 
     private wireless entities because of such entities' unique 
     ability to achieve substantial efficiencies in their use of 
     this important and finite public resource. A private wireless 
     system licensee or entity is able to customize communications 
     systems to meet the individual needs of that licensee or end 
     user while using engineering solutions and other cooperative 
     arrangements to share spectrum with other private system 
     licensees and entities without causing harmful interference 
     or other degradation of quality or reliability to such other 
     licensees or entities. Accordingly, spectrum allocations for 
     the shared use of private wireless systems achieve a high 
     level of spectrum use efficiency and contribute to the 
     economic and social welfare of the United States.
       (2) Wireless communication systems dedicated to the 
     internal communication needs of America's industrial, land 
     transportation, energy (including utilities and pipelines), 
     and other business enterprises are critical to the 
     competitiveness of American industry and business in 
     international commerce; increase corporate productivity; 
     enhance the safety and welfare of employees; and improve the 
     delivery of products and services to consumers in the United 
     States and abroad.
       (3) During the past decade, the Federal Communications 
     Commission allocation and licensing policies have led to 
     dramatic increases in spectrum available for commercial 
     mobile radio services while the spectrum available for 
     private mobile radio systems has decreased, even though the 
     Commission recognizes the spectrum use efficiencies and other 
     public benefits of such private systems and the substantial 
     increases in the use of such systems.
       (4) Spectrum auctions are designed to select among 
     competing applications for spectrum licenses when engineering 
     solutions, negotiation, threshold qualifications, service 
     regulations, and other cooperative means employed by the 
     Commission are not able to prevent mutual exclusivity among 
     such applications. Private wireless systems, on the other 
     hand, avoid mutual exclusivity through cooperative, multiple 
     uses generally achieved by the Commission, the users, or the 
     frequency advisory committees. Accordingly, the requirements 
     of such private wireless systems are accommodated within the 
     spectrum bands allocated for private uses. Since there is no 
     mutual exclusivity among private wireless system 
     applications, there is no need for the Commission to employ a 
     mechanism, such as auctions, to select among applications. 
     Auction valuation principles also do not apply to the private 
     wireless licensing process because the private wireless 
     spectrum is not used on a commercial, interconnected basis. 
     Rather, such private allocations are used for internal 
     communications applications to enhance safety, efficiency and 
     productivity. Nonetheless, there should be some payment 
     associated with the assignment of new private wireless 
     spectrum, and the Commission can and should develop a payment 
     mechanism for this purpose.

     SEC. 3. DEFINITIONS.

       Section 3 of the Communications Act of 1934 (47 U.S.C. 153) 
     is amended--
       (1) by redesignating paragraphs (33) through (52) as 
     paragraph (35) through (54); and
       (2) by inserting after paragraph (32) the following:

[[Page S13418]]

       ``(33) Private Wireless System.--The term `private wireless 
     system' means an infrastructure of telecommunications 
     equipment and customer premises equipment that is owned by, 
     and operated solely to meet the internal wireless 
     communication needs of, an industrial, business, 
     transportation, education, or energy (including utilities and 
     pipelines) entity, or other licensee.
       ``(34) Private Wireless Provider.--The term `private 
     wireless provider' means an entity that owns, operates, or 
     manages an infrastructure of telecommunications equipment and 
     customer premises equipment that is--
       ``(A) used solely for the purpose of meeting the internal 
     communications needs of another entity that is an industrial, 
     business, transportation, education, or energy (including 
     utilities and pipelines) entity, or similar end-user;
       ``(B) neither a commercial mobile service (as defined in 
     section 332(d)(1)) nor used to provide public safety services 
     (as defined in section 337(f)(1)); and
       ``(C) not interconnected with the public switched 
     network.''.

     SEC. 4. ALLOCATION AND ASSIGNMENT OF ADDITIONAL SPECTRUM.

       Part I of title III of the Communications Act of 1934 (47 
     U.S.C. 301) is amended by inserting after section 337 the 
     following:

     ``SEC. 338. ALLOCATION AND ASSIGNMENT OF SPECTRUM FOR PRIVATE 
                   WIRELESS USES.

       ``(a) Rulemaking Required.--Within 120 days after the date 
     of enactment of the Private Wireless Spectrum Use Act, the 
     Commission shall initiate a rulemaking designed to identify 
     and allocate at least 12 megahertz of electromagnetic 
     spectrum located between 150 and 2,000 megahertz for use by 
     private wireless licensees on a shared-use basis. The new 
     spectrum proposed to be reallocated shall be available and 
     appropriate for use by private wireless communications 
     systems and shall accommodate the need for paired allocations 
     and for proximity to existing private wireless spectrum 
     allocations. In accommodating the various private wireless 
     system needs in this rulemaking, the Commission shall reserve 
     at least 50 percent of the reallocated spectrum for the use 
     of private wireless systems. The remaining reallocated 
     spectrum shall be available for use by private wireless 
     providers solely for the purpose described in section 
     3(34)(A).
       ``(b) Order Required.--Within 180 days after the Commission 
     initiates the rulemaking required by subsection (a), the 
     Commission, in consultation with its frequency advisory 
     committees, shall--
       ``(1) issue an order reallocating spectrum in accordance 
     with subsection (a); and
       ``(2) issue licenses for the reallocated spectrum in a 
     timely manner.''.

     SEC. 5. REIMBURSEMENT FOR ADDITIONAL SPECTRUM ALLOCATED FOR 
                   PRIVATE WIRELESS SYSTEM USE.

       Section 309(j) of the Communications Act of 1934 (47 U.S.C. 
     309 (j)) is amended by inserting after paragraph (14) the 
     following:
       ``(15) Spectrum efficiency for shared spectrum.--
       ``(A) Within 120 days after the date of enactment of the 
     Private Wireless Spectrum Use Act, the Commission shall 
     initiate a rulemaking to devise a schedule of payment to the 
     Treasury by private wireless systems, and by private wireless 
     providers for the purpose described in section 3(34)(A), in 
     return for a license or other ability to use a portion of the 
     spectrum reallocated under section 338. The schedule shall be 
     designed to promote the efficient use of those frequencies.
       ``(B) Within 180 days after the Commission initiates the 
     rulemaking required by subparagraph (A), the Commission, 
     after consultation with its frequency advisory committees and 
     after opportunity for comment, shall adopt a schedule of 
     payment in accordance with subparagraph (A) and which it 
     determines to be in the public interest.
       ``(C) In adopting the schedule of payments referred to in 
     subparagraph (A), the Commission--
       ``(i) may not base a finding of public interest, 
     convenience, and necessity on the expectation of Federal 
     revenues for the use of such schedule of payment; and
       ``(ii) shall take into account the private nature of the 
     systems, the safety and efficiencies realized by the public 
     as a result of these private uses, the amount of bandwidth 
     and coverage area and geographic location of the license, and 
     the degree of frequency-sharing.''.

     SEC. 6. SPECTRUM SHARING

       Section 309(j)(6) of the Communications Act of 1934 (47 
     U.S.C. 309(j)(6)) is amended--
       (1) by striking ``or'' at the end of subparagraph (G);
       (2) by striking ``Act.'' in subparagraph (H) and inserting 
     ``Act; or''; and
       (3) by adding at the end the following:
       ``(I) be construed to permit the Commission to take any 
     action to create mutual exclusivity where it does not already 
     exist.''

     SEC. 7. CONFORMING AND TECHNICAL AMENDMENTS.

       (a) Private Mobile Service.--Section 332(d) of the 
     Communications Act of 1934 (47 U.S.C. 332(d)) is amended--
       (1) by inserting ``and'' after the semicolon in paragraph 
     (1);
       (2) by striking ``(c)(1)(B); and'' in paragraph (2) and 
     inserting ``(c)(1)(B).''; and
       (3) by striking paragraph (3).
       (b) Application of Spectrum-use Payment Schedule to New 
     Licenses.--Section 337(a)(2) of the Communications Act of 
     1934 (47 U.S.C. 337(a)(2)) is amended by inserting ``or 
     spectrum use payment schedule'' after ``competitive 
     bidding''.
       (c) Exemption from Competitive Bidding.--Section 309(j)(2) 
     of the Communications Act of 1934 (47 U.S.C. 309(j)(2)) is 
     amended--
       (1) by striking ``or'' at the end of subparagraph (B);
       (2) by striking ``Act.'' in subparagraph (C) and inserting 
     ``Act; or''; and
       (3) by adding at the end thereof the following:
       ``(D) for private wireless systems, and for private 
     wireless providers for the purpose described in section 
     3(34)(A), that--
       ``(i) are used to enhance the productivity or safety of 
     business or industry; and
       ``(ii) are not made commercially available to the public, 
     except for that purpose.''.
       (d) Technical Amendment.--Section 271(c)(1)(A) of the 
     Communications Act of 1934 (47 U.S.C. 271(c)(1)(A)) is 
     amended by striking ``3(47)(A),'' and inserting 
     ``3(49)(A),''.

 Mr. GORTON. Mr. President, I am pleased to join my colleague 
from Louisiana, Senator Breaux, in introducing a bill to rationalize 
the federal management of spectrum that is used by entities for their 
internal wireless communication needs. The legislation does essentially 
three things. First, it recognizes that auctions are not an appropriate 
means of allocating spectrum for these private users, and so exempts 
from auction that spectrum that is used for private wireless 
applications. Second, it directs the FCC to reallocate an additional 12 
megahertz of spectrum to private wireless users, who, over the years, 
and despite the efficiencies they have obtained through shared use, 
have lost spectrum and currently do not have enough to meet demands in 
some areas. Third, the legislation authorizes the FCC to collect lease 
fees for the use of the 12 MHZ to be reallocated.
  One of the biggest challenges in preparing this bill, Mr. President, 
has been to define the class of beneficiaries, that is, to identify 
what is a ``private wireless'' system. The definition in the measure we 
are introducing today may not be perfect, and I look forward to working 
with all interested parties to ensure that the definition covers the 
appropriate class of users. The intent, however, and one that I believe 
is captured in the current definition, is that we recognize that there 
are thousands of corporations, utilities, farmers, and other entities, 
that use spectrum purely for their internal communication needs, with 
applications that range from reading utility meters from a distance, to 
operating sprinkler or irrigation systems, to communicating over hand-
held radios in the middle of the woods, a factory floor, or a 
construction site. This use of the spectrum, Mr. President, is 
economically vital to our economy, as it enhances the productivity of 
all of these users and, in many cases, makes their operations possible.
  A distinguishing characteristic of private wireless users, and a 
reason that we are proposing that they be treated differently than 
other spectrum users, is that the private wireless users' application 
of the spectrum is often specifically tailored to the needs of that 
user, that is, it is a unique application that is not offered by 
commercial wireless providers.
  Currently, private wireless users are licensed on a site-by-site 
basis by the FCC. Their license applications are coordinated by 
spectrum managers who attempt to maximize the efficiency of the 
spectrum and eliminate mutually exclusive applications by requiring 
that the spectrum be shared by multiple users. In this way, hundreds of 
different users can and do operate their internal wireless 
communications systems within a given geographic area. When the users' 
needs change, as they frequently do, as companies open new production 
facilities, begin work at new construction sites, or extend their 
service area, the spectrum coordinators, (spectrum allowing), will 
propose a new sharing arrangement and obtain a new site-specific 
license for the user.
  The geographic based auction concept that the FCC is currently 
proposing for some of the spectrum now being used by private wireless, 
makes little sense for these private users. Unlike a commercial 
wireless provider, whose service must be operational within the 
entirety of a broad geographical license area, an individual private 
wireless user may require use of the spectrum only at single site 
within the area proposed to be auctioned. Moreover, private wireless 
system users are not in the business of

[[Page S13419]]

providing communications services, and don't want to be--so it is not 
in their interest to acquire, through auction, exclusive rights to the 
use of spectrum in a large fixed geographic area, when they will use 
only a small fraction of it, their site may change, and they lack both 
the expertise or the desire to rent out what they do not need.

  Recognizing that auctions are ill-suited as a means of allocating 
spectrum to private wireless users, however, is not to say that the 
public should receive no compensation for the use of this public 
resource. Unfortunately, the desire to raise revenue from the sale of 
spectrum appears to have overtaken the need to ensure that spectrum is 
used efficiently and that current, economically valuable applications, 
are not disrupted by a rush to sell in order to raise revenue. The 
proposal in this measure to allow the Federal Communications Commission 
to collect lease fees for the use of private wireless spectrum is, I 
believe, a way to reintroducing some rationality into our spectrum 
management policies, while ensuring a return for the taxpayer.
  The legislation we are introducing today, Mr. President, is not a 
final product. It stakes out, however, a very important claim, and that 
is the importance of the private wireless spectrum users to the smooth 
and efficient operation of our economy. I look forward to working with 
all interested parties to improve, and pass swiftly, this important 
measure.
                                 ______