[Congressional Record Volume 148, Number 56 (Tuesday, May 7, 2002)]
[House]
[Pages H2129-H2132]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       AUCTION REFORM ACT OF 2002

  Mr. UPTON. Madam Speaker, I move to suspend the rules and pass the 
bill

[[Page H2130]]

(H.R. 4560) to eliminate the deadlines for spectrum auctions of 
spectrum previously allocated to television broadcasting, as amended.
  The Clerk read as follows:

                               H.R. 4560

       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 ``Auction Reform Act of 
     2002''.

     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) Circumstances in the telecommunications market have 
     changed dramatically since the auctioning of spectrum in the 
     700 megahertz band was originally mandated by Congress in 
     1997, raising serious questions as to whether the original 
     deadlines, or the subsequent revision of the deadlines, are 
     consistent with sound telecommunications policy and spectrum 
     management principles.
       (2) No comprehensive plan yet exists for allocating 
     additional spectrum for third-generation wireless and other 
     advanced communications services. The Federal Communications 
     Commission should have the flexibility to auction frequencies 
     in the 700 megahertz band for such purposes.
       (3) The study being conducted by the National 
     Telecommunications and Information Administration in 
     consultation with the Department of Defense to determine 
     whether the Department of Defense can share or relinquish 
     additional spectrum for third-generation wireless and other 
     advanced communications services will not be completed until 
     after the June 19th auction date for the upper 700 megahertz 
     band, and long after the applications must be filed to 
     participate in the auction, thereby creating further 
     uncertainty as to whether the frequencies in the 700 
     megahertz band will be put to their highest and best use for 
     the benefit of consumers.
       (4) The Federal Communications Commission is also in the 
     process of determining how to resolve the interference 
     problems that exist in the 800 megahertz band, especially for 
     public safety. One option being considered for the 800 
     megahertz band would involve the 700 megahertz band. The 
     Commission should not hold the 700 megahertz auction before 
     the 800 megahertz interference issues are resolved or a 
     tenable plan has been conceived.
       (5) The 700 megahertz band is currently occupied by 
     television broadcasters, and will be so until the transfer to 
     digital television is completed. This situation creates a 
     tremendous amount of uncertainty concerning when the spectrum 
     will be available and reduces the value placed on the 
     spectrum by potential bidders. The encumbrance of the 700 
     megahertz band reduces both the amount of money that the 
     auction would be likely to produce and the probability that 
     the spectrum would be purchased by the entities that valued 
     the spectrum the most and would put the spectrum to its most 
     productive use.
       (6) The Commission's rules governing voluntary mechanisms 
     for vacating the 700 megahertz band by broadcast stations--
       (A) produced no certainty that the band would be available 
     for advanced mobile communications services, public safety 
     operations, or other wireless services any earlier than the 
     existing statutory framework provides; and
       (B) should advance the transition of digital television and 
     must not result in the unjust enrichment of any incumbent 
     licensee.

     SEC. 3. REPEAL OF DEADLINES FOR SPECTRUM AUCTIONS.

       (a) Communications Act of 1934.--Section 309(j)(14)(C)(ii) 
     of the Communications Act of 1934 (47 U.S.C. 
     309(j)(14)(C)(ii)) is amended by striking the second 
     sentence.
       (b) Balanced Budget Act of 1997.--Section 3007 of the 
     Balanced Budget Act of 1997 (111 Stat. 269) is amended by 
     adding at the end the following new sentence: ``This section 
     shall not apply to the band of frequencies between 698 and 
     806 megahertz, inclusive.''.
       (c) Consolidated Appropriations Act.--Paragraphs (2) and 
     (3) of section 213(a) of H.R. 3425 of the 106th Congress, as 
     enacted into law by section 1000(a)(5) of an Act making 
     consolidated appropriations for the fiscal year ending 
     September 30, 2000, and for other purposes (Public Law 106-
     113; 113 Stat. 1501A-295), are repealed.

     SEC. 4. TERMINATION OF SCHEDULED AUCTIONS.

       (a) Termination.--The Federal Communications Commission 
     shall not commence or conduct auctions 31 and 44 on June 19, 
     2002, as specified in the public notices of March 19, 2002, 
     and March 20, 2002 (DA 02-659 and DA 02-563).
       (b) Report.--Within one year after the date of enactment of 
     this Act, the Commission shall submit a report to the 
     Congress--
       (1) specifying when the Commission intends to reschedule 
     auctions 31 and 44; and
       (2) describing the progress made by the Commission in the 
     digital television transition and in the assignment and 
     allocation of additional spectrum for advanced mobile 
     communications services that warrants the scheduling of such 
     auctions.

     SEC. 5. COMPLIANCE WITH AUCTION AUTHORITY.

       The Federal Communications Commission shall conduct 
     rescheduled auctions 31 and 44 prior to the expiration of the 
     auction authority under section 309(j)(11) of the 
     Communications Act of 1934 (47 U.S.C. 309(j)(11)).

     SEC. 6. PRESERVATION OF BROADCASTER OBLIGATIONS.

       Nothing in this Act shall be construed to relieve 
     television broadcast station licensees of the obligation to 
     complete the digital television service conversion as 
     required by section 309(j)(14) of the Communications Act of 
     1934 (47 U.S.C. 309(j)(14)).

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Michigan (Mr. Upton) and the gentleman from Massachusetts (Mr. Markey) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Michigan (Mr. Upton).


                             General Leave

  Mr. UPTON. Madam Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks on this legislation and to insert extraneous material on the 
bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Michigan?
  There was no objection.
  Mr. UPTON. Madam Speaker, I yield myself such time as I may consume.
  The Auction Reform Act of 2002 will eliminate the statutory deadlines 
that have prompted the FCC to schedule auctions in June for spectrum in 
the 700 megahertz band currently occupied by television broadcasters.
  This legislation should not be necessary to stop the FCC from 
conducting the auctions in June. The FCC currently has the authority to 
delay these auctions and should do so on its own, many of us believe, 
but in addition to asking the FCC to use its own authority to delay the 
auctions, 52 members of the Committee on Energy and Commerce introduced 
this legislation to remove the deadlines from the statutes. Madam 
Speaker, I am delighted to report that the bill was passed by voice 
vote by the Committee on Energy and Commerce just last week.
  It is true that the auction of the upper portion of the 700 megahertz 
band has been delayed five times, but, Madam Speaker, conducting the 
auctions for both the upper and lower parts of the 700 megahertz band 
in June would be bad telecommunications policy and bad spectrum policy. 
These auctions should not go forward.
  Let me address some of the reasons why these auctions should not take 
place.
  One, no comprehensive plan exists for allocating additional spectrum 
for third generation wireless and other advanced mobile communications 
services. The 700 megahertz band may prove to be the commercial mobile 
wireless commercial industry's only viable option for obtaining 
additional spectrum for advanced mobile communications services if 
spectrum from other bands below 3 gigahertz is not allocated for such 
purposes.
  Two, the study being conducted by the National Telecommunications and 
Information Administration, NTIA, and the Pentagon to determine whether 
the Pentagon can share or relinquish additional spectrum for third 
generation wireless and other advanced mobile communications services 
will not be completed until after the June 19 auction date for the 
upper 700 megahertz band and long after the applications must be filed 
to participate in the auction.
  Third, it is difficult for wireless carriers to make sound business 
decisions concerning what options are available for spectrum for third 
generation and other advanced mobile communications services until the 
NTIA/Pentagon report has been released and then evaluated.
  Fourth, the Commission is also in the process of determining how to 
resolve the interference problems that exist in the 800 megahertz band, 
especially for public safety. One option being considered for the 800 
megahertz band would involve the 700 megahertz band. The Commission 
should not hold the 700 megahertz auction before the 800 megahertz 
interference issues are resolved or a viable plan has been approved.
  Next, the 700 megahertz band is still occupied by TV broadcasters and 
will be so until the digital transition is complete. This situation 
creates a tremendous amount of uncertainty concerning when the spectrum 
will be available and reduces the value placed on the spectrum by 
potential bidders. The encumbrance of the 700 megahertz band reduces 
both the amount of money that the auction would be likely to produce 
and the probability that the

[[Page H2131]]

spectrum would be purchased by the entities that valued the spectrum 
the most and would put the spectrum to its most productive use.
  Last, Madam Speaker, the Commission's rules governing voluntary 
mechanisms for the vacation of the 700 megahertz band by the 
broadcasters produced no certainty that the band would be available for 
advanced mobile communications services, public safety operations and 
other purposes any earlier than the existing statutory framework 
provides.
  Madam Speaker, the FCC and the administration clearly have a lot of 
work to do with respect to allocating and assigning additional spectrum 
for advanced mobile communications services and with respect to 
speeding the transition to digital TV. Until more progress is made in 
these areas, the 700 megahertz band auction simply should not occur.
  The FCC should use its own authority to delay these auctions, and we 
are making clear that holding the auctions within the FCC's designated 
time frame is contrary to both sound regulatory policy and contrary to 
the Communications Act.
  Madam Speaker, I reserve the balance of my time.
  Mr. MARKEY. Madam Speaker, I yield myself as much time as I may 
consume.
  I do so in order to compliment the gentleman from Michigan (Mr. 
Upton) for his excellent work on this legislation, along with the 
gentleman from Louisiana (Mr. Tauzin), the chairman, and the gentleman 
from Michigan (Mr. Dingell), the ranking member.
  This legislation has very broad based support across party lines, 
across ideological lines. It is a critical piece of legislation to 
pass.
  Madam Speaker, the reason that we are here today is to take action to 
correct a mess that Congress created in 1997, when Congress and the 
Clinton administration used illusory spectrum revenues to cook the 
books when it enacted the flawed 1997 Balanced Budget Act. Simply put, 
the Clinton OMB and Congressional budget scorekeepers put the cart 
before the horse.
  The 1997 proposal required the FCC to auction off the airwave 
frequencies occupied by television channels 52 to 69 many years before 
those airwave channels were due to be clear of those incumbent 
broadcasters, and the 1997 law contained no provisions to assure would-
be bidders or taxpaying consumers that the digital TV transition would 
be timely and successful.
  Instead, the budgeteers simply assumed that everything would work out 
and pushed for auctions on a calendar date convenient for scoring 
purposes of all the revenue that would come in from holding the 
auction. Forget about telecommunications policy, though.
  Today we know that the digital TV transition is woefully off 
schedule. The current FCC policy for clearing out the broadcast 
television spectrum in the area of 52 to 69 channels on our dial seems 
to be to simply sell off the frequencies and then authorize unseemly 
windfall profits to the lucky incumbents who, having gotten digital 
television spectrum for free, only elect to vacate their old analog 
channels for a price paid to them by auction winners.
  Under this policy, the term ``auction winner'' may well be an 
oxymoron. What one wins by being the highest bidder in this auction is 
the right to be subjected to a high tech hold-up by the incumbent 
broadcaster who will not move unless paid. To make this FCC policy even 
worse is that when that broadcaster agrees to vacate the area for a 
handsome fee, the broadcaster may not even broadcast in digital format 
on its so-called digital pair, the digital spectrum which they have. It 
may obtain FCC permission to continue analog broadcasting, the same 
broadcasting we have had since 1948. We will just continue to see the 
highlights of the first 75 years of NBC broadcasting for the next 75 
years and the same television channels with no new digital technology.
  I think this whole notion offends most people's sensibility, and I 
think it underscores the fact that the Commission needs additional time 
to rethink its mission in this area.
  Moreover, we also do not have anything remotely resembling an 
overarching spectrum plan to address key policy goals, such as 
fostering a more competitive wireless policy or enhancing public safety 
needs. We do not yet have a policy to promote new wireless services 
such as third generation, or 3G, mobile services or other innovative 
new wireless technologies and services for broadband connections of 
video applications.
  The reality today is that our lack of progress in accelerating the 
digital television transition is holding two revolutions in check, both 
the interactive digital television market, which all Americans are 
waiting for, that inexpensive digital television set costing $300, $400 
that they have been promised for 20 years, still not affordable to the 
average American family, still being denied to them by these terrible 
policies, and advancing the wireless market; that is, the two-way wrist 
TV that Dick Tracy and his cartoonist Chester Gould promised us in 
1960. That still is not possible because we do not have a spectrum 
policy, and it really is turning into a telecommunications disaster. 
Disaster.
  The utter failure to follow through effectively on the industrial 
policy we started when we gave the broadcast industry an extra 6 
megahertz each, each, for the transition to digital technology means 
that we are literally holding back the future. No digital television 
and no third generation wireless. Unbelievable for a country which is 
supposed to be the leader in new technology.
  We are now paralyzed as a Nation. We are stifling innovation. We are 
stunting growth and we are needlessly depressing the entire high tech 
sector of the American economy. We must free up this spectrum but in a 
way in which we know it is going to be used, both for digital TV and in 
the wireless area.
  It is time to put the telecom policy horse in front of the auction 
cart. Today, we will pass legislation that wisely deletes the budget-
mandated auction dates in the law and requires a report to Congress 
describing the progress made by the Commission in speeding the digital 
television transition, as well as identifying slices of spectrum for 
advanced wireless services, including mobile services such as 3G.
  Again, I want to compliment the gentleman from Michigan (Mr. Upton), 
along with the gentleman from Louisiana (Mr. Tauzin) and the gentleman 
from Michigan (Mr. Dingell) and all the members of our committee who 
are working together now on a policy that hopefully will now free up 
this spectrum. Unless the Federal Communications Commission begins to 
listen to us, unless the Bush administration starts to listen to us, 
then unfortunately all we are going to do is continue to repeat the 
mistakes that were made during the Clinton administration, and I am 
just afraid that we are not going to see this high tech sector, this 
telecommunications sector, this NASDAQ sector get off its back unless 
the Bush administration puts in place a set of policies that gives 
incentives to hundreds of companies and entrepreneurs across the 
country to once again invest in this high tech sector.
  Madam Speaker, I reserve the balance of my time.
  Mr. UPTON. Madam Speaker, I yield myself such time as I may consume.
  I would just note that I am convinced that the Bush administration 
does not want to repeat the mistakes of the Clinton administration. I 
look forward to working with the gentleman as we deal with this issue 
in the future.
  Mr. MARKEY. Madam Speaker, I yield myself such time as I may consume.
  Up to this point there is no evidence that can convict the Bush 
administration of not repeating the same mistakes as the Clinton 
administration. The only problem is that this high tech boom ended in 
2000 and that millions of Americans are now waiting for the next 
generation of technologies, and unless the policy is forthcoming from 
the Bush administration, I am afraid we could go through this entire 
decade and not see a revival.
  I think that is a very dangerous prospect, and I am hoping today, on 
a bipartisan basis, we can send a message to the Bush administration 
that they can put together a comprehensive policy.
  Madam Speaker, I yield back the balance of my time.
  Mr. UPTON. Madam Speaker, I yield myself such time as I may consume.

[[Page H2132]]

  I would just like to reiterate that Secretary Evans very strongly 
supports this legislation. We expect the President to sign it should we 
get it through the other body.
  Madam Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Michigan (Mr. Upton) that the House suspend the rules 
and pass the bill, H.R. 4560, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________