[Senate Report 106-243]
[From the U.S. Government Publishing Office]
Calendar No. 461
106th Congress Report
SENATE
2d Session 106-243
_______________________________________________________________________
LAUNCHING OUR COMMUNITIES' ACCESS TO LOCAL TELEVISION ACT OF 2000
__________
R E P O R T
OF THE
COMMITTEE ON BANKING, HOUSING,
AND URBAN AFFAIRS
UNITED STATES SENATE
to accompany
S. 2097
together with
ADDITIONAL VIEWS
March 15, 2000.--Ordered to be printed
Filed under authority of the order of the Senate of March 9, 2000
__________
U.S. GOVERNMENT PRINTING OFFICE
70-010 WASHINGTON : 2000
COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
PHIL GRAMM, Texas, Chairman
RICHARD C. SHELBY, Alabama PAUL S. SARBANES, Maryland
CONNIE MACK, Florida CHRISTOPHER J. DODD, Connecticut
ROBERT F. BENNETT, Utah JOHN F. KERRY, Massachusetts
ROD GRAMS, Minnesota RICHARD H. BRYAN, Nevada
WAYNE ALLARD, Colorado TIM JOHNSON, South Dakota
MICHAEL B. ENZI, Wyoming JACK REED, Rhode Island
CHUCK HAGEL, Nebraska CHARLES E. SCHUMER, New York
RICK SANTORUM, Pennsylvania EVAN BAYH, Indiana
JIM BUNNING, Kentucky JOHN EDWARDS, North Carolina
MIKE CRAPO, Idaho
Wayne A. Abernathy, Staff Director
Steven B. Harris, Democratic Staff Director and Chief Counsel
Linda L. Lord, Chief Counsel
Wayne A. Leighton, Senior Economist
Stephen S. McMillin, Financial Economist
Jonathan Miller, Democratic Professional Staff Member
C O N T E N T S
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Page
Introduction..................................................... 1
History of the Legislation....................................... 2
Purpose and Scope of the Legislation............................. 3
Section-by-Section Analysis:
Section 1. Short Title....................................... 5
Section 2. Purpose........................................... 5
Section 3. LOCAL Television Loan Guarantee Board............. 5
Section 4. Approval of Loan Guarantees....................... 5
Section 5. Administration of Loan Guarantees................. 5
Section 6. Annual Audit...................................... 5
Section 7. Sunset............................................ 7
Section 8. Retransmission of Local Television Broadcast
Stations................................................... 7
Section 9. Definitions....................................... 7
Section 10. Authorization of Appropriations.................. 8
Regulatory Impact Statement...................................... 8
Changes in Existing Laws......................................... 8
Cost of Legislation.............................................. 8
Additional views of Senators Sarbanes, Johnson, Dodd, Kerry,
Bryan, Reed, Schumer, Bayh, and Edwards........................ 11
Calendar No. 461
106th Congress Report
SENATE
2d Session 106-243
======================================================================
LAUNCHING OUR COMMUNITIES' ACCESS TO LOCAL TELEVISION ACT OF 2000
_______
March 15, 2000.--Ordered to be printed
Filed under authority of the order of the Senate of March 9, 2000
_______
Mr. Gramm, from the Committee on Banking, Housing, and Urban Affairs,
submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany S. 2097]
INTRODUCTION
On March 8, 2000, the Senate Committee on Banking, Housing,
and Urban Affairs met in legislative session and marked up and
ordered to be reported S. 2097, the Launching Our Communities
Access to Local Television Act of 2000 (LOCAL TV Act of 2000),
a bill to authorize loan guarantees in order to facilitate
access to local television broadcast signals in unserved and
underserved areas, and for other purposes, with a
recommendation that the bill do pass. The Committee's action
was taken by a 19-0 roll call vote, Senator Mack recusing
himself from voting.
The full Committee conducted two hearings to consider S.
2097. The first hearing was on February 1, 2000, and included
testimony from: Steven J. Cox, Senior Vice President, DIRECTV,
Inc.; David K. Moskowitz, Senior Vice President, ECHOSTAR
Communications Corporation; B. Robert Phillips, Chief Executive
Officer, National Rural Telecommunications Cooperative; Richard
Sjoberg, President, Sjoberg's Incorporated; K. James Yager,
President and Chief Operating Officer, Benedek Broadcasting;
Dale N. Hatfield, Chief, Office of Engineering and Technology,
Federal Communications Commission (FCC); William Roberts,
Senior Attorney, U.S. Copyright Office; Greg L. Rohde,
Assistant Secretary for Communications and Information,
National Telecommunications and Information Administration
(NTIA), U.S. Department of Commerce; and Christopher McLean,
Acting Administrator, Rural Utilities Service (RUS), U.S.
Department of Agriculture. The second hearing was on February
9, 2000, and included testimony from Senators Burns,
Hutchinson, Thomas, and Lincoln, and from Dan L. Crippen,
Director, Congressional Budget Office.
HISTORY OF THE LEGISLATION
The Launching Our Communities Access to Local Television
Act of 2000, S. 2097, was introduced on February 24, 2000, by
Senators Burns, Gramm, Lott, Stevens, Crapo, Hutchinson,
Allard, Bunning, Snowe, Collins, and Grassley. Senators Enzi,
Thomas, Hagel, Lugar, and Cochran became additional cosponsors.
On March 8, 2000, the LOCAL TV Act of 2000 was passed by
unanimous vote (19-0) by the Senate Committee on Banking,
Housing, and Urban Affairs. The Act was created in an attempt
to accomplish the same purpose as that set forth by the Rural
Viewer Amendment to the Satellite Home Viewer Improvement Act
of 1999 (SHVIA), but to do so in a manner more protective of
the taxpayer while enhancing the likelihood of successful
delivery of local television broadcasts in unserved and
underserved areas. The SHVIA was incorporated into an amendment
to the FY 2000 Consolidated Appropriations Act (P.L. 106-113),
but the Rural Viewer Amendment was not included in this
legislation.
The SHVIA legislation modified copyright and communications
law related to the transmission of broadcast television signals
by for-profit satellite providers. Particularly relevant to the
pending legislation were the modifications to copyright law
that allow a satellite provider to retransmit within a local
community the signal of that community's local broadcast
stations. During the conference for this legislation, several
conferees noted that, despite the changes in copyright law,
many local broadcast stations nonetheless may not be
retransmitted via satellite for the indefinite future. This
result seemed contrary to what was expected to be an important
benefit of the SHVIA legislation: the transmission via
satellite of local television signals to areas of the country
with no access to local television signals by any means. The
Rural Viewer Amendment was added in conference to the SHVIA
legislation in an attempt to correct this problem and promote
the transmission of local broadcast signals in areas that
otherwise would not receive such signals.
The Rural Viewer Amendment proposed to establish a federal
loan guarantee program to promote the delivery of local
television signals to unserved and underserved areas. However,
the amendment was introduced in conference and, therefore, was
not considered on the floor of the House or Senate. In
addition, the Congressional Budget Office (CBO) estimated the
proposed loan guarantee program would cost U.S. taxpayers
approximately $350 million. Following concerns over the lack of
time for consideration and the potential cost, the amendment
was removed from the final version of the SHVIA, and a
unanimous consent agreement in the Senate provided for
expedited consideration of a stand-alone bill addressing this
issue. The LOCAL TV Act of 2000 represents this new proposal
for a loan guarantee program.
PURPOSE AND SCOPE
The provision of local television signals to households
that do not have access to such signals by any means--including
over-the-air transmission, cable or satellite systems, or other
technologies--increasingly has become an important issue in
rural development. The two main satellite television providers
carry the local stations of approximately the 25 largest
markets, which include about half of the U.S. population,\1\
but the remaining 185 media markets do not receive local
television signals via satellite.\2\ In addition, while
estimates vary, the Federal Communications Commission reports
that about 3 million households do not have access to cable
television, which is required by law to carry local television
stations.\3\ Since most of these 3 million households are in
rural areas, the reception of an over-the-air local television
signal may be difficult or impossible. As a result, a small but
significant portion of the U.S. population cannot receive local
television signals from any means, while as much as half of the
population cannot receive such signals via satellite.
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\1\ Nielsen Media Research, Local Market Universe Estimates for the
1999-2000 Broadcast Season.
\2\ Testimony of Steven J. Cox, Senior Vice President, DIRECTV,
Inc., and David K. Moskowitz, Senior Vice President, ECHOSTAR
Communications Corporation, Hearing on the provision of local
television signals in rural areas: Senate Committee on Banking,
Housing, and Urban Affairs, February 1, 2000, at 1 and 1-2.
\3\ In the Matter of Annual Assessment of the Status of Competition
in Markets for the Delivery of Video Programming, Sixth Annual Report,
CS Docket No. 99-230 (Jan. 14, 2000).
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The lack of local television signals in many rural areas is
a product of both economics and public policy. Allocating the
spectrum used by a satellite to carry a local station, building
translators or repeaters to boost a local station's over-the-
air signal, or extending the lines of a cable television
provider frequently are uneconomical ventures in areas with low
population density and thus few potential viewers. Similarly,
costs are imposed by regulations such as the ``must carry''
provision, which requires that a satellite provider that
transmits the signal of one local broadcast television station
in a market must offer to transmit the signal of all stations
in that market. The major satellite television providers have
testified that the must-carry requirement severely limits their
ability to extend their offering of local television signals to
additional markets.\4\ This limitation exists because of the
finite amount of spectrum available for such service, and
because the most common satellite television technology, direct
broadcast satellite, was not designed with the intention of
providing many local stations.\5\ Since existing satellites
transmit over most or all of the country, using such technology
to transmit a local signal that serves only a relatively small
geographic area results in considerable use of spectrum that
could be used to serve other markets.
---------------------------------------------------------------------------
\4\ Supra note 2, at 2-3 and 4-6.
\5\ Testimony of Dale N. Hatfield, Chief, Office of Engineering and
Technology, Federal Communications Commission, Hearing on the provision
of local television signals in rural areas: Senate Committee on
Banking, Housing, and Urban Affairs, February 1, 2000, at 5.
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These economic and policy conditions make it costly to
provide the signals of local television stations in many rural
areas, and thus make projects to provide such service
financially risky investments.\6\ Nonetheless, several
technologies exist that can be used to provide such service in
many rural areas, though generally at high cost.\7\ In
addition, new technologies are under development that offer
promise for serving these areas at considerably lower cost.\8\
The challenge at present is to provide appropriate public
policy incentives to help promote the transmission of local
television signals in those areas that remain costly to serve.
---------------------------------------------------------------------------
\6\ Testimony of Dan L. Crippen, Director, Congressional Budget
Office, Hearing on the provision of local television signals in rural
areas: Senate Committee on Banking, Housing, and Urban Affairs,
February 9, 2000, at 1.
\7\ Supra note 3, at 5, and testimony of Bill Roberts, Senior
Attorney, U.S. Copyright Office, Hearing on the provision of local
television signals in rural areas: Senate Committee on Banking,
Housing, and Urban Affairs, February 1, 2000, at 4-5.
\8\ Supra note 3, at 9.
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The LOCAL TV Act of 2000 addresses this challenge by
developing a loan guarantee program that is guided by three
principles. First, the Act places its highest priority on
promoting service to the greatest number of households in
unserved areas--those that receive no local signals--while also
recognizing that a solution which serves other households as
well (including those in underserved areas) may be an effective
way to accomplish this goal. This prioritization is designed to
maximize the number of households that benefit from this Act,
especially those households that currently receive no local
television signals.\9\ Second, the Act is technologically
neutral, meaning that it does not favor a particular
technology, industry, or means by which local television
signals may be delivered. This principle is especially
important given the rapid change in technologies that can
provide such service and the possibility that the most
economically efficient delivery mechanisms in use today may be
obsolete in the near future.\10\ Third, the Act develops a loan
guarantee program that is fiscally responsible. This quality is
critical to ensuring that the American taxpayer does not have
to pay for economically inefficient projects and that projects
are supported by this program that are likely to provide
service now and into the future. All of these principles are
consistent with those advanced by the Administration.\11\
---------------------------------------------------------------------------
\9\ Testimony of Christopher McLean, Acting Administrator, Rural
Utilities Service (RUS), U.S. Department of Agriculture, Hearing on the
provision of local television signals in rural areas: Senate Committee
on Banking, Housing, and Urban Affairs, February 1, 2000, at 3-4.
\10\ Supra note 5, at 9.
\11\ Testimony of Greg L. Rohde, Assistant Secretary for
Communications and Information, National Telecommunications and
Information Administration (NTIA), U.S. Department of Commerce, Hearing
on the provision of local television signals in rural areas: Senate
Committee on Banking, Housing, and Urban Affairs, February 1, 2000, at
2-3.
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Properly implemented, the LOCAL TV Act of 2000 (the
``Act'') will provide incentives for loans for investment in
projects that promote access to local television signals while
at the same time establishing appropriate incentives for
private entities participating in the program to focus only on
economically feasible projects. These provisions are equally
important. Loans that are not made and loans that are not
repaid represent unsuccessful projects--either projects that
were never initiatedor that ultimately failed--and in both
cases result in no service for unserved and underserved areas. By
establishing incentives for economically viable projects, the
likelihood that the purpose of the Act will be accomplished increases
significantly.
SECTION-BY-SECTION ANALYSIS
Section 1. Short title
Section 1 provides that the bill may be cited as the
``Launching Our Communities Access to Local Television Act of
2000'' (``LOCAL TV Act of 2000'').
Section 2. Purpose
The purpose of the Act is to facilitate on a
technologically neutral basis access to signals of local
television stations in unserved and underserved areas.
Section 3. Local Broadcast Signal Loan Guarantee Board
Section 3 establishes and describes the responsibilities of
the LOCAL TV Loan Guarantee Board (the Board). The Board is
made up of three members: the Secretary of the Treasury, the
Chairman of the Board of the Federal Reserve System, and the
Secretary of Agriculture. Each of these members may appoint a
designee. A designee must be an officer of the United States
who has been appointed by the President with the advice and
consent of the Senate.
The Board is responsible for determining which entities
will receive loan guarantees under the Act. The Board must
consult with such departments and agencies of the Federal
Government as it considers appropriate to carry out its
responsibilities under the Act, and these departments and
agencies are required to assist the Board. Loan guarantees may
be made with approval of a majority of the Board.
Section 4. Approval of loan guarantees
Section 4 authorizes the Board to approve loan guarantees.
The Administrator (defined in Section 5) will prescribe
regulations to implement the Act under the direction of and for
approval by the Board. The regulations will include provisions
for the time period to review applications, safeguards against
evasion of the provisions of the Act, the description of who
will be considered an applicant, and requirements for the
submission of documents and other information necessary for the
administration of the provisions of the Act.
The Board is authorized to approve loan guarantees only to
the extent that funds for this purpose are provided for in
advance in appropriations acts. The Board may delegate to the
Administrator the authority to approve loan guarantees not
exceeding $20 million, provided that the Administrator complies
with the terms and conditions of the Act.
This section also stipulates the requirements that must be
met in order for a loan guarantee to be approved: The loan to
be guaranteed must be used to finance the means by which local
television signals will be delivered to viewers in an unserved
or underserved area, and such loan may not be used for
operating expenses. In addition, the loan must be provided by a
depository institution that is insured by the Federal Deposit
Insurance Corporation and that is acceptable to the Board. The
loan may not be for a term longer than 25 years or the
economically useful life of the asset, whichever is less.
Other requirements for approval of a loan guarantee include
a written determination that the collateral is sufficient to
protect U.S. financial interests. To this end, the Board must
determine that the collateral is equal to the unpaid balance of
the loan amount covered by the loan guarantee. If such
collateral is of a lower amount, then the collateral of an
affiliate of the applicant must be added to the existing
collateral. If necessary to meet requirements for sufficient
collateral under the Act, the assets of the applicant and all
assets from any affiliate can be required. Finally, the Board
must determine in writing that all necessary and required
regulatory approvals have been received for the loan and the
project that is associated with the loan, that the loan would
not have been available on reasonable terms and conditions
without the guarantee provided under this Act, and that there
is a reasonable expectation by the Board that the loan will be
repaid.
The Board will prioritize applicants for loan guarantees
using the following criteria. The first priority will be for
projects that serve the greatest number of households in
unserved areas. The second priority will be for projects that
serve the greatest number of households in underserved areas.
The Board must consider the cost per household served for the
proposed projects of all applicants.
The Board may guarantee up to 80 percent of that portion of
a loan that will be used to provide local television signals
and that otherwise meets the requirements established by the
Board and this Act. The aggregate value of all loans for which
loan guarantees may be issued under this Act cannot exceed
$1.25 billion, but otherwise there is no minimum or maximum
value required for a loan guarantee.
The 80 percent loan guarantee may take one of two forms.
The guarantee may represent up to 80 percent of a loan that
comprises all (100 percent) of the debt associated with a
project meeting the purposes of this Act. Alternatively, the
guarantee may represent a full guarantee (100 percent) of a
loan that comprises up to 80 percent of the debt associated
with a project. Under this second scenario, the same lender
must provide all of the financing for the project, including
both the guaranteed and the unguaranteed portions.
The Board also is authorized to establish and accept credit
risk premiums with respect to loan guarantees under this Act.
To the extent appropriations of budget authority are not
sufficient to cover the cost of loan guarantees under this Act,
the Board must require credit risk premiums from applicants to
cover this shortfall. Credit risk premiums will be paid into an
account established in the Treasury and shall accrue interest.
The Board shall use the proceeds of this account to cover any
shortfall between a guaranteed amount paid pursuant to this Act
and the net proceeds earned upon liquidation of all assets used
as collateral for the loan. When all loans guaranteed by this
Act have been repaid or otherwise satisfied, the Board will
refund any remainder in the account to those borrowers who did
not default or who cured any default, on a pro rata basis.
Section 5. Administration of loan guarantees
Section 5 provides that the Administrator of the Rural
Utilities Service (Administrator) will be responsible for
administering loan guarantees issued pursuant to this Act. The
Administrator will enforce the terms and conditions specified
by the Board and monitor the performance of loans guaranteed by
the Board.
The Administrator will have superior status to all other
lienholders on assets used to securea loan guaranteed under
this Act and a perfected security interest in such assets. In the event
of default, all property or related interests must be sold or disposed
of in an orderly and efficient manner so as to maximize return to the
taxpayer. The Administrator is authorized to accept property as payment
of amounts owed to the United States, but only to the extent that the
obligation is not fully satisfied by cash.
The Administrator may approve the modification of a loan
guarantee under this Act only if such modification meets
certain requirements: Consent must be obtained from parties to
the loan agreement. The modification must be consistent with
the underwriting criteria developed pursuant to this Act. There
must be no negative impact on the ability of the applicant to
repay the loan, and the National Telecommunications Information
Administration must be consulted. Finally the modification must
not adversely affect the Federal Government's interest in the
assets or collateral of the applicant and must be consistent
with the financial interests of the United States.
Notwithstanding any other provision of law, if any person
or entity indebted to the United States as a result of this Act
files for bankruptcy protection, the person's or entity's debts
due to the United States must be satisfied first. A discharge
in bankruptcy will not release a person or entity from
obligations under this Act.
Section 6. Annual audit
Section 6 requires the General Accounting Office (GAO) to
conduct an annual audit of the loan guarantee program developed
pursuant to this Act. The GAO report is to be submitted to the
Senate Committee on Banking, Housing, and Urban Affairs and the
House Committee on Banking and Financial Services.
Section 7. Sunset
Section 7 prohibits the guarantee of any loan under this
Act made after December 31, 2006.
Section 8. Retransmission of local television broadcast stations
Section 8 requires that if a local broadcast station
requests carriage of its signal and is located in a market not
served by a satellite carrier, the applicant shall carry the
signal of that station without charge and be subject to the
applicable rights, obligations, and limitations of sections
338, 614, and 615 of the Communications Act of 1934.
Section 9. Definitions
Section 9 defines the terms ``affiliate,'' ``unserved
area,'' ``underserved area,'' and common terms used in this
Act.
Section 10. Authorization of appropriations
Section 10 authorizes funds to be appropriated as necessary
to carry out the Act.
REGULATORY IMPACT STATEMENT
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee makes the following
statement regarding the regulatory impact of the bill.
S. 2097 imposes a modest burden on the Administrator of the
Rural Utilities Service to administer the provisions of this
Act. This requirement is similar to other responsibilities of
the Rural Utilities Service. In addition, a modest burden will
be imposed on the Secretary of the Treasury, the Secretary of
Agriculture, and the Chairman of the Board of the Federal
Reserve System, or their designees. Also, to the extent Federal
agencies or departments are consulted by the Board or the
Administrator so as to comply with the requirements of this
Act, these agencies or departments may face additional
operational costs. No new regulatory burden is anticipated to
be imposed by this legislation on the private sector since
participation in the loan guarantee program is elective, purely
voluntary.
CHANGES IN EXISTING LAWS
In the opinion of the Committee, it is necessary to
dispense with the requirements of paragraph 12 of rule XXVI of
the Standing Rules of the Senate in order to expedite the
business of the Senate.
COST OF LEGISLATION
Senate rule XXVI, section 11(b) of the Standing Rules of
the Senate, and section 403 of the Congressional Budget
Impoundment and Control Act, require that each committee report
on a bill containing a statement estimating the cost of the
proposed legislation, which has been prepared by the
Congressional Budget Office. The estimate is as follows:
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 15, 2000.
Hon. Phil Gramm,
Chairman, Committee on Banking, Housing, and Urban Affairs,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclose cost estimate for S. 2097, the Launching
Our Communities' Access to Local Television Act of 2000.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Mark Hadley.
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
S. 2097--Launching Our Communities' Access to Local Television Act of
2000
Summary: S. 2097 would establish a loan guarantee program
for certain companies to provide local television service to
areas of the country that do not receive local television
stations from satellite companies. The bill would authorize the
Administrator of the Rural Utilities Service (RUS) at the
Department of Agriculture to guarantee up to 80 percent of
private loans authorized to be made to qualified borrowers. The
bill would authorize the appropriation of amounts necessary for
the costs of the loan guarantees for up to $1.25 billion of
private borrowing, and associated administrative expenses.
Qualifying loans would be payable in full within the lesser of
25 years or the useful life of the assets purchased. The
authority to guarantee loans would be contingent upon future
appropriation action and would expire on December 31, 2006.
CBO estimates that implementing S. 2097 would cost about
$265 million for loan subsidy and administrative costs over the
2000-2005 period, assuming appropriation of the necessary
amounts. S. 2097 would not affect direct spending or receipts;
therefore, pay-as-you-go procedures would not apply. S. 2097
contains no intergovernmental or private-sector mandates as
defined in the Unfunded Mandates Reform Act (UMRA) and would
not affect the budgets of state, local, or tribal governments.
Estimated cost to the Federal Government: For the purpose
of this estimate, CBO assumes that S. 2097 will be enacted in
fiscal year 2000 and that funds will be provided for its
implementation each year. The estimated budgetary impact of S.
2097 is shown in the following table. The costs of this
legislation fall within budget function 370 (commerce and
housing credit).
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By fiscal year, in millions of dollars--
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2000 2001 2002 2003 2004 2005
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SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level................................... 5 252 2 2 2 2
Estimated Outlays............................................... 2 167 90 2 2 2
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Basis of estimate: Under procedures established by the
Federal Credit Reform Act of 1990, the subsidy cost of a loan
guarantee is the estimated long-term cost to the government,
calculated on a net present value basis (excluding
administrative costs). We estimate that the loan guarantees
provided under the bill would cost about 20 percent of the
total amount borrowed--or $250 million, subject to the
availability of appropriated funds. In addition, CBO estimates
that administering the program would cost about $5 million in
2000 and about $2 million in each subsequent year. The bill
would authorize the Secretary of Agriculture to charge fees,
which could offset some of the subsidy or administrative costs,
but this estimate assumes no fees would be charged.
To prepare this estimate, CBO consulted with industry
experts and investment analysts and examined the credit ratings
of firms in the satellite television and related industries.
The information on credit ratings is useful because different
credit ratings reflect analysts' expectations of defaults.
Based on this information, we assume that the rural television
loans likely to be guaranteed under this bill would have a
credit risk comparable to debt rated as ``B'' or ``CCC,'' which
typically have default rates ranging from about 30 percent to
45 percent respectively.
Pay-as-you-go considerations: None.
Intergovernmental and private-sector impact: S. 2097
contains no intergovernmental or private-sector mandates as
defined in UMRA and would not affect the budgets of state,
local, or tribal governments.
Previous CBO estimate: On March 1, 2000, CBO transmitted a
cost estimate for H.R. 3615, the Rural Local Broadcast Signal
Act, as ordered reported by the House Committee on Agriculture
on February 16, 2000. That bill would authorize the RUS to
guarantee 100 percent of the value of loans made for this
purpose--up to $1.25 billion in private borrowing. It also
would allow the government's guarantee to be subordinate to
third-party financing. CBO estimated that implementing H.R.
3615 would cost $365 million over the 2000-2005 period, subject
to the availability of appropriated funds. The lower estimated
cost for S. 2097 reflects the lower federal risk associated
with an 80-percent guarantee level and the fact that the
government's guarantee would not be subordinate.
Estimate prepared by: Mark Hadley.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
ADDITIONAL VIEWS
We strongly support the goal of the ``Launching Our
Communities' Access to Local Television Act of 2000.'' The
Committee heard testimony outlining how very important access
to local television is in unserved and underserved communities.
In order to promote the success of the effort to provide
this service through the loan guarantee program included in the
legislation, we believe that Section 4 of the legislation
should not include the requirement that the program be financed
only through depository institutions that are insured by the
Federal Deposit Insurance Corporation.
Our view is that the lender should be any qualified lender
that is acceptable to the Board, which includes membership with
broad and deep knowledge of financial markets and lending
institutions. In addition to the qualified lenders specified in
S. 2097, the final legislation should also allow other
qualified entities including venture capital firms, investment
banks, or cooperative banks that provide specialized financing
products that might not be available through FDIC-insured
institutions. This would allow borrowers expanded access to
capital, thus providing them with the experience of entities
who are regularly involved in the private capital markets.
John Edwards.
Chris Dodd.
Charles Schumer.
Tim Johnson.
Richard H. Bryan.
Paul S. Sarbanes.
John F. Kerry.
Jack Reed.
Evan Bayh.