[Senate Report 108-168]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 314
108th Congress                                                   Report
                                 SENATE
 1st Session                                                    108-168
_______________________________________________________________________

                                     

                                                       Calendar No. 314



                  COMMERCIAL SPECTRUM ENHANCEMENT ACT

                               __________

                              R E P O R T

                                 of the

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                               H.R. 1320




       DATE deg.October 17, 2003.--Ordered to be printed
?

       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                      one hundred eighth congress
                             first session

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana                DANIEL K. INOUYE, Hawaii
TRENT LOTT, Mississippi              JOHN D. ROCKEFELLER IV, West 
KAY BAILEY HUTCHISON, Texas              Virginia
OLYMPIA J. SNOWE, Maine              JOHN F. KERRY, Massachusetts
SAM BROWNBACK, Kansas                JOHN B. BREAUX, Louisiana
GORDON SMITH, Oregon                 BYRON L. DORGAN, North Dakota
PETER G. FITZGERALD, Illinois        RON WYDEN, Oregon
JOHN ENSIGN, Nevada                  BARBARA BOXER, California
GEORGE ALLEN, Virginia               BILL NELSON, Florida
JOHN E. SUNUNU, New Hampshire        MARIA CANTWELL, Washington
                                     FRANK LAUTENBERG, New Jersey
           Jeanne Bumpus, Staff Director and General Counsel
                   Ann Begeman, Deputy Staff Director
                  Robert W. Chamberlin, Chief Counsel
      Kevin D. Kayes, Democratic Staff Director and Chief Counsel
                Gregg Elias, Democratic General Counsel

                                  (ii)


                                                       Calendar No. 314
108th Congress                                                   Report
                                 SENATE
 1st Session                                                    108-168

======================================================================



 
                  COMMERCIAL SPECTRUM ENHANCEMENT ACT

                                _______
                                

                October 17, 2003.--Ordered to be printed

                                _______
                                

       Mr. McCain, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 1320]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the Act (H.R. 1320) TITLE deg. an 
Act to amend the National Telecommunications and Information 
Administration Organization Act to facilitate the reallocation 
of spectrum from government to commercial users, having 
considered the same, reports favorably thereon with an 
amendment and recommends that the Act (as amended) do pass.

                          Purpose of the Bill

  The purpose of this legislation is to streamline the current 
process for reimbursing Federal agencies that must relocate 
from spectrum that has been reallocated to commercial use. 
Under existing law, spectrum auction winners must negotiate 
with the Federal entity currently occupying the spectrum, and 
reimburse the entity directly for its relocation costs. The 
bill is intended to instill additional certainty into this 
process for both the auction winner and the Federal entity 
being relocated. The bill would create a central spectrum 
relocation fund (SRF) with the proceeds of spectrum auctions, 
and would grant authority to the relocated Federal entities to 
use the fund to pay their relocation costs without further 
appropriation. The bill also would make a technical correction 
to the statutory treatment of the Telecommunications 
Development Fund (TDF), which would benefit small businesses by 
making it easier for the TDF to make loans to such businesses.

                          Background and Needs

  Spectrum is a vital resource in the information and digital 
age. Today, there are ever-greater spectrum demands for both 
commercial and government uses. Policymakers have struggled to 
strike a balance between finding and allocating spectrum for 
new advanced services, and ensuring that our military forces 
and other public users have enough spectrum for current and 
future needs. The Federal government has decided to reallocate 
certain spectrum from Federal to commercial use. In order to 
complete this process, the displaced Federal user must relocate 
to another spectrum band or find an alternative technology to 
carry out its functions. H.R. 1320 would streamline the current 
process for reimbursing Federal entities that must relocate 
from spectrum that has been reallocated to commercial use.
  The Omnibus Budget Reconciliation Act of 1993 (OBRA '93) 
required the Federal government to relinquish at least 100 
megahertz (mhz) below 3 gigahertz (ghz) for commercial use (at 
least 200 mhz overall below 5 ghz). The Balanced Budget Act of 
1997 (BBA '97) required the Federal government to reallocate 
another 20 mhz for commercial use. BBA '97 also accelerated the 
reallocation of the 1710-1755 mhz band, which had been 
designated for reallocation in accordance with OBRA '93.
  At the 1998 World Radio Conference (WRC) in Istanbul, Turkey, 
the WRC, an intergovernmental body, voted to locate broadband, 
third-generation (or 3G) wireless services in certain spectrum 
bands, including the 1710-1755 mhz band. In the United States, 
the Department of Defense (DOD) uses much of the spectrum in 
this band for battlefield communications, aircraft-to-aircraft 
communications, and other communications-related functions.
  The Strom Thurmond National Defense Authorization Act for 
Fiscal Year 1999 (Strom Thurmond Act) reduced the overall 
amount of spectrum initially reallocated to 112 mhz below 3 ghz 
(212 mhz overall below 5 ghz). In addition, the Strom Thurmond 
Act also required companies that win the commercial licenses 
for this spectrum at auction to negotiate directly with 
government agencies over the terms and costs of relocating the 
government users to a different spectrum band. Under the 
current rules, the funds paid by the auction winner are 
deposited in the United States Treasury as miscellaneous 
receipts. The relocated agency must then be appropriated the 
money to pay for its relocation costs.
  The current rules create uncertainty for both the relocated 
Federal entity and the successful bidder for the spectrum. The 
Federal entities currently face uncertainty, because they must 
seek funds for relocation through the appropriations process. 
H.R. 1320 seeks to establish a sustainable and predictable 
funding mechanism to ensure that DOD and other government users 
can relocate to new spectrum bands. Likewise, commercial 
bidders currently face substantial uncertainty about timing and 
total cost of licenses for the spectrum they seek to use, 
because of the negotiations they must begin upon winning an 
auction. This system provides potential licensees with 
diminished incentive to participate in auctions of reallocated 
government spectrum.

                          Legislative History

  Senators McCain, Dorgan, Brownback, and Ensign introduced S. 
865, a bill that is nearly identical to H.R. 1320, on April 10, 
2003. S. 865 was cosponsored by Senator Burns. On June 11, 
2003, the House of Representatives passed H.R. 1320 by a vote 
of 408-10. On June 26, 2003, the Senate Committee on Commerce, 
Science, and Transportation (the Committee) held an executive 
session at which H.R. 1320 was considered. The bill was 
approved by voice vote and was ordered reported with an 
amendment offered by Senators Sununu and Cantwell regarding the 
Federal Communication Commission's ability to auction certain 
terrestrial spectrum, which was passed by a vote of 13-8.

                            Estimated Costs

  In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                                     July 11, 2003.
Hon. John McCain,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1320, the 
Commercial Spectrum Enhancement Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kathleen 
Gramp.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 1320--Commercial Spectrum Enhancement Act

    Summary: H.R. 1320 would amend the procedures used to pay 
for the cost of relocating federal telecommunications systems 
that use electromagnetic spectrum that will be licensed for 
commercial use. It would simplify the process companies use to 
reimburse the government for relocation costs and would allow 
agencies to spend those funds without further appropriation. 
Under current law, such spending is subject to appropriation. 
In addition, the act would exempt certain licenses from being 
auctioned and would amend existing law regarding loans made by 
the Telecommunications Development Fund (TDF).
    CBO estimates that implementing H.R. 1320 would increase 
net direct spending by $1.5 billion over the 2006-2008 period 
and by $2.6 billion over the next 10 years. Allowing agencies 
to directly spend some auction proceeds would eliminate the 
need to appropriate funds for relocation costs. Consequently, 
the increase in direct spending for relocation costs could be 
largely offset by a reduction in discretionary spending if the 
total amounts appropriated in future years are reduced 
correspondingly.
    H.R. 1320 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 1320 is shown in the following table. 
The costs of this legislation fall primarily within budget 
functions 050 (national defense) and 950 (undistributed 
offsetting receipts).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, in billions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                         2003     2004     2005     2006     2007     2008     2009     2010     2011     2012     2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING

Spectrum auction receipts under current law:
    Estimated budget authority.......................     -0.1     -0.3     -8.0     -8.0     -2.8     -2.5        0        0        0        0        0
    Estimated outlays................................     -0.1     -0.3     -8.0     -8.0     -2.8     -2.5        0        0        0        0        0
Proposed changes:
    Delay of spectrum auctions:
        Estimated budget authority...................        0        0      7.5     -7.5        0        0        0        0        0        0        0
        Estimated outlays............................        0        0      7.5     -7.5        0        0        0        0        0        0        0
    Spending for relocation costs: \1\
        Estimated budget authority...................        0        0        0      2.5        0        0        0        0        0        0        0
        Estimated outlays............................        0        0        0      0.3      0.5      0.6      0.6      0.3      0.1      0.1        0
    Auction exemption for certain licenses:
        Estimated budget authority...................        0        0      0.1        0        0        0        0        0        0        0        0
        Estimated outlays............................        0        0      0.1        0        0        0        0        0        0        0        0
    Total proposed changes:
        Estimated budget authority...................        0        0      7.6     -5.0        0        0        0        0        0        0        0
        Estimated outlays............................        0        0      7.6     -7.2      0.5      0.6      0.6      0.3      0.1      0.1        0
Net spectrum auction receipts under H.R. 1320:
    Estimated budget authority.......................     -0.1     -0.3     -0.4    -13.0     -2.8     -2.5        0        0        0        0        0
    Estimated outlays................................     -0.1     -0.3     -0.4    -15.2     -2.3     -1.9      0.6      0.3      0.1      0.1        0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Implementing H.R. 1320 could result in a reduction in discretionary spending, similar to the estimated $2.5 billion increase in direct spending for
  relocation costs if the total amounts appropriated in future years are reduced accordingly.

Basis of estimate

    H.R. 1320 would amend current law that governs auctions of 
the electromagnetic spectrum in three ways. First, it would 
change the process used to pay for the cost of relocating 
government operations when spectrum that is used by agencies is 
going to be reallocated andlicensed for commercial services. 
Second, the bill would preclude the FCC from auctioning licenses for 
terrestrial services that use the 500 megahertz extending from 12.2 
gigahertz to 12.7 gigahertz. Finally, the act would change the 
treatment of loans made by the Telecommunications Development Fund. The 
cost of these changes is described below.

            Federal Relocation Costs

    CBO estimates that implementing provisions that would allow 
agencies to spend some of the proceeds from spectrum auctions 
without further appropriation would increase net direct 
spending by $2.5 billion over the next 10 years. Spending for 
agencies' spectrum relation expenses is subject to 
appropriation under current law. By providing this direct 
spending authority, the act could lead to lower discretionary 
spending in the future if the funds appropriated are reduced by 
corresponding amounts.
    Relocation Costs Under Current Law. Some of the 
electromagnetic spectrum now used by federal agencies is being 
reallocated from government to commercial use. Relocating 
agency operations to new frequencies or services typically 
involves buying new equipment and facilities. Under current 
law, those costs will be paid by the companies that win the 
commercial licenses at auctions held by the Federal 
Communications Commission (FCC). Agencies will notify bidders 
of estimated relocation costs before the auction begins, but 
final payment will be negotiated and made after the winning 
bidder has obtained--and paid for--the license. Funds paid by 
the commercial licensees for relocation costs will be deposited 
in the Treasury as miscellaneous receipts, but agencies cannot 
spend the proceeds until they are appropriated. How well the 
current relocation process would work is unknown because no 
auctions of such frequencies have occurred since the 
requirements were enacted in 1998.
    Proposed Changes. H.R. 1320 would make two key changes in 
the agency location process. First, costs for relocation would 
be paid from the total auction proceeds rather than by 
individual licensees. The act would direct the FCC to set a 
minimum bid for an auction equal to 110 percent of the 
estimated relocation costs. If auction proceeds exceed that 
minimum bid, then all of the proceeds from the auction of the 
federal frequencies would be deposited in a Spectrum Relocation 
Fund. Auctions that fail to at least match the minimum bid 
would be canceled. Under the act, all auction proceeds in the 
fund could be spent by agencies without further appropriation 
on eligible relocation costs. Agency expenditures and 
relocation progress would be subject to review by the Office of 
Management and Budget (OMB), the National Telecommunications 
and Information Administration (NTIA), various Conressional 
committees, and the General Accounting Office (GAO). Unspent 
auction proceeds would remain in the Treasury. The Act also 
would require the FCC to notify NTIA of an upcoming auction at 
least 18 months in advance, giving agencies a year to prepare 
estimates of relocation costs that must be given to the FCC at 
least six months prior to the start of the auction.
    Budgetary Effects Related to Auctioning the 1710-1755 
Megahertz Band. The relocation procedures, both in current law 
and under H.R. 1320, apply only to certain frequencies. Among 
the bands eligible for reimbursement are the 1710-1755 
megahertz band, three small bands covered by existing law, and 
any frequencies reallocated from government to commercial use 
after January 1, 2003.
    Most of the estimated cost of this act would result from 
applying the new process to the 1710-1755 megahertz band, which 
is scheduled to be paired with 45 megahertz of commercial 
spectrum and auctioned for use by advanced, third-generation 
wireless services in the next few years. Under current law, CBO 
anticipates that licenses for this 90 megahertz will be 
auctioned near the beginning of fiscal year 2005 and that 
proceeds totaling about $15 billion would be collected over the 
2005-2006 period. This estimate reflects our expectation that 
companies will discount their bids by about $2 billion to $3 
billion because of the uncertainty associated with the time and 
cost of relocating federal and commercial users.
    CBO estimates that implementing the new relocation 
procedures would affect the budget in three ways.
           Requiring the FCC to give NTIA at least 18-
        months notice would delay the start of the auction 
        relative to CBO's baseline assumption, thereby shifting 
        about $7.5 billion in offsetting receipts from 2005 to 
        2006. CBO assumes that the 18-month period would not 
        begin until after the NTIA and FCC identify alternative 
        frequencies for federal operations, which will be a key 
        determinant of relocation costs.
           Agencies would spend about $2.5 billion, 
        without further appropriation, to relocate federal 
        systems that now use this band. This estimate reflects 
        the preliminary estimate prepared by NTIA in 2001 on 
        the cost of moving all federal systems out of this 
        band. Most of this expense will be incurred by the 
        Department of Defense (DoD).
           The estimated increase in direct spending 
        could be largely offset by a reduction in discretionary 
        spending if the amounts appropriated in future years 
        are reduced correspondingly. However, CBO anticipates 
        that total spending probably would be higher under H.R. 
        1320 than under current law because agencies' 
        relocation plans would not be subject to negotiations 
        with winning bidders or the appropriation process.
    It is possible that the net effect of the act on direct 
spending could be higher or lower than estimated by CBO. On the 
one hand, agency spending could exceed $2.5 billion because the 
NTIA study was based on preliminary data and did not include 
all systems or all allowable expenditures. Recent statements by 
DoD have suggested that its costs alone cold exceed $4 billion.
    On the other hand, simplifying the reimbursement process 
could reduce some of the uncertainty for bidders, which could 
result in higher auction proceess. Under current law, companies 
may underbid or overbid for spectrum licenses depending on how 
the amount they ultimately pay agencies for relocation expenses 
compares to the amount assumed in their bidding strategy. 
Likewise, under the act, agencies might have access to funds 
more quickly than under the current process, but CBO has no 
basis for determining whether this would have a material effect 
on when the spectrum would be available for commercial service. 
On balance, CBO expects that simplifying the process for 
bidders might lead to higher proceeds, but we estimate that the 
magnitude of any change would be small relative to other 
factors that will affect the market value of these frequencies.
    Budgetary Effects Related to Other Bands. Based on 
information from NTIA and other agencies, CBO expects that 
implementing this act would have no significant effect on the 
net proceeds from other auctions likely to be held before the 
FCC's auction authority expires in 2007.

            Auction Exemption for Certain Licenses

    The FCC is required by law to use competitive bidding 
procedures to assign most licenses for commercial uses of the 
radio spectrum. H.R. 1320 would exempt certain licenses--those 
using the 12.2-12.7 gigahertz band for terrestrial services--
from this auction requirement. It also would prohibit the FCC 
from licensing those frequencies for mobile telephony. CBO 
estimates that enacting this exemption would result in a loss 
of about $60 million in auction proceeds that would otherwise 
occur in 2005.
    The 12.2-12.7 gigahertz band is currently used for two 
different satellite-based services. Licenses for direct 
broadcast satellite services (DBS), which use geostationary 
satellites, were assigned by competitive bidding in 1996 and 
generated auction proceeds totaling $735 million. (Those 
licenses currently are held by Echostar, which markets its 
satellite television services through the DISH Network). The 
FCC also allocated those frequencies for use by 
nongeostationary satellites that provide international 
telecommunication services. Under current law, licenses for 
international services are assigned administratively rather 
than by auction, with international protocols.
    The FCC recently determined that it is also technically 
feasible to use the 12.2-12.7 gigahertz band for certain 
terrestrial services. Companies such as Northpoint Technology 
have proposed using those frequencies to provide multichannel 
video distribution and data services that would compete with 
existing DBS and cable television services. Other firms have 
expressed interest in using the band to provide high-speed data 
and broadband services. The FCC initially planned to begin 
auctioning licenses for terrestrial services for this band in 
June 2003, but the auction was postponed in response to 
industry proposals to change the geographic areas covered by 
each license. Although a new date has not yet been announced, 
CBO expects that the auction will now begin in 2004, with 
auction proceeds deposited in the Treasury in 2005.
    CBO estimates that proceeds from the auction of this 500 
megahertz band could range from $14 million (the minimum bid 
set by the FCC) to over $100 million, with an expected value of 
about $60 million. Auction proceeds are difficult to predict, 
and are especially uncertain in cases where the technology and 
markets are untested. For example, Nextel recently paid $144 
million to buy worldcom spectrum licenses and equipment in the 
2.5 gigahertz band, which may be used for broadband services. 
(Worldcom originally paid about $1 billion for those licenses.) 
Furthermore, some analysts have suggested that the new services 
in the 12.2-12.7 gigahertz band could capture between 10 
percent and 40 percent of the $14 billion DBS market. If 
auction participants were to base their bids on such marketing 
scenarios, CBO estimates that auction proceeds could exceed 
$100 million. Alternatively, auction proceeds could be at the 
lower end of this range if the potential services or 
technologies to be offered are considered financially risky.

            Telecommunications Development Fund

    The TDF was established by law in 1996 to spend the 
interest earned on certain proceess collected by the FCC as 
part of the spectrum auction process. Those interest earnings 
are used as venture capital for small businesses and spent on 
other activities related to telecommunications services. The 
fund is administered by a seven-member board appointed by the 
FCC and is governed by certain statutory criteria. H.R. 1320 
would remove one of those requirements, namely that loans made 
by the TDF are subject to the Federal Credit Reform Act.
    Since its creation, CBO has suggested that the TDF be 
included in the budget as a federal activity because its 
leadership, purpose, and funding are controlled by the 
government. OMB, however, treats the TDF as a nonfederal 
entity. Because the TDF currently is treated as a nonfederal 
entity, CBO estimates that enacting this provision would have 
no budgetary impact.
    Intergovernmental and private-sector impact: H.R. 1320 
contains no intergovernmental or private-sector mandates as 
defined in the UMRA and would impose no costs on state, local, 
or tribal governments.
    Previous CBO estimate: On May 13, 2003, CBO transmitted a 
cost estimate for H.R. 1320 as ordered reported by the House 
Committee on Energy and Commerce on April 30, 2003. The House 
version did not include provisions exempting the 12.2-12.7 
gigahertz band from auction requirements and our cost estimates 
reflect that difference.
    Comparison with other estimates: In February 2003, the 
Administration recommended enacting legislation that included 
provisions similar to those in H.R. 1320 regarding federal 
relocation costs. The Office of Management and Budget estimated 
that enacting its proposed legislation would increase direct 
spending by $2.5 billion over the 2005-2013 period.
    Estimate prepared by: Federal Costs: Kathleen Gramp; impact 
on state, local, and tribal governments: Victoria Heid Hall; 
impact on the private sector: Paige Piper/Bach.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
director for Budget Analysis.

                      Regulatory Impact Statement

  In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       NUMBER OF PERSONS COVERED

  H.R. 1320 would streamline the process for reimbursing 
Federal agencies that must relocate from spectrum that has been 
reallocated to commercial use. Because existing law requires 
auction winners to negotiate with the Federal entity currently 
occupying the spectrum, the number of persons affected by this 
legislation should be consistent with current levels.

                            ECONOMIC IMPACT

  The legislation would expedite the introduction of new 
commercial wireless services, and would likely have a 
beneficial impact on the nation's economy.

                                PRIVACY

  H.R. 1320 would not have any adverse impact on the personal 
privacy of the individuals affected.

                               PAPERWORK

  H.R. 1320 would require the National Telecommunications and 
Information Administration (NTIA) to submit an annual report to 
the House of Representatives Committee on Appropriations, the 
House of Representatives Committee on Energy, the Senate 
Committee on Appropriations, the Senate Committee on Commerce, 
Science, and Transportation, and the Comptroller General on (1) 
the progress made in adhering to the timelines applicable to 
relocation, and (2) the relocation costs incurred and paid from 
the spectrum relocation fund established by the legislation. 
The bill also would require NTIA and the Office of Management 
and Budget (OMB) to prepare various estimates and detailed 
plans related to the costs of relocation and the use of funds 
to pay for those costs. Any increase in paperwork requirements 
would be commensurate with the benefits gained by Congressional 
oversight.

                      Section-by-Section Analysis


Section 1. Short title

  Section 1 would establish the short title of the bill as the 
``Commercial Spectrum Enhancement Act''.

Section 2. Relocation of eligible federal entities for the reallocation 
        of spectrum for commercial purposes

  Section 2 of the bill would amend section 113(g) of the 
National Telecommunications and Information Administration 
Organization Act (47 U.S.C. 923(g)) by striking the existing 
provisions governing the compensation of Federal entities for 
costs incurred for relocating spectrum operations and by 
replacing those provisions as described in this section.
  New sections 113(g)(1) and 113(g)(2) would define which 
Federal entities would be eligible to receive compensation for 
relocation expenses. Any Federal entity that has spectrum 
operations in certain frequencies that incurs relocation costs 
because of the reallocation of eligible frequencies from 
Federal use to non-Federal use would be eligible. Eligible 
bands include the 216-220 mhz band, the 1432-1435 mhz band, the 
1710-1755 mhz band, and the 2385-2390 mhz band. Also included 
as an eligible band is any other band of frequencies 
reallocated from Federal to non-Federal use after January 1, 
2003, that the Commission assigns by auction, except for the 
1390-1400 mhz band, the 1427-1432 mhz band, the 1670-1675 mhz 
band, the 2300-2305 mhz band, the 2305-2310 mhz band, the 2390-
2450 mhz band, the 3650-3700 mhz band, and the 4940-4990 mhz 
band. Section 113(g)(1) also would permit Federal Power 
Agencies (FPAs) that voluntarily relocate from spectrum bands 
reallocated from government to non-government use to receive 
compensation for relocation costs from the SRF.
  New section 113(g)(3) would define reimbursable relocation 
costs as such costs incurred by a Federal entity to achieve 
comparable capability of systems by relocating spectrum 
operations to a different frequency band or by utilizing an 
alternative technology.
  New sections 113(g)(4) and 113(g)(5) would require the 
Federal Communications Commission (FCC or Commission) to notify 
NTIA at least 18 months prior to the commencement of an auction 
of spectrum used by a Federal agency. NTIA would then be 
required to notify the Commission of estimated relocation costs 
and timelines for relocation at least 6 months prior to the 
auction. NTIA would make this estimate on behalf of the 
affected agency, and after review by the OMB. NTIA also would 
be required to submit this estimate to the House of 
Representatives Committee on Appropriations, the House of 
Representatives Committee on Energy and Commerce, the Senate 
Committee on Appropriations, and the Senate Committee on 
Commerce, Science, and Transportation (relevant Congressional 
committees), and the Comptroller General. In order to assist an 
agency in calculating its estimated relocation costs, NTIA 
would be required to provide the agency with information 
regarding an alternative frequency assignment it could use when 
relocated to the extent that it is consistent with national 
security and if it is practicable to do so.
  New section 113(g)(6) would require NTIA to take such actions 
as are necessary to ensure the timely relocation of Federal 
entities' spectrum operations from eligible frequencies to 
frequencies or facilities of comparable capability. Once NTIA 
has determined that a Federal entity has achieved comparable 
capability of systems, new section 113(g)(6) would require NTIA 
to terminate the entity's authorization to operate on the 
reallocated frequency band, and to notify the Commission that 
the entity's relocation is complete. New section 113(g)(6) also 
would require NTIA to terminate a Federal entity's 
authorization if it determines that the entity has unreasonably 
failed to comply with the timeline for relocation submitted by 
OMB to Congress after the completion of the auction.

Section 3. Minimum auction receipts and disposition of proceeds

  Sections 3 would amend section 309(j)(3) of the 
Communications Act of 1934 (47 U.S.C. 309(j)(3)) by requiring 
an auction of eligible frequencies described in section 
113(g)(2) to yield at least 110 percent of the estimated 
relocation costs. This section also would permit the FCC to 
grant a license for commercial use prior to the termination of 
a Federal entity's authorization if the licensee did not cause 
harmful interference to the Federal entity. Section 3 would 
require that proceeds from an auction of eligible frequencies 
be deposited in the SRF.

Section 4. Establishment of fund and procedures

  Section 4 would create a new section 118 of the National 
Telecommunications and Information Organization Act. New 
section 118(a) would establish the SRF as a separate Treasury 
account, which would be administered by OMB in consultation 
with NTIA. New sections 118(b) and 118(c) would provide that 
the SRF be credited with the proceeds from auctions of eligible 
frequencies.
  New section 118(d) would appropriate from the SRF such sums 
as required to pay the relocation costs of eligible Federal 
entities upon certain conditions. This section would prohibit 
the transfer of monies from the SRF unless OMB, in consultation 
with NTIA, has determined the appropriateness of the relocation 
costs and the timeline for relocation. Moreover, the monies 
would not be available until 30 days after OMB submits a 
detailed plan describing how the funds will be spent for 
relocation and the timeline for relocation to the relevant 
Congressional committees, and the Comptroller General. This 
section also would provide that any auction proceeds remaining 
in the SRF after the payment of relocation costs shall revert 
to the general fund of the Treasury no later than 8 years after 
the date of the deposit of the respective auction proceeds in 
the SRF.
  New section 118(e) would govern the transfer of monies to the 
Federal entity. This section would permit more than 1 transfer 
to be made to an eligible Federal entity. However, if a 
subsequent transfer (or transfers) exceeds 10 percent of the 
first transfer to an entity, such subsequent transfer would not 
be permitted without the prior approval of OMB, in consultation 
with NTIA, and would not be permitted until 45 days after OMB 
notified the relevant Congressional committees and the 
Comptroller General. This notice would include a detailed plan 
describing how the funds will be spent for relocation and the 
timeline for relocation, as well as an explanation of the need 
for the subsequent transfer. Within 30 days after receiving the 
plan, the Comptroller General would be required to review the 
plan and submit to the relevant committees an assessment of the 
explanation for the subsequent transfer. The transferred 
amounts would be credited to the Federal entity's 
appropriations account, and would remain available until 
expended. Any funds in excess of actual relocation costs would 
have to be transferred back to the SRF immediately after the 
entity's relocation is complete or after the entity 
unreasonably fails to complete the relocation in accordance 
with the timeline submitted to Congress, as determined by NTIA. 
Eligible Federal entities that receive amounts from the SRF 
would be required to report their expenditures to OMB.

Section 5. Telecommunications development fund

  Section 5 would amend section 714(f) of the Communications 
Act of 1934 (47 U.S.C. 614(f)) to clarify that the 
Telecommunications Development Fund (TDF) would not be subject 
to the requirements of the Federal Credit Reform Act of 1990, 
which requires government entities making loans to get budget 
authority to cover the costs of loans, and to provide for those 
loans in advance in an appropriations act. TDF is not a 
government agency; it is a private entity funded by the 
interest on auction bids.

Section 6. Construction

  Section 6 would provide that H.R. 1320 does not modify 
section 1062(b) of the National Defense Authorization Act for 
Fiscal Year 2000 (Public Law 106-65), which prohibits, with 
certain exceptions, the surrender of spectrum by the DOD unless 
comparable spectrum is made available, in advance, for the 
relevant operations.

Section 7. Section annual report

  Section 7 would require NTIA to submit an annual report to 
the relevant Congressional committees and the Comptroller 
General regarding (1) the progress made in adhering to the 
timelines presented by OMB to Congress under new section 
118(d), and (2) the estimated relocation costs, the actual 
costs incurred, and the amount of such costs paid from the SRF.

Section 8. Preservation of authority; NTIA report required

  Section 8 would clarify that, with the exception of the 
certain specified bands, nothing in H.R. 1320 is intended to 
limit the Commission's authority to allocate spectrum 
reallocated from government to non-government use for 
unlicensed, public safety, shared, or non-commercial purposes. 
This section also would require NTIA to submit, within 1 year 
after the date of enactment, a report to the House of 
Representatives Committee on Energy and Commerce and the Senate 
Committee on Commerce, Science, and Transportation regarding 
policy options to compensate Federal entities for relocation 
costs when such entities' spectrum bands are reallocatedfrom 
government to non-government use and the Commission allocates the 
spectrum for unlicensed, public safety, shared, or non-commercial 
purposes.

Section 9. Exempt auctions

  Section 9 would amend section 647 of the Open-market 
Reorganization for the Betterment of International 
Telecommunications (ORBIT) Act (47 U.S.C. 765f) by exempting 
from auction the provision of fixed terrestrial services in the 
12.2-12.7 ghz band. The section also would prohibit the use of 
terrestrial licenses in this band for mobile terrestrial 
telephony services.

                      ROLLCALL VOTES IN COMMITTEE

  In accordance with paragraph 7(c) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following description of the record votes during its 
consideration of H.R. 1320:
  Senator Sununu (for himself and Senator Cantwell) offered an 
amendment regarding the FCC's ability to auction certain 
terrestrial spectrum. By rollcall vote of 13 yeas and 8 nays as 
follows, the amendment was adopted:
        YEAS--13                      NAYS--8
Mr. Stevens                         Mr. Brownback
Mr. Burns \1\                       Mr. Fitzgerald
Mr. Lott                            Mr. Ensign \1\
Ms. Snowe \1\                       Mr. Hollings
Mr. Smith                           Mr. Rockefeller \1\
Mr. Sununu                          Mr. Wyden
Mr. Inouye \1\                      Mrs. Boxer \1\
Mr. Kerry \1\                       Mr. McCain
Mr. Breaux
Mr. Dorgan \1\
Mr. Nelson \1\
Ms. Cantwell
Mr. Lautenberg

    \1\ By proxy

                        Changes in Existing Law

  In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee states that the 
bill as reported would make no change to existing law. deg.
  In compliance with paragraph 12 of rule XXVI of the Standing 
Rules of the Senate, changes in existing law made by the bill, 
as reported, are shown as follows (existing law proposed to be 
omitted is enclosed in black brackets, new material is printed 
in italic, existing law in which no change is proposed is shown 
in roman):

                       COMMUNICATIONS ACT OF 1934


SEC. 309. APPLICATION FOR LICENSE

                            [47 U.S.C. 309]

  (a) Considerations in Granting Application.--Subject to the 
provisions of this section, the Commission shall determine, in 
the case of each application filed with it to which section 308 
applies, whether the public interest, convenience, and 
necessity will be served by the granting of such application, 
and, if the Commission, upon examination of such application 
and upon consideration of such other matters as the Commission 
may officially notice, shall find that public interest, 
convenience, and necessity would be served by the granting 
thereof, it shall grant such application.
  (b) Time of Granting Application.--Except as provided in 
subsection (c) of this section, no such application--
          (1) for an instrument of authorization in the case of 
        a station in the broadcasting or common carrier 
        services, or
          (2) for an instrument of authorization in the case of 
        a station in any of the following categories:
                  (A) industrial radio positioning stations for 
                which frequencies are assigned on an exclusive 
                basis,
                  (B) aeronautical en route stations,
                  (C) aeronautical advisory stations,
                  (D) airdrome control stations,
                  (E) aeronautical fixed stations, and
                  (F) such other stations or classes of 
                stations, not in the broadcasting or common 
                carrier services, as the Commission shall by 
                rule prescribe, shall be granted by the 
                Commission earlier than thirty days following 
                issuance of public notice by the Commission of 
                the acceptance for filing of such application 
                or of any substantial amendment thereof.
  (c) Applications not Affected by Subsection (b).--Subsection 
(b) of this section shall not apply--
          (1) to any minor amendment of an application to which 
        such subsection is applicable, or
          (2) to any application for--
                  (A) a minor change in the facilities of an 
                authorized station,
                  (B) consent to an involuntary assignment or 
                transfer under section 310(b) or to an 
                assignment or transfer thereunder which does 
                not involve a substantial change in ownership 
                or control,
                  (C) a license under section 319(c) or, 
                pending application for or grant of such 
                license, any special or temporary authorization 
                to permit interim operation to facilitate 
                completion of authorized construction or to 
                provide substantially the same service as would 
                be authorized by such license,
                  (D) extension of time to complete 
                construction of authorized facilities,
                  (E) an authorization of facilities for remote 
                pickups, studio links and similar facilities 
                for use in the operation of a broadcast 
                station,
                  (F) authorizations pursuant to section 325(c) 
                where the programs to be transmitted are 
                special events not of a continuing nature,
                  (G) a special temporary authorization for 
                nonbroadcast operation not to exceed thirty 
                days where no application for regular operation 
                is contemplated to be filed or not to exceed 
                sixty days pending the filing of an application 
                for such regular operation, or
                  (H) an authorization under any of the proviso 
                clauses of section 308(a).
  (d) Petition To Deny Application; Time; Contents; Reply; 
Findings.--
          (1) Any party in interest may file with the 
        Commission a petition to deny any application (whether 
        as originally filed or as amended) to which subsection 
        (b) of this section applies at any time prior to the 
        day of Commission grant thereof without hearing or the 
        day of formal designation thereof for hearing; except 
        that with respect to any classification of 
        applications, the Commission from time to time by rule 
        may specify a shorter period (no less than thirty days 
        following the issuance of public notice by the 
        Commission of the acceptance for filing of such 
        application or of any substantial amendment thereof), 
        which shorter period shall be reasonably related to the 
        time when the applications would normally be reached 
        for processing. The petitioner shall serve a copy of 
        such petition on the applicant. The petition shall 
        contain specific allegations of fact sufficient to show 
        that the petitioner is a party in interest and that a 
        grant of the application would be prima facie 
        inconsistent with subsection (a)(or subsection (k) in 
        the case of renewal of any broadcast station license). 
        Such allegations of fact shall, except for those of 
        which official notice may be taken, be supported by 
        affidavit of a person or persons with personal 
        knowledge thereof. The applicant shall be given the 
        opportunity to file a reply in which allegations of 
        fact or denials thereof shall similarly be supported by 
        affidavit.
          (2) If the Commission finds on the basis of the 
        application, the pleadings filed, or other matters 
        which it may officially notice that there are no 
        substantial and material questions of fact and that a 
        grant of the application would be consistent with 
        subsection (a)(or subsection (k) in the case of renewal 
        of any broadcast station license), it shall make the 
        grant, deny the petition, and issue a concise statement 
        of the reasons for denying the petition, which 
        statement shall dispose of all substantial issues 
        raised by the petition. If a substantial and material 
        question of fact is presented or if the Commission for 
        any reason is unable to find that grant of the 
        application would be consistent with subsection (a)(or 
        subsection (k) in the case of renewal of any broadcast 
        station license), it shall proceed as provided in 
        subsection (e).
  (e) Hearings; Intervention; Evidence; Burden of Proof.--If, 
in the case of any application to which subsection (a) of this 
section applies, a substantial and material question of fact is 
presented or the Commission for any reason is unable to make 
the finding specified in such subsection, it shall formally 
designate the application for hearing on the ground or reasons 
then obtaining and shall forthwith notify the applicant and all 
other known parties in interest of such action and the grounds 
and reasons therefor, specifying with particularity the matters 
and things in issue but not including issues or requirements 
phrased generally. When the Commission has so designated an 
application for hearing the parties in interest, if any, who 
are not notified by the Commission of such action may acquire 
the status of a party to the proceeding thereon by filing a 
petition for intervention showing the basis for their interest 
not more than thirty days after publication of the hearing 
issues or any substantial amendment thereto in the Federal 
Register. Any hearing subsequently held upon such application 
shall be a full hearing in which the applicant and all other 
parties in interest shall be permitted to participate. The 
burden of proceeding with the introduction of evidence and the 
burden of proof shall be upon the applicant, except that with 
respect to any issue presented by a petition to deny or a 
petition to enlarge the issues, such burdens shall be as 
determined by the Commission.
  (f) Temporary Authorization of Operations Under Subsection 
(b).--When an application subject to subsection (b) has been 
filed, the Commission, notwithstanding the requirements of such 
subsection, may, if the grant of such application is otherwise 
authorized by law and if it finds that there are extraordinary 
circumstances requiring temporary operations in the public 
interest and that delay in the institution of such temporary 
operations would seriously prejudice the public interest, grant 
a temporary authorization, accompanied by a statement of its 
reasons therefor, to permit such temporary operations for a 
period not exceeding 180 days, and upon making like findings 
may extend such temporary authorization for additional periods 
not to exceed 180 days. When any such grant of a temporary 
authorization is made, the Commission shall give expeditious 
treatment to any timely filed petition to deny such application 
and to any petition for rehearing of such grant filed under 
section 405.
  (g) Classification of Applications.--The Commission is 
authorized to adopt reasonable classifications of applications 
and amendments in order to effectuate the purposes of this 
section.
  (h) Form and Conditions of Station Licenses.--Such station 
licenses as the Commission may grant shall be in such general 
form as it may prescribe, but each license shall contain, in 
addition to other provisions, a statement of the following 
conditions to which such license shall be subject:
          (1) The station license shall not vest in the 
        licensee any right to operate the station nor any right 
        in the use of the frequencies designated in the license 
        beyond the term thereof nor in any other manner than 
        authorized therein;
          (2) neither the license nor the right granted 
        thereunder shall be assigned or otherwise transferred 
        in violation of this Act;
          (3) every license issued under this Act shall be 
        subject in terms to the right of use or control 
        conferred by section 706 of this Act.
  (i) Random Selection.--
          (1) General authority.--Except as provided in 
        paragraph (5), if there is more than one application 
        for any initial license or construction permit, then 
        the Commission shall have the authority to grant such 
        license or permit to a qualified applicant through the 
        use of a system of random selection.
          (2) No license or construction permit shall be 
        granted to an applicant selected pursuant to paragraph 
        (1) unless the Commission determines the qualifications 
        of such applicant pursuant to subsection (a) and 
        section 308(b). When substantial and material questions 
        of fact exist concerning such qualifications, the 
        Commission shall conduct a hearing in order to make 
        such determinations. For the purpose of making such 
        determina-tions, the Commission may, by rule, and 
        notwithstanding any other provision of law--
                  (A) adopt procedures for the submission of 
                all or part of the evidence in written form;
                  (B) delegate the function of presiding at the 
                taking of the evidence to Commission employees 
                other than administrative law judges; and
                  (C) omit the determination required by 
                subsection (a) with respect to any application 
                other than the one selected pursuant to 
                paragraph (1).
          (3)(A) The Commission shall establish rules and 
        procedures to ensure that, in the administration of any 
        system of random selection under this subsection used 
        for granting licenses or construction permits for any 
        media of mass communications, significant preferences 
        will be granted to applicants or groups of applicants, 
        the grant to which of the license or permit would 
        increase the diversification of ownership of the media 
        of mass communications. To further diversify the 
        ownership of the media of mass communications, an 
        additional significant preference shall be granted to 
        any applicant controlled by a member or members of a 
        minority group.
          (B) The Commission shall have authority to require 
        each qualified applicant seeking a significant 
        preference under subparagraph (A) to submit to the 
        Commission such information as may be necessary to 
        enable the Commission to make a determination regarding 
        whether such applicant shall be granted such 
        preference. Such information shall be submitted in such 
        form, at such times, and in accordance with such 
        procedures, as the Commission may require.
          (C) For purposes of this paragraph:
                  (i) The term ``media of mass communications'' 
                includes television, radio, cable television, 
                multipoint distribution service, direct 
                broadcast satellite service, and other 
                services, the licensed facilities of which may 
                be substantially devoted toward providing 
                programming or other information services 
                within the editorial control of the licensee.
                  (ii) The term ``minority group'' includes 
                Blacks, Hispanics, American Indians, Alaska 
                Natives, Asians, and Pacific Islanders.
          (4)(A) The Commission shall, after notice and 
        opportunity for hearing, prescribe rules establishing a 
        system of random selection for use by the Commission 
        under this subsection in any instance in which the 
        Commission, in its discretion, determines that such use 
        is appropriate for the granting of any license or 
        permit in accordance with paragraph (1).
          (B) The Commission shall have authority to amend such 
        rules from time to time to the extent necessary to 
        carry out the provisions of this subsection. Any such 
        amendment shall be made after notice and opportunity 
        for hearing.
          (C) Not later than 180 days after the date of 
        enactment of this subparagraph, the Commission shall 
        prescribe such transfer disclosures and antitrafficking 
        restrictions and payment schedules as are necessary to 
        prevent the unjust enrichment of recipients of licenses 
        or permits as a result of the methods employed to issue 
        licenses under this subsection.
          (5) Termination of authority.--
                  (A) Except as provided in subparagraph (B), 
                the Commission shall not issue any license or 
                permit using a system of random selection under 
                this subsection after July 1, 1997.
                  (B) Subparagraph (A) of this paragraph shall 
                not apply with respect to licenses or permits 
                for stations described in section 397(6) of 
                this Act.
  (j) Use of Competitive Bidding.--
          (1) General authority.--If, consistent with the 
        obligations described in paragraph (6)(E), mutually 
        exclusive applications are accepted for any initial 
        license or construction permit, then, except as 
        provided in paragraph (2), the Commission shall grant 
        the license or permit to a qualified applicant through 
        a system of competitive bidding that meets the 
        requirements of this subsection.
          (2) Exemptions.--The competitive bidding authority 
        granted by this subsection shall not apply to licenses 
        or construction permits issued by the Commission--
                  (A) for public safety radio services, 
                including private internal radio services used 
                by State and local governments and non-
                government entities and including emergency 
                road services provided by not-for-profit 
                organizations, that--
                          (i) are used to protect the safety of 
                        life, health, or property; and
                          (ii) are not made commercially 
                        available to the public;
                  (B) for initial licenses or construction 
                permits for digital television service given to 
                existing terrestrial broadcast licensees to 
                replace their analog television service 
                licenses; or
                  (C) for stations described in section 397(6) 
                of this Act.
          (3) Design of systems of competitive bidding.--For 
        each class of licenses or permits that the Commission 
        grants through the use of a competitive bidding system, 
        the Commission shall, by regulation, establish a 
        competitive bidding methodology. The Commission shall 
        seek to design and test multiple alternative 
        methodologies under appropriate circumstances. The 
        Commission shall, directly or by contract, provide for 
        the design and conduct (for purposes of testing) of 
        competitive bidding using a contingent combinatorial 
        bidding system that permits prospective bidders to bid 
        on combinations or groups of licenses in a single bid 
        and to enter multiple alternative bids within a single 
        bidding round. In identifying classes of licenses and 
        permits to be issued by competitive bidding, in 
        specifying eligibility and other characteristics of 
        such licenses and permits, and in designing the 
        methodologies for use under this subsection, the 
        Commission shall include safeguards to protect the 
        public interest in the use of the spectrum and shall 
        seek to promote the purposes specified in section 1 of 
        this Act and the following objectives:
                  (A) the development and rapid deployment of 
                new technologies, products, and services for 
                the benefit of the public, including those 
                residing in rural areas, without administrative 
                or judicial delays;
                  (B) promoting economic opportunity and 
                competition and ensuring that new and 
                innovative technologies are readily accessible 
                to the American people by avoiding excessive 
                concentration of licenses and by disseminating 
                licenses among a wide variety of applicants, 
                including small businesses, rural telephone 
                companies, and businesses owned by members of 
                minority groups and women;
                  (C) recovery for the public of a portion of 
                the value of the public spectrum resource made 
                available for commercial use and avoidance of 
                unjust enrichment through the methods employed 
                to award uses of that resource;
                  (D) efficient and intensive use of the 
                electromagnetic spectrum; [and]
                  (E) ensure that, in the scheduling of any 
                competitive bidding under this subsection, an 
                adequate period is allowed--
                          (i) before issuance of bidding rules, 
                        to permit notice and comment on 
                        proposed auction procedures; and
                          (ii) after issuance of bidding rules, 
                        to ensure that interested parties have 
                        a sufficient time to develop business 
                        plans, assess market conditions, and 
                        evaluate the availability of equipment 
                        for the relevant [services.] services; 
                        and
                  (F) for any auction of eligible frequencies 
                described in section 113(g)(2) of the National 
                Telecommunications and Information 
                Administration Organization Act (47 U.S.C. 
                923(g)(2)), the recovery of 110 percent of 
                estimated relocation costs as provided to the 
                Commission pursuant to section 113(g)(4) of 
                such Act.
          (4) Contents of regulations.--In prescribing 
        regulations pursuant to paragraph (3), the Commission 
        shall--
                  (A) consider alternative payment schedules 
                and methods of calculation, including lump sums 
                or guaranteed installment payments, with or 
                without royalty payments, or other schedules or 
                methods that promote the objectives described 
                in paragraph (3)(B), and combinations of such 
                schedules and methods;
                  (B) include performance requirements, such as 
                appropriate deadlines and penalties for 
                performance failures, to ensure prompt delivery 
                of service to rural areas, to prevent 
                stockpiling or warehousing of spectrum by 
                licensees or permittees, and to promote 
                investment in and rapid deployment of new 
                technologies and services;
                  (C) consistent with the public interest, 
                convenience, and necessity, the purposes of 
                this Act, and the characteristics of the 
                proposed service, prescribe area designations 
                and bandwidth assignments that promote (i) an 
                equitable distribution of licenses and services 
                among geographic areas, (ii) economic 
                opportunity for a wide variety of applicants, 
                including small businesses, rural telephone 
                companies, and businesses owned by members of 
                minority groups and women, and (iii) investment 
                in and rapid deployment of new technologies and 
                services;
                  (D) ensure that small businesses, rural 
                telephone companies, and businesses owned by 
                members of minority groups and women are given 
                the opportunity to participate in the provision 
                of spectrum-based services, and, for such 
                purposes, consider the use of tax certificates, 
                bidding preferences, and other procedures;
                  (E) require such transfer disclosures and 
                antitrafficking restrictions and payment 
                schedules as may be necessary to prevent unjust 
                enrichment as a result of the methods employed 
                to issue licenses and permits; and
                  (F) prescribe methods by which a reasonable 
                reserve price will be required, or a minimum 
                bid will be established, to obtain any license 
                or permit being assigned pursuant to the 
                competitive bidding, unless the Commission 
                determines that such a reserve price or minimum 
                bid is not in the public interest.
          (5) Bidder and licensee qualification.--No person 
        shall be permitted to participate in a system of 
        competitive bidding pursuant to this subsection unless 
        such bidder submits such information and assurances as 
        the Commission may require to demonstrate that such 
        bidder's application is acceptable for filing. No 
        license shall be granted to an applicant selected 
        pursuant to this subsection unless the Commission 
        determines that the applicant is qualified pursuant to 
        subsection (a) and sections 308(b) and 310. Consistent 
        with the objectives described in paragraph (3), the 
        Commission shall, by regulation, prescribe expedited 
        procedures consistent with the procedures authorized by 
        subsection (i)(2) for the resolution of any substantial 
        and material issues of fact concerning qualifications.
          (6) Rules of construction.--Nothing in this 
        subsection, or in the use of competitive bidding, 
        shall--
                  (A) alter spectrum allocation criteria and 
                procedures established by the other provisions 
                of this Act;
                  (B) limit or otherwise affect the 
                requirements of subsection (h) of this section, 
                section 301, 304, 307, 310, or 706, or any 
                other provision of this Act (other than 
                subsections (d)(2) and (e) of this section);
                  (C) diminish the authority of the Commission 
                under the other provisions of this Act to 
                regulate or reclaim spectrum licenses;
                  (D) be construed to convey any rights, 
                including any expectation of renewal of a 
                license, that differ from the rights that apply 
                to other licenses within the same service that 
                were not issued pursuant to this subsection;
                  (E) be construed to relieve the Commission of 
                the obligation in the public interest to 
                continue to use engineering solutions, 
                negotiation, threshold qualifications, service 
                regulations, and other means in order to avoid 
                mutual exclusivity in application and licensing 
                proceedings;
                  (F) be construed to prohibit the Commission 
                from issuing nationwide, regional, or local 
                licenses or permits;
                  (G) be construed to prevent the Commission 
                from awarding licenses to those persons who 
                make significant contributions to the 
                development of a new telecommunications service 
                or technology; or
                  (H) be construed to relieve any applicant for 
                a license or permit of the obligation to pay 
                charges imposed pursuant to section 8 of this 
                Act.
          (7) Consideration of revenues in public interest 
        determinations.--
                  (A) Consideration prohibited.--In making a 
                decision pursuant to section 303(c) to assign a 
                band of frequencies to a use for which licenses 
                or permits will be issued pursuant to this 
                subsection, and in prescribing regulations 
                pursuant to paragraph (4)(C) of this 
                subsection, the Commission may not base a 
                finding of public interest, convenience, and 
                necessity on the expectation of Federal 
                revenues from the use of a system of 
                competitive bidding under this subsection.
                  (B) Consideration limited.--In prescribing 
                regulations pursuant to paragraph (4)(A) of 
                this subsection, the Commission may not base a 
                finding of public interest, convenience, and 
                necessity solely or predominantly on the 
                expectation of Federal revenues from the use of 
                a system of competitive bidding under this 
                subsection.
                  (C) Consideration of demand for spectrum not 
                affected.--Nothing in this paragraph shall be 
                construed to prevent the Commission from 
                continuing to consider consumer demand for 
                spectrum-based services.
          (8) Treatment of revenues.--
                  (A) General rule.--Except as provided in 
                subparagraph (B) or subparagraph (D), all 
                proceeds from the use of a competitive bidding 
                system under this subsection shall be deposited 
                in the Treasury in accordance with chapter 33 
                of title 31, United States Code.
                  (B) Retention of revenues.--Notwithstanding 
                subparagraph (A), the salaries and expenses 
                account of the Commission shall retain as an 
                offsetting collection such sums as may be 
                necessary from such proceeds for the costs of 
                developing and implementing the program 
                required by this subsection. Such offsetting 
                collections shall be available for obligation 
                subject to the terms and conditions of the 
                receiving appropriations account, and shall be 
                deposited in such accounts on a quarterly 
                basis. Such offsetting collections are 
                authorized to remain available until expended. 
                No sums may be retained under this subparagraph 
                during any fiscal year beginning after 
                September 30, 1998, if the annual report of the 
                Commission under section 4(k) for the second 
                preceding fiscal year fails to include in the 
                itemized statement required by paragraph (3) of 
                such section a statement of each expenditure 
                made for purposes of conducting competitive 
                bidding under this subsection during such 
                second preceding fiscal year.
                  (C) Deposit and use of auction escrow 
                accounts.--Any deposits the Commission may 
                require for the qualification of any person to 
                bid in a system of competitive bidding pursuant 
                to this subsection shall be deposited in an 
                interest bearing account at a financial 
                institution designated for purposes of this 
                subsection by the Commission (after 
                consultation with the Secretary of the 
                Treasury). Within 45 days following the 
                conclusion of the competitive bidding--
                          (i) the deposits of successful 
                        bidders shall be paid to the Treasury;
                          (ii) the deposits of unsuccessful 
                        bidders shall be returned to such 
                        bidders; and
                          (iii) the interest accrued to the 
                        account shall be transferred to the 
                        Telecommunications Development Fund 
                        established pursuant to section 714 of 
                        this Act.
                  (D) Disposition of cash proceeds.--Cash 
                proceeds attributable to the auction of any 
                eligible frequencies described in section 
                113(g)(2) of the National Telecommunications 
                and Information Administration Organization Act 
                (47 U.S.C. 923(g)(2)) shall be deposited in the 
                Spectrum Relocation Fund established under 
                section 118 of such Act, and shall be available 
                in accordance with that section.
          (9) Use of former government spectrum.--The 
        Commission shall, not later than 5 years after the date 
        of enactment of this subsection, issue licenses and 
        permits pursuant to this subsection for the use of 
        bands of frequencies that--
                  (A) in the aggregate span not less than 10 
                mhz; and
                  (B) have been reassigned from Government use 
                pursuant to part B of the National 
                Telecommunications and Information 
                Administration Organization Act.
          (10) Authority contingent on availability of 
        additional spectrum.--
                  (A) Initial conditions.--The Commission's 
                authority to issue licenses or permits under 
                this subsection shall not take effect unless--
                          (i) the Secretary of Commerce has 
                        submitted to the Commission the report 
                        required by section 113(d)(1) of the 
                        National Telecommunications and 
                        Information Administration Organization 
                        Act;
                          (ii) such report recommends for 
                        immediate reallocation bands of 
                        frequencies that, in the aggregate, 
                        span not less than 50 mhz;
                          (iii) such bands of frequencies meet 
                        the criteria required by section 113(a) 
                        of such Act; and
                          (iv) the Commission has completed the 
                        rulemaking required by section 
                        332(c)(1)(D) of this Act.
                  (B) Subsequent conditions.--The Commission's 
                authority to issue licenses or permits under 
                this subsection on and after 2 years after the 
                date of the enactment of this subsection shall 
                cease to be effective if--
                          (i) the Secretary of Commerce has 
                        failed to submit the report required by 
                        section 113(a) of the National 
                        Telecommunications and Information 
                        Administration Organization Act;
                          (ii) the President has failed to 
                        withdraw and limit assignments of 
                        frequencies as required by paragraphs 
                        (1) and (2) of section 114(a) of such 
                        Act;
                          (iii) the Commission has failed to 
                        issue the regulations required by 
                        section 115(a) of such Act;
                          (iv) the Commission has failed to 
                        complete and submit to Congress, not 
                        later than 18 months after the date of 
                        enactment of this subsection, a study 
                        of current and future spectrum needs of 
                        State and local government public 
                        safety agencies through the year 2010, 
                        and a specific plan to ensure that 
                        adequate frequencies are made available 
                        to public safety licensees; or
                          (v) the Commission has failed under 
                        section 332(c)(3) to grant or deny 
                        within the time required by such 
                        section any petition that a State has 
                        filed within 90 days after the date of 
                        enactment of this subsection; until 
                        such failure has been corrected.
          (11) Termination.--The authority of the Commission to 
        grant a license or permit under this subsection shall 
        expire September 30, 2007.
          (12) Evaluation.--Not later than September 30, 1997, 
        the Commission shall conduct a public inquiry and 
        submit to the Congress a report--
                  (A) containing a statement of the revenues 
                obtained, and a projection of the future 
                revenues, from the use of competitive bidding 
                systems under this subsection;
                  (B) describing the methodologies established 
                by the Commission pursuant to paragraphs (3) 
                and (4);
                  (C) comparing the relative advantages and 
                disadvantages of such methodologies in terms of 
                attaining the objectives described in such 
                paragraphs;
                  (D) evaluating whether and to what extent--
                          (i) competitive bidding significantly 
                        improved the efficiency and 
                        effectiveness of the process for 
                        granting radio spectrum licenses;
                          (ii) competitive bidding facilitated 
                        the introduction of new spectrum-based 
                        technologies and the entry of new 
                        companies into the telecommunications 
                        market;
                          (iii) competitive bidding 
                        methodologies have secured prompt 
                        delivery of service to rural areas and 
                        have adequately addressed the needs of 
                        rural spectrum users; and
                          (iv) small businesses, rural 
                        telephone companies, and businesses 
                        owned by members of minority groups and 
                        women were able to participate 
                        successfully in the competitive bidding 
                        process; and
                  (E) recommending any statutory changes that 
                are needed to improve the competitive bidding 
                process.
          (13) Recovery of value of public spectrum in 
        connection with pioneer preferences.--
                  (A) In general.--Notwithstanding paragraph 
                (6)(G), the Commission shall not award licenses 
                pursuant to a preferential treatment accorded 
                by the Commission to persons who make 
                significant contributions to the development of 
                a new telecommunications service or technology, 
                except in accordance with the requirements of 
                this paragraph.
                  (B) Recovery of value.--The Commission shall 
                recover for the public a portion of the value 
                of the public spectrum resource made available 
                to such person by requiring such person, as a 
                condition for receipt of the license, to agree 
                to pay a sum determined by--
                          (i) identifying the winning bids for 
                        the licenses that the Commission 
                        determines are most reasonably 
                        comparable in terms of bandwidth, scope 
                        of service area, usage restrictions, 
                        and other technical characteristics to 
                        the license awarded to such person, and 
                        excluding licenses that the Commission 
                        determines are subject to bidding 
                        anomalies due to the award of 
                        preferential treatment;
                          (ii) dividing each such winning bid 
                        by the population of its service area 
                        (hereinafter referred to as the per 
                        capita bid amount);
                          (iii) computing the average of the 
                        per capita bid amounts for the licenses 
                        identified under clause (i);
                          (iv) reducing such average amount by 
                        15 percent; and
                          (v) multiplying the amount determined 
                        under clause (iv) by the population of 
                        the service area of the license 
                        obtained by such person.
                  (C) Installments permitted.--The Commission 
                shall require such person to pay the sum 
                required by subparagraph (B) in a lump sum or 
                in guaranteed installment payments, with or 
                without royalty payments, over a period of not 
                more than 5 years.
                  (D) Rulemaking on pioneer preferences.--
                Except with respect to pending applications 
                described in clause (iv) of this subparagraph, 
                the Commission shall prescribe regulations 
                specifying the procedures and criteria by which 
                the Commission will evaluate applications for 
                preferential treatment in its licensing 
                processes (by precluding the filing of mutually 
                exclusive applications) for persons who make 
                significant contributions to the development of 
                a new service or to the development of new 
                technologies that substantially enhance an 
                existing service. Such regulations shall--
                          (i) specify the procedures and 
                        criteria by which the significance of 
                        such contributions will be determined, 
                        after an opportunity for review and 
                        verification by experts in the radio 
                        sciences drawn from among persons who 
                        are not employees of the Commission or 
                        by any applicant for such preferential 
                        treatment;
                          (ii) include such other procedures as 
                        may be necessary to prevent unjust 
                        enrichment by ensuring that the value 
                        of any such contribution justifies any 
                        reduction in the amounts paid for 
                        comparable licenses under this 
                        subsection;
                          (iii) be prescribed not later than 6 
                        months after the date of enactment of 
                        this paragraph;
                          (iv) not apply to applications that 
                        have been accepted for filing on or 
                        before September 1, 1994; and
                          (v) cease to be effective on the date 
                        of the expiration of the Commission's 
                        authority under subparagraph (F).
                  (E) Implementation with respect to pending 
                applications.--In applying this paragraph to 
                any broadband licenses in the personal 
                communications service awardedpursuant to the 
                preferential treatment accorded by the Federal 
                Communications Commission in the Third Report and 
                Order in General Docket 90-314 (FCC 93-550, 
                released February 3, 1994)--
                          (i) the Commission shall not 
                        reconsider the award of preferences in 
                        such Third Report and Order, and the 
                        Commission shall not delay the grant of 
                        licenses based on such awards more than 
                        15 days following the date of enactment 
                        of this paragraph, and the award of 
                        such preferences and licenses shall not 
                        be subject to administrative or 
                        judicial review;
                          (ii) the Commission shall not alter 
                        the bandwidth or service areas 
                        designated for such licenses in such 
                        Third Report and Order;
                          (iii) except as provided in clause 
                        (v), the Commission shall use, as the 
                        most reasonably comparable licenses for 
                        purposes of subparagraph (B)(i), the 
                        broadband licenses in the personal 
                        communications service for blocks A and 
                        B for the 20 largest markets (ranked by 
                        population) in which no applicant has 
                        obtained preferential treatment;
                          (iv) for purposes of subparagraph 
                        (C), the Commission shall permit 
                        guaranteed installment payments over a 
                        period of 5 years, subject to--
                                  (I) the payment only of 
                                interest on unpaid balances 
                                during the first 2 years, 
                                commencing not later than 30 
                                days after the award of the 
                                license (including any 
                                preferential treatment used in 
                                making such award) is final and 
                                no longer subject to 
                                administrative or judicial 
                                review, except that no such 
                                payment shall be required prior 
                                to the date of completion of 
                                the auction of the comparable 
                                licenses described in clause 
                                (iii); and
                                  (II) payment of the unpaid 
                                balance and interest thereon 
                                after the end of such 2 years 
                                in accordance with the 
                                regulations prescribed by the 
                                Commission; and
                          (v) the Commission shall recover with 
                        respect to broadband licenses in the 
                        personal communications service an 
                        amount under this paragraph that is 
                        equal to not less than $ 400,000,000, 
                        and if such amount is less than $ 
                        400,000,000, the Commission shall 
                        recover an amount equal to $ 
                        400,000,000 by allocating such amount 
                        among the holders of such licenses 
                        based on the population of the license 
                        areas held by each licensee. The 
                        Commission shall not include in any 
                        amounts required to be collected under 
                        clause (v) the interest on unpaid 
                        balances required to be collected under 
                        clause (iv).
                  (F) Expiration.--The authority of the 
                Commission to provide preferential treatment in 
                licensing procedures (by precluding the filing 
                of mutually exclusive applications) to persons 
                who make significant contributions to the 
                development of a new service or to the 
                development of new technologies that 
                substantially enhance an existing service shall 
                expire on the date of enactment of the Balanced 
                Budget Act of 1997.
                  (G) Effective date.--This paragraph shall be 
                effective on the date of its enactment and 
                apply to any licenses issued on or after August 
                1, 1994, by the Federal Communications 
                Commission pursuant to any licensing procedure 
                that provides preferential treatment (by 
                precluding the filing of mutually exclusive 
                applications) to persons who make significant 
                contributions to the development of a new 
                service or to the development of new 
                technologies that substantially enhance an 
                existing service.
          (14) Auction of recaptured broadcast television 
        spectrum.--
                  (A) Limitations on terms of terrestrial 
                television broadcast licenses.--A television 
                broadcast license that authorizes analog 
                television service may not be renewed to 
                authorize such service for a period that 
                extends beyond December 31, 2006.
                  (B) Extension.--The Commission shall extend 
                the date described in subparagraph (A) for any 
                station that requests such extension in any 
                television market if the Commission finds 
                that--
                          (i) one or more of the stations in 
                        such market that are licensed to or 
                        affiliated with one of the four largest 
                        national television networks are not 
                        broadcasting a digital television 
                        service signal, and the Commission 
                        finds that each such station has 
                        exercised due diligence and satisfies 
                        the conditions for an extension of the 
                        Commission's applicable construction 
                        deadlines for digital television 
                        service in that market;
                          (ii) digital-to-analog converter 
                        technology is not generally available 
                        in such market; or
                          (iii) in any market in which an 
                        extension is not available under clause 
                        (i) or (ii), 15 percent or more of the 
                        television households in such market--
                                  (I) do not subscribe to a 
                                multichannel video programming 
                                distributor (as defined in 
                                section 602) that carries one 
                                of the digital television 
                                service programming channels of 
                                each of the television stations 
                                broadcasting such a channel in 
                                such market; and
                                  (II) do not have either--
                                        (a) at least one 
                                        television receiver 
                                        capable of receiving 
                                        the digital television 
                                        service signals of the 
                                        television stations 
                                        licensed in such 
                                        market; or
                                          (b) at least one 
                                        television receiver of 
                                        analog television 
                                        service signals 
                                        equipped with digital-
                                        to-analog converter 
                                        technology capable of 
                                        receiving the digital 
                                        television service 
                                        signals of the 
                                        television stations 
                                        licensed in such 
                                        market.
                  (C) Spectrum reversion and resale.--
                          (i) The Commission shall--
                                  (I) ensure that, as licenses 
                                for analog television service 
                                expire pursuant to subparagraph 
                                (A) or (B), each licensee shall 
                                cease using electromagnetic 
                                spectrum assigned to such 
                                service according to the 
                                Commission's direction; and
                                  (II) reclaim and organize the 
                                electromagnetic spectrum in a 
                                manner consistent with the 
                                objectives described in 
                                paragraph (3) of this 
                                subsection.
                          (ii) Licensees for new services 
                        occupying spectrum reclaimed pursuant 
                        to clause (i) shall be assigned in 
                        accordance with this subsection.
                  (D) Certain limitations on qualified bidders 
                prohibited.--In prescribing any regulations 
                relating to the qualification of bidders for 
                spectrum reclaimed pursuant to subparagraph 
                (C)(i), the Commission, for any license that 
                may be used for any digital television service 
                where the grade A contour of the station is 
                projected to encompass the entirety of a city 
                with a population in excess of 400,000 (as 
                determined using the 1990 decennial census), 
                shall not--
                          (i) preclude any party from being a 
                        qualified bidder for such spectrum on 
                        the basis of--
                                  (I) the Commission's duopoly 
                                rule (47 C.F.R. 73.3555(b)); or
                                  (II) the Commission's 
                                newspaper cross-ownership rule 
                                (47 C.F.R. 73.3555(d)); or
                          (ii) apply either such rule to 
                        preclude such a party that is a winning 
                        bidder in a competitive bidding for 
                        such spectrum from using such spectrum 
                        for digital television service.
          (15) Commission to determine timing of auctions.--
                  (A) Commission authority.--Subject to the 
                provisions of this subsection (including 
                paragraph (11)), but notwithstanding any other 
                provision of law, the Commission shall 
                determine the timing of and deadlines for the 
                conduct of competitive bidding under this 
                subsection, including the timing of and 
                deadlines for qualifying for bidding; 
                conducting auctions; collecting, depositing, 
                and reporting revenues; and completing 
                licensing processes and assigning licenses.
                  (B) Termination of portions of auctions 31 
                and 44.--Except as provided in subparagraph 
                (C), the 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).
                  (C) Exception.--
                          (i) Blocks excepted.--Subparagraph 
                        (B) shall not apply to the auction of--
                                  (I) the C-block of licenses 
                                on the bands of frequencies 
                                located at 710-716 mhz, and 
                                740-746 mhz; or
                                  (II) the D-block of licenses 
                                on the bands of frequencies 
                                located at 716-722 mhz.
                          (ii) Eligible bidders.--The entities 
                        that shall be eligible to bid in the 
                        auction of the C-block and D-block 
                        licenses described in clause (i) shall 
                        be those entities that were qualified 
                        entities, and that submitted 
                        applications to participate in auction 
                        44, by May 8, 2002, as part of the 
                        original auction 44 short form filing 
                        deadline.
                          (iii) Auction deadlines for excepted 
                        blocks.--Notwithstanding subparagraph 
                        (B), the auction of the C-block and D-
                        block licenses described in clause (i) 
                        shall be commenced no earlier than 
                        August 19, 2002, and no later than 
                        September 19, 2002, and the proceeds of 
                        such auction shall be deposited in 
                        accordance with paragraph (8) not later 
                        than December 31, 2002.
                          (iv) Report.--Within one year after 
                        the date of enactment of this 
                        paragraph, the Commission shall submit 
                        a report to Congress--
                                  (I) specifying when the 
                                Commission intends to 
                                reschedule auctions 31 and 44 
                                (other than the blocks excepted 
                                by clause (i)); and
                                  (II) 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.
                  (D) Return of payments.--Within one month 
                after the date of enactment of this paragraph, 
                the Commission shall return to the bidders for 
                licenses in the A-block, B-block, and E-block 
                of auction 44 the full amount of all upfront 
                payments made by such bidders for such 
                licenses.
          (15) Special auction provisions for eligible 
        frequencies.--
                  (A) Special regulations.--The Commission 
                shall revise the regulations prescribed under 
                paragraph (4)(F) of this subsection to 
                prescribe methods by which the total cash 
                proceeds from any auction of eligible 
                frequencies described in section 113(g)(2) of 
                the National Telecommunications and Information 
                Administration Organization Act (47 U.S.C. 
                923(g)(2)) shall at least equal 110 percent of 
                the total estimated relocation costs provided 
                to the Commission pursuant to section 113(g)(4) 
                of such Act.
                  (B) Conclusion of auctions contingent on 
                minimum proceeds.--The Commission shall not 
                conclude any auction of eligible frequencies 
                described in section 113(g)(2) of such Act if 
                the total cash proceeds attributable to such 
                spectrum are less than 110 percent of the total 
                estimated relocation costs provided to the 
                Commission pursuant to section 113(g)(4) of 
                such Act. If the Commission is unable to 
                conclude an auction for the foregoing reason, 
                the Commission shall cancel the auction, return 
                within 45 days after the auction cancellation 
                date any deposits from participating bidders 
                held in escrow, and absolve such bidders from 
                any obligation to the United States to bid in 
                any subsequent reauction of such spectrum.
                  (C) Authority to issue prior to 
                deauthorization.--In any auction conducted 
                under the regulations required by subparagraph 
                (A), the Commission may grant a license as-
                signed for the use of eligible frequencies prior 
                to the termination of an eligible Federal entity's 
                authorization. However, the Commission shall 
                condition such license by requiring that the 
                licensee cannot cause harmful interference to such 
                Federal entity until such entity's authorization 
                has been terminated by the National Telecommunications 
                and Information Administration.
  (k) Broadcast Station Renewal Procedures.--
          (1) Standards for renewal.--If the licensee of a 
        broadcast station submits an application to the 
        Commission for renewal of such license, the Commission 
        shall grant the application if it finds, with respect 
        to that station, during the preceding term of its 
        license--
                  (A) the station has served the public 
                interest, convenience, and necessity;
                  (B) there have been no serious violations by 
                the licensee of this Act or the rules and 
                regulations of the Commission; and
                  (C) there have been no other violations by 
                the licensee of this Act or the rules and 
                regulations of the Commission which, taken 
                together, would constitute a pattern of abuse.
          (2) Consequence of failure to meet standard.--If any 
        licensee of a broadcast station fails to meet the 
        requirements of this subsection, the Commission may 
        deny the application for renewal in accordance with 
        paragraph (3), or grant such application on terms and 
        conditions as are appropriate, including renewal for a 
        term less than the maximum otherwise permitted.
          (3) Standards for denial.--If the Commission 
        determines, after notice and opportunity for a hearing 
        as provided in subsection (e), that a licensee has 
        failed to meet the requirements specified in paragraph 
        (1) and that no mitigating factors justify the 
        imposition of lesser sanctions, the Commission shall--
                  (A) issue an order denying the renewal 
                application filed by such licensee under 
                section 308; and
                  (B) only thereafter accept and consider such 
                applications for a construction permit as may 
                be filed under section 308 specifying the 
                channel or broadcasting facilities of the 
                former licensee.
          (4) Competitor consideration prohibited.--In making 
        the determinations specified in paragraph (1) or (2), 
        the Commission shall not consider whether the public 
        interest, convenience, and necessity might be served by 
        the grant of a license to a person other than the 
        renewal applicant.
  (l) Applicability of Competitive Bidding to Pending 
Comparative Licensing Cases.--With respect to competing 
applications for initial licenses or construction permits for 
commercial radio or television stations that were filed with 
the Commission before July 1, 1997, the Commission shall--
          (1) have the authority to conduct a competitive 
        bidding proceeding pursuant to subsection (j) to assign 
        such license or permit;
          (2) treat the persons filing such applications as the 
        only persons eligible to be qualified bidders for 
        purposes of such proceeding; and
          (3) waive any provisions of its regulations necessary 
        to permit such persons to enter an agreement to procure 
        the removal of a conflict between their applications 
        during the 180-day period beginning on the date of 
        enactment of the Balanced Budget Act of 1997.

           *       *       *       *       *       *       *


SEC. 714. TELECOMMUNICATIONS DEVELOPMENT FUND.

                            [47 U.S.C. 614]

  (a) Purpose of Section.--It is the purpose of this section--
          (1) to promote access to capital for small businesses 
        in order to enhance competition in the 
        telecommunications industry;
          (2) to stimulate new technology development, and 
        promote employment and training; and
          (3) to support universal service and promote delivery 
        of telecommunications services to underserved rural and 
        urban areas.
  (b) Establishment of Fund.--There is hereby established a 
body corporate to be known as the Telecommunications 
Development Fund, which shall have succession until dissolved. 
The Fund shall maintain its principal office in the District of 
Columbia and shall be deemed, for purposes of venue and 
jurisdiction in civil actions, to be a resident and citizen 
thereof.
  (c) Board of Directors.--
          (1) Composition of board; chairman.--The Fund shall 
        have a Board of Directors which shall consist of 7 
        persons appointed by the Chairman of the Commission. 
        Four of such directors shall be representative of the 
        private sector and three of such directors shall be 
        representative of the Commission, the Small Business 
        Administration, and the Department of the Treasury, 
        respectively. The Chairman of the Commission shall 
        appoint one of the representatives of the private 
        sector to serve as chairman of the Fund within 30 days 
        after the date of enactment of this section, in order 
        to facilitate rapid creation and implementation of the 
        Fund. The directors shall include members with 
        experience in a number of the following areas: finance, 
        investment banking, government banking, communications 
        law and administrative practice, and public policy.
          (2) Terms of appointed and elected members.--The 
        directors shall be eligible to serve for terms of 5 
        years, except of the initial members, as designated at 
        the time of their appointment--
                  (A) 1 shall be eligible to service for a term 
                of 1 year;
                  (B) 1 shall be eligible to service for a term 
                of 2 years;
                  (C) 1 shall be eligible to service for a term 
                of 3 years;
                  (D) 2 shall be eligible to service for a term 
                of 4 years; and
                  (E) 2 shall be eligible to service for a term 
                of 5 years (1 of whom shall be the Chairman). 
                Directors may continue to serve until their 
                successors have been appointed and have 
                qualified.
          (3) Meetings and functions of the Board.--The Board 
        of Directors shall meet at the call of its Chairman, 
        but at least quarterly. The Board shall determine the 
        general policies which shall govern the operations of 
        the Fund. The Chairman of the Board shall, with the 
        approval of the Board, select, appoint, and compensate 
        qualified persons to fill the offices as may be 
        provided for in the bylaws, with such functions, 
        powers, and duties as may be prescribed by the bylaws 
        or by the Board of Directors, and such persons shall be 
        the officers of the Fund and shall discharge all such 
        functions, powers, and duties.
  (d) Accounts of Fund.--The Fund shall maintain its accounts 
at a financial institution designated for purposes of this 
section by the Chairman of the Board (after consultation with 
the Commission and the Secretary of the Treasury). The accounts 
of the Fund shall consist of--
          (1) interest transferred pursuant to section 
        309(j)(8)(C) of this Act;
          (2) such sums as may be appropriated to the 
        Commission for advances to the Fund;
          (3) any contributions or donations to the Fund that 
        are accepted by the Fund; and
          (4) any repayment of, or other payment made with 
        respect to, loans, equity, or other extensions of 
        credit made from the Fund.
  (e) Use of Fund.--All moneys deposited into the accounts of 
the Fund shall be used solely for--
          (1) the making of loans, investments, or other 
        extensions of credits to eligible small businesses in 
        accordance with subsection (f);
          (2) the provision of financial advice to eligible 
        small businesses;
          (3) expenses for the administration and management of 
        the Fund (including salaries, expenses, and the rental 
        or purchase of office space for the fund);
          (4) preparation of research, studies, or financial 
        analyses; and
          (5) other services consistent with the purposes of 
        this section.
  [(f) Lending and Credit Operations.--Loans or other 
extensions of credit from the Fund shall be made available in 
accordance with the requirements of the Federal Credit Reform 
Act of 1990 (2 U.S.C. 661 et seq.) and any other applicable law 
to an eligible small business on the basis of--
          [(1) the analysis of the business plan of the 
        eligible small business;
          [(2) the reasonable availability of collateral to 
        secure the loan or credit extension;
          [(3) the extent to which the loan or credit extension 
        promotes the purposes of this section; and
          [(4) other lending policies as defined by the Board.]
  (f) Lending and Credit Operations.--Loans or other extensions 
of credit from the Fund shall be made available to an eligible 
small business on the basis of--
          (1) the analysis of the business plan of the eligible 
        small business;
          (2) the reasonable availability of collateral to 
        secure the loan or credit extension;
          (3) the extent to which the loan or credit extension 
        promotes the purposes of this section; and
          (4) other lending policies as defined by the Board.
  (g) Return of Advances.--Any advances appropriated pursuant 
to subsection (d)(2) shall be disbursed upon such terms and 
conditions (including conditions relating to the time or times 
of repayment) as are specified in any appropriations Act 
providing such advances.
  (h) General Corporate Powers.--The Fund shall have power--
          (1) to sue and be sued, complain and defend, in its 
        corporate name and through its own counsel;
          (2) to adopt, alter, and use the corporate seal, 
        which shall be judicially noticed;
          (3) to adopt, amend, and repeal by its Board of 
        Directors, bylaws, rules, and regulations as may be 
        necessary for the conduct of its business;
          (4) to conduct its business, carry on its operations, 
        and have officers and exercise the power granted by 
        this section in any State without regard to any 
        qualification or similar statute in any State;
          (5) to lease, purchase, or otherwise acquire, own, 
        hold, improve, use, or otherwise deal in and with any 
        property, real, personal, or mixed, or any interest 
        therein, wherever situated, for the purposes of the 
        Fund;
          (6) to accept gifts or donations of services, or of 
        property, real, personal, or mixed, tangible or 
        intangible, in aid of any of the purposes of the Fund;
          (7) to sell, convey, mortgage, pledge, lease, 
        exchange, and otherwise dispose of its property and 
        assets;
          (8) to appoint such officers, attorneys, employees, 
        and agents as may be required, to determine their 
        qualifications, to define their duties, to fix their 
        salaries, require bonds for them, and fix the penalty 
        thereof; and
          (9) to enter into contracts, to execute instruments, 
        to incur liabilities, to make loans and equity 
        investment, and to do all things as are necessary or 
        incidental to the proper management of its affairs and 
        the proper conduct of its business.
  (i) Accounting, Auditing, and Reporting.--The accounts of the 
Fund shall be audited annually. Such audits shall be conducted 
in accordance with generally accepted auditing standards by 
independent certified public accountants. A report of each such 
audit shall be furnished to the Secretary of the Treasury and 
the Commission. The representatives of the Secretary and the 
Commission shall have access to all books, accounts, financial 
records, reports, files, and all other papers, things, or 
property belonging to or in use by the Fund and necessary to 
facilitate the audit.
  (j) Report on Audits by Treasury.--A report of each such 
audit for a fiscal year shall be made by the Secretary of the 
Treasury to the President and to the Congress not later than 6 
months following the close of such fiscal year. The report 
shall set forth the scope of the audit and shall include a 
statement of assets and liabilities, capital and surplus or 
deficit; a statement of surplus or deficit analysis; a 
statement of income and expense; a statement ofsources and 
application of funds; and such comments and information as may be 
deemed necessary to keep the President and the Congress informed of the 
operations and financial condition of the Fund, together with such 
recommendations with respect thereto as the Secretary may deem 
advisable.
  (k) Definitions.--As used in this section:
          (1) Eligible small business.--The term ``eligible 
        small business'' means business enterprises engaged in 
        the telecommunications industry that have $50,000,000 
        or less in annual revenues, on average over the past 3 
        years prior to submitting the application under this 
        section.
          (2) Fund.--The term ``Fund'' means the 
        Telecommunications Development Fund established 
        pursuant to this section.
          (3) Telecommunications industry.--The term 
        ``telecommunications industry'' means communications 
        businesses using regulated or unregulated facilities or 
        services and includes broadcasting, telecommunications, 
        cable, computer, data transmission, software, 
        programming, advanced messaging, and electronics 
        businesses.

                               ORBIT ACT


SEC. 647. SATELLITE AUCTIONS.

                            [47 U.S.C. 765F]

  Notwithstanding any other provision of law, the Commission 
shall not have the authority to assign by competitive bidding 
orbital locations or spectrum used for the provision of 
international or [global satellite communications services.] 
global satellite communications services or for the provision 
of fixed terrestrial services in the 12.2-12.7 GHz band. The 
President shall oppose in the International Telecommunication 
Union and in other bilateral and multilateral fora any 
assignment by competitive bidding of orbital locations or 
spectrum used for the provision of such services. No license 
for fixed terrestrial services in the 12.2-12.7 GHz band may be 
used for the provision of mobile terrestrial telephony 
services.

NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION ORGANIZATION 
                                  ACT


SEC. 113. IDENTIFICATION OF REALLOCABLE FREQUENCIES.

                            [47 U.S.C. 923]

  (a) Identification Required.--The Secretary shall, within 18 
months after the date of the enactment of the Omnibus Budget 
Reconciliation Act of 1993 and within 6 months after the date 
of enactment of the Balanced Budget Act of 1997, prepare and 
submit to the President and the Congress a report identifying 
and recommending for reallocation bands of frequencies--
          (1) that are allocated on a primary basis for Federal 
        Government use;
          (2) that are not required for the present or 
        identifiable future needs of the Federal Government;
          (3) that can feasibly be made available, as of the 
        date of submission of the report or at any time during 
        the next 15 years, for use under the 1934 Act (other 
        than for Federal Government stations under section 305 
        of the 1934 Act);
          (4) the transfer of which (from Federal Government 
        use) will not result in costs to the Federal 
        Government, or losses of services or benefits to the 
        public, that are excessive in relation to the benefits 
        to the public that may be provided by non-Federal 
        licensees; and
          (5) that are most likely to have the greatest 
        potential for productive uses and public benefits under 
        the 1934 Act if allocated for non-Federal use.
  (b) Minimum Amount of Spectrum Recommended.--
          (1) Initial reallocation report.--In accordance with 
        the provisions of this section, the Secretary shall 
        recommend for reallocation in the initial report 
        required by subsection (a), for use other than by 
        Federal Government stations under section 305 of the 
        1934 Act (47 U.S.C. 305), bands of frequencies that in 
        the aggregate span not less than 200 mhz, that are 
        located below 5 gigahertz, and that meet the criteria 
        specified in paragraphs (1) through (5) of subsection 
        (a). Such bands of frequencies shall include bands of 
        frequencies, located below 3 gigahertz, that span in 
        the aggregate not less than 100 mhz.
          (2) Mixed uses permitted to be counted.--Bands of 
        frequencies which a report of the Secretary under 
        subsection (a) or (d)(1) recommends be partially 
        retained for use by Federal Government stations, but 
        which are also recommended to be reallocated to be made 
        available under the 1934 Act for use by non-Federal 
        stations, may be counted toward the minimum spectrum 
        required by paragraph (1) or (3) of this subsection, 
        except that--
                  (A) the bands of frequencies counted under 
                this paragraph may not count toward more than 
                one-half of the minimums required by paragraph 
                (1) or (3) of this subsection;
                  (B) a band of frequencies may not be counted 
                under this paragraph unless the assignments of 
                the band to Federal Government stations under 
                section 305 of the 1934 Act (47 U.S.C. 305) are 
                limited by geographic area, by time, or by 
                other means so as to guarantee that the 
                potential use to be made by such Federal 
                Government stations is substantially less (as 
                measured by geographic area, time, or 
                otherwise) than the potential use to be made by 
                non-Federal stations; and
                  (C) the operational sharing permitted under 
                this paragraph shall be subject to the 
                interference regulations prescribed by the 
                Commission pursuant to section 305(a) of the 
                1934 Act and to coordination procedures that 
                the Commission and the Secretary shall jointly 
                establish and implement to ensure against 
                harmful interference.
          (3) Second reallocation report.--In accordance with 
        the provisions of this section, the Secretary shall 
        recommend for reallocation in the second report 
        required by subsection (a), for use other than by 
        Federal Government stations under section 305 of the 
        1934 Act (47 U.S.C. 305), a band or bands of 
        frequencies that--
                  (A) in the aggregate span not less than 12 
                mhz;
                  (B) are located below 3 gigahertz; and
                  (C) meet the criteria specified in paragraphs 
                (1) through (5) of subsection (a).
  (c) Criteria for Identification.--
          (1) Needs of the federal government.--In determining 
        whether a band of frequencies meets the criteria 
        specified in subsection (a)(2), the Secretary shall--
                  (A) consider whether the band of frequencies 
                is used to provide a communications service 
                that is or could be available from a commercial 
                provider or other vendor;
                  (B) seek to promote--
                          (i) the maximum practicable reliance 
                        on commercially available substitutes;
                          (ii) the sharing of frequencies (as 
                        permitted under subsection (b)(2));
                          (iii) the development and use of new 
                        communications technologies; and
                          (iv) the use of nonradiating 
                        communications systems where 
                        practicable; and
                  (C) seek to avoid--
                          (i) serious degradation of Federal 
                        Government services and operations;
                          (ii) excessive costs to the Federal 
                        Government and users of Federal 
                        Government services; and
                          (iii) excessive disruption of 
                        existing use of Federal Government 
                        frequencies by amateur radio licensees.
          (2) Feasibility of use.--In determining whether a 
        frequency band meets the criteria specified in 
        subsection (a)(3), the Secretary shall--
                  (A) assume that the frequency will be 
                assigned by the Commission under section 303 of 
                the 1934 Act (47 U.S.C. 303) within 15 years;
                  (B) assume reasonable rates of scientific 
                progress and growth of demand for 
                telecommunications services;
                  (C) seek to include frequencies which can be 
                used to stimulate the development of new 
                technologies; and
                  (D) consider the immediate and recurring 
                costs to reestablish services displaced by the 
                reallocation of spectrum.
          (3) Analysis of benefits.--In determining whether a 
        band of frequencies meets the criteria specified in 
        subsection (a)(5), the Secretary shall consider--
                  (A) the extent to which equipment is or will 
                be available that is capable of utilizing the 
                band;
                  (B) the proximity of frequencies that are 
                already assigned for commercial or other non-
                Federal use;
                  (C) the extent to which, in general, 
                commercial users could share the frequency with 
                amateur radio licensees; and
                  (D) the activities of foreign governments in 
                making frequencies available for 
                experimentation or commercial assignments in 
                order to support their domestic manufacturers 
                of equipment.
          (4) Power agency frequencies.--
                  (A) Applicability of criteria.--The criteria 
                specified by subsection (a) shall be deemed not 
                to be met for any purpose under this part with 
                regard to any frequency assignment to, or any 
                frequency assignment used by, a Federal power 
                agency for the purpose of withdrawing that 
                assignment.
                  (B) Mixed use eligibility.--The frequencies 
                assigned to any Federal power agency may only 
                be eligible for mixed use under subsection 
                (b)(2) in geographically separate areas, but in 
                those cases where a frequency is to be shared 
                by an affected Federal power agency and a non-
                Federal user, such use by the non-Federal user 
                shall not cause harmful interference to the 
                affected Federal power agency or adversely 
                affect the reliability of its power system.
                  (C) Definition.--As used in this paragraph, 
                the term ``Federal power agency'' means the 
                Tennessee Valley Authority, the Bonneville 
                Power Administration, the Western Area Power 
                Administration, the Southwestern Power 
                Administration, the Southeastern Power 
                Administration, or the Alaska Power 
                Administration.
          (5) Limitation on reallocation.--None of the 
        frequencies recommended for reallocation in the reports 
        required by this subsection shall have been 
        recommended, prior to the date of enactment of the 
        Omnibus Budget Reconciliation Act of 1993, for 
        reallocation to non-Federal use by international 
        agreement.
  (d) Procedure for Identification of Reallocable Bands of 
Frequencies.--
          (1) Submission of preliminary identification to 
        Congress.--Within 6 months after the date of the 
        enactment of the Omnibus Budget Reconciliation Act of 
        1993, the Secretary shall prepare, make publicly 
        available, and submit to the President, the Congress, 
        and the Commission a report which makes a preliminary 
        identification of reallocable bands of frequencies 
        which meet the criteria established by this section.
          (2) Public comment.--The Secretary shall provide 
        interested persons with the opportunity to submit, 
        within 90 days after the date of its publication, 
        written comment on the preliminary report required by 
        paragraph (1). The Secretary shall immediately transmit 
        a copy of any such comment to the Commission.
          (3) Comment and recommendations from commission.--The 
        Commission shall, within 90 days after the conclusion 
        of the period for comment provided pursuant to 
        paragraph (2), submit to the Secretary the Commission's 
        analysis of such comments and the Commission's 
        recommendations for responses to such comments, 
        together with such other comments and recommendations 
        as the Commission deems appropriate.
          (4) Direct discussions.--The Secretary shall 
        encourage and provide opportunity for direct 
        discussions among commercial representatives and 
        Federal Government users of the spectrum to aid the 
        Secretary in determining which frequencies to recommend 
        for reallocation. The Secretary shall provide notice to 
        the public and the Commission of any such discussions, 
        including the name or names of any businesses or other 
        persons rep-resented in such discussions. A 
        representative of the Commission (and of the Secretary at 
        the election of the Secretary) shall be permitted to attend 
        any such discussions. The Secretary shall provide the public 
        and the Commission with an opportunity to comment on the 
        results of any such discussions prior to the submission of 
        the initial report required by subsection (a).
  (e) Timetable for Reallocation and Limitation.--
          (1) Timetable required.--The Secretary shall, as part 
        of the reports required by subsections (a) and (d)(1), 
        include a timetable that recommends effective dates by 
        which the President shall withdraw or limit assignments 
        of the frequencies specified in such reports.
          (2) Expedited reallocation.--
                  (A) Required reallocation.--The Secretary 
                shall, as part of the report required by 
                subsection (d)(1), specifically identify and 
                recommend for immediate reallocation bands of 
                frequencies that in the aggregate span not less 
                than 50 mhz, that meet the criteria described 
                in subsection (a), and that can be made 
                available for reallocation immediately upon 
                issuance of the report required by subsection 
                (d)(1). Such bands of frequencies shall include 
                bands of frequencies, located below 3 
                gigahertz, that in the aggregate span not less 
                than 25 mhz .
                  (B) Permitted reallocation.--The Secretary 
                may, as part of such report, identify and 
                recommend bands of frequencies for immediate 
                reallocation for a mixed use pursuant to 
                subsection (b)(2), but such bands of 
                frequencies may not count toward the minimums 
                required by subparagraph (A).
          (3) Delayed effective dates.--In setting the 
        recommended delayed effective dates, the Secretary 
        shall--
                  (A) consider the need to reallocate bands of 
                frequencies as early as possible, taking into 
                account the requirements of paragraphs (1) and 
                (2) of section 115(b);
                  (B) be based on the useful remaining life of 
                equipment that has been purchased or contracted 
                for to operate on identified frequencies;
                  (C) consider the need to coordinate frequency 
                use with other nations; and
                  (D) take into account the relationship 
                between the costs to the Federal Government of 
                changing to different frequencies and the 
                benefits that may be obtained from commercial 
                and other non-Federal uses of the reassigned 
                frequencies.
  (f) Additional Reallocation Report.--If the Secretary 
receives a notice from the Commission pursuant to section 
3002(c)(5) of the Balanced Budget Act of 1997, the Secretary 
shall prepare and submit to the President, the Commission, and 
the Congress a report recommending for reallocation for use 
other than by Federal Government stations under section 305 of 
the 1934 Act (47 U.S.C. 305), bands of frequencies that are 
suitable for the licensees identified in the Commission's 
notice. The Commission shall, not later than one year after 
receipt of such report, prepare, submit to the President and 
the Congress, and implement, a plan for the immediate 
allocation and assignment of such frequencies under the 1934 
Act to incumbent licensees described in the Commission's 
notice.
  (g) Relocation of Federal Government Stations.--
          [(1) In general.--
                  [(A) Authority of federal entities to accept 
                compensation.--In order to expedite the 
                commercial 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 from any person payment of the expenses 
                of relocating the Federal entity's operations 
                from one or more frequencies to another 
                frequency or frequencies, including the costs 
                of any modification, replacement, or reissuance 
                of equipment, facilities, operating manuals, or 
                regulations incurred by that entity. Any such 
                Federal entity which proposes to so relocate 
                shall notify the NTIA, which in turn shall 
                notify the Commission, before the auction 
                concerned of the marginal costs anticipated to 
                be associated with such relocation or with 
                modifications necessary to accommodate 
                prospective licensees. The Commission in turn 
                shall notify potential bidders of the estimated 
                relocation or modification costs based on the 
                geographic area covered by the proposed 
                licenses before the auction.
                  [(B) Requirement to compensate federal 
                entities.--Any person on whose behalf a Federal 
                entity incurs costs under subparagraph (A) 
                shall compensate the Federal entity in advance 
                for such costs. Such compensation may take the 
                form of a cash payment or in-kind compensation.
                  [(C) Disposition of payments.--
                          [(i) Payment by electronic funds 
                        transfer.--A person making a cash 
                        payment under this paragraph shall make 
                        the cash payment by depositing the 
                        amount of the payment by electronic 
                        funds transfer in the account of the 
                        Federal entity concerned in the 
                        Treasury of the United States or in 
                        another account as authorized by law.
                          [(ii) Availability.--Subject to the 
                        provisions of authorization Acts and 
                        appropriations Acts, amounts deposited 
                        under this subparagraph shall be 
                        available to the Federal entity 
                        concerned to pay directly the costs of 
                        relocation under this paragraph, to 
                        repay or make advances to 
                        appropriations or funds which do or 
                        will initially bear all or part of such 
                        costs, or to refund excess sums when 
                        necessary.
                  [(D) Application to certain other 
                relocations.--The provisions of this paragraph 
                also apply to any Federal entity that operates 
                a Federal Government station assigned to used 
                electromagnetic spectrum identified for 
                reallocation under subsection (a) if before 
                August 5, 1997, the Commission has not 
                identified that spectrum for service or 
                assigned licenses or otherwise authorized 
                service for that spectrum.
                  [(E) Implementation procedures.--The NTIA and 
                the Commission shall develop procedures for the 
                implementation of this paragraph, which 
                procedures shall include a process for 
                resolving any differences that arise between 
                the Federal Government and commercial licensees 
                regarding estimates of relocation or 
                modification costs under this paragraph.
                  [(F) Inapplicability to certain 
                relocations.--With the exception of the band of 
                frequencies located at 1710-1755 mhz, the 
                provisions of this paragraph shall not apply to 
                Federal spectrum identified for reallocation in 
                the first reallocation report submitted to the 
                President and Congress under subsection (a).
          [(2) Process for relocation.--Any person seeking to 
        relocate a Federal Government station that has been 
        assigned a frequency within a band that has been 
        allocated for mixed Federal and non-Federal use, or 
        that has been scheduled for reallocation to non-Federal 
        use, may submit a petition for such relocation to NTIA. 
        The NTIA shall limit or terminate the Federal 
        Government station's operating license within 6 months 
        after receiving the petition if the following 
        requirements are met:
                  [(A) the person seeking relocation of the 
                Federal Government station has guaranteed to 
                pay all relocation costs incurred by the 
                Federal entity, including all engineering, 
                equipment, site acquisition and construction, 
                and regulatory fee costs;
                  [(B) all activities necessary for 
                implementing the relocation have been 
                completed, including construction of 
                replacement facilities (if necessary and 
                appropriate) and identifying and obtaining new 
                frequencies for use by the relocated Federal 
                Government station (where such station is not 
                relocating 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 
                successfully accomplish its purposes; and
                  [(D) NTIA 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 
                        clause (i) of this subparagraph, NTIA 
                        shall consult with the Secretary of 
                        Defense, the Secretary of State, or 
                        other appropriate officers of the 
                        Federal Government.
          [(3) Right to reclaim.--If within one year after the 
        relocation the Federal entity 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 
        who filed the petition under paragraph (2) for such 
        relocation shall take reasonable steps to remedy any 
        defects or pay the Federal entity for the expenses 
        incurred in returning the Federal Government station to 
        the spectrum from which such station was relocated.]
          (1) Eligible federal entities.--Any Federal entity 
        that operates a Federal Government station assigned to 
        a band of frequencies specified in paragraph (2) and 
        that incurs relocation costs because of the 
        reallocation of frequencies from Federal use to non-
        Federal use shall receive payment for such costs from 
        the Spectrum Relocation Fund, in accordance with 
        section 118 of this Act. For purposes of this 
        paragraph, Federal power agencies exempted under 
        subsection (c)(4) that choose to relocate from the 
        frequencies identified for reallocation pursuant to 
        subsection (a), are eligible to receive payment under 
        this paragraph.
          (2) Eligible frequencies.--The bands of eligible 
        frequencies for purposes of this section are as 
        follows:
                  (A) the 216-220 mhz band, the 1432-1435 mhz 
                band, the 1710-1755 mhz band, and the 2385-2390 
                mhz band of frequencies; and
                  (B) any other band of frequencies reallocated 
                from Federal use to non-Federal use after 
                January 1, 2003, that is assigned by 
                competitive bidding pursuant to section 309(j) 
                of the Communications Act of 1934 (47 U.S.C. 
                309(j)), except for bands of frequencies 
                previously identified by the National 
                Telecommunications and Information 
                Administration in the Spectrum Reallocation 
                Final Report, NTIA Special Publication 95-32 
                (1995).
          (3) Definition of relocation costs.--For purposes of 
        this subsection, the term ``relocation costs'' means 
        the costs incurred by a Federal entity to achieve 
        comparable capability of systems, regardless of whether 
        that capability is achieved by relocating to a new 
        frequency assignment or by utilizing an alternative 
        technology. Such costs include--
                  (A) the costs of any modification or 
                replacement of equipment, software, facilities, 
                operating manuals, training costs, or 
                regulations that are attributable to 
                relocation;
                  (B) the costs of all engineering, equipment, 
                software, site acquisition and construction 
                costs, as well as any legitimate and prudent 
                transaction expense, including outside 
                consultants, and reasonable additional costs 
                incurred by the Federal entity that are 
                attributable to relocation, including increased 
                recurring costs associated with the replacement 
                facilities;
                  (C) the costs of engineering studies, 
                economic analyses, or other expenses reasonably 
                incurred in calculating the estimated 
                relocation costs that are provided to the 
                Commission pursuant to paragraph (4) of this 
                subsection;
                  (D) the one-time costs of any modification of 
                equipment reasonably necessary to accommodate 
                commercial use of such frequencies prior to the 
                termination of the Federal entity's primary 
                allocation or protected status, when the 
                eligible frequencies as defined in paragraph 
                (2) of this subsection are made available for 
                private sector uses by competitive bidding and 
                a Federal entity retains primary allocation or 
                protected status in those frequencies for a 
                periodof time after the completion of the 
                competitive bidding process; and
                  (E) the costs associated with the accelerated 
                replacement of systems and equipment if such 
                acceleration is necessary to ensure the timely 
                relocation of systems to a new frequency 
                assignment.
          (4) Notice to commission of estimated relocation 
        costs.--
                  (A) The Commission shall notify the NTIA at 
                least 18 months prior to the commencement of 
                any auction of eligible frequencies defined in 
                paragraph (2). At least 6 months prior to the 
                commencement of any such auction, the NTIA, on 
                behalf of the Federal entities and after review 
                by the Office of Management and Budget, shall 
                notify the Commission of estimated relocation 
                costs and timelines for such relocation.
                  (B) Upon timely request of a Federal entity, 
                the NTIA shall provide such entity with 
                information regarding an alternative frequency 
                assignment or assignments to which their 
                radiocommunications operations could be 
                relocated for purposes of calculating the 
                estimated relocation costs and timelines to be 
                submitted to the Commission pursuant to 
                subparagraph (A).
                  (C) To the extent practicable and consistent 
                with national security considerations, the NTIA 
                shall provide the information required by 
                subparagraphs (A) and (B) by the geographic 
                location of the Federal entities' facilities or 
                systems and the frequency bands used by such 
                facilities or systems.
          (5) Notice to congressional committees and gao.--The 
        NTIA shall, at the time of providing an initial 
        estimate of relocation costs to the Commission under 
        paragraph (4)(A), submit to the Committees on 
        Appropriations and Energy and Commerce of the House of 
        Representatives, the Committees on Appropriations and 
        Commerce, Science, and Transportation of the Senate, 
        and the Comptroller General a copy of such estimate and 
        the timelines for relocation.
          (6) Implementation of procedures.--The NTIA shall 
        take such actions as necessary to ensure the timely 
        relocation of Federal entities' spectrum-related 
        operations from frequencies defined in paragraph (2) to 
        frequencies or facilities of comparable capability. 
        Upon a finding by the NTIA that a Federal entity has 
        achieved comparable capability of systems by relocating 
        to a new frequency assignment or by utilizing an 
        alternative technology, the NTIA shall terminate the 
        entity's authorization and notify the Commission that 
        the entity's relocation has been completed. The NTIA 
        shall also terminate such entity's authorization if the 
        NTIA determines that the entity has unreasonably failed 
        to comply with the timeline for relocation submitted by 
        the Director of the Office of Management and Budget 
        under section 118(d)(2)(B).
  (h) Federal Action To Expedite Spectrum Transfer.--Any 
Federal Government station which operates on electromagnetic 
spectrum that has been identified in any reallocation report 
under this section shall, to the maximum extent practicable 
through the use of the authority granted under subsection (g) 
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.
  (i) Definition.--For purposes of this section, the term 
``Federal entity'' means any department, agency, or other 
instrumentality of the Federal Government that utilizes a 
Government station license obtained under section 305 of the 
1934 Act (47 U.S.C. 305).

           *       *       *       *       *       *       *


SEC. 118. SPECTRUM RELOCATION FUND.

  (a) Establishment of Spectrum Relocation Fund.--There is 
established on the books of the Treasury a separate fund to be 
known as the ``Spectrum Relocation Fund'' (in this section 
referred to as the ``Fund''), which shall be administered by 
the Office of Management and Budget (in this section referred 
to as ``OMB''), in consultation with the NTIA.
  (b) Crediting of Receipts.--The Fund shall be credited with 
the amounts specified in section 309(j)(8)(D) of the 
Communications Act of 1934 (47 U.S.C. 309(j)(8)(D)).
  (c) Used To Pay Relocation Costs.--The amounts in the Fund 
from auctions of eligible frequencies are authorized to be used 
to pay relocation costs, as defined in section 113(g)(3) of 
this Act, of an eligible Federal entity incurring such costs 
with respect to relocation from those frequencies.
  (d) Fund Availability.--
          (1) Appropriation.--There are hereby appropriated 
        from the Fund such sums as are required to pay the 
        relocation costs specified in subsection (c).
          (2) Transfer conditions.--None of the funds provided 
        under this subsection may be transferred to any 
        eligible Federal entity--
                  (A) unless the Director of OMB has 
                determined, in consultation with the NTIA, the 
                appropriateness of such costs and the timeline 
                for relocation; and
                  (B) until 30 days after the Director of the 
                OMB has submitted to the Committees on 
                Appropriations and Energy and Commerce of the 
                House of Representatives, the Committees on 
                Appropriations and Commerce, Science, and 
                Transportation of the Senate, and the 
                Comptroller General a detailed plan describing 
                how the sums transferred from the Fund will be 
                used to pay relocation costs in accordance with 
                such subsection and the timeline for such 
                relocation.
          (3) Reversion of unused funds.--Any auction proceeds 
        in the Fund that are remaining after the payment of the 
        relocation costs that are payable from the Fund shall 
        revert to and be deposited in the general fund of the 
        Treasury not later than 8 years after the date of the 
        deposit of such proceeds to the Fund.
  (e) Transfer to Eligible Federal Entities.--
          (1) Transfer.--
                  (A) Amounts made available pursuant to 
                subsection (d) shall be transferred to eligible 
                Federal entities, as defined in section 
                113(g)(1) of this Act.
                  (B) An eligible Federal entity may receive 
                more than one such transfer, but if the sum of 
                the subsequent transfer or transfers exceeds 10 
                percent of the original transfer--
                          (i) such subsequent transfers are 
                        subject to prior approval by the 
                        Director of OMB as required by 
                        subsection (d)(2)(A);
                          (ii) the notice to the committees 
                        containing the plan required by 
                        subsection (d)(2)(B) shall be not less 
                        than 45 days prior to the date of the 
                        transfer that causes such excess above 
                        10 percent;
                          (iii) such notice shall include, in 
                        addition to such plan, an explanation 
                        of need for such subsequent transfer or 
                        transfers; and
                          (iv) the Comptroller General shall, 
                        within 30 days after receiving such 
                        plan, review such plan and submit to 
                        such committees an assessment of the 
                        explanation for the subsequent transfer 
                        or transfers.
                  (C) Such transferred amounts shall be 
                credited to the appropriations account of the 
                eligible Federal entity which has incurred, or 
                will incur, such costs, and shall, subject to 
                paragraph (2), remain available until expended.
          (2) Retransfer to fund.--An eligible Federal entity 
        that has received such amounts shall report its 
        expenditures to OMB and shall transfer any amounts in 
        excess of actual relocation costs back to the Fund 
        immediately after the NTIA has notified the Commission 
        that the entity's relocation is complete, or has 
        determined that such entity has unreasonably failed to 
        complete such relocation in accordance with the 
        timeline required by subsection (d)(2)(A).

      ADDITIONAL VIEWS OF SENATORS McCAIN, HOLLINGS, AND BROWNBACK

    We strongly support the bill as originally considered by 
the Committee. We ardently oppose section 9 of the bill, which 
was added as an amendment at the Committee's executive session. 
Section 9 would reverse long-standing Congressional spectrum 
policy, reaffirmed by an FCC decision last year, by prohibiting 
the FCC from holding a competitive spectrum auction for the 
terrestrial use of this valuable taxpayer resource. Section 9 
is opposed by the Bush Administration, the satellite 
broadcasting industry, the wireless industry, and other 
potential bidders in this planned spectrum auction. In 1993, 
Congress put its faith in the auction process for the licensing 
of spectrum. We found that consumer benefit is maximized when 
spectrum is auctioned, because auctions ensure that spectrum is 
assigned to those who value it most highly.
    The provision of ORBIT that this section seeks to modify 
prohibits the use of competitive bidding to award licenses for 
spectrum used for international or global satellite 
communications services. The original ORBIT limitation follows 
from the logic that the auction of international satellite 
spectrum may create uncertainty for a bidder that is sure to 
face sequential auctions in other countries after succeeding in 
the United States. Such an auction would create an incentive 
for other countries to demand exorbitant license fees of the 
American licensee knowing that the licensee needs to obtain 
such rights to avoid interference and to make use of its 
American license. Failure to create certainty in this area 
could have an adverse effect on investment in satellite 
technology.
    Clearly none of these factors applies to the terrestrial 
use of spectrum contemplated by section 9. Bidders in an 
auction for terrestrial use rights would not face the 
uncertainty of a sequential auction, because the spectrum would 
be used to provide domestic services. In this sense, the award 
of such a license is similar to the FCC's award of a domestic 
license for the use of spectrum to provide direct broadcast 
satellite services, which the Commission has determined should 
be awarded via competitive bidding. Section 9 serves only to 
create a government handout of free spectrum to special 
interests.We are not now prepared to open the door to 
exceptions to our auction policy. The FCC believes a 
competitive auction is the right answer. We agree.
    The Administration has opposed a similar provision in the 
Agriculture Appropriations Bill for FY 2002, stating, ``The 
Administration would strongly oppose any amendment that would 
restrict the FCC's ability to assign, via competitive bidding, 
spectrum licenses that could be used by terrestrial (i.e., non-
satellite) services. Such a provision would interfere with the 
efficient allocation of Federal spectrum licenses, provide a 
windfall to certain users, and reduce Federal revenues.''
    The Cellular Telecommunications and Internet Association 
(CTIA) agrees that this proposal would ``give away valuable 
spectrum to certain private entities without recovering for the 
taxpayer any portion of the value of that spectrum'' and 
``would stand in fundamental conflict to wise spectrum 
management policy.''

                                
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