Spectrum Reform: Promoting Job Creation, Innovation, and Public Safety

February 17, 2012

To meet the public’s growing demand for broadband devices and services, and to support the next generation of high-tech investment and innovation, Congress approved – and the president signed into law – a package of major spectrum reforms that originated in the Energy and Commerce Committee. The legislation clears the path for the long-awaited auction of additional spectrum – the airwaves on which wireless communications travel. Spectrum auctions will bring in revenues, spur innovation and investment, and promote significant new job creation. Along with these spectrum auctions, the agreement will help to finally build the nationwide interoperable broadband public safety network that was a key recommendation of the 9/11 Commission.

The spectrum provisions were included in a House-Senate agreement on H.R. 3630, legislation that also extended payroll tax relief, protected seniors' access to doctors through Medicare, and addressed other key issues. These spectrum reforms were first proposed by Communications and Technology Subcommittee Chairman Greg Walden (R-OR) in legislation known as the Jumpstarting Opportunity with Broadband Spectrum (JOBS) Act. Freeing up spectrum will create jobs, spur investment and innovation in the growing technology sector, and support first responders. It does all of these things while offering strong protections for taxpayers and helping offset other costs within the bill.

Voluntary Incentive Auctions

  • A key component of the agreement is authority for the Federal Communications Commission to conduct voluntary incentive auctions.
  • By giving a portion of the auction proceeds to licensees who return spectrum, these voluntary incentive auctions allow us to make more efficient use of the airwaves and clear valuable blocks of spectrum to support next-generation wireless networks.
  • The agreement includes important protections for broadcasters sought by the House to ensure individuals who rely on over-the-air broadcasting will not lose access.

Strong Protections for Taxpayers

  • The agreement aims to produce a net $15 billion in auction proceeds – more than double the amount initially proposed by the Senate – that will help offset other costs within the legislation.
  • Like the original House-passed legislation, the agreement ensures that if the federal government spends money to clear spectrum, taxpayers will get a return on that investment by ensuring it is auctioned. Other proposals would have allowed the FCC to give away this spectrum, at a potential billion-dollar cost to taxpayers.
  • The agreement also supports fair and open auctions that will bring in the greatest revenue for taxpayers by including limitations on the FCC’s ability to exclude bidders.

Major Job Creation

  • According to recent studies, investment in next-generation wireless broadband could produce an estimated 300,000 jobs or more.
  • FCC Chairman Genachowski even cites one study indicating spectrum legislation could create as many as 770,000 jobs, generate $25 to $53 billion in investment, and produce $73 to $151 billion in GDP growth.

Development of a Public Safety Network

  • Both the House and Senate had developed legislation to support build-out of a nationwide interoperable broadband public safety network, and the agreement unifies the framework that will be used to finally make this recommendation of the 9/11 Commission a reality.
  • The agreement reallocates the “D-Block,” which – combined with spectrum already given to public safety by Congress – gives public safety the contiguous 20 MHz of spectrum they have sought for wireless broadband.
  • It also directs a share of future auction proceeds, up to $7 billion, to support development of the network.
  • Unlike legislation initially developed in the Senate that would have established an entirely new federal corporation to run the network, the agreement establishes a central governing authority within the National Telecommunications and Information Administration while permitting states that choose to build their own networks the opportunity to opt-out of the central network while maintaining interoperability.

On February 17, 2012, the House of Representatives approved H.R. 3630 by a bipartisan vote of 293 to 132. The bill became law on February 22, 2012.