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Subcommittee Approves Spectrum Relocation Fund

The House Energy and Commerce Subcommittee on Telecommunications and the Internet approved legislation Wednesday to create a spectrum relocation fund for federal agencies. The Commercial Spectrum Enhancement Act (H.R. 1320) seeks to help federal agencies relocate to comparable wavelengths to make way for private wireless carriers' advanced wireless service offerings to consumers.

The government already has identified the 1710-1755 MHz band, mostly currently used by the military, for relocation to the private sector. The military spectrum is considered so valuable to the private wireless industry that it has been dubbed "beachfront property" for its suitability for commercial, mobile advanced wireless services such as 3G.

Sponsored by Rep. Fred Upton (R.-Mich.), the subcommittee chairman, the bill now goes to the House and Energy Committee, where Chairman Billy Tauzin (R.La.) is expected to push the legislation to the House floor. The bill has received the endorsement of the military, the Bush administration and the Cellular Telecommunications and Internet Association (CTIA).

Under current law, a commercial telecom has to win a spectrum license at a Federal Communications Commission (FCC) auction and then negotiate separately with an affected federal agency regarding the price and timeline for the agency to move its spectrum operations to another band.

Upton's bill would require the Office of Management and Budget (OMB) and the National Telecommunications and Information Administration (NTIA), an agency of the U.S. Department of Commerce and the administration's principal voice on spectrum, to provide a cost estimate and timeframe for relocation to the FCC prior to auction. The FCC then will hold its auction, but cannot close until the bidding equals at least 110 percent of the estimated relocation cost.

Once the auction is closed, the winning bidder's money will be placed in a newly created spectrum relocation trust fund and the relocating agency will draw down directly from that trust fund until the relocation is complete and fully paid for.

"H.R. 1320 will accomplish the dual goals of making spectrum available for advanced commercial uses and fully compensating federal agencies required to relocate spectrum operations to make bands available for commercial use," Tauzin said. "It will ensure that at least 90 MHz of new spectrum is made available for advanced wireless services that will give consumers mobile high-speed Internet access and other innovative applications."

Steve Berry, SVP for Government Affairs at CTIA, added, "When this legislation becomes law, it will ensure a smooth transition for both the wireless industry and government spectrum users including the Department of Defense, guaranteeing new spectrum for wireless consumers and a simple method of migration and reimbursement for incumbents."