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House Passes Spectrum Relocation Bill

The U.S. House of Representatives approved legislation Wednesday designed to move spectrum that is considered so valuable it has been dubbed "beachfront property" from the government to the private sector. If eventually passed by the Senate, the legislation will clear airwaves for private companies deploying third generation wireless services.

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.

Sponsored by Rep. Fred Upton (R.-Mich.), the legislation creates a a spectrum relocation fund for federal agencies. 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 requires 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.

"This is good news for government agencies who know that they will be made whole when they relocate to comparable spectrum and the taxpayer who will not have to pay a dime to relocate government agencies," Upton said.

The bill has received the endorsement of the military, the Bush administration and the Cellular Telecommunications and Internet Association (CTIA). Companion legislation (S. 865) has been introduced in the Senate.

"This is a big win for consumers and for government spectrum users. The legislation ensures that sufficient airwaves will be available to support millions of wireless users, who are increasing their use of wireless voice and adopting wireless data at record speed," said Steve Berry, SVP for Government Affairs at the CTIA. "It also offers government incumbents, especially the Department of Defense, the whole package: sufficient funding for relocation and a clear plan for a smooth transition into alternative bands of spectrum."