Spectrum

If you thought the sparring between AT&T and Sprint ended with the demise late last year of AT&T's bid to buy T-Mobile, think again.

AT&T is once again on opposite sides of a major telecom issue with Sprint, a fierce critic of the AT&T-T-Mobile merger, and several other smaller rivals. The issue this time is over legislation aimed at freeing up more spectrum to meet the public's growing demand for wireless technologies.

Sprint, along with T-Mobile, C-Spire Wireless, Cricket and other smaller wireless operators want members of Congress to give the Federal Communications Commission discretion to design future spectrum auctions as it sees fit. They called on lawmakers Wednesday to strip a provision from House spectrum legislation that would bar the FCC from imposing restrictions on who can bid for spectrum given up for auction by broadcasters.

"The proposed provision would substantially limit the FCC's ability to promote competition and a competitive wireless marketplace for consumers throughout America. It would facilitate spectrum warehousing, inefficient use of scarce spectrum resources, and reduce spectrum auction revenues to the U.S. Treasury," they wrote in a letter to the House and Senate payroll tax conference committee.

The payroll tax cut package could include the spectrum legislation.

The provision in the House spectrum bill is aimed at ensuring the FCC can't keep the nation's two biggest wireless providers ,Verizon Wireless and AT&T, from participating in future spectrum auctions. Energy and Commerce Communications and Technology Subcommittee Chairman Greg Walden, R-Ore., who drafted the House spectrum legislation, said last month that he doesn't think it's good public policy to exclude any market players from participating in spectrum auctions.

AT&T has echoed Walden's view on the issue. "Auctions should be open, not closed. Any qualified carrier, including those on today's letter, should have a chance to bid on any spectrum available in an auction," AT&T Senior Executive Vice President Jim Cicconi said in a statement. "This group, however, wants the FCC to stack the deck in its favor. Congress is right to resist this notion."

The spectrum language is just one of many thorny issues lawmakers are trying to resolve as part of the negotiations over the payroll tax deal. One of the biggest issues is how to pay for the cost of the payroll tax package.

The embattled wireless company LightSquared formally asked the Federal Communications Commission on Tuesday to develop standards that would require global positioning system manufacturers to ensure their devices are compatible with transmissions from other networks.

LightSquared's bid to build a nationwide wireless network with spectrum near that used by GPS has been on hold after tests indicated its transmissions could interfere with the navigation systems. The company says the problem lies with GPS devices that should have been designed to filter out neighboring signals.

"It has become apparent that the commercial [GPS] industry has failed to design receivers that communicate with the U.S. GPS system in a manner that is compatible with the authorized use of adjacent spectrum bands," LightSquared wrote in documents filed with the FCC on Tuesday. "This failure has inhibited the deployment of licensed services in adjacent bands that would provide significant public interest benefits, such as increased competition."

While the FCC has traditionally relied on market forces to keep competing spectrum users from overlapping, LightSquared says this method has failed.

GPS manufacturers say it should be up to LightSquared to fix the problem because GPS devices were built with the expectation that the adjacent bandwidth wouldn't be used for a land-based network like LightSquared has planned.

"This latest filing yet again proceeds from the same false premises and claims that LightSquared has repeated ad nauseum in its ongoing effort to deny its obligation to avoid harmful interference to millions of government and private GPS users," Jim Kirkland, vice president at the GPS manufacturer Trimble, said in a statement. "LightSquared's continuing efforts to move the goal posts are too little, too late."

On Wednesday the House Transportation Subcommittee on Aviation plans to hold a hearing which could include the potential impact of LightSquared's plans on aviation navigation systems.

Two key lawmakers said Tuesday that despite some differences between the House and Senate approaches to the issue, they are still hopeful spectrum legislation will be included in a package to extend a payroll tax cut.

House and Senate lawmakers on the payroll tax cut conference committee met again Tuesday to try and hammer out differences between the two chambers' versions of the legislation but did not discuss spectrum.

Still, House Energy and Commerce ranking member Henry Waxman of California, one of the House Democratic conferees, told Tech Daily Dose that staffers are meeting and making slow progress on ways to narrow differences between the House-GOP passed spectrum legislation, which was included in a one-year extension of the payroll tax bill, and a stand-alone bipartisan spectrum bill approved last summer by the Senate Commerce Committee.

Both bills focus on freeing up more spectrum to meet the nation's growing demand for wireless technologies and providing public safety officials with spectrum and funding to help build a national wireless broadband network. They also would authorize the Federal Communications Commission to conduct incentive auctions of spectrum voluntarily relinquished by broadcasters.

The major sticking points continue to be over how much flexibility the FCC should be given to set aside spectrum for unlicensed uses such as Wi-Fi, who should be allowed to participate in the incentive auctions, and the governance structure of the public safety network, Waxman said.

"If we can work out the policy, we want to move it ... The differences on this bill have never been so great that we couldn't resolve it in the House," Waxman said. He and most of the other Democrats on the Energy and Commerce Committee did not support the House GOP spectrum measure when it was approved by the Communications and Technology Subcommittee late last year because of their concerns over the restrictions on unlicensed spectrum and the public safety governance structure.

House Republicans may have the upper hand in the negotiations given that their spectrum legislation is in the House payroll measure and the Senate Commerce bill is not. In addition, the authors of the House spectrum bill, Energy and Commerce Chairman Fred Upton, R-Mich., and Communications and Technology Subcommittee Chairman Greg Walden, R-Ore., are among the House payroll-tax negotiators, while no one from the Senate Commerce Committee is on the conference committee.

"We have to work to accommodate the positions of both the House and the Senate," Waxman said. "The House bill was only a partisan bill -- never voted on in full committee, went right to the floor and the Senate's not going to take it as is."

Senate Commerce Chairman Jay Rockefeller, D-W.Va., said Tuesday he believes differences over how to structure the public safety network, which is his top priority, could be resolved by having the National Telecommunications and Information Administration oversee its development. "I'm hopeful," Rockefeller said about finally getting spectrum legislation enacted. "The problem is always on the House side."

The Senate Judiciary Antitrust Subcommittee announced Wednesday that it will hold a hearing to examine the impact on competition from the deal struck between Verizon and some of the nation's biggest cable firms to buy some of their spectrum and cross-promote their services.

Subcommittee Chairman Herb Kohl, D-Wis., said in a statement he planned to examine the potential competitive effects the deals will have in markets where both Verizon and the cable firms offer both video and Internet services.

Kohn has "not reached any conclusions on this deal yet - just beginning an inquiry which this hearing will be a part of," Kohl's spokeswoman said. The committee has not set a firm date but is aiming to hold the hearing sometime after the President's Day break.

Verizon announced late last year that it had struck deals with Bright House Networks, Comcast, Cox, and Time Warner to buy some spectrum from them and also to cross-promote their services.

Public interest groups welcomed Kohl's interest. They say the deals raise serious competitive issues given that in most markets there are only two major broadband, phone and television providers.

"If, as these companies claim, they cannot compete against one another, Congress and the FCC need to consider whether we will need to return to the world of regulated natural monopolies," Public Knowledge Legal Director Harold Feld said in a statement. "While Public Knowledge believes that competition is better, there are serious questions to be answered whether true broadband competition can ever emerge if one provider in a two-company broadband market starts selling the products of the other company."

It's been a month since its bid to buy T-Mobile USA went south, and AT&T made clear Thursday that it hasn't forgotten the Federal Communications Commission's role in the deal's demise.

The two sides clashed Thursday after AT&T Chairman and CEO Randall Stephenson complained that the FCC is taking too long and using inconsistent standards to decide spectrum transactions and other deals.

"This industry continues to see just explosive mobile broadband growth and it's providing one of the few bright spots in the U.S. economy. But I think we all understand this growth cannot continue without more spectrum being cleared and brought to market," Stephenson said on a conference call Thursday morning to discuss the company's earnings report. "Despite all the speeches from the FCC, we are all still waiting. The last significant spectrum auction was nearly five years ago now and this FCC has made it abundantly clear that they will not allow significant [merger and acquisition] to help bridge their delays in freeing up new spectrum."

AT&T reported a $6.7 billion loss in the last quarter of 2011 in large part because of the break-up fee it must pay after its bid to buy T-Mobile failed. The company dropped its bid for T-Mobile last month after both the Justice Department and the FCC objected to the deal.

Stephenson complained on Thursday that the FCC used differing sets of standards related to how much spectrum AT&T can hold in each market for evaluating its bid for T-Mobile and in its recently cleared purchase of a swath of spectrum from Qualcomm.

"We are literally sitting here in a situation where we don't know how much spectrum we are allowed to hold...who we are allowed to do business with, and so forth," he said.

The FCC fired back Thursday afternoon noting that the commission has approved more than 150 commercial mobile transactions in the last year, including AT&T's Qualcomm deal.

"Unfortunately, these facts were completely ignored in the conference call," FCC spokesman Neil Grace said in a statement. On the AT&T-T-Mobile deal, Grace added that, "The DOJ and FCC staffs concluded that this action would violate the antitrust laws and result in higher prices for consumers, and less innovation and investment in the marketplace. Those conclusions surely disappointed AT&T executives, but they followed directly from the facts and the law."

It wasn't always this way between the telecom operator and its regulator. Just over a year ago, AT&T was among the few broadband providers to endorse the FCC's controversial open Internet order. Then again both sides got something out of it. For AT&T, the order's most controversial provisions did not apply to the growing wireless broadband market. At the same time, the FCC gained the support of one of the biggest broadband providers in the country.

The chairman of the House Energy and Commerce Communications and Technology Subcommittee said Wednesday he is confident that House and Senate negotiators will include his version of spectrum legislation in a payroll tax package given that it would generate more cash to pay down the deficit than the Senate Commerce Committee's version.

Rep. Greg Walden, R-Ore., outlined an aggressive agenda for his panel for this year, including pushing for legislation to free up more spectrum for wireless broadband and to help build a national broadband public safety network.

Walden and Energy and Commerce Chairman Fred Upton, R-Mich., are among the House conferees picked to help negotiate the differences between the House and Senate versions of legislation that would extend a payroll tax holiday and other tax breaks. The House's payroll tax bill, passed last month, included the spectrum legislation authored by Walden that was approved by his subcommittee in November.

The Senate Commerce Committee approved its own version of spectrum legislation last summer. Both the Walden and Commerce bills would authorize auctions to entice broadcasters to voluntarily give up some of their spectrum for a share of the money generated. Among the notable differences between Walden's measure and the Senate Commerce bill is that his would generate about $10 billion more for deficit reduction, Walden said.

Another provision that has emerged as a point of contention in recent weeks is language in the House bill that would bar the FCC from limiting which companies could participate in incentive auctions. FCC Chairman Julius Genachowski earlier this month urged lawmakers not to limit the commission's flexibility to structure the auctions as it sees fit.

Following his speech, AT&T voiced concern that the FCC may try to keep it and other large wireless operators from bidding for the spectrum that broadcasters give up at auction. Walden said the language included in his bill would ensure the FCC can't pick winners and losers. He added that the commission would still have authority to address concerns over market concentration even after an auction is conducted.

"The only reason the chairman is upset about the provision is that he wants to exclude one of two market participants," Walden said, referring to the nation's two biggest wireless firms: AT&T and Verizon Wireless. "I don't think it's good public policy."

Walden said he believes it's likely that some version of the spectrum legislation will be included in the payroll tax package the House and Senate negotiators are trying to hammer out. The conference committee met for the first time Tuesday. "I would think given the need to pay for the various components of the [payroll] legislation...it would cause a problem if it dropped out," he said. The Congressional Budget Office has estimated that Walden's spectrum legislation would generate $16.7 billion for deficit reduction compared with just $6.5 billion for the Senate bill, authored by Commerce Chairman Jay Rockefeller, D-W.Va.

Walden also said the full Energy and Commerce committee plans to mark up FCC reform legislation on Feb. 7. While praising Genachowski for making some progress in overhauling how the FCC conducts its business, Walden said changes promoting transparency need to be codified into law.

Democrats, however, have been critical of a provision that would limit the FCC's ability to demand conditions from merging companies in the name of the public interest. "All we're saying is that you can't use leverage on mergers...to achieve effects in the marketplace that you don't statutorily have the right to do," Walden said.

House and Senate talks meant to resolve sticking points over spectrum legislation appear to have stalled for now.

Staffers from the House and Senate Commerce committees had been in talks to try to resolve some of the differences between legislation approved by the Senate Commerce Committee in June and GOP draft legislation approved by the House Energy and Commerce Communications and Technology Subcommittee earlier this month.

The draft Energy and Commerce measure was added to the payroll tax package passed by the House Tuesday. Senate Democratic leaders have said the payroll tax package is unlikely to pass the Senate for reasons unrelated to the spectrum bill and President Obama has vowed to veto it if it passes Congress in its current form.

"I'm disappointed that the House has unilaterally stopped negotiating with us on spectrum, but I'm not giving up," Senate Commerce Chairman Jay Rockefeller, D-W.Va., said in a statement late Wednesday. "It's my hope that we can include a compromise in the final year-end package. Although I don't care to negotiate this publicly, we remain open to any good idea. "

Both the House and Senate bills aim to free up more spectrum for wireless broadband and help build a national broadband network for public safety.

Energy and Commerce Communications and Technology Subcommittee Chairman Greg Walden, R-Ore., told reporters earlier Wednesday that discussions with the Senate weren't making enough progress to continue.

"We had a bipartisan vote on the House floor. It's up to the Senate to try to do something here," Walden said. "Why would we negotiate against ourselves?"

Walden said the main problem in talks with his Senate counterparts was the governance structure for the public safety network. He said he and other Republicans on the committee have already given in on a key issue by lifting their opposition to giving a swath of spectrum known as the D-block to public safety for their network.

"We haven't seen much give, and I didn't feel there was any reason to continue those discussions," Walden said. "And you know if it's all going to break down over their governance model or the highway, then maybe public safety has to come out" of the spectrum measure.

But Rockefeller said public safety is his top priority in the spectrum legislation and he would not compromise on the need to build a national network to improve emergency communications. "Frankly, the rest of the spectrum debate is secondary to the needs of our firefighters, cops, and emergency workers," he said.

Rep. Anna Eshoo, D-Calif., the ranking member on Walden's subcommittee, told Tech Daily Dose Wednesday afternoon that she would support passing Rockefeller's bill in the House. Eshoo and other Energy and Commerce Democrats opposed Walden's bill during the subcommittee markup because of concerns with the public safety governance language and other provisions.

After months of debate and hearings, the House passed spectrum legislation Tuesday as part of a larger package that includes a payroll tax holiday.

The package, passed on a 234-193 vote, faces an uncertain future. Senate Democratic leaders have said the package will likely fail in that chamber and President Obama has vowed to veto the payroll tax package if it remains in its current form.

To help offset the cost of the measure, the payroll tax package includes spectrum legislation that could raise $16 billion for the Treasury from spectrum auctions. The spectrum language is largely similar, with a few changes, to the draft bill approved by the House Energy and Commerce Communications and Technology Subcommittee earlier this month.

That bill would free up more spectrum for wireless broadband by authorizing "incentive auctions" that would cut in broadcasters for a share of the revenue if they give up some of their spectrum. It would provide spectrum and funding to build a broadband network for public safety officials.

All but one of the panel's Democrats opposed the bill in subcommittee and Energy and Commerce Democrats reiterated their concerns Tuesday with the legislation during the floor debate on the payroll tax package.

Communications and Technology Subcommittee ranking member Anna Eshoo, D-Calif., said she opposed the bill's treatment of unlicensed spectrum. And while Energy and Commerce Republicans gave in to demands from Democrats and public safety groups to reallocate a chunk of spectrum known as the D-block to public safety, Eshoo and a coalition of public safety groups worried about other provisions in the bill related to the build out of the public safety network.

"I'm very concerned about how this bill treats the spectrum public safety needs to create and manage a nationwide, interoperable broadband network," Eshoo said during floor debate on the payroll tax measure. "What the Republican bill does, is on the one hand it gives, and on the other hand it takes away. This is not a solution, and I don't believe it's fair to public safety, and our country. "

Federal Communications Commission Chairman Julius Genachowski also complained about the bill.

"Over the last weeks and months, we have conveyed to members of Congress and their staff concerns about provisions that would reduce FCC flexibility to maximize the overall value of freed-up spectrum, enhance spectrum efficiency, and promote robust innovation and investment," Genachowski said in a statement. "Several provisions of the House bill would tie the agency's hands in ways that could be counterproductive, reducing economic value and hindering innovation and investment."

But Communications and Technology Subcommittee Chairman Greg Walden, R-Ore., said he has spent months working with Democrats and the bill's stakeholders on the legislation. "At some point, the American people say stop talking and get it done," Walden said in his floor remarks. "That's what this legislation does with this bigger bill."

Despite this, staffers from both the Energy and Commerce Committee and the Senate Commerce Committee, which passed its own version of spectrum legislation in June, have been meeting over the last week to try to hammer out their differences. And even if the House payroll tax package fails, supporters will continue looking for other avenues to move the spectrum legislation or continue trying to advance it through the regular legislative process.

Rhod Shaw, executive director of the High Tech Spectrum Coalition, praised the House vote as "a vital step forward". "Without passage of voluntary incentive auction legislation this year the FCC will not have the tools necessary to meet the rising demand for spectrum," Shaw said.

A top Democrat on the House Energy and Commerce Committee voiced frustration Wednesday with reports that House GOP leaders are considering including spectrum legislation in a broader bill that might include an extension of a payroll tax holiday and other measures.

Rep. Anna Eshoo, D-Calif., the ranking member on the Communications and Technology Subcommittee, told Tech Daily Dose that it's important for the committee to continue its work on the issue even if it ends up getting attached to another bill.

The subcommittee approved spectrum legislation crafted by the panel's chairman, Rep. Greg Walden, R-Ore., on a largely party-line vote last week. Eshoo and other Democrats opposed the bill because of concerns about provisions related to unlicensed spectrum and the governance structure for a national broadband network for public safety.

"It is my understanding that the Republican leadership is considering placing this in an omnibus," Eshoo said. "But this is without the benefit of a full committee markup. These are complex issues. Congress does not do spectrum legislation but for maybe once a decade, if that," she added."I'd like to see the fullness of the effort optimized."

A spokesman for House Speaker John Boehner, R-Ohio, confirmed that GOP leaders are considering including spectrum in the payroll tax measure, which the House may take up next week. Spectrum legislation has been floated several times this year as a possible offset to pay for various measures Congress has considered.

Walden said last week that his spectrum measure, which is focused on freeing up more spectrum for mobile broadband and helping to build a public safety broadband network, could raise as much as $15 billion for the U.S. Treasury through spectrum auctions.

Walden said last week that he expected the full committee would take up his measure this week but that appears to be on hold until a decision is made on whether his bill will be attached to the payroll tax measure. Eshoo said her staff and Walden's aides are continuing to talk about ways to resolve their differences on his spectrum bill.

Meanwhile, Senate Commerce Chairman Jay Rockefeller, D-W.Va. said Tuesday that his staff may begin discussions with the House on ways to resolve differences between his spectrum bill, approved in June, and Walden's proposal.

"Were moving to get together with the House folks," Rockefeller said, though he didn't say when such talks would take place.

The top Democrats on the House Energy and Commerce Committee have asked the panel's GOP leaders to postpone Thursday's markup of spectrum legislation offered by Communications and Technology Subcommittee Chairman Greg Walden, R-Ore.

The Democrats wrote full committee Chairman Fred Upton, R-Mich., and Walden to say a delay is necessary to give them more time to analyze Walden's spectrum bill and to give both parties a chance to resume negotiations on crafting bipartisan legislation.

"We believe the difference between us can be resolved and we have some new ideas for bridging our differences that we would like to discuss with you," Energy and Commerce ranking member Henry Waxman, D-Calif., and Communications and Technology Subcommittee ranking member Anna Eshoo, D-Calif., wrote. "We hope you will agree to postpone the markup so we can work with you to produce a bipartisan bill that all members can support."

Following the release of Walden's draft bill on Tuesday, Waxman chided the panel's GOP members for cutting off negotiations last month before a bipartisan deal could be reached. He also announced that Democrats on the panel planned to introduce their own competing spectrum measure.

Still, in their letter Wednesday, Waxman and Eshoo praised Walden for reversing his previous opposition to giving a stretch of spectrum known as the D-block to public safety officials to create a national broadband network.

The Democrats, however, voiced concern that Walden's bill doesn't provide enough funds for building the network and that provisions related to deploying and maintaining it are too burdensome. They also complained about a provision that would bar the Federal Communications Commission from allocating some spectrum freed up through incentive auctions authorized by the bill for unlicensed uses such as super-fast Wi-Fi.

"After almost a year of hearings and extensive meetings, the committee looks forward to convening the markup tomorrow at 10 a.m." a Walden spokeswoman said in response to the Democrats' letter.

Wireless companies and other supporters of freeing up more spectrum for wireless broadband technologies have been keen for the committee to act on the issue. "Spectrum is a vital resource that needs immediate attention. We are thankful for the chairman's leadership and the progress that's been made," AT&T Executive Vice President of Federal Relations Tim McKone said in a statement Tuesday.