FCC Process Reform Act and Major Spectrum Proposal Poised to Clear House Commerce

The Federal Spectrum Incentive Act, HR-3674, would give government agencies financial incentives to give up or share their spectrum. The Matsui-Guthrie bill is co-sponsored by Walden, subcommittee ranking member Anna Eshoo, D-Calif., and full committee ranking member Henry Waxman, D-Calif. This bill would help allow the FCC to accomplish its National Broadband Plan objective of freeing up 500 MHz of commercial spectrum within 10 years, according to a news release. The bill would create a federal spectrum incentive auction fund, which would allow some agencies to get auction revenue from the spectrum they have given up and potentially use those funds to offset sequestration losses. The Commercial Spectrum Enhancement Act would, under the bill’s provisions, have “incentive auction-like authority” to help with relocation cost recovery elements of the Spectrum Relocation Trust Fund.

Several members offered laudatory statements in the news release. “By providing financial incentives for the first time, this bipartisan legislation will serve as a model to encourage the government to reallocate non-critical spectrum for commercial purposes,” Matsui said. “It will provide many federal agencies an opportunity that will be hard to refuse, particularly as our nation’s budget continues to shrink.” Guthrie pointed to the progress made by the federal spectrum working group, which he and Matsui chair together. Waxman called on his colleagues to back this “innovative, bipartisan” legislation. Eshoo emphasized the way the bill would help meet the needs of wireless broadband. Walden lauded the committee “members working together to promote innovation and create jobs.”

Walden, in a separate news release, said both the FCC Process Reform Act and the Federal Spectrum Incentive Act are ready for full committee markup this week and a vote Wednesday. Both bills demonstrate bipartisan agreement, he said. “For the last three years this subcommittee has diligently worked to improve the transparency and predictability of FCC processes,” Walden said in a statement. “I am pleased that we were able to achieve a bipartisan consensus on a path forward to give consumers and businesses with matters before the commission a more transparent and certain process. I thank the minority for their work on this important piece of legislation and look forward to the Senate’s prompt action on this bipartisan effort to boost transparency.”

CTIA thanked the spectrum bill’s authors. “The federal government is the single largest holder of spectrum below 3 GHz, and incenting agencies to relinquish bands they aren’t utilizing or using efficiently can help the commercial mobile industry gain access to the spectrum it needs,” said CTIA Vice President-Government Affairs Jot Carpenter. “We hope the full Energy and Commerce Committee will approve the bill.”

The prospects for the FCC Process Reform Act, HR-3675, getting voted out of the House Commerce Committee in a full committee vote Wednesday are good, multiple Democratic aides told us Monday. One Democratic staffer expects “something very positive” out of the week’s markup, reflecting significant progress and bipartisan support, he said. Committee Republicans have worked to address concerns of Democratic members, the staffer said. Another aide to a Democratic member agreed independently. The latest draft is more common-sense compared with the partisan version the House members had considered previously, the aide said. He expects the bill to pass by a voice vote easily on Wednesday. A third Democratic committee aide told us discussions have been ongoing and cited “much progress” in improving the legislation. Walden has pushed the legislation forward all year, clearing it from subcommittee July 25 and in November citing his desire to revisit the bill in a bipartisan way.

Walden and Eshoo will introduce “an amendment in the nature of a substitute” (http://1.usa.gov/IBxQXF) to the FCC Process Reform Act, representing “a bipartisan compromise that presents the commission with a framework to bring additional transparency and predictability to the FCC,” Walden’s release said. “It also contains some statutory provisions including changes to the sunshine rules and a permanent exception to the Antideficiency Act for the federal Universal Service Fund.” The amendment said the FCC must complete a rulemaking within a year of the bill’s enactment “to maximize opportunities for public participation and efficient decisionmaking.” It outlined various changes the agency must make, in terms of commissioners meeting, how the agency treats comments and ex parte filings and how it must review policies going forward. The FCC must present consumer complaints in a “publicly available, searchable database on its website,” the new amendment proposed. The FCC would also have to post more information related to Freedom of Information Act requests the agency receives, among other changes.

House Commerce members first considered the FCC Process Reform Act earlier this year and debated it at length, but Democrats and Republicans disagreed, and the bill never moved forward. The committee announced Friday that it will begin marking up the legislation (http://1.usa.gov/1aOuxmo) Tuesday at 4:30 p.m. in 2123 Rayburn and then vote on the bill Wednesday at 12:30 p.m.

Memos from before the amendment was revealed outlined broad changes to FCC operations. A House Republican background memo (http://1.usa.gov/1cwlECv) for the markup had described the new sections that the bill would add to Section 13 of the Communications Act. The bill would provide for time for FCC commissioners to meet and establish certain types of shot clocks for its actions. The FCC must consider market forces more than it has, said the memo. “For economically significant rules -- rules that will have an annual effect of $100 million or more -- the FCC must identify the problem it is trying to solve, make reasoned determinations that the benefits of the rule justify its costs, and that market forces are unlikely to resolve the issue within a reasonable amount of time.” Under the bill, the FCC could still review transactions, but the bill would require “conditions to be: (a) remedies to harms that arise as a direct result of the transaction, (b) within the FCC’s general authority, and (c), related to harms specific to the transaction that are not present more broadly in industry.” House Democratic staff had said the bill “strives to improve [FCC] transparency, efficiency, and accountability,” according to the bill’s website (http://1.usa.gov/1bRUsja). “The bill institutes a new requirement for cost-benefit analysis of economically significant rules but exempts the cost-benefit analysis from judicial review. It also makes revisions to the FCC merger standards and removes the provision allowing a minority of Commissioners to block delegated authority items."

A communications industry lobbyist told us early Monday she heard a compromise was reached on the FCC Process Reform Act. Democratic offices are signaling a compromise has been hammered out in recent months, she added. Walden met with FCC Chairman Tom Wheeler for the first time last week, he told reporters then, stressing it was a good discussion focused on policy. Wheeler, since confirmation, has initiated his own process reform review within the agency, noted the lobbyist. Industry officials have also pointed to other bills set for introduction -- Eshoo plans to introduce her bill, released as a discussion draft this summer, on retransmission consent blackouts, and Rep. Steve Scalise, R-La., plans to reintroduce a video proposal of his.