Airwaves, like oil reserves, are cash cows in US budget deal

WASHINGTON — The U.S. is turning to another asset in addition to its strategic oil reserve to help pay for a budget deal: Congress and the Obama administration want to sell federal airwaves after an auction earlier this year set records.

The Federal Communications Commission needs to begin an auction of 30 megahertz of airwaves used by U.S. agencies by 2024, according to a deal reached by congressional and White House budget negotiators Monday. The measure could get a vote by the House as soon as Wednesday.

Airwaves are coveted by mobile companies straining to send video to the growing number of smartphones. An auction earlier this year for 65 megahertz of government and private airwaves attracted$44.9 billion in bids, with participants including AT&T Inc., Verizon Communications Inc., T-Mobile US Inc. and Dish Network Corp.

“Anything Congress can do to encourage long-term spectrum planning is very important,” said Phillip Berenbroick, counsel for government affairs at the policy group Public Knowledge. “There’s an opportunity for it to be very positive.”

The FCC plans another auction next year, of airwaves voluntarily given up by television broadcasters, and the Congressional Budget Office has estimated the sale will raise $10 billion to $40 billion. Next year’s auction is the last of three mandated by Congress in 2012, as part of a deal to raise funds as lawmakers preserved payroll tax cuts.

The deal also frees funding for agencies to plan to relinquish more airwaves, and it tells the FCC and Commerce Department to identify additional frequencies for sale, Berenbroick said.

Spectrum prices, particularly for frequencies that are well-suited to adding capacity, have risen rapidly as carriers brace for a surge in mobile video use, Bloomberg Intelligence analysts John Butler and Matthew Kanterman said in a note Monday.

Mobile companies have pressed the federal government to identify more airwaves for auctioning after next year’s sale. “We now need to execute on a new five-year plan” to re-allocate 350 megahertz for mobile broadband, Meredith Attwell Baker, president of CTIA-The Wireless Association, said in a statement in June. Amy Storey, a spokeswoman for the Washington-based trade group, didn’t immediately offer a comment.

Recently, House lawmakers considered a bill to let U.S. agencies participating in auction use proceeds for program costs. The measure is part of efforts to “provide clear incentives for agencies to free up under-used, or unneeded, spectrum,” Rep. Greg Walden, the Oregon Republican who is chairman of the House telecommunications subcommittee, said at a hearing Oct. 7.

More than 60 federal agencies and departments combined have more than 240,000 frequency assignments across all spectrum bands, although nine departments, including the Defense Department, hold 94 percent of all frequency assignments for federal use, the Government Accountability Office said in a 2013 report.

In 2010, the Obama administration told U.S. spectrum planners to make a total of 500 megahertz of federal and non-federal spectrum available for wireless broadband within 10 years.

Neil Grace, an FCC spokesman, declined to comment.

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