Squeezing More Blood From The Spectrum Turnip—Harry Reid’s Contribution To The Spectrum Muddle

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No sooner had I posted my wonkish critique of the Congressional Budget Office (CBO) score for S.911, the Rockefeller Public Safety/Spectrum Bill over on my Wetmachine blog ("Where snark meets wonk and the sparks fly!") when Senator Harry Reid (D-NV) turns around and drops a new version of the plan as part of his debt ceiling bill (Best version of Debt Ceiling bill I could find here). Reid promises to raise $15 billion in "spectrum sales" while still reallocating the D Block to public safety. That's quite a trick, given that CBO had given S.911 a "score" (meaning the amount of money it will add or subtract from the deficit) of $6 billion.

 

A quick review shows how Reid is trying to squeeze more blood from the spectrum turnip. Specifically, the bill would:

1. Cut the proposed level of public safety funding from $12 billion to $7 billion.

2. Cut the proposed level of funding for public safety research from $500 Million to $300 Million.

4. Give the FCC much greater flexibility to repack broadcasters.

5. Limit the total amount of incentive auction reimbursement to $1 billion.

6. While the FCC could allocate 6 MHz for unlicensed if it reclaimed more than 84 MHz of broadcast spectrum, any additional unlicensed would need to come from somewhere else -- although you could use the incentive auction fund to clear other licensees.

This certainly helps limit some of the unknowns -- especially on pay out. It also helps the FCC free up more spectrum by allowing them to repack the broadcasters a heck of a lot lighter. OTOH, it is unclear to me that you get the same level of participation if you limit the possible pay out. The impact on unlicensed, while certainly better than the House Republican Discussion Draft, is still not great.

Still, doing the math, Reid is counting on squeezing a heck of a lot of blood from the spectrum auctions turnip. Reid is counting on raising $4 billion in spectrum revenue more than CBO projected from S.911. I am personally skeptical the changes proposed really add up to that much. But then, I am skeptical of the effort to estimate the auction revenues generally. But why should the accounting on spectrum auctions be any different from the rest of the budget accounting? Oh yeah, because our digital future depends on making the right choices. 

Bummer.

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