CBO: Incentive Auction Could Net $10 Billion to $40 Billion, TR Daily

The Congressional Budget Office estimated today that the FCC’s incentive auction may net between $10 billion and $40 billion, “with an expected value of $25 billion,” with most of that going to the U.S. Treasury. The amount appears to be what CBO generally expects the Treasury to get after broadcasters are compensated, according to budget experts.

The figures were included in a letter from CBO Director Keith Hill to Sen. Dean Heller (R., Nev.), a member of the Senate Commerce, Science, and Transportation Committee who posed questions to CBO about FCC auction revenues.

CBO noted that the AWS (advanced wireless services)-3 auction generated “net receipts” of $41.3 billion. The spectrum sold in that auction was in higher bands with less favorable propagation characteristics.  But some carriers and others have noted that the incentive auction is more complicated, and some say the FCC’s plan to set aside spectrum for providers with fewer frequencies below 1 gigahertz could depress bidding. Some also say that revenue totals from the AWS-3 sale were inflated due to bidding arrangements that Dish Network Corp. had with two small companies.

Some parties project that the incentive auction will see higher revenues than the AWS-3 sale. For example, Preston Padden, executive director of the Expanding Opportunities for Broadcasters Coalition, noted today that SNL Kagan expects auction revenues of $60-$80 billion, while auction expert Peter Cramton has estimated revenues of at least $84 billion.

“Nothing in the CBO letter is a surprise to those of us who follow budgets and scorekeeping. CBO has been consistent in both its scoring practices and its forecast for net incentive auction receipts since the Middle Class Tax Relief Act was adopted in February 2012,” said David Taylor of Capitol Solutions, a government relations firm.

The National Association of Broadcasters had no comment on CBO’s estimate, nor did the FCC.

The record AWS-3 auction revenues have prompted some broadcasters to take a closer look at participating in the incentive auction, according to industry officials.

– Paul Kirby, paul.kirby@wolterskluwer.com

TR Daily: AWS-3 Auction Closes With Record $44.9B in Bids

The FCC’s AWS-3 auction closed Thursday, January 29th, after 341 rounds and 45 days, garnering a record $44.9 billion in gross bids. In comparison, all FCC auctions before the AWS-3 sale generated just more than $53 billion in net proceeds to the U.S. Treasury.

David Taylor, executive director of the Wireless Broadband Coalition, weighed in on the conclusion of the historic auction. “The record-setting AWS-3 auction results demonstrate that the wireless industry values cleared, paired, internationally-harmonized spectrum allocations. The results also suggest that the federal relocation process reforms contained in the 2012 Spectrum Act aimed at reducing risks for both relocating federal agencies and prospective auction bidders worked better than most analysts anticipated.”

TR Daily: OMB Approves $69.9 Million for Agencies Before AWS-3 Auction

Office of Management and Budget Director Shaun Donovan has notified Congress that OMB has approved the transfer of $69.865 million from the Spectrum Relocation Fund to the Defense, Homeland Security, Justice, and Interior departments to help them plan for relocation and sharing arrangements ahead of the AWS (advanced wireless services)-3 auction, which is scheduled to begin Nov. 13.  OMB can transfer funds 30 days after the Sept. 8 notification to Congress.

“We are pleased that OMB Director Donovan has approved funding to allow the affected agencies to continue planning for Auction 97,” said David Taylor, executive director of the Wireless Broadband Coalition. “Doing so avoids potential delays in the relocation process and sets the stage for a successful auction – one that promises to fully fund federal agency relocation costs while protecting critical national security communications capabilities.”

Mr. Taylor also commended the efforts of federal agencies to reduce the expected relocation and transition costs as well as the required exclusion or coordination zones.

“Progress over the past 18 months has been incredible,” he said. “Federal system relocation cost estimates have dropped from over $18 billion to $4.6 billion. Geographic exclusion zones are significantly smaller and relocation timetables for several systems have been compressed. All of these changes enhance the value of this internationally-harmonized spectrum for potential bidders.” – Paul Kirby, paul.kirby@wolterskluwer.com

WBC and David Taylor in TR Daily

The Wireless Broadband Coalition criticized a National Telecommunications and Information Administration report this week that affirmed the agency’s recommendation that the 1695-1710 megahertz band should be freed up for commercial wireless services on a shared basis with government users.  “This report continues a disappointing trend.  The FCC’s National Broadband Plan was released in March 2010.  Since then, the Administration has yet to recommend that a single MHz of federal spectrum below 3 GHz should be cleared for commercial use,” said David Taylor, the coalition’s executive director.

David Taylor on OMB Spectrum Relocation Guidance in TR Daily

This morning TR Daily quoted David Taylor on the recent OMB “Guidance for Agencies on Transfers from the Spectrum Relocation Fund for Certain Pre-Auction Costs”. Mr. Taylor stated “The OMB guidance to federal agencies implements one of the WBC’s legislative priorities. The WBC supports providing NTIA and other affected agencies resources for spectrum planning and management activities to 1) improve federal spectrum efficiency, 2) protect critical federal communications capabilities and 3) identify, evaluate, reallocate and clear licensed spectrum for commercial use.”

Taylor Talks Odds of Inclusion of Spectrum Auctions in the Conference Committee’s Tax Deal


December 23, 2011, Ted Gotsch, ted.gotsch@wolterskluwer.com

“Procedurally, the deal effectively limits the scope of the conference and increases the odds that spectrum legislation based largely on the JOBS Act will be incorporated into any conference agreement that emerges,” said David Taylor, executive director of the Wireless Broadband Coalition.

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David Taylor on Year-End Outlook for Spectrum

“The fact that Walden’s spectrum bill was in the House’s original payroll bill (HR-3630) ‘gives both House and Senate conferees procedural and budgetary incentives to use spectrum auction receipts’ as an offset for the other spending measures in the payroll tax bill, said David Taylor, managing partner of Capitol Solutions.”

Capitol Solutions’ David Taylor Talks Outlook for Spectrum Legislation with Telecommunications Reports

“There are a variety of budgetary, procedural, and jurisdictional challenges those seeking to attach spectrum legislation to an omnibus appropriations bill would have to overcome,” said David Taylor, managing partner of Capitol Solutions, a lobbying firm whose clients include wireless industry entities.  “The fact that the legislation is not part of either the House or Senate-passed versions of any of the appropriations bills in conference is a good place to start that list.”

He also noted that policy language, such as that dealing with the construction of a nationwide, interoperable public safety broadband network, could be stricken from appropriations legislation because it wouldn’t involve appropriations of funds.

But Mr. Taylor is one of many industry lobbyists who is still bullish on spectrum legislation getting through due to its popularity – and ability to raise billions of dollars to help with the deficit.  Although the supercommittee process failed, lawmakers are still likely next year to look for savings to offset mandatory cuts that would come in 2013, Mr. Taylor said, adding that spectrum auctions are a good bet to be part of that effort.

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Greg Waring Featured in CQ’s “On the Move”

Capitol Solutions’ Greg Waring was featured in CQ Weekly’s “On the Move,” a profile on people in new roles shaping the debate in Washington.

CQ Writes, “An aide to Maryland Rep. Chris Van Hollen has left for a job at a Washington lobbying firm. Greg Waring was a senior analyst for the House Budget Committee, where Van Hollen is the ranking Democrat. Waring now is a vice president for budget policy and analysis at Capitol Solutions […]

Waring, 34, is focusing on telecommunications clients, who might gain if the committee decides to auction off more electromagnetic spectrum. Wireless companies need the spectrum to transmit content. The firm represents CTIA-The Wireless Association, the trade group for Verizon and AT&T. “It’s an opportunity for Congress to produce savings that are relatively non-controversial and bipartisan,” he says. At the budget panel, Waring was Van Hollen’s principal analyst on spectrum issues.”

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David Taylor on Spectrum Auctions in Communications Daily

“The president’s proposal is further evidence that spectrum auctions remain one of the few multibillion dollar deficit reduction options that Democrats, Republicans, Congress and the Administration support,” said Managing Partner David Taylor of Capitol Solutions, whose clients include wireless interests that seek incentive auctions. “The administration’s decision to include spectrum auctions on the list of options it supports to finance the president’s new jobs plan has increased the prospects that the Joint Select Committee on Deficit Reduction includes spectrum issues in its recommendations to Congress later this year.” While President Barack Obama outlined his spectrum objectives in the FY 2012 budget, the Jobs Act “provides a much clearer indication of the steps the Administration supports to achieve those goals,” Taylor said.

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