Sen. Rounds Claims DOD Pressured to Back Scuttled Spectrum Omnibus Deal

Sen. Mike Rounds, R-S.D., who sank a bid by telecom-focused congressional leaders to attach a modified version of the chamber's version of the Spectrum Innovation Act (S-4117) and other related telecom priorities to the FY 2023 appropriations omnibus measure (see 2212190069), claimed Tuesday that DOD faced outside pressure to agree to back the proposal. Rounds vowed to continue opposing future attempts to weaken DOD's authority to manage its spectrum holdings.

Senate Commerce Committee backers of the scuttled spectrum deal were mystified by Rounds’ objections to their proposal but remain optimistic about its prospects in the next Congress. The omnibus text Capitol Hill leaders released Tuesday instead includes a short-term extension of the FCC's auction authority through March 9, 2023, as expected. The proposed spectrum deal would have renewed the commission's remit through Dec. 31, 2025. The omnibus also contained a handful of tech priorities, including text from the No TikTok on Government Devices Act (S-3455).

DOD’s ability to use its spectrum is a “national security” issue and “in my opinion, this is way too important to simply have a change in what is already a process that allows DOD significant authority in making a final determination about the release of spectrum in a very sensitive part” of the airwaves, Rounds told reporters. The spectrum proposal modified the Infrastructure Investment and Jobs Act’s original 3.1-3.45 GHz band framework to restore NTIA’s spectrum management authority by giving the Commerce Department the ability to override DOD’s recommendations for the frequency based on a pending study on relocating its systems off the band. DOD would be able to appeal Commerce's decision to the White House.

IIJA’s original language is what “we’ve agreed to” and lawmakers should “let that process work,” Rounds said: DOD’s spectrum policy role “has been an ongoing concern” among department officials “for years. It has not changed. It has become more significant, not less significant.” Rounds apparently went to Minority Leader Mitch McConnell, R-Ky., with his objections, lobbyists said. IIJA’s passed language gave DOD more power to identify how much of the band the federal government repurposes. DOD signed off on the proposal despite some misgivings, lobbyists said. NTIA and the White House Office of Science and Technology Policy also backed the language.

“My impression, and I can’t say this for sure, but I suspect” DOD was “told to stand down,” Rounds said. “I can’t do that.” There “is no way that they would have simply agreed to take away the authority they currently have without someone asking them to give back that authority,” he said: “My only assumption is that someone leaned on them to back off.” He spoke to Defense Secretary Lloyd Austin and Joint Chiefs of Staff Chairman Gen. Mark Milley “over the last several weeks” about his spectrum concerns but said he hadn’t communicated with either in recent days as the scuttled deal coalesced. The White House and DOD didn't comment.

Proposal Details

Rounds clarified in an earlier statement he doesn’t oppose “other telecom measures” in the spectrum deal, “but I cannot support using spectrum auctions that damage our national security as the pay-for.” The 111-page proposal lawmakers circulated Sunday would have allocated up to $23.28 billion in potential proceeds from the 3.1-3.45 GHz auction and sales of frequencies identified under the 2015 Spectrum Pipeline Act to a Spectrum Auction Trust Fund to disburse for telecom priorities. The proposal calls for prioritizing allocation of a combined $19.6 billion in sales proceeds for deficit reduction.

The proposal would allocate up to 30% of the auction trust fund's allocation, up to $14.8 billion, to pay for next-generation 911 tech upgrades. That amount and additional NG-911 language mirrors what the House Commerce Committee included in its Leading Infrastructure for Tomorrow’s (Lift) America Act (HR-1848) and budget reconciliation proposals. Lawmakers proposed allocating 30% of the trust fund, up to $3.08 billion, to fully fund the FCC's Secure and Trusted Communications Networks Reimbursement Program. A further 30% of the funding, up to $5 billion, would go to fund middle-mile projects previously included in IIJA. Senate Commerce Chair Maria Cantwell, D-Wash., spearheaded the push for that money. The proposal allocates 5% of the fund, or up to $200 million, for a proposed NTIA Telecommunications Workforce Training Grant Program Senate Commerce ranking member Roger Wicker, R-Miss., proposed in the Improving Minority Participation and Careers in Telecommunications Act (S-996). An additional 5% of the fund, up to $200 million, would go to a proposed NTIA-led Minority Serving Institutions Program.

S-4117 lead sponsor and Senate Communications Subcommittee Chairman Ben Ray Lujan, D-N.M., told us he’s holding out hope he and other lawmakers can “try and get to an agreement” to move forward on the spectrum deal despite what he called “bumps along the way.” There’s “always a chance to get something done until the final vote” happens, he later told reporters. “It’s important” that Congress at least reauthorize the FCC’s auction authority even for a short time since it “encourages Congress to act sooner rather than later,” Lujan said: “I have not lost hope that something can still come to fruition based on where everything is.”

Senate Communications ranking member John Thune, R-S.D., was more definitive, telling reporters Monday he believes “a clean extension” of the FCC’s authority was all that Congress would be able to pass via the omnibus given current dynamics. He sidestepped commenting on Rounds’ objections to the proposal but said “we’ll try and … continue to hammer away on a bigger package deal next year.”

'Major Miss'

"This is a major miss by the 117th Congress,” said Cooley’s Robert McDowell. “America needs more spectrum put into the pipeline as soon as possible, and now we are facing a new kind of supply chain problem that will have longer-term economic and competitiveness” effects. “On the other hand, this will drive up prices in the spectrum secondary markets,” he said: “It will also drive investment in technologies that enhance spectral efficiency. So the market has ways to work around government-created distortions."

“The fact that the Spectrum Innovation Act is off the table is simply baffling, especially when it was a very modest proposal,” emailed Digital Progress Institute President Joel Thayer: “My guess is that spectrum will be front and center in the telecom policy space. It kind of has to be due to the lack of future spectrum to auction off. The unfortunate reality is that the more we stall on this, the more control we cede to China on 5G and 6G.”

“It's not a surprise” that the spectrum deal fell through, “nor does it matter in a practical sense,” said New Street’s Blair Levin. “There are no auctions teed-up in the near term, nor does the industry need a new tranche of spectrum, as it is fully occupied building out networks to utilize spectrum purchased over the last couple years.” He said predicting the legislative outlook “as opposed to the performative activity of the next Congress, particularly the House, is tricky, but there is an opportunity to produce a bipartisan comprehensive spectrum reform package that will enable both public and private enterprises to have a clearer and improved road map for spectrum use in the decade ahead.”

Others say the issues not addressed won’t go away. Competitive Carriers Association President Steve Berry said it was “disappointing” that Congress couldn’t reach agreement to cover the remaining $3.08 billion shortfall in funding for the rip-and-replace program. “Many eligible small and rural carriers began work over two years ago, or are frozen without sufficient funding to begin work, to remove and replace covered equipment to answer Congress’s national security mandate to address the threat posed by Chinese equipment,” Berry emailed: “Full funding is desperately needed for this work to be completed. Without adequate funding, not only their customers, but also the millions that roam on their networks each year, risk losing service. This is unacceptable in today’s day and age.”

“The necessity of getting more spectrum into the market isn't going away, and legislative oomph will likely be necessary to make it happen,” said Information Technology and Innovation Foundation Broadband and Spectrum Policy Director Joe Kane. “All the ideas and bills from this Congress will certainly be back on the table in January, and, perhaps the lack of a time crunch … will allow for progress on some of the more complicated issues, like lower-3 GHz and support for efforts to enhance federal spectrum efficiency.”