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Summary:
For the last decade, the primary method by which the Federal Communications Commission (FCC) has assigned access to radio spectrum is through the auctioning of licenses for specific frequencies in designated geographical areas. Subsequently, with the recognition by capital markets that a spectrum license is a valuable asset, and with the relaxation of rules regarding ownership, sale, and trading of licenses, radio spectrum licenses have been increasingly treated like other financial holdings. The ongoing policy debate on the legal and economic implications of various forms of spectrum rights ownership has expanded since auctions began in the mid-1990s. Other major policy debates include the structuring of the auction process and of the auction rules that decide eligibility for bidding. A number of these debates have been addressed in the form of hearings held by the Senate Committee on Commerce, Science, and Transportation and the House Committee on Energy and Commerce. Recent hearings have sought testimony regarding the upcoming auction of licenses for radio spectrum at 700 MHz being vacated by television broadcasters as part of the transition from analog to digital technologies. Preparation for this auction has prompted a policy debate about a governance structure that would permit public sector entities -- in this case first responders and other emergency workers -- to share spectrum rights and network capacity with commercial interests. The FCC has received numerous proposals for setting up a governance model; this report discusses three: creating an entity to build a shared network on new spectrum at 700 MHz; building a shared network on spectrum already allocated to public safety users; and combining spectrum licensed for public safety with a commercial license for a shared, nationwide network. One of the models is the basis for a bill introduced by Senator John McCain (Save Lives Act, S. 744). Among its provisions, the bill would create a framework, and funding, to govern a shared network and spectrum access. The FCC has the regulatory authority to set rules for auctions and is presently considering options for using its rule-making authority to create a shared network that would serve both the public safety community and commercial interests. Other options, including a Congressionally-chartered corporate structure, are also available to provide governance of a shared network. This report has been written in order to provide Congress with a summary of some of the issues being debated in anticipation of an upcoming ruling by the FCC regarding the auction of licenses for spectrum at 700 MHz. It will be updated after the FCC announces its decisions.
