Public Media Policybase

Wireless Technology Investment and Digital Dividends Act, 2002

On May 2, 2002, Rep. Edward J. Markey (D-Mass.) introduced a bill to authorize the investment of spectrum auction proceeds in public-service content for digital media, apparently inspired in part by the Digital Promise Project of 1991. See also his remarks about the bill and Current coverage of the bill. The bill was referred to the House Committee on Energy and Commerce.

A BILL
To allocate spectrum for the enhancement of wireless telecommunications, and to invest wireless spectrum auction proceeds for the military preparedness and educational preparedness of the United States for the digital era, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the `Wireless Technology Investment and Digital Dividends Act of 2002′.

SEC. 2. FINDINGS.

    The Congress finds the following:
      (1) The United States stands to benefit in the global economy by reallocating additional airwave assets to the private sector for innovative wireless services.
      (2) Congress previously mandated reallocation of over 200 megahertz of frequency spectrum from Government use to the Federal Communications Commission for private sector licensing.
      (3) This previous reallocation spurred deployment of new digital wireless services, Government action that helped to lower prices, create jobs, and increase consumer choice.
      (4) Similarly, the public interest would be served by reallocating additional portions of the public’s airwaves for use by the private sector for advanced wireless services.
      (5) A continuation of our competition-based spectrum policy can promote innovation, create jobs, lower prices, and increase consumer choice in the marketplace.
      (6) Determining which specific frequencies to reallocate must be done in a manner that reflects an appropriate balance between the needs of current users and the legitimate requirements of the private sector for introducing new services.
      (7) Spectrum auctions will reap revenue that can be used to compensate incumbent users, including the military, for relocation costs.
      (8) Auction proceeds can additionally be utilized to foster the use of educational technology, promote deployment of public telecommunications infrastructure, and establish a self-sustaining fund for grants to address the digital divide.
      (9) While more and more Americans are utilizing electronic tools in every aspect of their lives, a digital divide still remains in many areas of our country between rich and poor, and between urban and many rural areas.
      (10) Utilizing spectrum auction proceeds to enhance the use of educational technology and to increase public access to advanced telecommunications underscores our commitment to ensuring that our citizens obtain the skill set necessary to compete for jobs in the new economy.
      (11) Educational preparedness will be critical if the United States is to have a technologically savvy workforce to fuel growth of our high tech economy in the global marketplace.
      (12) The creation of a self-sustaining mechanism to make available annual funding for needed public access and educational technology grants is an appropriate use of revenue generated from corporate use of the public’s airwaves.
      (13) A policy that promotes investment in wireless technology along with a concomitant investment in the human resources of our Nation is in the national economic interest of the United States.

TITLE I–TELECOMMUNICATIONS INFRASTRUCTURE DEVELOPMENT
AND CITIZEN EMPOWERMENT
SEC. 101. DIGITAL DIVIDENDS TRUST FUND.

    Title III of the Communications Act of 1934 is amended by inserting after section 309 (47 U.S.C. 309) the following new section:

`SEC. 309A. DIGITAL DIVIDENDS TRUST FUND.

    `(a) ESTABLISHMENT-
      `(1) FUND ESTABLISHED- There is hereby established in the Treasury of the United States the Digital Dividends Trust Fund (hereinafter in this section referred to as the `Fund’).
      `(2) DEPOSITS- The corpus of the Fund shall be the amounts deposited into the Fund pursuant to section 309(j)(8)(D)(ii).
    `(b) BOARD OF TRUSTEES- The Fund shall be administered under the direction of a board of directors (hereinafter in this section referred to as `the board’) comprised of–
      `(1) the Assistant Secretary for Communications and Information of the Department of Commerce; and
      `(2) 6 additional members, appointed by the President, with experience in one or more of the following fields: investment management; corporate finance; computer software; telecommunications; and education and cultural heritage.
    `(c) ADMINISTRATION; PRESERVATION OF PRINCIPAL- All deposits described in subsection (a)(2) shall be invested in a manner that the board finds prudent and reasonable and that is designed to ensure that annual income is sufficient to cover the uses specified in subsection (d) and the other expected costs of carrying out the purposes of this section. Such deposits shall not be expended for the support of any of the purposes authorized by subsection (d).
    `(d) USE OF INCOME- Income to the fund shall be allocated by the Board as follows:
      `(1) HUMAN CAPITAL TELECOMMUNICATIONS INVESTMENTS- Not to exceed 65 percent of the income for any fiscal year to the human capital telecommunications investment program under section 106 of the National Telecommunications and Information Administration Organization Act.
      `(2) BROADBAND INFRASTRUCTURE INVESTMENTS FOR PUBLIC ACCESS AND RURAL DEVELOPMENT- Not to exceed 65 percent of the income for any fiscal year to the Public Broadband Infrastructure Investments Program under section 107 of the National Telecommunications and Information Administration Organization Act.’.

SEC. 102. HUMAN CAPITAL TELECOMMUNICATIONS INVESTMENTS.

    Part A of the National Telecommunications and Information Administration Organization Act (47 U.S.C. 901 et seq.) is amended by adding at the end the following new section:

`SEC. 106. HUMAN CAPITAL TELECOMMUNICATIONS INVESTMENTS.

    `(a) GRANT PROGRAM AUTHORIZED- From the funds available under section 309A(c)(1) of the Communications Act of 1934, the Secretary shall carry out a Human Capital Telecommunications Investment Program in accordance with the requirements of this section.
    `(b) USE OF GRANT FUNDS- Funds made available by a grant under this section may be used for–
      `(1) training for teachers and other educational personnel at schools and libraries eligible for services or assistance under section 254;
      `(2) research and development for sophisticated, content-related educational software and programming designed to enhance learning in elementary, secondary, and postsecondary education and to enable schools, libraries, and museums to reach outside their walls and into homes, other schools, and workplaces;
      `(3) digitizing eductional materials held in our Nation’s libraries, archives, and museums and other institutiions of learning;
      `(4) technology projects supported by volunteers enrolled in the AmeriCorps and designated by the Corporation for National Service;
      `(5) projects enhancing the access of individuals with disabilities to advanced telecommunications services;
      `(6) projects for retraining workers and unemployed individuals with skills applicable to the new economy; and
      `(7) projects for after school programs for youth focused on computer literacy and interaction.
    `(c) ELIGIBLE APPLICANTS- The following organizations and agencies shall be eligible to apply for funds under this section:
      `(1) an elementary, secondary, or postsecondary educational institution;
      `(2) a nonprofit agency or organization that is exempt from income taxes under section 501(c)(3) of the Internal Revenue Code of 1986; or
      `(3) an agency or instrumentality of a State or local government of the United States (including an agency or instrumentality of a territory or possession of the United States).
    `(d) APPLICATION- Any organization or entity seeking a grant under this section shall submit to the Secretary an application at such time, in such manner, and containing or accompanied by such information and assurances as the Secretary may require by regulation.’.

SEC. 103. PUBLIC BROADBAND INFRASTRUCTURE INVESTMENTS.

    Part A of the National Telecommunications and Information Administration Organization Act is amended by adding after section 106 (as added by section 102 of this Act) the following new section:

`SEC. 107. PUBLIC BROADBAND INFRASTRUCTURE INVESTMENTS PROGRAM.

    `(a) GRANT PROGRAM AUTHORIZED- From the funds available under section 309A(c)(2) of the Communications Act of 1934, the Secretary shall carry out a Public Broadband Infrastructure Investments Program in accordance with the requirements of this section.
    `(b) USE OF GRANT FUNDS-
      `(1) PERMITTED USES- Funds made available by a grant under this section may be used for–
        `(A) local and regional initiatives that expand public access to advanced telecommunications and information services at locations that are accessible to the general public;
        `(B) deployment of broadband telecommunications services in unserved rural areas; and
        `(C) deployment of broadband telecommunications services to low-income housing and community centers.
      `(2) REQUIRED USES- Not to exceed $300,000,000 from the funds available under section 309A(c)(2) of the Communications Act of 1934 for each of the first 5 fiscal years shall be made available by grant for the purpose of converting public broadcasting facilities to digital technology through the public telecommunications facilities program under section 392 of the Communications Act of 1934.
    `(c) ELIGIBLE APPLICANTS- The following organizations and agencies shall be eligible to apply for funds under this subsection (b)(1):
      `(1) a nonprofit agency or organization that is exempt from income taxes under section 501(c)(3) of the Internal Revenue Code of 1986; or
      `(2) an agency or instrumentality of a State or local government of the United States (including an agency or instrumentality of a territory or possession of the United States).
    `(d) APPLICATION- Any organization or entity seeking a grant under this section shall submit to the Secretary an application at such time, in such manner, and containing or accompanied by such information and assurances as the Secretary may require by regulation.’.

TITLE II–AVAILABILITY OF SPECTRUM
FOR ADVANCED COMMERCIAL MOBILE SERVICES
SEC. 201. AVAILABILITY OF SPECTRUM FOR ADVANCED COMMERCIAL MOBILE SERVICES.

    (a) IDENTIFICATION- Section 113 of the National Telecommunications and Information Administration Organization Act (47 U.S.C. 923) is amended by adding at the end thereof the following new subsection:
    `(j) DESIGNATION OF SPECTRUM FOR ADVANCED COMMERCIAL MOBILE SERVICES; RELOCATION PLAN-
      `(1) PLAN REQUIRED- The Secretary shall, not later than January 1, 2003, prepare, make publicly available, and submit to the President, the Congress, and the Commission a report that–
        `(A) designates bands of frequencies for reallocation for the provision of advanced commercial mobile services;
        `(B) in consultation with the Commission, establishes a plan for the relocation or modification of Federal Government stations currently occupying the band of frequencies located at 1,710-1,850 megahertz, including a description of the phases by which such relocation or modification shall be accomplished consistent with the public interest; and
        `(C) designates a 20-megahertz band of contiguous frequencies located below 2 gigahertz, and a band of between 3 and 500 megahertz of contiguous frequencies above 2 gigahertz and below 6 gigahertz, for reallocation to the public for unlicensed use.
      `(2) DEADLINES-
        `(A) MINIMUM FOR 2005- Notwithstanding any other provision of law, such plan shall ensure that not less than 30, but not more than 45, megahertz of paired spectrum is available and usable for advanced commercial mobile services by December 31, 2005.
        `(B) MINIMUM FOR 2008- Notwithstanding any other provision of law, such plan shall ensure that an additional 50 megahertz of paired spectrum is made available and usable for advanced commercial mobile services by December 31, 2008.
        `(C) POTENTIAL ADDITIONAL SPECTRUM FOR TIMELY REALLOCATION- Notwithstanding any other provision of law, the Commission shall ensure that any rules necessary to effectuate the timely transition to digital television are promulgated and completed by the Commission prior to making available the bands of frequencies at 747-762 and 777-792 megahertz for advanced commercial mobile services or other competitive wireless services. The Commission shall ensure that any plan to achieve the clearance of such frequencies shall not result in the unjust enrichment of any incumbent licensee.
        `(D) DEFINITION- For the purposes of subparagraph (C), the term `rules necessary to effectuate the timely transition to digital television’ includes rules requiring must-carry of free, over-the-air signals of broadcast television stations, minimum digital television network programming and broadcasting requirements, and rules requiring that models of television receiver equipment have the capability of displaying digital television signals by certain dates.’.
    (b) ALLOCATION- Section 115 of the National Telecommunications and Information Administration Organization Act (47 U.S.C. 925) is amended by adding at the end the following new subsection:
    `(d) ALLOCATION OF SPECTRUM FOR ADVANCED COMMERCIAL MOBILE SERVICES-
      `(1) IN GENERAL- With respect to the frequencies identified in section 113(j)(1)(A) and in section 113(j)(1)(B), the Commission shall, within 60 days of the release of the report required by section 113(j), commence a proceeding to allocate such frequencies for advanced commercial mobile services and adopt technical, licensing, and service rules applicable to such frequencies. Such frequencies shall be assigned by competitive bidding pursuant to section 309(j) of the 1934 Act on a schedule consistent with the relocation plan established pursuant to section 113(j)(1)(B) and the requirements of section 113(g)(1)(A).
      `(2) SPECTRUM COMMONS- With respect to the frequencies designated for reallocation pursuant to section 113(j)(1)(C), the Commission shall establish any rules necessary for unlicensed use of such spectrum and make it available to the public by December 31, 2004.
      `(3) PRESERVATION OF COMPETITION-BASED SPECTRUM POLICY- The frequencies identified in paragraph (1) shall be assigned by the Commission pursuant to section 309(j) of the 1934 Act. In conducting such assignment, the Commission shall reestablish limits on the amount of spectrum that a licensee may accumulate or utilize in individual markets in a manner that is sufficient to ensure, at a minimum, the same number of unaffiliated licensees that were competing in such markets as of October 1, 2001.
      `(4) PRESERVATION OF ITFS- Notwithstanding any other provision of law, the Commission shall not commence any proceeding to reallocate the band of frequencies located at 2,500-2,690 megahertz from instructional television fixed services to any other service.’.

SEC. 202. RELOCATION OF FEDERAL GOVERNMENT STATIONS.

    (a) RELOCATION FROM SPECTRUM FOR ADVANCED COMMERCIAL MOBILE SERVICES- Section 113(g) of National Telecommunications and Information Administration Organization Act (47 U.S.C. 923(g)) is amended by adding at the end the following new paragraph:
      `(4) SPECIAL PROVISIONS FOR RELOCATION FROM SPECTRUM FOR ADVANCED COMMERCIAL MOBILE SERVICES-
        `(A) APPLICABILITY- The provisions of this paragraph shall apply in lieu of the provisions of paragraphs (1) through (3) with respect to relocating the operations of Federal entities from the frequencies reallocated to advanced commercial mobile services under section 115(d).
        `(B) AUTHORITY TO ACCEPT COMPENSATION- In order to expedite the commercial use of the electromagnetic spectrum and notwithstanding section 3302(b) of title 31, United States Code, the head of any Federal entity may accept from the Spectrum Relocation Trust Fund compensation for the costs of relocating such entity’s operations from one or more frequencies to another frequency or frequencies. The costs for which the Federal entity shall be compensated shall be the relocation costs of the entity’s operations, except that the entity may be compensated for the replacement costs of relocating a particular station if the head of such entity can demonstrate to the President that such a level of compensation is vital to the national security or public safety.
        `(C) REQUIREMENT TO COMPENSATE FEDERAL ENTITIES- The Federal entity shall be compensated in advance for the costs that the Federal entity incurs under subparagraph (B). Such compensation may take the form of a cash payment or in-kind compensation. Such compensation shall come from the Spectrum Relocation Trust Fund.
        `(D) SPECTRUM RELOCATION TRUST FUND-
          `(i) ESTABLISHMENT- There is established in the Treasury a Spectrum Relocation Trust Fund (referred to in this subparagraph as the ‘Fund’), consisting of amounts deposited pursuant to section 309(j)(8)(D)(i) of the 1934 Act.
          `(ii) EXPENDITURE OF AMOUNTS FOR REIMBURSEMENT OF RELOCATED OPERATIONS- The Secretary of the Treasury shall transfer from the Fund to each Federal entity the sums identified under subparagraph (B) to pay the costs of relocation or modification of the entity’s stations and the head of such entity shall use such sums to make payments to satisfy such costs.
          `(iii) MAXIMUM DEPOSITS- If the NTIA determines that the proceeds of an auction the proceeds of which are required to be deposited in the Fund have exceeded or will exceed a sum equal to (I) the replacement costs incurred in connection with such auction, plus (II) 10 percent of any auction proceeds above such amount, the NTIA shall notify the Secretary of the Treasury. Upon receipt of such notice, the Secretary of the Treasury shall, notwithstanding section 309(j)(8) of the Communications Act of 1934 (47 U.S.C. 309(j)(8)), transfer the remainder of the proceeds of any such auction in excess of such sum to the Digital Dividends Trust Fund established by section 309A of the 1934 Act.
          `(iv) TERMINATION- When the NTIA determines that no additional Federal Government stations need to be relocated or modified, NTIA shall notify the Secretary of the Treasury, who shall terminate the Fund. Any unallocated funds remaining in the Fund shall be transferred to the Fund specified in clause (iii).’.

SEC. 203. DEFINITIONS.

    Section 111 of the National Telecommunications and Information Administration Organization Act (47 U.S.C. 921) is amended by adding at the end the following new paragraphs:
      `(4) The term `relocation costs’ means the costs that will be incurred by a Federal entity to achieve comparable capability of systems that are relocated to a new frequency assignment or band or otherwise modified, including the costs of any modification, replacement, or reissuance of equipment and facilities incurred by that entity.
      `(5) The term `replacement costs’ means the costs that would be incurred by a Federal entity to replace existing equipment or facilities in order to relocate to a new frequency assignment or band.’.

TITLE III–DISTRIBUTION OF PROCEEDS OF AUCTIONS
FOR ADVANCED COMMERCIAL MOBILE SERVICES
SEC. 301. DIVISION BETWEEN TRUST FUNDS.

    Section 309(j)(8) of the Communications Act of 1934 (47 U.S.C. 309(j)(8)) is amended–
      (1) in subparagraph (A), by striking `subparagraph (B)’ and inserting `subparagraphs (B) and (D)'; and
      (2) by adding at the end the following new subparagraph:
        `(D) PROCEEDS OF AUCTIONS FOR ADVANCED COMMERCIAL MOBILE SERVICES- Notwithstanding subparagraph (A), the proceeds of any competitive bidding under this subsection with respect to the spectrum allocated for advanced commercial mobile services pursuant to section 115(d)(1) of the National Telecommunications and Information Administration Organization Act shall, after the deduction of salaries and expenses required by subparagraph (B), be allocated as follows:
          `(i) the first $5,000,000,000 shall be deposited in the Relocated Federal Entities Trust Fund established BY section 113(g)(4)(D) of such Act; and
          `(ii) the remainder of the proceeds of such competitive bidding shall be deposited in the Digital Dividends Trust Fund established by section 309A of this Act.’.

Markey’s remarks

Rep. Edward J. Markey’s remarks marking his introduction of the Wireless Technology Investment and Digital Dividends Act, introduced May 2, 2002. Extension of remarks in the House of Representatives, May 3, 2002.
  • Mr. MARKEY . Mr. Speaker, today I am introducing the “Wireless Technology Investment and Digital Dividends Act.” I am proposing this measure in order to advance three key goals: (1) to create a permanent public interest telecommunications trust fund; (2) to establish a “Spectrum Commons”; and (3) to recapture wireless policymaking from unrelated budgetary initiatives.
  • Mr. Speaker, the public deserves to reap the benefits of the sale of licenses to its air-waves, not only in the offering of new commercial services or the temporary infusion of cash into the Federal treasury. The public should also enjoy the “dividends” that can be reaped by reinvesting money raised through use of a public asset in a manner designed to promote educational technology projects, educational software R&D, as well as initiatives addressing the digital divide.
  • The bill I am introducing today creates a permanent trust fund (the “Digital Dividends Trust Fund”) from wireless auction revenue to fund such public interest telecommunications initiatives. Splitting the grants into two general categories–“human capital telecommunications investments” and “broadband infrastructure investments for public access and rural development” the Digital Dividends Trust Fund authorizes grants for the following initiatives: Training of teachers & other personnel at schools and libraries eligible for E-rate funding; R&D for cutting-edge educational software designed to enhance learning in schools; Digitizing educational materials held in our nation’s libraries, archives, and museums; Technology projects supported by volunteers enrolled in AmeriCorps; Projects enhancing the access of individuals with disabilities to advanced telecommunications services; Retraining workers and unemployed individuals with skills applicable to the new economy; After-school programs for youth focused on computer literacy and interaction; Local and regional programs to expand access to advanced telecommunications in areas available to the general public; Broadband deployment to low-income housing and community centers and to unserved rural areas; and, Conversion of public radio and television broadcasting stations to digital broadcasting technology.
  • In addition, Mr. Speaker, the legislation I introduce today establishes a “Spectrum Commons.” High tech manufacturers, entrepreneurs and the proverbial `kid in the garage’ could make more robust use of wireless communications if sufficient spectrum were available in unlicensed form for the general public. The bill requires the FCC to establish a 20 MHz band of contiguous frequencies below 2 GHz as well as between 3 to 500 MHz between 2 GHz and 6 GHz–a swath of the airwaves that would remain open to the public and unlicensed. Such a public set-aside could foster the formation of an open platform for innovation, entrepreneurial activity, and public communications. It would also militate against unhealthy consolidation of spectrum in the hands of too few providers.
  • An unlicensed area of the airwaves will permit the public, through the use of `smart’ radio technology and better receiver equipment, to harness the airwaves for countless applications if the government is willing to give back to the public a portion of its own airwaves in such an unlicensed format. From “wi-fi” technology and low power “Bluetooth” wireless connections, to so-called “802.11b” protocols, wireless local area networks and Net connections, utilization of publicly available airwaves can help connect people and businesses in cost-effective and spectrum efficient ways. The “Spectrum Commons” will also help to propel economic growth and innovation by opening up the airwaves to new marketplace entry by individuals and entities unaffiliated with established network providers.
  • Finally, Mr. Speaker, it is important that telecommunications policymaking reassert itself in wireless policy, where for too long budget priorities have warped sound policy. Since Congress first enacted legislation in 1993 to permit the Federal Communications Commission (FCC) to distribute certain airwave licenses to the public through the use of auctions, the FCC has used this licensing mechanism numerous times and the U.S. Government has reaped billions of dollars for general revenue purposes. The initial principle behind auctions was to enhance telecommunications policy goals through the efficient licensing of frequency spectrum, where the revenue an auction raised represented an additional beneficial dividend to the taxpayer.
  • Over time, however, the use of auctions has become perverted. They are increasingly advocated primarily for purposes of raising general revenue irrespective of whether such auctions advance sound telecommunications policy. Moreover, the money raised from auctions has been sent directly to the U.S. Treasury. The money from telecommunications auctions was not reinvested in order to enhance our democracy, bridge the digital divide, or promote public interest telecommunications projects. Instead, the auction of licenses for use of the public’s airwaves has been subjected to the alchemy of budget scorers intent on transforming thin air into gold.
  • Legitimate telecommunications policy objectives are often undermined by proposals to auction certain slices of the airwaves on a date dictated by budgetary scoring needs. Instead, auctions should only be scheduled once the appropriate telecommunications policy goals have been agreed upon and the conditions necessary for successful licensing through auctions have been secured.
  • This legislation requires the FCC, prior to scheduling upcoming auctions, to take action to achieve the timely transition to digital television by establishing rules governing must-carry issues, minimum programming and broadcasting requirements, and digital television receiver benchmarks. It also directs the NTIA and the FCC to take action to secure additional spectrum for advanced wireless services–including mobile services such as so-called “3G” services. Sound telecommunications policy, consistent with the public interest, would be greatly furthered by putting the “policy horse” back in front of the “auction cart.” The bill re-establishes this principle in wireless policy.

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