The proposed 2002 budget released Monday calls for the auctioning of certain spectrum as much as four years later than originally planned. This is spectrum that companies such as Verizon Wireless and Cingular have eyed for 3G, or high-speed, always-on Internet service.
The bands are currently occupied by companies that broadcast analog TV signals, and it's unclear when the airwaves will be freed up for wireless use. The lack of certainty has left wireless carriers wondering how much they should bid if a spectrum auction is held anytime soon.
Bush wants to postpone the auctions of the spectrum containing TV channels 60 to 69 until 2004 and channels 52 to 59 until 2006. Each equals a four-year delay from the date outlined during the Clinton administration, although the 60 to 69 auction already has been postponed several times past its 2000 date and is now scheduled for Sept. 12.
The administration wants more certainty for these auctions as the TV channels operating in the spectrum don't have to leave until 2006 or when 85 percent of the United States has switched from analog television to digital television, whichever comes later.
The proposed postponement is not related to any potential auction of spectrum used by the military in the 1.7GHz band or fixed wireless consumers such as Sprint and WorldCom in the 2.5GHz band. Nor does it affect the recently completed airwaves auction that netted the U.S. Treasury nearly $18 billion.
Bush's proposed delay was met with approval by a key member of the House of Representatives, who will play a role in shaping the final budget.
"The president's decision to postpone certain spectrum auctions makes a lot of sense to me, and I will support his efforts," said House Commerce Committee Chairman Billy Tauzin, R-La.
But Tauzin said he feels differently about a related Bush proposal to impose a fee on broadcasters for the continued use of analog spectrum, a fee that would be lifted once a station converts to digital and gives back the analog slot. Such a fee was also proposed during the Clinton administration but never made it through Congress.
"Penalizing America's broadcasters--who are struggling to make the transition to digital--with punitive spectrum fees is a terrible idea, and I will fight it every inch of the way," Tauzin said.
Tauzin also said he was disappointed the budget didn't do more to help the Federal Communications Commission hire more engineers and update its lab.
"FCC Chairman Michael Powell has made a compelling case to Congress for the need for additional money," Tauzin said. "Given the FCC's enormous responsibilities in the digital age, I will personally ask the White House to reconsider the agency's recommended funding level."
Other budget highlights:
As expected, President Bush called for the reduction of the Department of Commerce's Technology Opportunity Program (TOP) from $45.5 million to $15.3 million, and also called for Commerce to study the program before it could receive further funding. The program, championed in the Clinton administration, promotes widespread availability of broadband infrastructure in underserved areas to provide social services.
Bush will seek to make permanent the research and development tax credit, a benefit that will cost the U.S. Treasury $1.7 billion this year. The Democratic leadership also supports a permanent tax credit.
The budget includes $4.5 billion for the National Science Foundation, which the administration says is a 15 percent increase over two years. The administration will undertake a review of the foundation to "determine how best to support (its) budget in a sustained manner over time," the budget said. According to the budget, the agency represents 3 percent of federal research and development spending while supporting nearly half of the nonmedical basic research at academic institutions.