Why Did The White House Support Reallocating D Block? It’s Smart Politics.

The announcement that the White House that it would support reallocating the D Block – the 10 MHz of spectrum left over from big broadcast band auction of 2008 (the 700 MHz Auction) – to public safety use rather than auction it for commercial use defies conventional wisdom on two fronts. First, the National Broadband Plan called for an auction of D block to commercial providers as a means of providing critical spectrum for broadband, using the revenue to fund the construction of the public safety network, and giving public safety access to the rest of the 700 MHz band. Given that the Administration generally supported the FCC’s assessment that we have a looming “spectrum crisis” (although they took no position, until now, on D Block), why pull 10 MHz of prime spectrum ready for auction out of contention? Second, conventional wisdom holds that because of deficit concerns, lust for auction revenue will drive spectrum policy. But the White House not only endorses taking prime spectrum off the market, it wants to spend additionally billions on public safety infrastructure (under the FCC’s original plan, the auction of D Block would fund the build out of an interoperable national public safety network). So what happened?

The White House Recognizes The Gentleman From West Virginia

The short answer is, I believe, Senator Jay Rockefeller (D-WV), Chair of the Senate Commerce Committee. Rockefeller recently reintroduced his bill from last Congress (with some modifications) to reallocate D Block to public safety. Perhaps more importantly, Rockefeller directly tied D Block reallocation with incentive auctions for broadcasters, which have become the Holy Grail of FCC and Administration spectrum policy. As it is pretty much impossible to get any spectrum bill passed without Rockefeller’s support, and Rockefeller made it clear that he considered D Block reallocation a non-negotiable condition for support, the Administration had two choices: agree to D Block reallocation or give up on incentive auctions and any other spectrum legislation.

In addition, a number of other considerations make it the politically smart thing for the White House to do, despite likely opposition from Republicans in the House eager for auction revenues and the added resistance from broadcasters over incentive auctions. D Block reallocation has a strong republican champion In the House, Rep. Peter King (R-NY), who last year got 80 co-sponsors on a bill to reallocate the D Block. That means the WH will have strong bipartisan support trying to push through reallocation — a must in the new Congress.  It is also significant that auction supporters failed to get any national public safety orgs to back the original FCC proposal to auction D Block and use the revenue to build the public safety network. By contrast, a vast number of national public safety orgs have lobbied for reallocation. And, of course, the fact that the original proposal for the D Block auction allocated the money for building out the national public safety network meant that the FCC’s plan was revenue neutral rather than generating revenue to pay down the debt. So auction supporters have a tough time arguing that reallocation deprives the budget of valuable auction revenues, and a tough time arguing that the D Block auction proposal is better for public safety when all the name brand public safety folks are in favor of reallocation.

Of course, the astute will notice that we are still talking about allocating money from auction revenues to fund the public safety network, only now we are actually taking money *away* from the Treasury because we are relying on the revenues from the broadcast incentive auctions and reallocating them from debt reduction to public safety build out. In other words, we’ve gone fro revenue neutral to revenue negative. This will certainly arouse the staunch resistance of Republican Deficit hawks. Can even the normal cuddliness of national public safety trade associations overcome the deficit reduction mania of the Tea Party Caucus and the Republican leadership? Normally, I’d say “not a chance.” But now we come to the second element of strategy behind the White House decision to back D Block allocation.

“It’s The 9/11 Anniversary Charlie Brown.”

The sad fact is that spectrum bills – no matter how much bipartisan and industry support they have – never seem to move on their own. I don’t know why. You’d think something this wonky and complicated would pass on voice vote if the leadership of both parties agreed and with industry cheerleading the way. But they don’t. Last Congress, despite broad support, Congress failed to pass a spectrum inventory bill. You’d think that Congress could get a bill through that just assesses what spectrum is actually in use, but they couldn’t. There’s always someone who puts up a fuss (here, it was the Department of Defense, which does not want to give up any of its spectrum allocation and would classify bus schedules as Top Secret in the name of national security), and there usually isn’t enough pressure to push past the resistance and go to a vote. Indeed, every spectrum bill of the last 20 years was passed as part of an appropriations bill. Because the only way to move spectrum bills through Congress is to hook them onto something must pass.

So how to create an event to get things like incentive auctions through Congress? Especially over the resistance of the broadcast lobby, which regards this as a fight for their existence and not the delightful present everyone else keeps insisting it is? Sure, it’s a “voluntary” auction. But broadcasters know that there’s voluntary and then there’s “voluntary,” and that things have a way of going from voluntary to “voluntary” to mandatory when Congress wants revenue.

Happily for the White House and other supporters of incentive auctions, we have the 10th anniversary of 9/11 coming up this September – just when Congress returns from Summer Recess. For those who don’t remember, creating an interoperable public safety communication system was one of the major recommendations of the 9/11 Commission, reflecting the fact that a heck of a lot of firefighters died because they did not get the warning to evacuate the Towers – a failure traceable in part to the inability of public safety communication systems to communicate.
So lets pretend the Rockefeller D Block/incentive auction bill clears the Senate right before the Senate leaves for the summer but remains stalled in the House, where the Republicans in charge of the Commerce Committee are insisting on auctioning D Block and where broadcasters have effectively bottled up a stand alone incentive auction bill. On September 11, 2011, the White House holds a special event where President Obama is standing there at Ground Zero flanked by representatives of the public safety community, the 9/11 families, Rep. Peter King and a number of other House Republicans. The President calls on the House to carry out the recommendation of 9/11 Commission, he thanks Rep. King for his bipartisan support and leadership. Firefighters and policeman in husky voices tell the American people how this legislation will prevent the needless death of our Brave First Responders like those who died so tragically because they could not hear the warning to pull out. And the only thing standing in the way of this amazing bill, that will build out this network at no cost, are a handful of stubborn deficit hawks who would rather pay down the deficit than give our Brave First Responders the tools they need.

Is that a photo op? IS THAT A PHOT OP? You bet your sweet spectrum that’s a photo op. Heck, it might even get a spectrum bill on The Daily Show. Even the normally powerful broadcast lobby and the fanatical deficit hawks would find it hard to stand up to that kind of cynical manipulation appeal to public sentiment. And where the 9/11 train pulls, the incentive auction caboose follows.

But Is It Good Policy?

Wonk that I am, though I admire the cleverness of the game I cannot resist wondering whether this result (assuming it works) is ultimately good public policy.
On the whole, I find I’m pretty indifferent. I agree with Senator Olympia Snowe (R-ME) that we are focusing on incentive auctions way too much and need to remember there are a lot of other tools to address the need for spectrum (assuming there actually is a spectrum crisis). For some time, I’ve been on the fence about D Block, and am still on the fence about incentive auctions. I think auctioning D Block was probably better for promoting competition than reallocating D Block, so I preferred Genachowski’s original proposal in the National Broadband Plan. But I’m not going to get terribly worked up about going the other way – assuming things get set up so that this network finally creates an interoperable wireless network usable by the many thousands of public safety organizations that need it.

Similarly, I’m finding it very hard to get excited about incentive auctions one way or another. I will, God willing, eventually get around to something focused on incentive auctions. Suffice it to say that I think they are worth doing if they promote competition, but not if all they do is get more broadcast band spectrum into the hands of Verizon and AT&T. I am extremely skeptical that anything genuinely voluntary (as opposed to “voluntary”) is going to attract much interest from broadcasters because (a) broadcasters like being broadcasters; and, (b) broadcasting is profitable again.
Bottom line for me is that this is rather like watching the Super Bowl after the Patriots were eliminated. I don’t really care which team wins at this point, but it’s the game that’s on so I’ll watch and arm chair quarterback with everyone else. Meanwhile, I’ll wait until white spaces and secondary markets the Red Sox start playing again.

Stay tuned.

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