AIRWAVES FOR SALE: CONTACT BILL CLINTON
After more than a decade of debate, it looks as if super-salesman Bill Clinton is about to pull off what his Republican predecessors never could: auctioning a chunk of the nation's airwaves for a cool $7 billion over five years.
The idea was first pitched during the Carter Administration, and it appeared in every budget proposed by Presidents Reagan and Bush. Supporters argued that selling the spectrum not only would raise money but also would end the politicized process of government regulators granting broadcast licenses.
Every year, congressional Democrats, who believed the airwaves were akin to the national parks, killed the idea. But now, a cash-strapped Clinton has proposed his own plan to sell off part of the radio spectrum, and this time Hill Democrats are behind him. The idea's toughest foe, House Energy & Commerce Committee Chairman John D. Dingell (D-Mich.), finds the notion far more palatable with a Democrat in the White House. Another longtime critic, House Telecommunications & Finance Subcommittee Chairman Edward J. Markey (D-Mass.), has become a big booster. "The government is losing out on much-needed revenue," he says.
The sale would take place over several years. A bill turning 200 megahertz now controlled by the government over to private use is wending through Congress. Then the Administration would auction part of the newly available spectrum.
Most of the money would be collected through bidding on licenses for a new form of cellular communication called personal communication services, or PCS. In addition, television broadcasters might have to pay for the extra channels they would need to broadcast high-definition-TV signals. And radio stations could be required to buy spectrum space for high-quality radio broadcasts. The channels now used by radio and TV stations, and by local governments for such services as police and fire communications, would remain free.
But if the auction is a done deal, there are still key legislative battles ahead. The biggest question: How much of the spectrum will be sold? Commerce Secretary Ronald H. Brown wants to auction all new licenses. But some congressional Democrats are more cautious. Senate Communications subcommittee chairman Daniel K. Inouye (D-Hawaii) favors a relatively small test auction of 30 megahertz.
Broadcasters also will ask for an exemption. They'll claim that their service is in the public interest and that HDTV should not be treated differently from today's television. But broadcasters seem resigned to the auctions and have focused on limiting the damage.
PAY LATER. Another looming battle: how to protect small businesses in the auction. Many fear they will be outbid by companies with deeper pockets. They also worry that their bigger rivals will buy spectrum they don't need and lock up promising markets. R. Craig Roos, president of a small New York-based wireless-phone concern called Locate Inc., says if the spectrum is sold, "small, innovative telecommunications companies will become a part of this nation's history rather than a part of its future."
The Clintonites are urging Congress to level the playing field by allowing companies to bid for a share of the airwaves by pledging future revenues, instead of up-front cash. But most other disputes will be resolved by the Federal Communications Commission, long after Congress has authorized the sales.
Will spectrum sales strengthen the big communications combines at the expense of smaller outfits and consumers? Not necessarily. Britain and New Zealand have successfully sold off part of their broadcast spectrums. And the Clintonites are determined to make the auction system work in the U.S. Even the plan's critics admit that, after all these years, it's an idea whose time has come.Edited by Stephen H. Wildstrom Mark Lewyn