SPECTRUM AUCTIONS.

SEC. 3002. SPECTRUM AUCTIONS. (a) Extension and Expansion of Auction Authority.— (1) In general.—Section 309(j) of the Communications Act of 1934 (47 U.S.C. 309(j)) is amended— (A) by striking paragraphs (1) and (2) and inserting in lieu thereof the following: “(1) General authority.—If, consistent with the obligations described in paragraph (6)(E), mutually exclusive applications are accepted for any initial license or construction permit, then, except as provided in paragraph (2), the Commission shall grant the license or permit to a qualified applicant through a system of competitive bidding that meets the requirements of this subsection. “(2) Exemptions.—The competitive bidding authority granted by this subsection shall not apply to licenses or construction permits issued by the Commission— “(A) for public safety radio services, including private internal radio services used by State and local governments and non-government entities and including emergency road services provided by not-for-profit organizations, that— “(i) are used to protect the safety of life, health, or property; and “(ii) are not made commercially available to the public; “(B) for initial licenses or construction permits for digital television service given to existing terrestrial broadcast licensees to replace their analog television service licenses; or “(C) for stations described in section 397(6) of this Act.”;111 STAT. 259 (B) in paragraph (3)— (i) by inserting after the second sentence the following new sentence: “The Commission shall, directly or by contract, provide for the design and conduct (for purposes of testing) of competitive bidding using a contingent combinatorial bidding system that permits prospective bidders to bid on combinations or groups of licenses in a single bid and to enter multiple alternative bids within a single bidding round.”; (ii) by striking “and” at the end of subparagraph (C); (iii) by striking the period at the end of subparagraph (D) and inserting “; and”; and (iv) by adding at the end the following new subparagraph: “(E) ensure that, in the scheduling of any competitive bidding under this subsection, an adequate period is allowed— “(i) before issuance of bidding rules, to permit notice and comment on proposed auction procedures; and “(ii) after issuance of bidding rules, to ensure that interested parties have a sufficient time to develop business plans, assess market conditions, and evaluate the availability of equipment for the relevant services.”; (C) in paragraph (4)— (i) by striking “and” at the end of subparagraph (D); (ii) by striking the period at the end of subparagraph (E) and inserting “; and”; and (iii) by adding at the end the following new subparagraph: “(F) prescribe methods by which a reasonable reserve price will be required, or a minimum bid will be established, to obtain any license or permit being assigned pursuant to the competitive bidding, unless the Commission determines that such a reserve price or minimum bid is not in the public interest.”; (D) in paragraph (8)(B)— (i) by striking the third sentence; and (ii) by adding at the end the following new sentence: “No sums may be retained under this subparagraph during any fiscal year beginning after September 30, 1998, if the annual report of the Commission under section 4(k) for the second preceding fiscal year fails to include in the itemized statement required by paragraph (3) of such section a statement of each expenditure made for purposes of conducting competitive bidding under this subsection during such second preceding fiscal year.”; (E) in paragraph (11), by striking “1998” and inserting “2007”; and (F) in paragraph (13)(F), by striking “September 30, 1998” and inserting “the date of enactment of the Balanced Budget Act of 1997”.111 STAT. 260 (2) Termination of lottery authority.—Section 309(i) of the Communications Act of 1934 (47 U.S.C. 309(i)) is amended— (A) by striking paragraph (1) and inserting the following: “(1) General authority.—Except as provided in paragraph (5), if there is more than one application for any initial license or construction permit, then the Commission shall have the authority to grant such license or permit to a qualified applicant through the use of a system of random selection.”; and (B) by adding at the end the following new paragraph: “(5) Termination of authority.—(A) Except as provided in subparagraph (B), the Commission shall not issue any license or permit using a system of random selection under this subsection after July 1, 1997. “(B) Subparagraph (A) of this paragraph shall not apply with respect to licenses or permits for stations described in section 397(6) of this Act.”. (3) Resolution of pending comparative licensing cases.—Section 309 of the Communications Act of 1934 (47 U.S.C. 309) is further amended by adding at the end the following new subsection: “(l) Applicability of competitive bidding to pending comparative licensing cases.—With respect to competing applications for initial licenses or construction permits for commercial radio or television stations that were filed with the Commission before July 1, 1997, the Commission shall— “(1) have the authority to conduct a competitive bidding proceeding pursuant to subsection (j) to assign such license or permit; “(2) treat the persons filing such applications as the only persons eligible to be qualified bidders for purposes of such proceeding; and “(3) waive any provisions of its regulations necessary to permit such persons to enter an agreement to procure the removal of a conflict between their applications during the 180-day period beginning on the date of enactment of the Balanced Budget Act of 1997.”. (4) Conforming amendment.—Section 6002 of the Omnibus Budget Reconciliation Act of 1993 is amended by striking subsection (e). (5) Effective date.—Except as otherwise provided therein, the amendments made by this subsection are effective on July 1, 1997. (b) Accelerated Availability for Auction of 1,710–1,755 Megahertz From Initial Reallocation Report.—The band of frequencies located at 1,710–1,755 megahertz identified in the initial reallocation report under section 113(a) of the National Telecommunications and Information Administration Act (47 U.S.C. 923(a)) shall, notwithstanding the timetable recommended under section 113(e) of such Act and section 115(b)(1) of such Act, be available in accordance with this subsection for assignment for commercial use. The Commission shall assign licenses for such use by competitive bidding commenced after January 1, 2001, pursuant to section 309(j) of the Communications Act of 1934 (47 U.S.C. 309(j)).111 STAT. 261 (c) Commission Obligation to Make Additional Spectrum Available by Auction.— (1) In general.—The Commission shall complete all actions necessary to permit the assignment by September 30, 2002, by competitive bidding pursuant to section 309(j) of the Communications Act of 1934 (47 U.S.C. 309(j)), of licenses for the use of bands of frequencies that— (A) in the aggregate span not less than 55 megahertz; (B) are located below 3 gigahertz; (C) have not, as of the date of enactment of this Act— (i) been designated by Commission regulation for assignment pursuant to such section; (ii) been identified by the Secretary of Commerce pursuant to section 113 of the National Telecommunications and Information Administration Organization Act (47 U.S.C. 923); (iii) been allocated for Federal Government use pursuant to section 305 of the Communications Act of 1934 (47 U.S.C. 305); (iv) been designated for reallocation under section 337 of the Communications Act of 1934 (as added by this Act); or (v) been allocated or authorized for unlicensed use pursuant to part 15 of the Commission’s regulations (47 C.F.R. Part 15), if the operation of services licensed pursuant to competitive bidding would interfere with operation of end-user products permitted under such regulations; (D) include frequencies at 2,110–2,150 megahertz; and (E) include 15 megahertz from within the bands of frequencies at 1,990–2,110 megahertz. (2) Criteria for reassignment.—In making available bands of frequencies for competitive bidding pursuant to paragraph (1), the Commission shall— (A) seek to promote the most efficient use of the electromagnetic spectrum; (B) consider the cost of relocating existing uses to other bands of frequencies or other means of communication; (C) consider the needs of existing public safety radio services (as such services are described in section 309(j)(2)(A) of the Communications Act of 1934, as amended by this Act); (D) comply with the requirements of international agreements concerning spectrum allocations; and (E) coordinate with the Secretary of Commerce when there is any impact on Federal Government spectrum use. (3) Use of bands at 2,110–2,150 megahertz.—The Commission shall reallocate spectrum located at 2,110–2,150 megahertz for assignment by competitive bidding unless the Commission determines that auction of other spectrum (A) better serves the public interest, convenience, and necessity, and (B) can reasonably be expected to produce greater receipts. If the Commission makes such a determination, then the Commission shall, within 2 years after the date of enactment of this Act, 111 STAT. 262identify an alternative 40 megahertz, and report to the Congress an identification of such alternative 40 megahertz for assignment by competitive bidding. (4) Use of 15 megahertz from bands at 1,990–2,110 megahertz.—The Commission shall reallocate 15 megahertz from spectrum located at 1,990–2,110 megahertz for assignment by competitive bidding unless the President determines such spectrum cannot be reallocated due to the need to protect incumbent Federal systems from interference, and that allocation of other spectrum (A) better serves the public interest, convenience, and necessity, and (B) can reasonably be expected to produce comparable receipts. If the President makes such a determination, then the President shall, within 2 years after the date of enactment of this Act, identify alternative bands of frequencies totalling 15 megahertz, and report to the Congress an identification of such alternative bands for assignment by competitive bidding. (5) Notification to the secretary of commerce.—The Commission shall attempt to accommodate incumbent licensees displaced under this section by relocating them to other frequencies available for allocation by the Commission. The Commission shall notify the Secretary of Commerce whenever the Commission is not able to provide for the effective relocation of an incumbent licensee to a band of frequencies available to the Commission for assignment. The notification shall include— (A) specific information on the incumbent licensee; (B) the bands the Commission considered for relocation of the licensee; (C) the reasons the licensee cannot be accommodated in such bands; and (D) the bands of frequencies identified by the Commission that are— (i) suitable for the relocation of such licensee; and (ii) allocated for Federal Government use, but that could be reallocated pursuant to part B of the National Telecommunications and Information Administration Organization Act (as amended by this Act). (d) Identification and Reallocation of Frequencies.— (1) In general.—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: “(f) Additional Reallocation Report.—If the Secretary receives a notice from the Commission pursuant to section 3002(c)(5) of the Balanced Budget Act of 1997, the Secretary shall prepare and submit to the President, the Commission, and the Congress a report recommending for reallocation for use other than by Federal Government stations under section 305 of the 1934 Act (47 U.S.C. 305), bands of frequencies that are suitable for the licensees identified in the Commission’s notice. The Commission shall, not later than one year after receipt of such report, prepare, submit to the President and the Congress, and implement, a plan for the immediate allocation and assignment of such frequencies under the 1934 Act to incumbent licensees described in the Commission’s notice. “(g) Relocation of Federal Government Stations.—111 STAT. 263 “(1) In general.—In order to expedite the commercial use of the electromagnetic spectrum and notwithstanding section 3302(b) of title 31, United States Code, any Federal entity which operates a Federal Government station may accept from any person payment of the expenses of relocating the Federal entity’s operations from one or more frequencies to another frequency or frequencies, including the costs of any modification, replacement, or reissuance of equipment, facilities, operating manuals, or regulations incurred by that entity. Such payments may be in advance of relocation and may be in cash or in kind. Any such payment in cash shall be deposited in the account of such Federal entity in the Treasury of the United States or in a separate account authorized by law. Funds deposited according to this paragraph shall be available, without appropriation or fiscal year limitation, only for such expenses of the Federal entity for which such funds were deposited under this paragraph. “(2) Process for relocation.—Any person seeking to relocate a Federal Government station that has been assigned a frequency within a band that has been allocated for mixed Federal and non-Federal use, or that has been scheduled for reallocation to non-Federal use, may submit a petition for such relocation to NTIA. The NTIA shall limit or terminate the Federal Government station’s operating license within 6 months after receiving the petition if the following requirements are met: “(A) the person seeking relocation of the Federal Government station has guaranteed to pay all relocation costs incurred by the Federal entity, including all engineering, equipment, site acquisition and construction, and regulatory fee costs; “(B) all activities necessary for implementing the relocation have been completed, including construction of replacement facilities (if necessary and appropriate) and identifying and obtaining new frequencies for use by the relocated Federal Government station (where such station is not relocating to spectrum reserved exclusively for Federal use); “(C) any necessary replacement facilities, equipment modifications, or other changes have been implemented and tested to ensure that the Federal Government station is able to successfully accomplish its purposes; and “(D) NTIA has determined that the proposed use of the spectrum frequency band to which the Federal entity will relocate its operations is— “(i) consistent with obligations undertaken by the United States in international agreements and with United States national security and public safety interests; and “(ii) suitable for the technical characteristics of the band and consistent with other uses of the band. In exercising its authority under clause (i) of this subparagraph, NTIA shall consult with the Secretary of Defense, the Secretary of State, or other appropriate officers of the Federal Government. “(3) Right to reclaim.—If within one year after the relocation the Federal entity demonstrates to the Commission that 111 STAT. 264the new facilities or spectrum are not comparable to the facilities or spectrum from which the Federal Government station was relocated, the person who filed the petition under paragraph (2) for such relocation shall take reasonable steps to remedy any defects or pay the Federal entity for the expenses incurred in returning the Federal Government station to the spectrum from which such station was relocated. “(h) Federal Action to Expedite Spectrum Transfer.—Any Federal Government station which operates on electromagnetic spectrum that has been identified in any reallocation report under this section shall, to the maximum extent practicable through the use of the authority granted under subsection (g) and any other applicable provision of law, take action to relocate its spectrum use to other frequencies that are reserved for Federal use or to consolidate its spectrum use with other Federal Government stations in a manner that maximizes the spectrum available for non-Federal use. “(i) Definition.—For purposes of this section, the term ‘Federal entity’ means any department, agency, or other instrumentality of the Federal Government that utilizes a Government station license obtained under section 305 of the 1934 Act (47 U.S.C. 305).”. (2) Section 114(a) of such Act (47 U.S.C. 924(a)) is amended— (A) in paragraph (1), by striking “(a) or (d)(1)” and inserting “(a), (d)(1), or (f)”; and (B) in paragraph (2), by striking “either” and inserting “any”. (e) Identification and Reallocation of Auctionable Frequencies.— (1) Second report required.—Section 113(a) of the National Telecommunications and Information Administration Organization Act (47 U.S.C. 923(a)) is amended by inserting “and within 6 months after the date of enactment of the Balanced Budget Act of 1997” after “Act of 1993”. (2) In general.—Section 113(b) of such Act (47 U.S.C. 923(b)) is amended— (A) by striking the caption of paragraph (1) and inserting “INITIAL REALLOCATION REPORT.—”; (B) by inserting “in the initial report required by subsection (a)” after “recommend for reallocation” in paragraph (1); (C) by inserting “or (3)” after “paragraph (1)” each place it appears in paragraph (2); and (D) by adding at the end thereof the following: “(3) Second reallocation report.—In accordance with the provisions of this section, the Secretary shall recommend for reallocation in the second report required by subsection (a), for use other than by Federal Government stations under section 305 of the 1934 Act (47 U.S.C. 305), a band or bands of frequencies that— “(A) in the aggregate span not less than 20 megahertz; “(B) are located below 3 gigahertz; and “(C) meet the criteria specified in paragraphs (1) through (5) of subsection (a).”.111 STAT. 265 (3) Conforming amendment.—Section 113(d) of such Act (47 U.S.C. 923(d)) is amended by striking “final report” and inserting “initial report”. (4) Allocation and assignment.—Section 115 of such Act (47 U.S.C. 925) is amended— (A) by striking “the report required by section 113(a)” in subsection (b) and inserting “the initial reallocation report required by section 113(a)”; and (B) by adding at the end thereof the following: “(c) Allocation and Assignment of Frequencies Identified in the Second Reallocation Report.— “(1) Plan and implementation.—With respect to the frequencies made available for reallocation pursuant to section 113(b)(3), the Commission shall, not later than one year after receipt of the second reallocation report required by section 113(a), prepare, submit to the President and the Congress, and implement, a plan for the immediate allocation and assignment under the 1934 Act of all such frequencies in accordance with section 309(j) of such Act. “(2) Contents.—The plan prepared by the Commission under paragraph (1) shall consist of a schedule of allocation and assignment of those frequencies in accordance with section 309(j) of the 1934 Act in time for the assignment of those licenses or permits by September 30, 2002.”.