Democratic members of the House Telecom Subcommittee at a hearing...

Democratic members of the House Telecom Subcommittee at a hearing today (March 25) are likely to stress the needs for cost controls on the proposed spectrum reallocation trust fund, a staffer of a Democratic member of the Commerce Committee said. The House Telecom Subcommittee hearing will be on the proposed Commercial Spectrum Enhancement Act (HR- 1320), which would create a fund to cover the costs of switching govt. spectrum users to different spectrum bands. The bill, by Subcommittee Chmn. Upton (R-Mich.) and supported by Commerce Committee Chmn. Tauzin (R-La.), would require all auctions conducted by the FCC to take in at least 110% of the costs of reallocating the govt. spectrum users. Senate Commerce Committee Chmn. McCain (R-Ariz.) has said he would introduce a similar bill. There were concerns among the Democrats that such a fund could lead to “gold-plating” of projects, particularly military reallocation projects, said the staffer. “We're conscious of the history of the $500 hammer,” the staffer said. Most govt. spectrum reallocations would involve the military. The staffer said the Defense Dept. (DoD) might tell members today that the 110% figure wasn’t enough. Senior Democrats were worried that without a cap on the fund and spending control measures, spending could get out of hand, the staffer said. Since there isn’t a cap on the size of the fund, auctions could bring in well more than the 110% required by the bill, all of which would go to the fund, the staffer said, and such a sizable fund would need cost overrun controls. The hearing, scheduled for 2 p.m., Rm. 2123, Rayburn Bldg., will include the following witnesses: Nancy Victory, NTIA dir.; Stephen Price, DoD Deputy Asst. Secy. for Spectrum; Steven Berry, CTIA Senior Vp-Govt. Affairs; Larry Grossman, Co-Chmn. Digital Promise Project. A spokesman for Upton said the bill would include several cost-control mechanisms, including scrutiny by the Office of Management & Budget (OMB). Before any money could be transferred from the fund, OMB would have to submit reports to both Senate and House Commerce and Appropriations committees, the spokesman said. Even then, money couldn’t be transferred for 30 days after the reports were issued, the spokesman said.