Congressional negotiators in the US have reached a tentative agreement on a $1.7 trillion omnibus spending package that would keep the federal government funded through part of 2023.
However, the legislation does not address two big, complex topics – midband spectrum auctions and the FCC's "rip and replace" program – that have been the subject of much debate in recent months.
A number of analysts had expected Congress to act on at least one of those issues.
But the legislation, introduced in the Senate this week, does handle a few other items of interest to the US telecommunications industry, as noted by Axios. First, it provides the FCC with the authority necessary to conduct spectrum auctions, at least for a short time. It also adds funds to the CHIPS and Science Act that's designed to help rekindle the US chipmaking industry. And it would ban the use of TikTok on devices used by government officials – a reaction to worries that the app could support Chinese espionage.
A debate on spectrum
According to the financial analysts at New Street Research, there had been "considerable effort" in Washington, in recent weeks to pass legislation that would reserve spectrum between 3.1GHz and 3.45GHz for a 5G auction. Importantly, they expected that the band would be reserved for "exclusive" licensing, which would represent a major win for big 5G network operators like Verizon and AT&T.
Spectrum between 3.1GHz and 3.45GHz has often been discussed as the next big midband prize for 5G operators. However, the US military currently runs radar operations in that band, and military officials have been firm in their opposition to releasing the spectrum for "exclusive" use. Instead, they want to keep a portion of the band for their operations, while sharing the remainder with the wireless industry. That kind of scenario has been implemented in the nearby 3.5GHz CBRS band.
In recent weeks, the US wireless industry's main trade group, the CTIA, has worked to convince lawmakers to avoid a sharing regime for the band and instead to allocate it exclusively for 5G.
According to Communications Daily, there was a push among lawmakers to include the Spectrum Innovation Act – which would have in part required an auction of the 3.1 GHz-3.45GHz band for 5G – in the new omnibus legislation. But that appears to have fallen apart at the last minute.
Meanwhile, the legislation does extend the FCC's authority to conduct spectrum auctions – but just through March 9, 2023. That authority is a procedural, but necessary, part of the FCC's remit to manage the nation's spectrum resources.
Ripping and replacing, but not funding
The other major topic absent from the new legislation is additional funding for the FCC's "rip and replace" program. The program is designed to help finance the removal of Huawei and ZTE equipment from US networks over fears it could lead to Chinese espionage (a fear those companies reject). Some analysts had expected Congress to push more funds into the program this year – but that doesn't seem to have happened.
"This is unacceptable in today's day and age," said Steve Berry, president of the Competitive Carriers Association (CCA), which represents some of the smaller US wireless network operators participating in the "rip and replace" program. Broadly, Congress has only allocated around 40% – or $2 billion – of what companies in the program believe is ultimately necessary.
"The conversation is far from over," Berry added. "CCA is astutely focused on ensuring the program is fully funded as soon as possible, and we look forward to working with the 118th Congress [next year] on this critical issue for competitive carriers and consumers across the country."
Meanwhile, the Rural Wireless Association (RWA) trade group continues to urge the FCC to delay some of the requirements the agency developed for companies in the "rip and replace" program. The trade group also complained about a wide range of elements in the program, from technical glitches to logistical difficulties to supply chain troubles operators face in obtaining replacement equipment.
"It is becoming increasingly difficult for program participants to complete their removal, replacement, and destruction of covered equipment with only 40% of the funds required and no assurance that additional funds will ever come," according to the RWA.