February 6, 2006

Facing a huge budget deficit, President Bush today proposed squeezing more money from the nation's airwaves by supporting legislative changes.

The proposed modifications would allow the Federal Communications Commission to set "user fees" on "un-auctioned" radio spectrum.

The proposal, contained in the president's 2007 budget plan and projected to raise $3.6 billion during the decade, is believed to be aimed at unlicensed frequencies used for Wi-Fi and other applications.

It's unclear whether the "user fee" tax would be paid by equipment vendors or end users.

"Spectrum assignment policy has not kept pace with the changing market.

Service providers using different technologies to deliver a similar product can face different spectrum license acquisition costs," the budget stated.

"The lack of parity in spectrum assignment creates incentives that can diminish the overall utility of the spectrum."

Bush's $2.77 trillion spending package proposes $302 million for the FCC in fiscal 2007. Most of the agency's budget would be underwritten by regulatory fees.

Bush again called for the elimination of the Telecommunications Development Fund, describing it as "a poorly performing venture capital enterprise financed by interest earned on spectrum auctions."

The TDF was included in the 1996 telecom act, whose ten year anniversary is Wednesday.

Source: RCR