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Senate Budget Staffers Blast Northpoint Bill

The GOP staff of the Senate Budget Committee, with the apparent approval of Chairman Don Nickles (R-Okla.), last week criticized some of his Senate colleagues for pushing a bill that would require the FCC to provide free spectrum for a new terrestrial pay-TV service.

The provision could give license winners a leg up in their effort to launch new pay-TV or broadband services. The measure was resisted by Senate Appropriations Committee member Ernest Hollings (D-S.C.) when it was attached to an FCC spending bill in September, but it was ultimately approved. A battle is likely when the spending bill goes to the Senate floor later this month.

The primary beneficiary would be just one company, Northpoint Technologies, Republican staffers complained in their weekly bulletin to Budget Committee members. They politely characterized the Appropriations Committee's decision to include the free-spectrum provision in an FCC spending bill as "curious" and a violation of Senate policy: Typically, new programs must be created in "authorization" legislation separate from bills dictating how much money they get.

Of course, lawmakers regularly break their rules, but the "Northpoint provision" is a violation that is "breathtaking," the Budget staffers said, for both its public policy and its budgetary impact. The provision would force the FCC to cancel a planned Jan. 14 auction that the Congressional Budget Office estimates would raise $60 million.

Northpoint Executive Vice President Toni Cook Bush pointed out that a 2000 law exempted satellite companies vying for the spectrum from auctions and that the current plan would provide needed balance for her company. "There have been no auctions of any satellite spectrum since 1997," she said, "and the FCC has awarded over a hundred satellite licenses since that time."

The satellite exemption is particularly galling to Northpoint officials because DBS executives are actively campaigning against Northpoint's bid for free licenses. Two weeks ago, DirecTV CEO Eddy Hartenstein rallied his retailer network to lobby against the pending allocation measure.