I 

108TH CONGRESS 

1ST SESSION H. R. 1396

To allocate spectrum for the enhancement of wireless telecommunications, 

and to invest wireless spectrum auction proceeds for the military preparedness and educational preparedness of the United States for the 

digital era, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 20, 2003

Mr. MARKEY (for himself and Mr. LARSON of Connecticut) introduced the 

following bill; which was referred to the Committee on Energy and Commerce 

A BILL

To allocate spectrum for the enhancement of wireless telecommunications, and to invest wireless spectrum auction 

proceeds for the military preparedness and educational 

preparedness of the United States for the digital era, 

and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Spectrum Commons 

5 and Digital Dividends Act of 2003’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 
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1 (1) The United States stands to benefit in the 

2 global economy by reallocating additional airwave as3 sets to the private sector for innovative wireless serv4 ices. 

5 (2) Congress previously mandated reallocation 

6 of over 200 megahertz of frequency spectrum from 

7 Government use to the Federal Communications 

8 Commission for private sector licensing. 

9 (3) This previous reallocation spurred deploy10 ment of new digital wireless services, Government 

11 action that helped to lower prices, create jobs, and 

12 increase consumer choice. 

13 (4) Similarly, the public interest would be 

14 served by reallocating additional portions of the 

15 public’s airwaves for use by the private sector for 

16 advanced wireless services. 

17 (5) In addition, certain frequencies should be 

18 allocated to the general public as a ‘‘spectrum com19 mons’’ for unlicensed use. 

20 (6) A continuation of our competition-based 

21 spectrum policy can promote innovation, create jobs, 

22 lower prices, and increase consumer choice in the 

23 marketplace. 

24 (7) Determining which specific frequencies to 

25 reallocate must be done in a manner that reflects an 
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1 appropriate balance between the needs of current 

2 users and the legitimate requirements of the private 

3 sector for introducing new services. 

4 (8) Spectrum auctions will reap revenue that 

5 can be used to compensate incumbent users, includ6 ing the military, for relocation costs. 

7 (9) Auction proceeds can additionally be utilized 

8 to foster the use of educational technology, promote 

9 deployment of public telecommunications infrastruc10 ture, and establish a self-sustaining fund for grants 

11 to address the digital divide. 

12 (10) While more and more Americans are uti13 lizing electronic tools in every aspect of their lives, 

14 a digital divide still remains in many areas of our 

15 country between rich and poor, and between urban 

16 and many rural areas. 

17 (11) Utilizing spectrum auction proceeds to en18 hance the use of educational technology and to in19 crease public access to advanced telecommunications 

20 underscores our commitment to ensuring that our 

21 citizens obtain the skill set necessary to compete for 

22 jobs in the new economy. 

23 (12) Educational preparedness will be critical if 

24 the United States is to have a technologically savvy 
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1 workforce to fuel growth of our high tech economy 

2 in the global marketplace. 

3 (13) The creation of a self-sustaining mecha4 nism to make available annual funding for needed 

5 public access and educational technology grants is 

6 an appropriate use of revenue generated from cor7 porate use of the public’s airwaves. 

8 (14) A policy that promotes investment in wire9 less technology along with a concomitant investment 

10 in the human resources of our Nation is in the na11 tional economic interest of the United States. 

12 TITLE I—TELECOMMUNI13 CATIONS INFRASTRUCTURE 

14 DEVELOPMENT AND CITIZEN 

15 EMPOWERMENT 

16 SEC. 101. DIGITAL DIVIDENDS TRUST FUND. 

17 Title III of the Communications Act of 1934 is 

18 amended by inserting after section 309 (47 U.S.C. 309) 

19 the following new section: 

20 ‘‘SEC. 309A. DIGITAL DIVIDENDS TRUST FUND. 

21 ‘‘(a) ESTABLISHMENT.—

22 ‘‘(1) FUND ESTABLISHED.—There is hereby es23 tablished in the Treasury of the United States the 

24 Digital Dividends Trust Fund (hereinafter in this 

25 section referred to as the ‘Fund’). 
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1 ‘‘(2) DEPOSITS.—The corpus of the Fund shall 

2 be the amounts deposited into the Fund pursuant to 

3 section 309(j)(8)(D)(ii). 

4 ‘‘(b) BOARD OF TRUSTEES.—The Fund shall be ad5 ministered under the direction of a board of directors 

6 (hereinafter in this section referred to as ‘the board’) com7 prised of—

8 ‘‘(1) the Assistant Secretary for Communica9 tions and Information of the Department of Com10 merce; and 

11 ‘‘(2) 6 additional members, appointed by the 

12 President, with experience in one or more of the fol13 lowing fields: investment management; corporate fi14 nance; computer software; telecommunications; and 

15 education and cultural heritage. 

16 ‘‘(c) ADMINISTRATION; PRESERVATION OF PRIN17 CIPAL.—All deposits described in subsection (a)(2) shall 

18 be invested in a manner that the board finds prudent and 

19 reasonable and that is designed to ensure that annual in20 come is sufficient to cover the uses specified in subsection 

21 (d) and the other expected costs of carrying out the pur22 poses of this section. Such deposits shall not be expended 

23 for the support of any of the purposes authorized by sub24 section (d). 
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1 ‘‘(d) USE OF INCOME.—Income to the fund shall be 

2 allocated by the Board as follows: 

3 ‘‘(1) HUMAN CAPITAL TELECOMMUNICATIONS

4 INVESTMENTS.—Not to exceed 65 percent of the in5 come for any fiscal year to the human capital tele6 communications investment program under section 

7 106 of the National Telecommunications and Infor8 mation Administration Organization Act. 

9 ‘‘(2) BROADBAND INFRASTRUCTURE INVEST10 MENTS FOR PUBLIC ACCESS AND RURAL DEVELOP11 MENT.—Not to exceed 65 percent of the income for 

12 any fiscal year to the Public Broadband Infrastruc13 ture Investments Program under section 107 of the 

14 National Telecommunications and Information Ad15 ministration Organization Act.’’. 

16 SEC. 102. HUMAN CAPITAL TELECOMMUNICATIONS INVEST17 MENTS. 

18 Part A of the National Telecommunications and In19 formation Administration Organization Act (47 U.S.C. 

20 901 et seq.) is amended by adding at the end the following 

21 new section: 

22 ‘‘SEC. 106. HUMAN CAPITAL TELECOMMUNICATIONS IN23 VESTMENTS. 

24 ‘‘(a) GRANT PROGRAM AUTHORIZED.—From the 

25 funds available under section 309A(d)(1) of the Commu-
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1 nications Act of 1934, the Secretary shall carry out a 

2 Human Capital Telecommunications Investment Program 

3 in accordance with the requirements of this section. 

4 ‘‘(b) USE OF GRANT FUNDS.—Funds made available 

5 by a grant under this section may be used for—

6 ‘‘(1) training for teachers and other educational 

7 personnel at schools and libraries eligible for services 

8 or assistance under section 254; 

9 ‘‘(2) research and development for sophisti10 cated, content-related educational software and pro11 gramming designed to enhance learning in elemen12 tary, secondary, and postsecondary education and to 

13 enable schools, libraries, and museums to reach out14 side their walls and into homes, other schools, and 

15 workplaces; 

16 ‘‘(3) digitizing eductional materials held in our 

17 Nation’s libraries, archives, and museums and other 

18 institutiions of learning; 

19 ‘‘(4) technology projects supported by volun20 teers enrolled in the AmeriCorps and designated by 

21 the Corporation for National Service; 

22 ‘‘(5) projects enhancing the access of individ23 uals with disabilities to advanced telecommunications 

24 services; 
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1 ‘‘(6) projects for retraining workers and unem2 ployed individuals with skills applicable to the new 

3 economy; and 

4 ‘‘(7) projects for after school programs for 

5 youth focused on computer literacy and interaction. 

6 ‘‘(c) ELIGIBLE APPLICANTS.—The following organi7 zations and agencies shall be eligible to apply for funds 

8 under this section: 

9 ‘‘(1) an elementary, secondary, or postsec10 ondary educational institution; 

11 ‘‘(2) a nonprofit agency or organization that is 

12 exempt from income taxes under section 501(c)(3) 

13 of the Internal Revenue Code of 1986; or 

14 ‘‘(3) an agency or instrumentality of a State or 

15 local government of the United States (including an 

16 agency or instrumentality of a territory or posses17 sion of the United States). 

18 ‘‘(d) APPLICATION.—Any organization or entity seek19 ing a grant under this section shall submit to the Sec20 retary an application at such time, in such manner, and 

21 containing or accompanied by such information and assur22 ances as the Secretary may require by regulation.’’. 
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1 SEC. 103. PUBLIC BROADBAND INFRASTRUCTURE INVEST2 MENTS. 

3 Part A of the National Telecommunications and In4 formation Administration Organization Act is amended by 

5 adding after section 106 (as added by section 102 of this 

6 Act) the following new section: 

7 ‘‘SEC. 107. PUBLIC BROADBAND INFRASTRUCTURE INVEST8 MENTS PROGRAM. 

9 ‘‘(a) GRANT PROGRAM AUTHORIZED.—From the 

10 funds available under section 309A(d)(2) of the Commu11 nications Act of 1934, the Secretary shall carry out a Pub12 lic Broadband Infrastructure Investments Program in ac13 cordance with the requirements of this section. 

14 ‘‘(b) USE OF GRANT FUNDS.—

15 ‘‘(1) PERMITTED USES.—Funds made available 

16 by a grant under this section may be used for—

17 ‘‘(A) local and regional initiatives that ex18 pand public access to advanced telecommuni19 cations and information services at locations 

20 that are accessible to the general public; 

21 ‘‘(B) deployment of broadband tele22 communications services in unserved rural 

23 areas; and 

24 ‘‘(C) deployment of broadband tele25 communications services to low-income housing 

26 and community centers. 
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1 ‘‘(2) REQUIRED USES.—Not to exceed 

2 $300,000,000 from the funds available under section 

3 309A(d)(2) of the Communications Act of 1934 for 

4 each of the first 5 fiscal years shall be made avail5 able by grant for the purpose of converting public 

6 broadcasting facilities to digital technology through 

7 the public telecommunications facilities program 

8 under section 392 of the Communications Act of 

9 1934. 

10 ‘‘(c) ELIGIBLE APPLICANTS.—The following organi11 zations and agencies shall be eligible to apply for funds 

12 under this subsection (b)(1): 

13 ‘‘(1) a nonprofit agency or organization that is 

14 exempt from income taxes under section 501(c)(3) 

15 of the Internal Revenue Code of 1986; or 

16 ‘‘(2) an agency or instrumentality of a State or 

17 local government of the United States (including an 

18 agency or instrumentality of a territory or posses19 sion of the United States). 

20 ‘‘(d) APPLICATION.—Any organization or entity seek21 ing a grant under this section shall submit to the Sec22 retary an application at such time, in such manner, and 

23 containing or accompanied by such information and assur24 ances as the Secretary may require by regulation.’’. 
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1 TITLE II—CREATION OF SPEC2 TRUM COMMONS AND AVAIL3 ABILITY OF SPECTRUM FOR 

4 ADVANCED WIRELESS SERV5 ICES 

6 SEC. 201. AVAILABILITY OF SPECTRUM FOR ADVANCED 

7 WIRELESS SERVICES. 

8 (a) IDENTIFICATION.—Section 113 of the National 

9 Telecommunications and Information Administration Or10 ganization Act (47 U.S.C. 923) is amended by adding at 

11 the end thereof the following new subsection: 

12 ‘‘(j) CREATION OF SPECTRUM COMMONS AND DES13 IGNATION OF SPECTRUM FOR ADVANCED WIRELESS

14 SERVICES; RELOCATION PLAN.—

15 ‘‘(1) PLAN REQUIRED.—The Secretary shall, 

16 not later than January 1, 2003, prepare, make pub17 licly available, and submit to the President, the Con18 gress, and the Commission a report that—

19 ‘‘(A) designates a 20-megahertz band of 

20 contiguous frequencies located below 2 

21 gigahertz, and a band of between 3 and 500 

22 megahertz of contiguous frequencies above 2 

23 gigahertz and below 6 gigahertz, for realloca24 tion to the public for unlicensed use; 
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1 ‘‘(B) designates bands of frequencies for 

2 reallocation for the provision of advanced wire3 less services; and 

4 ‘‘(C) in consultation with the Commission, 

5 establishes a plan for the relocation or modi6 fication of Federal Government stations cur7 rently occupying the band of frequencies located 

8 at 1,710–1,850 megahertz, including a descrip9 tion of the phases by which such relocation or 

10 modification shall be accomplished consistent 

11 with the public interest. 

12 ‘‘(2) DEADLINES.—

13 ‘‘(A) MINIMUM FOR 2005.—Notwith14 standing any other provision of law, such plan 

15 shall ensure that not less than 30, but not more 

16 than 45, megahertz of paired spectrum is avail17 able and usable for advanced wireless services 

18 by December 31, 2005. 

19 ‘‘(B) MINIMUM FOR 2008.—Notwith20 standing any other provision of law, such plan 

21 shall ensure that an additional 50 megahertz of 

22 paired spectrum is made available and usable 

23 for advanced wireless services by December 31, 

24 2008. 
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1 ‘‘(C) POTENTIAL ADDITIONAL SPECTRUM

2 FOR TIMELY REALLOCATION.—Notwithstanding 

3 any other provision of law, the Commission 

4 shall ensure that any rules necessary to effec5 tuate the timely transition to digital television 

6 are promulgated and completed by the Commis7 sion prior to making available the bands of fre8 quencies at 747–762 and 777–792 megahertz 

9 for advanced wireless services or other competi10 tive wireless services. The Commission shall en11 sure that any plan to achieve the clearance of 

12 such frequencies shall not result in the unjust 

13 enrichment of any incumbent licensee. 

14 ‘‘(D) DEFINITION.—For the purposes of 

15 subparagraph (C), the term ‘rules necessary to 

16 effectuate the timely transition to digital tele17 vision’ includes rules requiring must-carry of 

18 free, over-the-air signals of broadcast television 

19 stations, minimum digital television network 

20 programming and broadcasting requirements, 

21 and rules requiring that models of television re22 ceiver equipment have the capability of dis23 playing digital television signals by certain 

24 dates.’’. 
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1 (b) ALLOCATION.—Section 115 of the National Tele2 communications and Information Administration Organi3 zation Act (47 U.S.C. 925) is amended by adding at the 

4 end the following new subsection: 

5 ‘‘(d) ALLOCATION OF SPECTRUM FOR ADVANCED

6 WIRELESS SERVICES.—

7 ‘‘(1) IN GENERAL.—With respect to the fre8 quencies identified in section 113(j)(1)(A) and in 

9 section 113(j)(1)(B), the Commission shall, within 

10 60 days of the release of the report required by sec11 tion 113(j), commence a proceeding to allocate such 

12 frequencies for advanced wireless services and adopt 

13 technical, licensing, and service rules applicable to 

14 such frequencies. Such frequencies shall be assigned 

15 by competitive bidding pursuant to section 309(j) of 

16 the 1934 Act on a schedule consistent with the relo17 cation plan established pursuant to section 

18 113(j)(1)(B) and the requirements of section 

19 113(g)(1)(A). 

20 ‘‘(2) SPECTRUM COMMONS.—With respect to 

21 the frequencies designated for reallocation pursuant 

22 to section 113(j)(1)(C), the Commission shall—

23 ‘‘(A) establish any rules necessary for unli24 censed use of such spectrum including—
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1 ‘‘(i) standards for interference protec2 tion; and 

3 ‘‘(ii) rules ensuring that all wireless 

4 broadband devices meet minimum technical 

5 standards; and 

6 ‘‘(B) make such spectrum available to the 

7 public by December 31, 2004.’’. 

8 SEC. 202. RELOCATION OF FEDERAL GOVERNMENT STA9 TIONS. 

10 (a) RELOCATION FROM SPECTRUM FOR ADVANCED

11 WIRELESS SERVICES.—Section 113(g) of National Tele12 communications and Information Administration Organi13 zation Act (47 U.S.C. 923(g)) is amended by adding at 

14 the end the following new paragraph: 

15 ‘‘(4) SPECIAL PROVISIONS FOR RELOCATION

16 FROM SPECTRUM FOR ADVANCED WIRELESS SERV17 ICES.—

18 ‘‘(A) APPLICABILITY.—The provisions of 

19 this paragraph shall apply in lieu of the provi20 sions of paragraphs (1) through (3) with re21 spect to relocating the operations of Federal en22 tities from the frequencies reallocated to ad23 vanced wireless services under section 115(d). 

24 ‘‘(B) AUTHORITY TO ACCEPT COMPENSA25 TION.—In order to expedite the commercial use 
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1 of the electromagnetic spectrum and notwith2 standing section 3302(b) of title 31, United 

3 States Code, the head of any Federal entity 

4 may accept from the Spectrum Relocation 

5 Trust Fund compensation for the costs of relo6 cating such entity’s operations from one or 

7 more frequencies to another frequency or fre8 quencies. The costs for which the Federal entity 

9 shall be compensated shall be the relocation 

10 costs of the entity’s operations, except that the 

11 entity may be compensated for the replacement 

12 costs of relocating a particular station if the 

13 head of such entity can demonstrate to the 

14 President that such a level of compensation is 

15 vital to the national security or public safety. 

16 ‘‘(C) REQUIREMENT TO COMPENSATE FED17 ERAL ENTITIES.—The Federal entity shall be 

18 compensated in advance for the costs that the 

19 Federal entity incurs under subparagraph (B). 

20 Such compensation may take the form of a cash 

21 payment or in-kind compensation. Such com22 pensation shall come from the Spectrum Relo23 cation Trust Fund. 

24 ‘‘(D) SPECTRUM RELOCATION TRUST

25 FUND.—
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1 ‘‘(i) ESTABLISHMENT.—There is es2 tablished in the Treasury a Spectrum Relo3 cation Trust Fund (referred to in this sub4 paragraph as the ‘Fund’), consisting of 

5 amounts deposited pursuant to section 

6 309(j)(8)(D)(i) of the 1934 Act. 

7 ‘‘(ii) EXPENDITURE OF AMOUNTS FOR

8 REIMBURSEMENT OF RELOCATED OPER9 ATIONS.—The Secretary of the Treasury 

10 shall transfer from the Fund to each Fed11 eral entity the sums identified under sub12 paragraph (B) to pay the costs of reloca13 tion or modification of the entity’s stations 

14 and the head of such entity shall use such 

15 sums to make payments to satisfy such 

16 costs. 

17 ‘‘(iii) MAXIMUM DEPOSITS.—If the 

18 NTIA determines that the proceeds of an 

19 auction the proceeds of which are required 

20 to be deposited in the Fund have exceeded 

21 or will exceed a sum equal to (I) the re22 placement costs incurred in connection 

23 with such auction, plus (II) 10 percent of 

24 any auction proceeds above such amount, 

25 the NTIA shall notify the Secretary of the 
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1 Treasury. Upon receipt of such notice, the 

2 Secretary of the Treasury shall, notwith3 standing section 309(j)(8) of the Commu4 nications Act of 1934 (47 U.S.C. 

5 309(j)(8)), transfer the remainder of the 

6 proceeds of any such auction in excess of 

7 such sum to the Digital Dividends Trust 

8 Fund established by section 309A of the 

9 1934 Act. 

10 ‘‘(iv) TERMINATION.—When the 

11 NTIA determines that no additional Fed12 eral Government stations need to be relo13 cated or modified, NTIA shall notify the 

14 Secretary of the Treasury, who shall termi15 nate the Fund. Any unallocated funds re16 maining in the Fund shall be transferred 

17 to the Fund specified in clause (iii).’’. 

18 SEC. 203. DEFINITIONS. 

19 Section 111 of the National Telecommunications and 

20 Information Administration Organization Act (47 U.S.C. 

21 921) is amended by adding at the end the following new 

22 paragraphs: 

23 ‘‘(4) The term ‘relocation costs’ means the costs 

24 that will be incurred by a Federal entity to achieve 

25 comparable capability of systems that are relocated 
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1 to a new frequency assignment or band or otherwise 

2 modified, including the costs of any modification, re3 placement, or reissuance of equipment and facilities 

4 incurred by that entity. 

5 ‘‘(5) The term ‘replacement costs’ means the 

6 costs that would be incurred by a Federal entity to 

7 replace existing equipment or facilities in order to 

8 relocate to a new frequency assignment or band.’’. 

9 TITLE III—DISTRIBUTION OF 

10 PROCEEDS OF AUCTIONS FOR 

11 ADVANCED WIRELESS SERV12 ICES 

13 SEC. 301. DIVISION BETWEEN TRUST FUNDS. 

14 Section 309(j)(8) of the Communications Act of 1934 

15 (47 U.S.C. 309(j)(8)) is amended—

16 (1) in subparagraph (A), by striking ‘‘subpara17 graph (B)’’ and inserting ‘‘subparagraphs (B) and 

18 (D)’’; and 

19 (2) by adding at the end the following new sub20 paragraph: 

21 ‘‘(D) PROCEEDS OF AUCTIONS FOR AD22 VANCED WIRELESS SERVICES.—Notwith23 standing subparagraph (A), the proceeds of any 

24 competitive bidding under this subsection with 

25 respect to the spectrum allocated for advanced 
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1 wireless services pursuant to section 115(d)(1) 

2 of the National Telecommunications and Infor3 mation Administration Organization Act shall, 

4 after the deduction of salaries and expenses re5 quired by subparagraph (B), be allocated as fol6 lows: 

7 ‘‘(i) the first $5,000,000,000 shall be 

8 deposited in the Relocated Federal Entities 

9 Trust Fund established BY section 

10 113(g)(4)(D) of such Act; and 

11 ‘‘(ii) the remainder of the proceeds of 

12 such competitive bidding shall be deposited 

13 in the Digital Dividends Trust Fund estab14 lished by section 309A of this Act.’’.

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