Electromagnetic spectrum, commonly referred to as radio frequency spectrum or wireless spectrum, refers to electromagnetic waves that, with applied technology, can transmit signals to deliver voice, text, and video communications. Electromagnetic waves include radio waves, microwaves, infrared radiation, visible light, ultraviolet light, x-rays, and gamma radiation. The allocation and assignment of radio frequency spectrum are managed by the Federal Communications Commission (FCC) for commercial and other nonfederal uses and by the National Telecommunications and Information Administration (NTIA) for federal government use. Wireless broadband, with its rich array of services and content, requires new spectrum capacity to accommodate growth. Spectrum capacity is necessary to deliver high speed, high quality communications to consumers and businesses and also to support the communications needs of industries that use spectrum-dependent technologies. Although radio frequency spectrum is abundant, usable spectrum is currently limited by the constraints of applied technology. Spectrum policy therefore requires making decisions about how radio frequencies will be allocated and who will have access to them. Current spectrum policy is based on managing channels of radio frequencies to avoid interference. The FCC, over many years, has developed and refined a system of exclusive licenses for users of specific frequencies. Auctions are a market-driven solution to assigning licenses to use specific frequencies and are a recent innovation in spectrum management and policy. Previously, the FCC granted licenses using a process known as "comparative hearings" (also known as "beauty contests"), and has used lotteries to distribute spectrum licenses. The FCC also allocates spectrum for designated purposes, such as Wi-Fi, without assigning a license to a specific owner (unlicensed spectrum). For purposes of allocation and assignment, spectrum is segmented into bands of radio frequencies measured in cycles per second, or hertz. Standard abbreviations for measuring frequencies include kHz—kilohertz or thousands of hertz; MHz—megahertz, or millions of hertz; and GHz—gigahertz, or billions of hertz. The designation can refer to an entire band, such as the 700 MHz band, or to specific frequencies within a band. Most licenses are issued on a geographic basis, serving a specific area (license coverage). More than one license, therefore, is likely to have the same frequency designation. Technology for commercial mobile services generally is designed to operate most efficiently on frequencies below 3 GHz, although the ceiling has moved higher as technology has changed, so that frequencies through 5 GHz are now considered desirable for commercial network deployment. Similarly, the bandwidth of assigned frequencies is increasing. With new technology, wider bandwidths have been shown to reduce interference and mitigate other problems hampering the efficient use of spectrum. The Middle Class Tax Relief and Job Creation Act of 2012 ( P.L. 112-96 ) was signed into law on February 22, 2012. Many of the provisions in Title VI of the act focus on spectrum assignment within the existing regulatory framework, in which licenses for designated radio frequencies are awarded through competitive bidding systems (auctions). Specific provisions of Title VI (frequently referred to as the Public Safety and Spectrum Act, or Spectrum Act) include expediting auctions of licenses for spectrum designated for mobile broadband; authorizing incentive auctions, which would permit television broadcasters to receive compensation for steps they might take to release some of their airwaves for mobile broadband; requiring that specified federal holdings be auctioned or reassigned for commercial use; and providing for the availability of spectrum for unlicensed use. Major provisions in the Spectrum Act that are summarized in this report cover Deficit reduction; Directed auctions; Incentive auctions for television broadcasters; Reallocation of spectrum from federal to commercial use; and Unlicensed spectrum. Other provisions in the act, not covered in this report, include simplifying the approval of zoning requests for modification of cell towers at the state and local level and putting in place measures to facilitate antenna placement on federal property. The act also provides for the establishment of a new authority to plan and develop a nationwide public safety broadband network (FirstNet) and other measures in support of improved emergency communications. The Spectrum Act addresses the interlaced issues of spectrum access and deficit reduction. The issues are connected because, when radio frequency spectrum licenses are auctioned for commercial purposes by the FCC, the net proceeds are typically deposited in the U.S. Treasury. The act has extended the FCC's auction authority until the end of FY2022. Because the FCC's authority would have expired at the end of FY2012, revenue from auctions held after FY2012 is considered new revenue. The legislation that first authorized the FCC to establish "system of competitive bidding" for a limited period was included in the Omnibus Budget Reconciliation Act of 1993 ( P.L. 103-66 ). The Balanced Budget Act of 1997 gave the FCC auction authority until September 30, 2007. This authority was extended to September 30, 2011, by the Deficit Reduction Act of 2005 and to 2012 by the DTV Delay Act ( P.L. 111-4 ). The Deficit Reduction Act of 2005 also specified that $7.363 billion of proceeds from auctions required by the act be applied to new spending as well as deficit reduction. Proceeds from auctions of licenses in designated spectrum as specified in the act are directed first into a Public Safety Trust Fund, created by the act, with nearly $28 billion designated for purposes defined in the act, including $20.4 billion for deficit reduction. Spectrum revenue above the designated amount is applied to deficit reduction. Proceeds from the sale of licenses of repurposed federal spectrum identified in the Spectrum Act will be directed first to the Spectrum Relocation Fund, to cover costs of moving federal users, with the balance going to the Public Safety Trust Fund. Proceeds from the sale of advanced wireless service licenses in the other spectrum bands identified by the act will go directly to the Public Safety Trust Fund. Proceeds from the auction of new licenses created by the release of television broadcasting spectrum will go to cover costs specified in the act, with the balance to the Public Safety Trust Fund. Balances remaining in any fund created by the act will revert to the Treasury in 2022 to be used "for the sole purpose of deficit reduction." The law provides for transfers from a Public Safety Trust Fund that is created by the act to receive revenues from designated auctions of spectrum licenses. Any revenue beyond the amounts specified in the act goes to the Treasury for deficit reduction. A major beneficiary of funding is FirstNet (First Responder Network Authority), the nationwide broadband network to be developed for public safety communications. Auction proceeds are to be distributed in the following priority: To the NTIA, to reimburse the Treasury for funds advanced to cover the initial costs of establishing FirstNet: not to exceed $2 billion. To the State and Local Implementation Fund for a grant program, as part of FirstNet: $135 million. To the Network Construction Fund for FirstNet, for costs associated with building the nationwide network and for grants to states that qualify to build their own networks: $7 billion, reduced by the amount advanced to establish FirstNet in the first round of funding. To the National Institute of Standards and Technology (NIST) for public safety research: $100 million. To the Treasury for deficit reduction: $20.4 billion. To the NTIA and the National Highway Traffic Safety Administration for a grant program to improve 911 services: $115 million. To NIST for public safety research, phase two: $200 million. To the Treasury for deficit reduction: any remaining amounts from designated auction revenues. The Spectrum Act requires the FCC and the NTIA to identify specific bands for auction from spectrum designated for commercial advanced wireless services and for federal use, and in most cases to commence the auction process within three years. The act mandates spectrum license auctions for frequencies at 1915-1920 MHz; 1995-2000 MHz; 2155-2180 MHz; an additional 15 MHz to be identified by the FCC; and 15 MHz of spectrum between 1675 and 1710 MHz, subject to conditions in the act. The Secretary of Commerce was required to submit a report to the President identifying 15 MHz of spectrum between 1675 and 1710 MHz for reallocation from federal to nonfederal use. The NTIA reaffirmed an initial recommendation to reassign 1695-1710 MHz and submitted a report, as required by the act, recommending that the FCC reallocate the band for commercial use. The act requires that these auctions be completed and licenses issued by February 22, 2015, which would require that the auctions commence no later than the third quarter of 2014. These licenses were to provide at least 65 MHz of new spectrum for commercial broadband. The FCC scheduled the first designated auction for January 2014. Frequencies at 1915-1920 MHz and 1995-2000 MHz, known as the H Block, were offered in Auction 96. The reserve price was set at $1.56 billion, that is, the combined final bids for all licenses offered must total at least $1.56 billion. The licenses cover 176 Economic Areas. Auction 96 was completed on February 27, 2014, with a total winning bid of $1.564 billion. On January 30, 2015, the FCC completed a second auction (Auction 97), for Advanced Wireless Service (AWS) spectrum licenses, for an additional 65 MHz of frequencies that fulfills the congressional mandate for certain auctions by 2015. The frequencies cover 1695-1710 MHz; and paired licenses at 1755-1780 MHz; and 2155-2180 MHz. The auction, referred to as AWS-3, grossed almost $44.9 billion, of which $5.1 billion is to be applied to the costs of relocation or sharing of frequencies now used by the federal government. The FCC also will reimburse its costs for managing the auction and some bidders may default, reducing the total available for payment in to the Public Safety Trust Fund.