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OMB COST ESTIMATE
FOR PAY-AS-YOU-GO CALCULATIONS

Report No: 579
Date: 07/10/2002

  1. LAW NUMBER: P.L. 107-195 (H.R. 4560)

  2. BILL TITLE: Auction Reform Act

  3. BILL PURPOSE: Prohibits the Federal Communications Commission (FCC) from conducting the auctions of licenses for spectrum scheduled for Wednesday, June 19, 2002.

  4. OMB ESTIMATE: The FCC was scheduled to auction licences for spectrum in the 700 Megahertz (MHz) band that is currently used by television channels 52 to 59 on June 19, 2002. P.L. 107-195 prohibited that auction and established a new schedule. The Act requires that specific segments of the lower 700 MHz band be auctioned between August 19 and September 19, 2002. The remaining portions of the 700 MHz band are required to be auctioned prior to September 30, 2007. The Act reduces offsetting receipts (and thus increases outlays) in 2003 and 2004 and increases them in 2005 and 2006.

    5. (Fiscal years; in millions of dollars)
    2002 2003 2004 2005 2006 2007
    Outlay effect..................... 0 2,150 3,150 -3,900 -3,850 0

     

  5. CBO ESTIMATE:
    6. (Fiscal years; in millions of dollars)
    2002 2003 2004 2005 2006 2007
    Outlay effect..................... 0 775 1,300 1,525 -2,200 -2,200

     

  6. EXPLANATION OF DIFFERENCES BETWEEN OMB AND CBO ESTIMATES:

    7. Differences between OMB and CBO estimates are the result of different baseline assumptions and different assumptions about the timing of replacement auctions and the estimated increase in value of the spectrum resulting from delay.

  7. CUMULATIVE EFFECT OF DIRECT SPENDING AND REVENUE LEGISLATION ENACTED TO DATE:
    8. (Fiscal years; in millions of dollars)
    2002 2003 2004 2005 2006 2007
    Outlay effect.............. 2,204 36,520 39,016 30,997 15,293 9,894
    Receipt effect............ 0 -86,865 -106,317 -107,742 -126,472 2
    Net costs.................... 2,204 123,385 145,333 138,739 141,765 9,892