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October 11, 1998

H.R. 3888 - Telecommunications Competition and Consumer
Protection Act

(Tauzin (R) Louisiana and 63 cosponsors)

The Administration supports legislation to protect consumers from slamming, the unauthorized change of a long-distance provider. The Administration strongly opposes however, House passage of H.R. 3888, as ordered reported by the House Commerce Committee, because of the unrelated provisions contained in Title III, "Auction Rescission and Re-Auction", which would modify the payment terms for "C block" radio spectrum licensees.

Specifically, these provisions would: (1) waive any form of penalty for failure to make contractual payments and provide a full refund of payments made to date by successful bidders in the auction of certain radio spectrum who chose to relinquish their spectrum assignments; and (2) write-down the value of the debt owed by licensees who chose to retain their spectrum.

Those provisions are highly objectionable on both policy and budget grounds. They would not only create extensive costs to the Federal Government, but would undermine the integrity of the spectrum auction process.

The Administration understands that an amendment may be offered to strike the provisions that would modify the payment terms for "C-Block" radio spectrum licenses. If such an amendment were adopted, the Administration would support passage of H.R. 3888 as amended.

Pay-As-You-Go Scoring

H.R. 3888 would affect receipts; therefore, it is subject to the pay-as-you-go requirements of the Omnibus Budget Reconciliation Act. This Office's preliminary estimate is that H.R. 3888 will result in a loss of receipts of $ 1.131 billion in fiscal year 1999. All of this loss is associated with Title III, "Auction Rescission and Re-Auction".

The Administration opposes H.R. 3888, and notes that the bill does not contain provisions to offset the loss in receipts. As a result, if the bill were enacted without any further action to provide offsets, it could likely contribute to a sequester of mandatory programs, as required by the Budget Enforcement Act.