WASHINGTON-The Bush administration came under pressure from key Senate Democrats last week to require the Department of Defense to surrender spectrum sought by mobile-phone firms for third-generation wireless systems, a development with heavy political overtones and a sense of urgency that could further isolate the Pentagon and force it to compromise in order to avert a costly defeat.
“We call upon your administration to do more to identify sufficient spectrum for the development and deployment of the most advanced mobile communications services,” said Senate Majority Leader Tom Daschle (D-S.D.) in a July 2 letter co-signed by Sens. John Breaux (D-La.), John Kerry (D-Mass.), Byron Dorgan (D-N.D.), Jay Rockefeller (D-W.Va.), Ron Wyden (D-Ore.) and Max Cleland (D-Ga.).
While House and Senate GOP lawmakers-like Sens. Ted Stevens (R-Alaska) and Judd Gregg (R-N.H.)-have written the Bush administration and made public statements in support of an industry plan to underwrite the multibillion-dollar cost of moving the Pentagon from the 1700 MHz band to other frequencies, last week’s Senate Democratic letter is particularly important because of the implicit political message it carries.
With the defection of Sen. James Jeffords (I-Vt.) from the Republican Party and the changes in leadership that followed, President Bush’s political agenda is now in the hands of the new, Democratic-controlled Senate. In that respect, Daschle is obviously important because of his Senate stature, and Breaux-being a center-right Democrat-represents a critical swing vote for Bush in the Senate.
“This is a serious management challenge that demands active White House leadership,” stated the lawmakers. “In recent years, Congress has mandated safeguards to ensure that DoD does not surrender frequencies in such a way as to compromise its mission capabilities. But executive agencies must take the initiative to drive the process forward.”
However, an industry-drafted 3G bill effectively would strip the Pentagon of those safeguards by giving the Commerce Department the upper hand in deciding the terms and conditions for handing over military spectrum at 1700 MHz to mobile-phone operators. Commerce Secretary Donald Evans, a close and loyal friend of Bush, has signaled a willingness to help mobile-phone carriers acquire 3G spectrum.
While the 3G-spectrum controversy is being negotiated in a White House process that includes the National Economic Council and National Security Council, Congress ultimately may be forced to decide the issue. Such an outcome, among other things, would help the White House avoid an embarrassing fight within the administration.
The cellular industry prefers the 1700 MHz band over the other two bands-2500 MHz and 700 MHz-that were designated last year by the World Radiocommunication Conference for 3G, which promises Internet-ready mobile phones that offer multimedia applications at high data speeds. The 700 MHz and 2500 MHz bands are occupied by TV broadcasters, churches, schools, fixed-wireless Internet carriers and others. 1700 MHz is expected to be used by mobile carriers around the world, a reality that will foster global roaming and push down equipment production costs.
The Federal Communications Commission, which has determined that 3G spectrum sharing in the 2500 MHz band is not feasible and that alternative frequencies for relocation are not available, is under growing pressure to take the 2500 MHz band off the table.
FCC Chairman Michael Powell recently decided to delay a final decision on 3G spectrum allocation, which was to be made by July 31 under an executive memorandum issued by President Clinton last October. Powell’s decision likely will cause a delay in the scheduled June 2002 auction of 3G licenses.
Defense Secretary Donald Rumsfeld, who is conducting a top-to-bottom defense review and attempting a modernization effort likely to cost many billions of dollars, has not taken a public position on the 3G spectrum issue. However, military brass are openly opposed to giving up more spectrum to the cellular industry, and Deputy Defense Secretary Paul Wolfowitz also is said to be against further frequency concessions.
Since 1993, when Congress authorized auctions in a budget bill, the federal government has had to transfer 235 megahertz to the private sector.
While the Pentagon has been hurt by budget pressures and not being able to have political appointees lobby the 3G spectrum issue on Capitol Hill, the mobile-phone industry’s voice on 3G spectrum shows signs of becoming unraveled.
In late May, Qualcomm Inc. Chairman Irwin Jacobs dressed down Cellular Telecommunications & Internet Association President Thomas Wheeler in an angry e-mail over a May 10 CTIA letter to the White House that said the United States was behind Japan and Europe in plans to roll out 3G services.
Jacobs said Sprint PCS and Verizon Wireless (both adopters of CDMA technology developed by Qualcomm) plan to deploy 3G-level services via 1x technology later this year. 1x, an advanced version of CDMA, is commercially available in Korea today.
On a related front, Celsat America Inc. said it does not share New ICO’s view that the mobile satellite business cannot survive without a terrestrial component, and the firm is irked at being dragged into a 3G spectrum controversy that has delayed its receipt of a license.
The mobile-phone industry now seeks 2 GHz mobile satellite service spectrum in response to New ICO’s request to the FCC for authority to supplement MSS with ground-based cellular service.
Celsat, unlike Craig McCaw’s New ICO, wants to put a single, high-power geostationary satellite above the United States. New ICO wants to place a constellation of low-earth-orbiting satellites around the globe, a business model unsuccessfully pursued to date by Iridium and Globalstar.
“I have every confidence the FCC will maintain the integrity of its process and the MSS license will be issued in a timely manner,” said Celsat Chairman David Otten.
Otten and other MSS applicants, though, likely will have to wait a bit longer for their licenses as the FCC considers MSS frequencies and other spectrum for 3G in a public rule making soon. The FCC had wanted to issue MSS licenses by June 30.
Gerry Salemme, senior vice president of external affairs for New ICO, said the company does not claim to speak for all MSS applicants and is looking only for regulatory flexibility that benefits satellite operators and consumers, especially those in rural areas.
