WASHINGTON-Last December, two months after President Clinton ordered government studies on spectrum availability for third-generation wireless systems and at a time when mobile-phone and Pentagon officials were intensely studying the issue, Senate Armed Services Committee member James Inhofe (R-Okla.) quietly directed the General Accounting Office and the Congressional Budget Office to evaluate the budgetary and operational implications of forcing the military to surrender radio frequencies to the private sector.
Those studies, unknown to many in the mobile-phone industry until last week, could be key in determining the outcome of a 3G spectrum debate that is playing out at both ends of Pennsylvania Avenue.
“We wanted an independent review of the process,” said a congressional aide close to the issue.
Last week, GAO officials questioned representatives from Verizon Wireless, Motorola Inc. and the Cellular Telecommunications & Internet Association on the 3G-spectrum issue. GAO plans more questioning of industry officials this week.
Next month, GAO and CBO officials will be among those who testify on `spectrum encroachment’ issues before Inhofe’s Armed Services subcommittee on readiness and management. Representing GAO will be Jack Brock, managing director of acquisition and sourcing management.
A June 1997 GAO report, following up on 1993 legislation that transferred 235 megahertz from the federal government to the private sector and authorizing spectrum auctions, concluded the sale of government spectrum could impair military operations.
The Senate Armed Services Committee, chaired by Sen. John Warner (R-Va.), likely will play a major role in shaping the outcome of the battle escalating between industry and the Pentagon over the 1700 MHz band. In recent weeks and months, military top brass and top DoD political appointees have raised the spectrum issue with committee members.
As details emerge about GAO’s and CBO’s involvement in the spectrum tug-of-war and with two government reports casting serious doubts on industry access to the 1700 MHz and 2500 MHz bands, carriers and manufacturers are mounting an aggressive lobbying campaign to build support for 3G spectrum.
Mobile phone industry executives here two weeks from now for a CTIA executive committee meeting, are scheduled to meet with Commerce Secretary Donald Evans April 24 and the next day will visit House and Senate lawmakers on Capitol Hill.
Also April 24, mobile-phone leaders will meet with Attorney General John Ashcroft to discuss the industry’s push to remove the spectrum cap. Service providers say the cap should be repealed to enable carriers to buy 3G spectrum at the September 2002 auction. The Federal Communications Commission, which will receive comments on April 16 on the two government 3G-spectrum studies, is scheduled to issue a final order in July that allocates additional spectrum for 3G services.
But given the resistance so far from the Pentagon and others, some observers believe the FCC will be hard pressed to meet that deadline.
“We’re certainly working toward that goal and anticipate we’ll meet it,” said Thomas Sugrue, chief of the FCC’s Wireless Telecommunications Bureau.
Evans met late last month with industry representatives and reassured them that the final NTIA report-which offered only a tad more hope for 3G 1700 MHz sharing than the Department of Defense’s internal analysis-would not necessarily be the last word on the matter.
“We think there’s a win-win here,” said Steven Berry, senior vice president of government affairs for CTIA. In return for handing over the 1700 MHz band to 3G carriers, according to Berry, industry would pay to install new digital communications systems for the military on different frequencies. But before that happens, Evans, Defense Secretary Donald Rumsfeld and the chairman of the joint chiefs of staff would have to certify to Congress that alternative frequency bands provide comparable technical characteristics and would not result in any loss of military capability.
Berry and other industry lobbyists want Rumsfeld to consider the industry’s spectrum proposal as part of his top-to-bottom defense review. That review, according to Rear Admiral Robert Nutwell, deputy assistant secretary of defense, will include an evaluation of spectrum and communications requirements. Key lawmakers with telecom industry oversight recently wrote Rumsfeld seeking to have 3G spectrum issues included in the reform review.
The mobile-phone industry has approached various lawmakers about sponsoring legislation that would earmark a portion of 3G spectrum auction receipts specifically for DoD relocation and possibly delay the 2002 auction of 1700 MHz frequencies until the matter is fully resolved.
But already there is competition for auction proceeds. A broad-based coalition of educators, library, museum, science and arts officials last week called for proceeds from future auctions to be deposited into a fund to support nonprofit educational and public service institutions.
In January, CBO predicted spectrum auctions could raise $28 billion during the next decade.
Industry got help last week from congressional Democrats who advocated-as part of their high-tech agenda-that additional spectrum be allocated for 3G by July and be auctioned by September 2002 in accordance with timetables set in the Clinton 3G plan. However, congressional Democrats said they were willing to support a delay in the auction if it furthers U.S. 3G policy goals.
Wireless firms and policy-makers fear that without sufficient spectrum in the United States, Japan and Europe will assume 3G leadership in the global market.
“Today’s report by the Democratic leadership is right on target, regarding the spectrum issue,” said Thomas Wheeler, president of CTIA.
Last year, the World Radiocommunication Conference identified the 698-960 MHz, 1710-1885 MHz and 2500-2690 MHz bands for a 3G mobile technology that promises to put the power of high-speed Internet in the palms of consumers’ hands.
But mobile-phone carriers-highly leveraged as a result of spectrum purchases and network buildout-face major challenges in securing additional spectrum and winning consumer support of new wireless data services.
At every turn, the mobile-phone industry is staring at fierce opposition. FCC Chairman Michael Powell perhaps summed it up best: “Have you ever taken on the Department of Defense on Capitol Hill? They are as strong as the broadcasters.”
The Pentagon, particularly, and other federal agencies are heavy users of the 1700 MHz band. The latest DoD study concludes sharing the 1700 MHz band with 3G carriers is not feasible and would compromise military capability.
A separate study by the National Telecommunications and Information Administration-an arm of the Commerce Department-said some 1700 MHz band sharing between the military and mobile-phone carriers is possible under certain circumstances. The industry believes some 3G sharing can be accomplished as well.
The mobile-phone industry prefers the 1700 MHz band because it will be used for 3G in other countries, enabling consumers to use wireless devices around the world. Use of a common, harmonized 3G frequency band throughout the world will drive down costs for phone manufacturers. Those cost savings could then be passed on to wireless consumers.
The 2500 MHz band also is highly problematic for 3G on technical and political levels.
The FCC recently concluded 3G band sharing at 2500 MHz is not workable, and said alternative relocation spectrum could not be found. Religious and educational licensees in congressional districts throughout the country heavily occupy the frequency band. The two groups have burned the phone lines on Capitol Hill and filed voluminous written comments with the FCC to oppose having to give up the 2500 MHz band to 3G mobile-phone firms.
Two of the nation’s largest long-distance carriers-WorldCom Inc. a
nd Sprint Corp.-have invested $1 billion each on 2500 MHz licensees to provide high-speed, broadband Internet access to homes and business across the country.
Verizon Wireless, the No. 1 mobile-phone carrier, tried to convince the FCC to postpone last week’s issuance of 2500 MHz licenses. But the FCC last Wednesday rejected the Verizon Wireless petition.
“The FCC deserves applause for its prompt decision to permit broadband deployments to move forward by rejecting this outrageous and unprecedented requirement by Verizon Wireless,” said Andrew Kreig, president of the Wireless Communications Association. WCA represents fixed wireless licensees.
The 700 MHz band, another 3G candidate band, is occupied by TV broadcasters. Broadcasters are supposed to leave the band as part of the move to digital technology, but the transition is going slower than expected because of the public’s lukewarm reception to high-definition TVs.
Reporter Heather Forsgren Weaver contributed to this report.
