U.S. Spectrum Management Policy:
Agenda for the Future

EXECUTIVE SUMMARY

SUMMARY OF RECOMMENDATIONS

CHAPTER 1: INTRODUCTION

CHAPTER 2: REGULATORY ISSUES

I. Overview

A. General

B. Objectives of Spectrum Management

II. The NTIA Process

A. NTIA and the Federal Agencies

1. Current Arrangements

2. Clarifying the Roles of the IRAC and NTIA

B. Openness of the Federal Process

1. Direct Public Contact

a. Current Procedures

b. Direct Participation in IRAC

c. Procedures for Formal Public Comment to NTIA

2. Coordination through the FCC

3. Advisory Bodies

4. Notices of Inquiry

C. General Accountability for Efficient Use of the Spectrum - Access to Spectrum Use Data

1. The Need for Spectrum Data

2. Areas for Improvement in Access to Frequency Assignment Data

a. Comprehensive Data Sources

b. Data Security

c. Physical Access

D. Access to Exclusive and Shared Federal Spectrum

1. Frequency Authorizations and Allocations

2. A Proposal: Develop Procedures for NTIA to Receive and Evaluate Private Sector Needs for Spectrum Directly

E. Policy Conclusions

III. The FCC Process

A. Allocation

B. Frequency Assignment

C. Private Sector Frequency Coordination Groups

1. Introduction

2. Frequency Coordination

3. Coordinators and Planning

4. Improving Frequency Coordination

a. Direct Coordination by FCC

b. Multiple Certified Coordinators

c. Implementation

(1) Updated Databases

(2) Electronic Transfer of License Applications and Coordination Requests

d. Funding for Frequency Coordination

5. Findings and Recommendations

IV. Domestic Spectrum Management Coordination

A. Introduction

B. Existing Coordination Processes

C. Strategic Decisionmaking

D. Alternative Coordination Approaches

E. Conclusions and Recommendations

V. International Spectrum Coordination

A. Introduction

B. Current ITU Study Efforts

C. International Coordination Issues

D. Conclusions and Recommendation

CHAPTER 3: THE BLOCK ALLOCATION SYSTEM AND FLEXIBILITY

I. Introduction

A. Block Allocation Issues

B. Increasing Flexibility in the System

II. Enhancing Flexibility in Service Definitions

A. FCC Efforts to Broaden Service Categories

B. Federal User Categories

C. Increased Spectrum Sharing

1. Dynamic Sharing

2. Federal/Non-Federal Sharing

III. Enhancing Technical Flexibility through Adaptable Standards 68

A. Types of Standards

B. Benefits and Costs of Setting Standards

C. Mandatory Radiocommunication Standards

1. Technical Flexibility in Non-Federal Spectrum Use

2. Technical Flexibility in Federal Spectrum Use

D. Receiver Standards

IV. Increasing User Flexibility

A. Recent Efforts to Increase User Flexibility

B. Interference Rights: Limited Experiment with EMC Methods above 10 GHz

V. Flexibility and Markets

CHAPTER 4: ALTERNATIVES FOR APPORTIONING AND VALUING SPECTRUM

I. Introduction

A. Alternative Spectrum Management Approaches

B. Value of Spectrum

1. Societal Value

2. "Dollar Value"

C. Private Spectrum Markets

D. Other Countries

II. Market-Based Systems

A. General Policy Issues

1. Characteristics of Market Systems

a. General Principles

b. Issues

(1) Introduction

(2) Public Interest Issues

(3) Competitive Issues

(4) Property Rights

2. General Conclusion and Recommendation

B. Implementation

1. Government-to-User Transactions

a. Allocation

b. Assignment

(1) Competitive Bidding for New FCC Licenses

(2) Leases of Federal Spectrum to Private

Sector Users

2. User-to-User Transactions

III. Revenue Enhancement and Fees

A. Policy Issues

B. Types of Fees

1. Periodic Administrative Cost Recovery Fee

2. Fees Based On "Shadow Prices"

3. "Spectrum Conservation" Fees

4. Gross Revenue Fees

5. Fees for Federal Users Only

CHAPTER 5: SPECTRUM USE, EFFICIENCY AND CONSERVATION

I. Introduction

II. Determining Spectrum Use and Efficiency

A. Introduction

B. Determining Spectrum Use

1. General

2. Automated Computer Models

a. Current Efforts

b. Recommendations

3. Data Availability

a. Data Adequacy

b. Data on Protected Receivers

c. Structure

d. Recommendations

4. Monitoring to Verify Spectrum Use

a. Identification of Lightly Used Frequencies

b. Identification of Lightly Used Bands

c. Identification of Heavily Used Bands

d. Recommendations

C. Determining Spectrum Efficiency

1. Automated Computer Models

2. Recommendations

III. Spectrum Conservation

A. Improving System Efficiency

1. Technologies that Improve Spectrum Efficiency

a. Trunking

b. Cellular Reuse

c. Digital Compression and Coding

d. Spread Spectrum

2. Roles of Industry and Government

3. Implementation

a. Regulatory Measures

b. Economic Measures

4. Recommendations

B. Improving Band Efficiency

1. Group Assignment

2. Repacking

3. Recommendations

C. Eliminating or Combining Frequency Assignments

1. Inactive Assignments

2. Intermittently Used Assignments

3. Recommendations

D. Alternatives to Frequency Assignments

1. Shared Systems

a. Federal Use of Private Sector Telecommunication Services

b. Private Sector Use

c. Recommendations

2. Non-Radio Alternatives

a. Increased Capacity

b. Increased Spectrum Efficiency

c. Recommendations

CHAPTER 6: PLANNING AND FORECASTING

I. Introduction

II. Value of Spectrum Management Planning

III. Identification of Spectrum Requirements

A. Non-Federal Requirements Identification

1. Petitions for Rulemaking

2. Licensing Process

3. Monitoring Spectrum Occupancy

4. Inquiries

B. Federal Requirements Identification

1. Systems Review Process

2. Frequency Assignment Process

3. Monitoring Spectrum Occupancy

4. Spectrum Resource Assessments

5. Conference Preparations

C. Conclusions

D. Recommendations

IV. Spectrum Use Forecasting

A. The Value of Forecasting

B. Government Forecasting

C. Forecasting Tools in Use or under Development

D. Conclusions and Recommendations

V. Long-Range Planning

A. Objectives of Long-Range Planning

1. Improvements in Management Techniques and Capabilities

2. Spectrum Use

3. Strategic National Goals

B. Current Efforts

1. Federal Long-Range Planning Activities

a. IRAC

b. The Long-Range Plan

c. Other Plans

2. Non-Federal Long-Range Planning Activities

C. Coordination of NTIA and FCC Long-Range Plans

D. Conclusions and Recommendations

VI. Accommodating Unforeseen Spectrum Requirements

A. Identification of Unused or Lightly Used Spectrum

B. Set Aside Spectrum for Unforeseen Requirements

C. Conclusions and Recommendations

VII. Spectrum Planning Resources

A. Planning Committee Participation

B. Planning Support

C. Conclusions and Recommendations

APPENDICES

APPENDIX A: ALPHABETICAL LIST OF COMMENTS AND REPLIES

APPENDIX B: ALPHABETICAL LIST OF COMMENTER ACRONYMS AND

ABBREVIATIONS

APPENDIX C: NONLICENSED DEVICES

APPENDIX D: ESTIMATING THE VALUE OF CELLULAR LICENSES

APPENDIX E: SPECIFIC REQUIREMENTS APPLICABLE TO BROADCASTERS

APPENDIX F: EXAMPLES OF SPECTRUM USE QUANTIFICATION

APPENDIX G: FORECASTING

APPENDIX H: SPECTRUM MANAGEMENT TRAINING REQUIREMENTS

Because use of the spectrum is a vital component of many communications systems, the United States has developed strong industries based in radio-related technologies. Shipments in radio communications equipment alone are estimated to be more than $55 billion annually,⁽¹⁾ while revenues from broadcasting and cellular radio services, two industries built on spectrum use, are estimated to exceed $30 billion annually.⁽²⁾ The United States is highly competitive in the industries related to spectrum. It is a leader in the manufacture of satellite, microwave, and cellular radio equipment, as well as in innovative uses of radio technology for purposes ranging from new forms of mobile communications and advanced military applications to garage door openers and baby monitors.

However, in light of technological and marketplace changes, the United States must evaluate whether its spectrum management policies will permit it to continue in this leadership position. Demand for spectrum is growing rapidly from both the expanded use of existing services and the development of new services, such as personal communications services (PCS), satellite-based mobile services, digital audio broadcasting, and advanced television (ATV). While technical advances, the traditional means of meeting such growth in services, have been making more spectrum available, this increased supply is being overtaken by an even more rapidly increasing demand. Moreover, technology may be "pushing the envelope" of practicality, at least in the short term. How much more can technologists compress signals to permit additional use of increasingly crowded low frequencies? How useful will the higher frequencies be for inexpensive wireless communications? Accordingly, U.S. spectrum managers must ensure that their processes effectively promote, and provide strong private incentives for, efficient spectrum use. If, as many industry observers predict, the 1990s are to see the widespread deployment and strong consumer demand for mobile communications and advanced broadcasting services, the increased requirement for spectrum can only mean an increase in the challenges of managing spectrum to benefit the public. Successfully meeting these challenges in the coming decade can make a critical contribution toward enhancing the competitiveness of the U.S. economy and the quality of life of our citizens.

U.S. spectrum management has traditionally combined centralized administrative decisionmaking and planning with private sector investment and initiative to develop radio-based services. Central management, with the National Telecommunications and Information Administration (NTIA) managing the federal government spectrum users and the Federal Communications Commission (FCC) managing the non-federal users, has served several important functions, such as providing clear regulatory authority and a framework of consistent practices to limit radio interference among users as new applications emerge. In part, this was a response to early disputes over interference among the radio broadcasters of the 1920s -- the so-called "radio wars." By reserving spectrum for potential future uses, centralized management has also helped to shape and define the developing communications infrastructure.

Concurrently, the reliance on private sector investment has also led to considerable success. For example, when radio broadcasting first came of age in the 1920s, the United States did not establish government-owned radio stations, nor did it choose to regulate radio communication as a public utility, despite the recommendations of the first radio conference convened by then-Commerce Secretary Herbert Hoover.⁽³⁾ Instead, commercial broadcasters were allowed to establish themselves, and they prospered on the basis of selling paid advertising. Similarly, as technologies permitting efficient, two-way voice communications over radio spectrum developed, the United States relied on the initiative of common carriers and private radio operators to bring these services to the American public. One of the triumphs of U.S. communications policy is the successful development of a strong and independent system of privately-owned and operated radio-based services.

Those familiar with the history of spectrum management may find that the issues we have mentioned -- crowded spectrum, excess demand, technology placing pressures on the system -- seem familiar. Users, engineers, and politicians have struggled with similar spectrum management issues almost since the first practical application of radio, altered only by the specific context and the technology of the day. Current conditions raise questions as to whether the prevailing system of spectrum management continues to be both efficient and fair. To address such questions, in December 1989, NTIA released a Notice of Inquiry (the Notice) seeking information on key issues in spectrum use and management.⁽⁴⁾ In response, we received 118 initial and reply comments from more than 100 different organizations and individuals.⁽⁵⁾

The extensive public response to the Notice is one indication that once again, the management and use of spectrum is an item of increasing national interest. Spectrum issues are moving to the foreground of communications policy debates. During the past year, spectrum use and management, a subject previously relegated to technical engineering and economics journals, found its place in major business and policy publications -- including a Business Week cover story, a Wall Street Journal editorial, and a National Journal feature article.⁽⁶⁾

In addition to the questions asked in the Notice, fundamental spectrum management issues are being raised throughout the federal government. The FCC has recently begun several spectrum-related proceedings that address aspects of these issues.⁽⁷⁾ Moreover, legislative efforts are focusing national attention on managing and planning for future uses of the spectrum.⁽⁸⁾

NTIA, as the Executive branch telecommunications policy adviser and manager of federal government uses of the spectrum, has a strong interest in, and is well qualified to examine, these issues. In preparing this report, comments on the Notice provided one extremely valuable source of information for analysis. NTIA also considered both academic and technical research and FCC proceedings on spectrum issues, including proposals for new apportionment and regulatory strategies. This report avoids recreating existing work, but seeks to focus attention on how to accomplish the fundamental changes necessary to improve the current spectrum management system.

Considering the diversity and dynamism of the spectrum-using industries in the United States, NTIA believes that U.S. spectrum management should rely less on a centralized administrative system and more on private sector incentives to achieve national goals. Accordingly, we strongly support increased use of market mechanisms to apportion spectrum among private users, and increased flexibility to provide users with greater ability to determine for themselves how spectrum should be employed. Moreover, because of the extensive use of spectrum by the federal government as well as by the private sector, we strongly believe that the public should have increased access to the process by which NTIA manages federal spectrum. In this report, NTIA states its plans for increasing public access to the process.

While NTIA strongly recommends making these fundamental reforms, we recognize that much can be accomplished in the short term through specific changes to the existing system. These changes include improving current procedures and data files, making better use of available measurement tools, establishing strategic spectrum management goals, and planning the steps needed to achieve those goals.

However, as in the past, the challenge of ensuring efficient and fair spectrum use will not be met by these "fixes" or by simply seeking to accommodate new users by moving existing users. Simply opening tracts of spectrum for reallocation will not necessarily result in long-term efficiencies. Only basic changes in the U.S. system can achieve that goal. The fundamental changes to the U.S. spectrum management system recommended in this report acknowledge that spectrum has economic value, and rely on marketplace incentives and a flexible regulatory system to maximize that value in the interests of the American public. Under our proposals, in encouraging new uses of the spectrum, current users would not be disadvantaged. Instead, incentives would exist and regulation would allow for these users to change and adapt as they find necessary. The FCC and NTIA would retain their central oversight role in controlling interference and assuring that socially necessary services reach the public. In this report, we seek a better balance between these important government roles and the fairness and efficiency provided by private ordering through use of the marketplace.

This chapter examines the regulatory provisions and institutions that govern the current spectrum management process and identifies changes that would improve that process. As discussed in the Notice, U.S. spectrum management authority is divided between the FCC and the President. The Communications Act of 1934 (the "Act")⁽⁹⁾ established the FCC and gave it the authority to assign frequencies to all radio stations in the United States, except for those belonging to the federal government. Under Section 305 of the Act, the President retains the authority to assign frequencies to the latter stations. The President has delegated this authority to the Secretary of Commerce, who has delegated it in turn to the Administrator of NTIA.⁽¹⁰⁾ The Act provides for the functions of developing classes of service, allocating frequency bands to the various services, and authorizing frequency use. However, the Act does not mandate specific allocations of specific bands for specific services or for exclusive federal or non-federal use; all such allocations stem from agreements made between NTIA and the FCC that result in allocations to various services and classes of user. In other words, there are no statutory "federal" or "non-federal" bands.

NTIA and the FCC manage their particular constituents' uses of the spectrum; however, both must keep in mind the overall public interest, since 63% of the spectrum below 30 GHz is shared.⁽¹¹⁾ NTIA cannot be solely the advocate and protector of federal sector use, nor can the FCC be solely the advocate and protector of private sector use. The two must work together for the public good.

B. Objectives of Spectrum Management

The Act provides limited guidance regarding spectrum management objectives. It states that the FCC is to regulate:

so as to make available . . . a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges, for the purpose of the national defense, [and] for the purpose of promoting safety of life and property.⁽¹²⁾

Title III of the Act authorizes the FCC to regulate generally the "channels of radio transmission," including the licensing and operation of radio stations, but provides few details on the FCC's objectives for spectrum management. The Act empowers the FCC to act consistently with the "public interest, convenience, and necessity." The "public interest" standard is the primary criterion for apportioning non-federal spectrum in the United States,"⁽¹³⁾ although the Act mentions the goals of preventing interference among stations, promoting the efficient use of spectrum, and promoting public safety.⁽¹⁴⁾ The Act does not define the "public interest," but instead gives the FCC broad discretion to elucidate and give specific content to the public interest standard.⁽¹⁵⁾

NTIA has identified spectrum management objectives to guide federal users of the radio spectrum. These are similar in intent to the Act's guidelines and state that the federal agencies are to "make effective, efficient, and prudent use of the radio spectrum in the best interest of the Nation, with care to conserve it for uses where other means of communication are not available or feasible."⁽¹⁶⁾ NTIA interprets the standard "effective, efficient, and prudent," and the reference to "the best interests of the Nation" as encompassing the overall benefits the American public derives from radiocommunication services, both federal and non-federal, as well as the needs of various federal users and choices among competing users.

Several commenters on the Notice state that goals and objectives of spectrum management should be clearly identified. They say that the goals and objectives should be to provide the widest possible range of wireless services to those who desire them, maximize the spectrum available to those who must depend upon wireless technologies, and assure maximum spectral efficiency.⁽¹⁷⁾

Recent legislative efforts have focused national attention on managing and planning for future uses of the spectrum.⁽¹⁸⁾ NTIA believes that legislation is needed for some spectrum policy reforms, as described in the remainder of this study. Although the general objectives stated in the Act and in the NTIA Manual continue to provide guidance and flexibility to NTIA, the FCC, and spectrum users, this study makes numerous recommendations for regulatory reform to satisfy better those objectives.

II. The NTIA Process

A. NTIA and the Federal Agencies

1. Current Arrangements

NTIA's authority in spectrum management policy is extensive. The governing Executive Order and OMB Circular No. A-11 clearly provide NTIA with the power to assign frequencies and approve the spectrum needs of new systems.⁽¹⁹⁾ Federal users must obtain frequency assignments before they can operate transmitters. OMB Circular No. A-11 requires that federal users obtain certification of spectrum support from NTIA (certification that new radiocommunication systems are expected to be able to operate compatibly with existing and planned stations) before developing and procuring equipment.

Pursuant to the delegations from the President and the Secretary of Commerce, the Administrator of NTIA is the ultimate authority in all spectrum management decisions for the federal government, except for frequency assignment decisions, which can be appealed to the Director of the Office of Management and Budget.⁽²⁰⁾ The Administrator, in turn, has delegated most spectrum management decisions to the Associate Administrator for NTIA's Office of Spectrum Management (OSM), who draws upon the advice of the Interdepartment Radio Advisory Committee (IRAC). The current member agencies of the IRAC are the 20 most active federal users of the spectrum and a liaison representative from the FCC.⁽²¹⁾ The IRAC reports to the OSM Deputy Associate Administrator, who presently serves as its chairman. The IRAC consists of a main committee, 3 subcommittees and over 20 ad hoc committees that consider various aspects of spectrum management policy.⁽²²⁾ NTIA provides to the IRAC Executive Secretariat support, technical advice and usually the chairmen of the subcommittees.

The primary function of the IRAC is to:

assist the Assistant Secretary [of Commerce, through the Deputy Associate Administrator of OSM] in assigning frequencies to U.S. Government radio stations and in developing and executing policies, programs, procedures and technical criteria pertaining to the allocation, management, and use of the spectrum.⁽²³⁾

In addition, the IRAC forum provides a mechanism for coordinating federal use of the spectrum and resolving interference conflicts among the federal agencies that use the spectrum.

Representatives to the IRAC are able to propose new frequency assignments and new radiocommunication systems, or raise any other spectrum management issue of interest to their agencies, in the appropriate subcommittee. The IRAC considers each request and provides a recommendation agreed upon by the majority (normally a consensus) to the OSM, via the Deputy Associate Administrator (also the IRAC Chairperson), who accepts, rejects, or modifies the recommendation. Members can appeal findings of any subcommittee to the main committee or to the OSM at any time.

The meetings of the IRAC presently are not open to the general public, largely because they often involve review of considerable data on classified uses of the spectrum, examination of documents that are likely to be exempt under the Freedom Of Information Act (FOIA),⁽²⁴⁾ and deliberation and development of advice on federal policies.

2. Clarifying the Roles of the IRAC and NTIA

Since the IRAC chairman is the Deputy Associate Administrator of OSM and most of the subcommittee chairmen are also NTIA employees, it may appear to some that NTIA decisions are actually made by IRAC, or vice versa. The advisory role of IRAC and the decisionmaking role of NTIA should be clarified and the ability of the IRAC to develop independent policy proposals emphasized.⁽²⁵⁾

In order to alleviate such concerns, NTIA will appoint two IRAC vice-chairs. The first vice-chair, appointed from among the IRAC members, will work closely with NTIA to develop meeting agendas and with the agencies to develop positions on issues under review. This executive position could strengthen the role of the member agencies and permit the IRAC to develop proposals more directly based on their views. The second vice-chair, appointed from the NTIA staff, will coordinate activities of the IRAC with the private sector.⁽²⁶⁾ This management structure will allow the IRAC to balance the views of the private sector more easily with those of federal users in developing recommendations to NTIA. It will also help NTIA in implementing the new procedures for private sector input discussed below.

B. Openness of the Federal Process

One aspect of federal spectrum management that has drawn widespread criticism is what the commenters on the Notice call its "closed" nature, due largely to the closed meetings of the IRAC and the generally perceived inaccessibility of NTIA decisionmakers to the public. In fact, because of this perceived "closed approach," many of the commenters express suspicions that federal spectrum use is inefficient. As one commenter says:

There is considerable suspicion and distrust on the part of the non-government users that the government is not using, or is not efficiently using, the spectrum allocated to it. Records of the government's use of the spectrum are not available to non-government users and thus a natural auditing mechanism is not at work.⁽²⁷⁾

Some commenters even state that legislative action, like the Emerging Telecommunications Technologies Act of 1991, is needed to address these problems and extract unused frequencies from the government.⁽²⁸⁾

One federal agency, the Coast Guard, also believes that greater openness is needed, stating:

[T]he best and most effective means for ensuring [that the] radio spectrum is managed fairly and efficiently is to ensure that it is done openly. . . .  We believe that the NTIA process should be more accessible to the public, and that general data bases of UNCLASSIFIED frequency assignments (NTIA and [sic] as well as FCC) should be publicly accessible. . . . [M]aking the process of federal allocation as open as possible may well save time and protect federal use of the spectrum in the long run by cleaning up the "mystery" and associated feelings of secrets being kept (protectionism).⁽²⁹⁾

Many commenters request release of data on federal use of the spectrum, but the commenters' concerns go beyond that. Together, the comments request greater openness in three areas:

Policy and Decisionmaking Several parties note that private sector users cannot formally comment on or appeal NTIA policies. They contrast this with FCC procedures, which provide an opportunity for all spectrum users, including the federal agencies, to comment on FCC spectrum management decisions as they are being made and to appeal them when necessary.⁽³⁰⁾

General Accountability for Efficient Use of the Spectrum Resource Several commenters contend that the federal spectrum management process should be opened up to encourage or ensure efficient use of the spectrum by federal users and permit analysis of actual federal spectrum use to determine its efficiency.⁽³¹⁾

Access to Exclusive and Shared Federal Spectrum Some private sector users argue that it is difficult for non-federal users to gain access to spectrum allocated exclusively, or even on a shared basis, to the federal government.⁽³²⁾

While we conclude that commenters' concerns about lack of openness have merit, we do note that they are, in certain respects, overstated. For example, they largely ignore the numerous avenues for private parties to provide their input into the federal process and sources of information already available.⁽³³⁾ Furthermore, some of the commenters' complaints reflect a lack of sensitivity about legitimate national security needs. Nevertheless, we agree that more openness in the federal process is both desirable as a matter of public policy and achievable as a matter of spectrum management. Private sector users have no formal methods for influencing NTIA policy or administratively appealing decisions. As USTA notes, NTIA has a responsibility above that of an agent or advocate for federal users of the spectrum: "[C]ompeting users are dependent upon NTIA to ensure its management policies encourage the efficient use of the spectrum and provide incentives for development of new technologies."⁽³⁴⁾

NTIA uses four mechanisms to obtain input from the public in making its spectrum management decisions: direct contact; coordination between the FCC and NTIA staffs at the IRAC and elsewhere; advisory bodies; and notices of inquiry. The commenters and others have made suggestions on how to improve these mechanisms. We address those suggestions, and discuss our initiatives in "opening" the federal system, in the following sections.

1. Direct Public Contact

a. Current Procedures

Private sector users often meet directly with the NTIA Administrator or Deputy Administrator, or the staffs of OSM and the Office of Policy Analysis and Development (OPAD) on such issues as use of frequencies allocated to the federal government for private purposes or on general policy concerns. OSM deals primarily with proposals directly affecting federal spectrum use, while OPAD often addresses more general communications policies. This direct, individual contact should and will continue, as it does in the FCC. However, because private users initiate contacts to pursue their own particular agendas, this mechanism should not be used as the primary source of public views for policy development. In receiving private sector input, we seek to ensure that our procedures are fair and impartial.

b. Direct Participation in IRAC

Some commenters recommend direct private sector participation in the IRAC, as either observers or full participants, as a way to obtain public participation in the decisionmaking process.⁽³⁵⁾ However, it is important to recall that NTIA, not the IRAC, is the decisionmaker for federal spectrum management policies; IRAC serves an advisory purpose that represents the views of federal agencies.⁽³⁶⁾ Thus, it is entirely possible that the IRAC may not follow private sector wishes in providing advice on the needs of the federal government.

The IRAC can, and does already, open its doors to private sector briefings and dialogue when specific issues are identified.⁽³⁷⁾ Because of the importance of cooperation and coordination between federal users and the private sector, NTIA will seek to formalize this policy by providing a period at the beginning of IRAC meetings for members of the public to present new proposals for spectrum use or management and comments on spectrum policy issues, and to seek, in turn, the advice and perspectives of IRAC members on such proposals and issues. This will add structure and regularity to the present informal, ad hoc procedures and should provide a useful exchange of information and viewpoints between private and federal users.

However, the benefits from increased public participation in IRAC must be balanced with the need to preserve the ability of federal agencies to develop advice on federal spectrum policies. When the IRAC is considering a federal position to be presented to the NTIA, the deliberations are likely to be predecisional under the FOIA. In addition, many proposals or issues before the IRAC involve consideration of classified information, which cannot be shared with the public. Thus, the initial portion of each IRAC meeting will be open to the public, followed by a closed portion for IRAC to consider classified matters and deliberate on policy proposals.

c. Procedures for Formal Public Comment to NTIA

Although commenters on the Notice seek to gain access to federal spectrum management decisionmaking processes, they propose to do so primarily through more open access to the meetings of the IRAC. NTIA believes that the federal process can be opened further, and will begin seeking public review of and comment on NTIA spectrum decisions that have a particular and substantial impact on private users. Under this proposal, the IRAC will continue to develop recommendations for action. When practical,⁽³⁸⁾ NTIA will publicize, and seek public comment on, major new policy proposals of NTIA, IRAC, or other specific users that could significantly affect the private sector. NTIA's procedures for these reforms will provide opportunities for all interested parties to receive such information and to comment. NTIA will make these proposals available through a dial-in, computerized, electronic bulletin board and by mail to parties interested in spectrum management. NTIA will also publish significant new policy proposals in the Federal Register. After considering all relevant comments, NTIA will explain its decision on the issue. Similarly, if a private party has a proposal for federal spectrum management action,⁽³⁹⁾ NTIA will, when appropriate, request and consider comment on the proposal from IRAC and other affected parties outside the IRAC.

These procedures will give the public greater access to the government's spectrum management and policymaking processes. They will also permit the federal agencies to understand how NTIA evaluates IRAC recommendations and the reasons for NTIA decisions. NTIA will continue to give the IRAC's recommendations due weight, but the public will have ample opportunity to comment on those recommendations. This should strengthen NTIA's ability to make balanced decisions on spectrum management issues and policies.

In addition to providing increased opportunities for comment on recommendations from the IRAC and other parties outside the IRAC, NTIA will begin to make all non-classified NTIA and IRAC spectrum management documents, and those that are unlikely to be exempt under the FOIA, readily available through a public reference room. NTIA will also place on its new electronic bulletin board IRAC agendas, issues under consideration in the IRAC and at NTIA, IRAC recommendations, and proposed NTIA decisions for review and comment. NTIA will also consider publishing lists and abstracts of the documents in the Federal Register, making them available to the press, and making copies of these documents available, at cost, upon request. If sufficient demand exists, NTIA will examine contracting with a private sector vendor to reproduce and sell copies.

NTIA will, using existing resources, appoint a coordinator and staff as needed to act as a point person for private sector access to IRAC meetings and NTIA decisionmakers.

2. Coordination through the FCC

FCC and NTIA have a long history of cooperative management of the spectrum. FCC is a liaison member of the IRAC, and the FCC and NTIA consult closely on spectrum management decisions. Both exercise limited veto rights when consulting together to resolve issues regarding shared spectrum. Some have expressed an expectation that the FCC would act as the representative of the private sector in NTIA spectrum management deliberations.⁽⁴⁰⁾ Some commenters, such as Bell Atlantic, recommend giving the FCC "a more formal position within IRAC, including full voting membership" to help ensure that "FCC views, as spokesman for the non-government users it licenses, are fully heard within the IRAC."⁽⁴¹⁾

As a practical matter, however, it is difficult for the FCC in its roles as liaison to IRAC and direct negotiator with NTIA to represent accurately all the individual concerns of the private sector groups that are interested in an issue. Thus, although continued close liaison between NTIA and the FCC and with the IRAC is extremely desirable and must be bolstered from a planning and policy development viewpoint, this approach should not be used as the sole source of public views for spectrum policy development by NTIA.

Indeed, the FCC, as a regulatory agency with a great deal of spectrum management authority, has a different status from that of the IRAC members, which are federal agency spectrum users that advise NTIA. Because the IRAC is an advisory body that provides federal user advice and information to NTIA, the FCC role as a liaison is to provide input to help the IRAC formulate its position, not to directly advise NTIA. Moreover, if the FCC staff were charged with taking formal positions and casting votes in the IRAC process, they might have a greater burden of obtaining clearance from the Chairman and Commissioners or, on delegated authority, the various Bureau and Office Chiefs with spectrum-related responsibilities.⁽⁴²⁾ This could make it difficult for the FCC to provide input to the IRAC process in a timely manner, which is a virtue of the present system of informal advice and consultation. Accordingly, we do not recommend any change to the status of the FCC vis-à-vis the IRAC.

3. Advisory Bodies

The Frequency Management Advisory Council (FMAC or Council) now provides advice to NTIA on spectrum management matters. FMAC is composed of "15 non-Federal members . . . appointed by the Secretary of Commerce to insure a balanced representation in such functional areas as manufacturing, analysis and planning, operations, research, academia, and international negotiations."⁽⁴³⁾ The chair of the FMAC is the Associate Administrator of OSM. The FMAC Objectives and Duties state that:

1. The Council will advise the Secretary of Commerce on radio frequency spectrum allocation and assignment matters and means by which the effectiveness of federal government frequency management may be enhanced. 

2. Specifically, the Council will draw on the expertise of its members to:

(a) review, as appropriate, recommendations of the IRAC;

(b) review the progress of electromagnetic compatibility programs; and

(c) provide recommendations for United States positions on spectrum matters with respect to International Telecommunication Union conferences.⁽⁴⁴⁾

While FMAC meetings are open to the public, the FMAC is not designed to provide day-to-day public input to NTIA. It is not tasked to obtain or present the views of the public on spectrum management issues. The FMAC therefore reflects only the views and considerable expertise of its members. MST argues that the FMAC is under-used.⁽⁴⁵⁾ While this sometimes may have been the case in the past, we believe it is less so in the present. In particular, it is NTIA's recent experience that when the FMAC has been given specific policies to review and tasks to complete, it provides effective, high quality, expert advice. For example, the FMAC has provided substantial advice and views on the Notice, and it will continue to play an important advisory role for NTIA.⁽⁴⁶⁾

As noted above, we will seek to provide an opportunity for private sector and government agency representatives to interact during open portions of IRAC meetings. NTIA believes that such opportunities will allow for an interchange of information on spectrum management issues that would lead to better decisions and planning in both the private and government sectors. We also believe, however, that to maximize the interchange of information and to improve strategic planning aspects of spectrum management, other opportunities for public/private sector coordination and joint planning would be valuable. We conclude, therefore, that a private-sector/government-agency planning group consisting of experts from both the private sector and from the government agencies, should be established to provide input from both sectors for spectrum planning. This advisory committee could address both specific, immediate problems and long-term issues to assist NTIA and the FCC in developing rational, unified spectrum management plans and policies based on the best interests of the nation as a whole. Therefore, in addition to the openness provisions discussed at page 25, NTIA will seek to expand the current FMAC to include government sector as well as private sector representatives and to expand its role to include a strategic planning function.⁽⁴⁷⁾

4. Notices of Inquiry

The Notice is an example of NTIA using a tool long used by the FCC, i.e., the notice of inquiry, to obtain private sector comment on a number of spectrum issues. Although an inquiry can be time-consuming, it provides notification of an intent to develop policy in a given area and an opportunity for the public to comment before the decisions are made. If NTIA uses this method regularly, however, it must ensure that issues affecting current or future non-federal use are identified early to obtain adequate private sector responses. This method is the only one currently being used by NTIA that provides an opportunity for organized public comment. As discussed above, NTIA intends to provide additional opportunity for public review of and comment on proposed NTIA spectrum management policies.

C. General Accountability for Efficient Use of the Spectrum - Access to Spectrum Use Data

1. The Need for Spectrum Data

Many private sector commenters contend that access to data on federal spectrum use would allow the private sector to determine where available spectrum might be found.⁽⁴⁸⁾ Various functions of spectrum management, including planning, frequency coordination, and resolution of interference problems, require knowledge of the electromagnetic environment -- that is, the aggregate of radio systems in use.⁽⁴⁹⁾ An organization planning to employ a new radio system chooses its frequency so as to preclude interference with existing systems. A user experiencing interference from another system often needs spectrum use data to identify the source of interference.

The primary sources of data on spectrum use in the United States are the frequency assignment and license data files maintained by NTIA and the FCC. NTIA's Government Master File (GMF) contains data on frequency use by the federal government. Information on frequency use by the private sector and by state and local government agencies is contained in the FCC's Master Frequency File. While this file has basically the same type of data as the GMF, the data formats in the two files are different.⁽⁵⁰⁾

The GMF includes numerous classified records and records that the user agencies have stated are exempt from the release requirements of the FOIA. Moreover, NTIA classifies lists of two or more otherwise unclassified frequency assignment records from the GMF to prevent the disclosure of matters related to national security.⁽⁵¹⁾

2. Areas for Improvement in Access to Frequency Assignment Data

The record indicates that the current system of data files hinders access to spectrum use data in three ways. First, spectrum managers and users have no comprehensive source of spectrum use data for the United States. Second, the classification of government records limits their availability to the private sector. Third, data on current spectrum use is not available in a form amenable to automated analysis. We discuss these in turn below.

a. Comprehensive Data Sources

Information from both NTIA and FCC files is necessary to provide a complete picture of overall spectrum use, or of spectrum use in a shared frequency band. However, since the data files use different formats, combining and comparing the data are difficult tasks.

One solution suggested by several commenters is a unified database containing both government and non-government data.⁽⁵²⁾ A unified database, maintained by NTIA, the FCC, or both, would provide a single source of spectrum use data in a consistent format. Software developed for government data would also work for non-government data or a combination of both. The unified database could also be designed to include the international data filed with and maintained by the International Frequency Registration Board (IFRB).⁽⁵³⁾ Administrative efficiency would be increased by eliminating the duplication of these efforts by NTIA and the FCC.

The implementation of a unified database, however, presents some difficulties. If NTIA and the FCC continue to retain their separate frequency assignment responsibilities, they would still represent two distinct sources of data for the database. Short-term administrative problems might also result from the shifting of database responsibilities.

Alternatively, and less expensively, the goal of compatible data sources could be realized without physically combining the data of NTIA and the FCC, as long as the data fields were made consistent in the respective files. As COMSAT notes:

There is an absolute need for comprehensive data bases of spectrum use. A centralized spectrum information bureau would be useful, but it would suffice if potential users had access to all necessary data, even if these data were not at the same location but rather were available from several known complementary sources. What is important is that the data should be correct, comprehensive and current.⁽⁵⁴⁾

Based on the record compiled in the proceeding and our own experience in spectrum management, NTIA will investigate with the assistance of the FCC, the establishment of a common frequency assignment database, with compatible, modern file formats, to provide comprehensive information on spectrum use in the United States.⁽⁵⁵⁾

b. Data Security

Since the early 1980s, NTIA has restricted access to lists of two or more frequency assignments from the GMF on national security grounds. NTIA's Security Classification Guide For Frequency Assignment Records provides for protection of lists of unclassified GMF records:

Although most of the frequency assignment records in the GMF are unclassified per se, lists of unclassified frequency assignment records in a given range of frequencies or in a given area can be classified . . . because they can provide information leading to the disclosure of military or national security related operations, and scientific and technological matters relating to the national security. Such lists can indicate the overall strategic telecommunications capabilities of the United States and their disclosure could cause damage to the national security. The continued protection of this information is essential to the national security because it pertains to communications security and it reveals vulnerability and capability data, the unauthorized disclosure of which can reasonably be expected to result in nullifying the effectiveness of the telecommunications networks and capabilities of the United States.⁽⁵⁶⁾

In short, virtually all listings of two or more frequency assignment records are currently classified, regardless of whether the individual records are classified.

Several private sector entities have expressed opposition to this classification of otherwise unclassified data.⁽⁵⁷⁾ The Coast Guard shares this view, stating: "We believe that . . . general databases of UNCLASSIFIED frequency assignments (NTIA. . . as well as FCC) should be publicly accessible."⁽⁵⁸⁾

A reexamination of the need for classification of groups of unclassified assignments is warranted, given the 10-year period since the creation of the NTIA Classification Guide and the difficulties created by the consequent restrictions on data flow. Declassification of many lists of records may be appropriate. In addition, if certain unclassified records must be protected (e.g., records of assignments used in law enforcement) they might be protected via an FOIA exemption.

Besides declassification, another way of making records more available would be for NTIA to release lists of unclassified records on a "need to know" basis, i.e., when a group can demonstrate that the records requested are needed for coordination or for the resolution of interference. Another alternative, if it proves feasible, would be for specific entities, such as recognized private coordination groups, to obtain the proper security clearances for access to classified federal spectrum management data. These groups would be required to obtain the needed clearance and to protect the data, but would be able to use the data in formulating their decisions.

Some private sector information requirements could be met without disclosing classified GMF data. For example, an entity requesting a license to operate a station in an exclusive government or shared band could be given a list of acceptable frequencies, instead of merely an answer on a specific frequency requested. Techniques such as the Spectrum Use Measure (described below in Chapter 5) could be used to convey information on government use of a band to the private sector, without disclosing classified information.

NTIA will reevaluate the need for classification of lists of unclassified GMF records, with a purpose of declassifying, to the extent possible, the GMF. NTIA will also explore ways to make specific data on spectrum use available that should satisfy most private sector requirements.

c. Physical Access

Paper listings of frequency assignments were once the only form of data file available. Today, such a listing is rarely adequate for spectrum management. Automated analysis of large numbers of assignments by NTIA, FCC, or users requires access to computer files with the necessary spectrum use data. A common means of obtaining data uses networked computers. One commenter states that "all non-classified NTIA databases should be available for remote (electronic) access by non-federal users and the FCC."⁽⁵⁹⁾ As NTIA creates non-classified databases, it will examine methods of making them available, including remote on-line access for a fee. This proposal is contingent on NTIA having the resources to develop such access, as well as adequate resolution of the security concerns discussed above.

NTIA also is developing an access method employing read-only memory (ROM) on compact discs (CDs). The CDs can be produced inexpensively and supplied to those who need the data. This method will eliminate the expense and potential security problems associated with providing network access to government computers, since if a comprehensive database is available on CD ROMs, private firms could obtain electronic access using their own computers. As resources permit, NTIA will pursue developing access through CD ROMs.

D. Access to Exclusive and Shared Federal Spectrum

Private sector commenters argue that they lack access to spectrum allocated to the federal government, claiming among other things, that "users must blindly file with the FCC in the hope that federal spectrum might somehow be available for their proposed operations."⁽⁶⁰⁾ MRFAC states that the concern applies to both shared and exclusive federal spectrum, and that:

Since non-government applications for shared spectrum cannot be designed at the outset to minimize interference to government users, the result is often unnecessary redesign, delay, and expense, when (and if) NTIA discloses the particulars of government usage for a given frequency.  . . .  [N]ew technologies or uses for the spectrum are often stymied by the lack of information regarding government usage.⁽⁶¹⁾

In almost every shared band, either the government allocation or the non-government allocation has a primary status, with the other sector's allocation having a secondary status. Use of bands shared in this way is coordinated as if the band were allocated on an exclusive basis to the primary user; users wishing to operate on a secondary allocation are treated almost as if their service had no status in the band.

The private sector depends on NTIA to give full, equitable consideration to requests for spectrum access. However, NTIA, because of the spectrum management structure created in the Act, cannot directly authorize requests from the non-government sector for spectrum. NTIA can only make recommendations to the FCC, which the FCC considers in light of its internal policies when making decisions to approve specific operations. We discuss the issues pertaining to assignments and allocations in the next Subsection and offer a recommendation in the following subsection.

1. Frequency Authorizations and Allocations

Private sector requests for frequencies used by the government on a shared or exclusive basis are coordinated by FCC with NTIA and the federal agencies through the FAS. Ongoing coordination between the FCC and the federal agencies within the FAS on specific private sector requests for frequency authorization does not generally involve NTIA.⁽⁶²⁾ The FCC decides on private sector requests for federal spectrum after having examined, through the FAS, potential conflicts with federal users. If a non-federal user does not agree with the response that it gets from the FCC, the FCC must resolve the issue.

Using current, informal procedures for interacting with NTIA, private sector users that desire access to federal spectrum can continue to approach NTIA directly for support with the FCC. MMR requests that "a mechanism be established for informally coordinating government and non-government spectrum use so that private sector interests may have an informed basis for applying to the Federal Communications Commission for license authority."⁽⁶³⁾ Also, API "supports the development of more formal procedures to address and provide for direct private sector requests for federal spectrum."⁽⁶⁴⁾

MRFAC asserts that:

[E]nterprises developing new technologies or uses for the spectrum are often stymied by the lack of information regarding government usage. In a typical scenario an entity files a spectrum allocation proposal with the FCC which in turn seeks the comment of NTIA. If NTIA objects, the petitioner may be told in only the most conclusory of terms what the government's problem is. There is no opportunity to hear the viewpoints of the various government agencies represented in the Interdepartment Radio Advisory Committee, much less comment on those viewpoints. Thus, there is little or no opportunity for efficiently designing an allocation proposal so as to avoid untoward effects on government usage.⁽⁶⁵⁾

While we believe that these comments substantially understate the opportunities available to work with federal users in developing authorization and allocation proposals under current procedures,⁽⁶⁶⁾ we recognize that some private sector users find the current system too informal and ad hoc. Some of the reforms already discussed that would increase the openness of the federal process and the availability of spectrum use data should help respond to these concerns. Moreover, we present below a proposal to permit more direct interaction between NTIA and private sector users that wish to make use of federally allocated spectrum.

2. A Proposal: Develop Procedures for NTIA to Receive and Evaluate Private Sector Needs for Spectrum Directly

Given the interest expressed in the establishment of a more formal process for the consideration of private sector requests for use of spectrum allocated on an exclusive or shared basis to the federal government,⁽⁶⁷⁾ we believe that users and system developers from the private sector should be able to directly request assistance from NTIA. NTIA thus will establish procedures to be open to the private sector on an impartial basis, and to evaluate private sector requests for sharing use of the spectrum in bands allocated either exclusively or on a primary basis to the government. This could include requests for new systems seeking an allocation change or individual stations seeking authorization to operate on a specific frequency. NTIA will advise the FCC of any preliminary conclusions on allocation changes for FCC use in allocation and authorization decisions.⁽⁶⁸⁾ In addition, NTIA will forward any objective data developed during consideration of private sector frequency assignment requests to the requesting party to prepare an FCC license application, as well as to the FCC.⁽⁶⁹⁾

E. Policy Conclusions

The debate on the "openness" of federal spectrum management demonstrates that NTIA must consider the needs of the private sector in developing federal spectrum management policies. In addition, NTIA must provide more data on how the federal government uses the spectrum to assist private sector developers in their own planning. NTIA will use the public input it gains in its new processes to bolster analysis of the broad policy issues associated with the apparently technical matters that spectrum management decisionmakers and analysts often address within both NTIA and the IRAC. NTIA will continue to base its spectrum management decisions on the technical, economic, and societal merits of spectrum-use proposals, and not on the status of the proponents. NTIA will strive to conserve the spectrum as a natural resource for innovative uses and growing needs, and will seek to devise ways to recover "wasted" spectrum to meet future needs.

The reforms needed to accomplish this are not cost-free. In addition to the direct expenses involved in implementing these new procedures and avenues for public access, they will introduce some degree of delay in the federal decisionmaking process on spectrum policy issues. However, the potential benefits to be derived from the more equitable and comprehensive decisions that could result from increased public input should outweigh such costs. In implementing these reforms, NTIA will seek to maximize the net benefits while ensuring that costs are minimized and reasonable in light of the benefits obtained.

III. The FCC Process

The NTIA process, while relatively speedy and responsive to the needs of federal users, could be opened to more input from private sector interests, and we have outlined steps for doing so. In contrast, the FCC spectrum management process relies on extensive public proceedings to determine, under "public interest" standards, allocations and assignments. However, some commenters characterize the FCC process as slow and complex.

In the following subsections, we discuss fundamental reforms that could result in substantial long-term improvements in the FCC's spectrum management process by increasing regulatory flexibility and placing greater reliance on market principles. We start by briefly describing the FCC's allocation and assignment procedures and suggest a number of changes to the current procedures to address immediate concerns expressed by commenters.

A. Allocation

The FCC makes allocation decisions for non-federal spectrum use through public rulemakings that seek to determine the public interest.⁽⁷⁰⁾ Implementing domestic changes to the non-federal portion of the allocation table through this process can be time-consuming and contentious, often lasting several years.

Numerous commenters state that the allocation process should be streamlined or improved. GPT/Stromberg claims that the expense and delay of the "existing regulatory process hampers the technical and market development of significant telecommunications services in the United States."⁽⁷¹⁾ USTA believes that the FCC should act to reduce delay in allocation decisions.⁽⁷²⁾

Harris describes a lengthy rulemaking in which it petitioned the FCC in 1979 to change a sub-channel bandwidth within an allocation in the 17.7-19.7 GHz band. Four years were required to rechannelize, causing substantial delay before the industry could start production.⁽⁷³⁾

MCI supports a more flexible allocation process. It states that there have been situations:

in which delays in the allocation process have effectively retarded deployment of new technology.  . . . When decisions languish, existing allocations become more congested and they can no longer adequately address user needs. In these circumstances, the growth of radio systems is impeded, and the public that relies upon the services they provide is inconvenienced.⁽⁷⁴⁾

NYNEX advocates the imposition of time limits for FCC action at each stage of a proceeding. It states that unless deadlines are tightened, the process will become increasingly contentious and drawn out as competition increases. NYNEX recommends that the FCC adopt a rule requiring that within six months of receipt of reply comments for a spectrum rulemaking, the FCC should grant the requested allocation, deny it, or issue a Further Notice.⁽⁷⁵⁾ Similarly, CTIA suggests that the FCC commit in writing to conclusion dates at the beginning of a proceeding and devise a means of making the dates meaningful.⁽⁷⁶⁾

API, however, argues that "[t]here should be no effort to streamline the existing allocation process. . . . [T]he safeguards built into the existing process, such as they are, remain essential to preserving the rights of other interested parties."⁽⁷⁷⁾ Ameritech, ATA, and BellSouth indicate that, regardless of what reforms are pursued, the FCC's "public interest" standard should be maintained in the allocation process.⁽⁷⁸⁾

A number of parties support increased resources for the FCC. For example, GTE says that the resource requirements of the FCC should be carefully reviewed in the light of its current responsibilities, and that adequate provisions should be made to permit needed enhancements to the spectrum management process.⁽⁷⁹⁾

Delays in the FCC rulemaking and allocation process can seriously affect the economic vitality of businesses attempting to introduce new spectrum-based technologies. In this manner, the regulatory process itself can become an impediment to innovation and a barrier to entry into spectrum-related markets. This situation can be particularly burdensome for smaller firms, which may lack the resources to withstand substantial regulatory delay. NTIA recommends that, as suggested by NYNEX and CTIA, the FCC consider imposing deadlines on its rulemaking proceedings to accelerate the process. Although such deadlines could be imposed through legislation, we believe that a sounder and more flexible approach would be to have the FCC adopt and enforce such deadlines on a trial basis.

B. Frequency Assignment

Within particular allocations, the FCC assigns spectrum through various means for different services. If the characteristics of a service require competing applications for a license, the FCC chooses licensees through either an adjudicative comparative hearing process,⁽⁸⁰⁾ or by lottery.⁽⁸¹⁾ When users are not assigned exclusive use of a frequency, the FCC will generally grant licenses on a "first-come, first-served" basis until a frequency or band is fully "loaded" -- that is, until the FCC determines that further users would interfere with the operations of others.

Some commenters criticize comparative hearings as being overly time-consuming and expensive to applicants as well as to the FCC,⁽⁸²⁾ although others support them.⁽⁸³⁾ Commenters state that, ironically, the substantial record gathered in the course of such lengthy and expensive proceedings may not materially assist decisionmaking because sometimes there are relatively few objective criteria available to the FCC to apply in distinguishing among competing applicants.

A comparative hearing imposes substantial costs on the FCC as well as the applicant.⁽⁸⁴⁾ The FCC has said that "the substantial time consumed in the process of selecting among competing applicants greatly disserves the public," and noted that the average hearing case takes almost three years to complete through a hearing, initial decision, review board decision, and Commission decision.⁽⁸⁵⁾ To address such concerns, the FCC recently adopted new rules to expedite its comparative hearing process for new applicants. The new rules are intended to encourage settlements (but limit such settlements to the payment of expenses); expedite pre-hearing discovery; encourage written rather than oral proceedings; impose other time limits; and expedite appeals.⁽⁸⁶⁾ Although these procedural changes do not eliminate some of the difficulties inherent in performing the comparisons required in these hearings, they should result in a somewhat more streamlined process. In other proceedings, the FCC has sought additional reforms in the comparative process, such as a limitation on settlement payments in cases involving competing applications for construction permits for new broadcast stations, and changes in various aspects of comparative hearings in the broadcast license renewal context.⁽⁸⁷⁾

The FCC instituted lotteries for some services after congressional authorization in 1982, as a spectrum management reform measure.⁽⁸⁸⁾ Some parties support lotteries as an alternative to the time-consuming and intricate comparative hearing process.⁽⁸⁹⁾ The FCC uses lotteries for such services as cellular radio and specialized mobile radio licenses.

The lottery process, however, has been criticized on at least three grounds: 1) lotteries are inappropriate in situations where there are public interest differences among license applicants, or contenders propose truly diverse or innovative systems;⁽⁹⁰⁾ 2) lotteries encourage speculators, who flood the FCC with applications;⁽⁹¹⁾ and 3) particularly in the case of cellular licenses, lottery "winners" obtain extremely valuable rights with little initial investment.⁽⁹²⁾

In addition to comments on specific FCC assignment processes, parties raise more general points. As with allocations, commenters criticize the delays in the FCC assignment process, arguing that the application procedures for licensing should be simplified. For example, Telocator claims that assignments must be made expeditiously to enable prompt delivery of service to the public.⁽⁹³⁾

McCaw contends that an "ideal" spectrum assignment system would ensure that only bona fide entities were permitted to participate and that assignment decisions were based on an evaluation of which applicant would offer the best service to the public. McCaw believes that both the comparative hearing and lottery processes have flaws, and that lotteries have been unsuccessful in the cellular service. McCaw proposes that the FCC impose additional threshold criteria to guard against "insincere" applicants. Such criteria could include requirements concerning financial commitment, site availability, and technical requirements. McCaw further states that the FCC should use an "objective selection criteria" relating directly to the service to be assigned.⁽⁹⁴⁾

Contel claims that the licensing system should provide incentives to promote efficient use of frequency bands, such as preferences in awarding licenses to those applicants who propose the use of more efficient technology.⁽⁹⁵⁾ RTT advocates a form of "pioneer's preference" for experimental licenses associated with new technologies: "experimental licenses should be granted with a clear understanding that if the technology succeeds in commercially establishing itself, licensees will be given the right to expect either permanent rule authorization or continued operation under a waiver, so as to complete commercial deployment and recoup their investment."⁽⁹⁶⁾

DMC suggests eliminating waiting periods in the licensing process for point-to-point microwave operations using spectrum at 10 GHz and above, through a user self-certification process. This would be similar to the process instituted by the FCC in the land-mobile area in 1989.⁽⁹⁷⁾ According to DMC, there is ample spectrum available in the microwave bands above 10 GHz and current coordination practices virtually eliminate the risk of interference. As a result, DMC claims that almost all microwave applications in those bands are routinely granted. DMC petitioned the FCC in May 1989 to examine the possibility of adopting an "instant" temporary licensing scheme for common carrier and private point-to-point microwave operations in the 10 GHz, 18 GHz, and 23 GHz bands, similar to that adopted by the FCC in certain private land mobile operations.⁽⁹⁸⁾

The FCC has been active in searching for ways to improve its processes in order to make spectrum management more efficient and to encourage innovation. In addition to the procedural rules to reform the comparative hearing process discussed above, the FCC has proposed to establish a so-called "pioneer's preference" to promote innovation⁽⁹⁹⁾ and a "finder's preference"⁽¹⁰⁰⁾ to encourage full use of the allocated spectrum. NTIA applauds these initiatives by the FCC to reform its processes and improve its service to the public.

In addition to the major reforms discussed in Chapters 3 and 4, NTIA recommends that the FCC undertake a program of further streamlining its processing functions. For example, the FCC could actively investigate additional proposals to speed the licensing process, such as the "instant" temporary licensing concept advocated by DMC. Moreover, even such ministerial improvements as an electronic application filing capability could ease the concerns about timeliness and access expressed generally in the comments.

C. Private Sector Frequency Coordination Groups

1. Introduction

Under FCC rules, prior to applying for a station license for certain services, an applicant must provide technical coordination information or evidence of "prior coordination" of the station with existing stations.⁽¹⁰¹⁾ Private groups often perform this prior coordination function. In the Private Land Mobile Radio Services (PLMRS), the FCC has certified groups for specific sub-allocations (e.g., public safety, industrial, and land transportation services) to coordinate frequency assignments prior to their submission for the actual license.⁽¹⁰²⁾ Under this system, applicants proposing new stations or modifying existing licenses send their completed applications to the certified coordinator for the appropriate sub-allocation. The coordinator checks the application for completeness, accuracy, and compliance with the FCC's rules, recommends the most suitable frequency for the applicant, and forwards the completed application to the FCC, which issues the license directly to the applicant upon approval. The FCC oversees the performance of the coordinating committees.⁽¹⁰³⁾ Private frequency coordinators often charge a fee for their services.

Through this requirement for prior coordination, the FCC attempts to ensure that interference conflicts are resolved through private negotiations before applications are filed. Successful coordination through this method lessens the need for increased federal government administrative processes to resolve conflicting private claims to the spectrum.⁽¹⁰⁴⁾

NTIA requested comments in the Notice on the appropriate role of private coordinating groups and companies in spectrum management. We sought to determine how effective user group coordination has been, how equitable the process has been for non-members, what improvements could be made in the program, whether other types of services could be managed through the use of private groups, and what type of government oversight is needed. Many of the commenters addressed these issues, and we consider their positions and present our conclusions on the appropriate role for frequency coordination groups.

2. Frequency Coordination

The coordination and assignment of radio frequencies has long been a governmental function. In fact, the 1927 Federal Radio Commission, the predecessor to the FCC, was established partly to provide a means to coordinate radio frequencies in the private sector. Some commenters oppose the concept of private user group frequency coordinators and state that because the federal government is ultimately responsible for use of the spectrum, it alone should "handle these spectrum management functions."⁽¹⁰⁵⁾ Others note that since the spectrum is a "scarce natural resource belonging to the public, it should be managed by the government."⁽¹⁰⁶⁾

Most commenters, however, support frequency coordination by private user groups or clearinghouses. They argue that an exclusive reliance on the federal government for all coordination activities is unnecessary and would only serve to make the licensing process less efficient. In support of this position, several commenters note that since the FCC established the certified frequency coordinator program in 1986, with clear guidelines for the recognized coordinators, the speed of service has improved and the FCC's licensing burden has been reduced.⁽¹⁰⁷⁾ In its comments AAR notes that private frequency coordination groups are "highly familiar with the specialized spectrum needs of the user groups they represent."⁽¹⁰⁸⁾ Because of this familiarity, private frequency coordinators contend they can provide fast, efficient, conflict-free assignments to industry users. Comsearch states that because of their unique third-party status, private coordination groups "are in a position to provide a highly efficient and expeditious method of frequency coordination that is not usually available to either the end user or the FCC."⁽¹⁰⁹⁾ With improvements in standards of service and oversight by the federal government, private frequency coordination can result in an efficient, responsive system.

Nevertheless, even supporters of private coordination groups express a need for government involvement in the process. For example, CSAA, while acknowledging the budgetary and efficiency savings that the FCC has realized by using private frequency coordinators, cautions that the FCC must maintain effective oversight of the private coordination process.⁽¹¹⁰⁾ A number of other commenters, including several that support the use of coordinating groups, also state that the government should maintain and exercise an oversight role in non-government frequency coordination.⁽¹¹¹⁾

We agree that frequency coordination by private groups is an activity that the FCC must actively oversee. We also agree, however, that the use of such groups for certain coordinating functions has increased the efficiency of the FCC's licensing procedures. In our view, the very great number of users in the services that use private coordinators and the limited FCC resources to coordinate such a large number of diverse users are compelling reasons for continuing the current system of FCC recognition of private frequency coordination groups in the licensing process.

3. Coordinators and Planning

AAR states that their role has expanded beyond the frequency coordination function to include spectrum management (e.g., assistance in communications planning).⁽¹¹²⁾ According to AAR, their user group coordination and frequency selection activities have been highly successful over the years and recognized coordinators should be given more responsibility to assist the federal government in spectrum planning. Contel, because of the effectiveness of private frequency coordination, also encourages increased responsibility to such groups to "manage the coordination and assignment process."⁽¹¹³⁾ Ameritech also supports "[i]ncreased reliance on private user groups for purposes of coordination and tracking [frequency assignments]."⁽¹¹⁴⁾

NTIA agrees that involving coordinating groups in planning and cooperative management of the use of the spectrum they coordinate could increase efficient usage. However, efficiencies in management of resources like the spectrum may not result from user-based planning unless users have proper incentives to act efficiently. Long-range planning efforts that include coordination groups should be sufficiently broad to consider general demand conditions for the spectrum. Thus, national planning groups should include private sector coordinating groups.

4. Improving Frequency Coordination

Several commenters and other observers think that the current system establishes the recognized coordinators as monopolists and allows them to adopt practices that work to the detriment of prospective end users.⁽¹¹⁵⁾ To improve the current frequency coordination system, commenters call for fair fee structures for the coordinators and fair and equitable treatment for the constituents. The FCC, in a rulemaking initiated in 1989,⁽¹¹⁶⁾ is reviewing alternatives to the PLMRS frequency coordination program. We address several, non-mutually exclusive approaches to revising the frequency coordinator process to ensure that user interests are adequately served.

a. Direct Coordination by FCC

One alternative to the current private frequency coordination system would be for the FCC to accept applications supported by an engineering study directly from users as well as through certified coordinators. This would, in effect, interject an element of competition into the frequency coordination process by giving end users a choice in how to obtain a frequency assignment. It could benefit the end user without eliminating the certified coordinator completely. Applicants would be able to engineer a communications system and obtain a license themselves, or use a consulting engineer, without going through a certified coordinator. Some certified coordinators believe that this proposal would lead to "a rapid degradation of coordinators' databases and increased instances of interference."⁽¹¹⁷⁾ However, at least one certified coordinator, FIT, indicates that it has consistently supported carefully designed and appropriately supervised alternatives.⁽¹¹⁸⁾ NTIA believes that this alternative could be beneficial if a means were developed to prevent database degradation, as suggested below.

b. Multiple Certified Coordinators

Another alternative to the present system would be to certify more than one coordinating entity for each group. This would give each user a choice among private sector coordinators, which could improve their performance. The FCC has previously addressed and rejected this recommendation because of concerns for maintaining an accurate and up-to-date database and ensuring the integrity of the frequency assignment process. In initially establishing private coordination, the FCC stated that "if multiple coordinators were involved in coordination for a single service, it would be very difficult to keep track of the pending frequency selections of the various coordinators."⁽¹¹⁹⁾ We recognize the potential for difficulties in organizing the efforts of such coordinators. However, the FCC should consider the benefits of such an approach, which would require some means of ensuring that all coordinators and users have access to all data needed for both existing and pending frequency licenses.

c. Implementation

In order for these proposals to be most effective, the FCC needs to develop more fully its databases so that all coordinators can have rapid access to all data needed to coordinate proposed licenses and develop rapid, electronic methods of submitting coordination requests and license applications. These issues are discussed below.

(1) Updated Databases

The previous suggestions for improvement of the certified frequency coordinator process hinge on the general availability of data required for coordination, which is currently maintained only by the coordinators. The FCC has recognized that, "[w]ithout accurate and current information, a coordinator cannot make sound frequency recommendations to applicants . . . ."⁽¹²⁰⁾ Currently, the FCC data files are not designed, and are not adequate, to support frequency coordination in the services where there are private coordinators; the coordinators themselves are required to maintain separate databases containing additional data in order to coordinate proposed assignments.⁽¹²¹⁾

To make possible the increased use of direct applications to the FCC for assignment and the use of multiple coordinators, the FCC should develop a database and computer system capable of providing access to the public on a commercial basis at a reasonable cost. All coordinators and users would then be able to use a centralized, upgraded FCC database rather than maintaining separate databases. This would require major improvements to current FCC data files, including developing a means for rapid accessibility to appropriate coordinators and parties interested in submitting a direct application. In order to preclude different coordinators from selecting the same frequency for two different applicants, the FCC should also establish a pending applications file for review by coordinators and applicants prior to them choosing a frequency for their own application.⁽¹²²⁾

(2) Electronic Transfer of License Applications and Coordination Requests

There are a number of PLMRS and point-to-point microwave frequencies with suballocations for more than one radio business service. When different coordinators for different suballocations are involved, coordinators cannot recommend a particular frequency until they have received concurrence from each of the other services having sharing rights to the frequency. In the past this coordination has taken place using the mails. An element in improving the frequency coordination system would be to establish a method of more rapidly coordinating frequency proposals when more than one coordinating group can oversee a frequency. In its comments, NYNEX recognizes the problems of interservice coordination and provides extensive recommendations encouraging more structured cooperative management and FCC resolution of conflicts that develop with respect to sharing allocations.⁽¹²³⁾

One way to accomplish this result is for the FCC to require remote dial-up, electronic access among the databases of the affected frequency coordinators. In the longer term, the FCC could establish such access to the improved database described above, while developing procedures for remote, on-line submission of applications for review by other affected coordinators and, after coordination, to the FCC. US West states "the FCC can also prevent abuse of spectrum information by providing remote access to users who wish to do their own frequency studies."⁽¹²⁴⁾ If this were coupled with a remote dial-up to a pending applications file, coordination and frequency selection could be completed very quickly.⁽¹²⁵⁾ License approval by the FCC could also be transmitted electronically, allowing an applicant to begin operations immediately upon FCC action. The time and resources expended for all parties -- applicant, coordinator, and FCC staff -- would decrease dramatically.

In some point-to-point services, NSMA has attempted to provide a forum for coordination efforts. NSMA states that it is investigating the use of electronic distribution of prior coordination notices and has found that, "[t]he combination of regulatory guidelines and user cooperation is effective in helping the FCC manage the spectrum."⁽¹²⁶⁾ APCO, in conjunction with the FCC, has conducted a pilot project for electronic transfer of mobile public safety radio license applications from APCO to the FCC and filed a petition for rulemaking with the FCC looking toward electronic application filing on a permanent basis.⁽¹²⁷⁾ In addition, APCO has invited other coordinators to exchange data electronically and notes that such a system would speed the coordination process, particularly with respect to interservice sharing of frequencies, and improve the accuracy and consistency of all the databases employed in the process.

d. Funding for Frequency Coordination

A number of commenters state that budgetary constraints currently make improvement to the FCC data files and alternative coordination mechanisms impractical, if not impossible.⁽¹²⁸⁾ MRFAC believes that "a significant factor in the delays and added costs in the processing of FCC applications is due to the budgetary constraints which the agency has experienced over the past several years."⁽¹²⁹⁾ In this regard, Schwaninger argues that despite the current fiscal restraint in the federal government, the "FCC should not be denied the funds necessary to effectively manage the spectrum in the public interest."⁽¹³⁰⁾ Implementing these recommendations to improve the frequency coordination system could well require the expenditure of additional resources. Therefore, the FCC should evaluate carefully whether some level of additional resources is needed, or whether resource reallocation will allow them to fulfill these tasks.

5. Findings and Recommendations

FCC-certified coordinators for the PLMRS and the somewhat more informal coordination accomplished by user groups and coordination consultants in the fixed services perform valuable services, partly because such groups have extensive knowledge of their constituents' requirements and maintain extensive and specific databases. This is particularly important because the data maintained by the FCC is inadequate for coordination of frequencies in the PLMRS and fixed services. Thus, NTIA recommends that:

a. The certified coordinating groups used by the FCC in the PLMRS and the coordinating groups and consultants used by fixed service licensees should be continued.

b. The FCC should involve such coordinating groups in strategic, long-range planning for the management of the spectrum with active FCC oversight.

c. The FCC should encourage greater fairness, economy and efficiency by:

1. accepting assignment applications directly from prospective licensees.

2. investigating the possibility of certifying more than one coordination group for each suballocation subject to private coordination.

d. To facilitate these changes, the FCC should:

1. expand its data files to include all data required for frequency coordination. This would include the creation of a pending applications file for all included services.

2. develop the capability to permit on-line, dial-up access among coordinators and to the expanded files.

3. use on-line access as a means of coordinating frequency assignment requests, granting licenses and updating the master file of frequency assignments.

IV. Domestic Spectrum Management Coordination

A. Introduction

As noted earlier, NTIA and the FCC share domestic spectrum management responsibilities, while NTIA, the FCC, and the State Department share preparations for international telecommunication conferences and negotiations on other issues.

B. Existing Coordination Processes

NTIA and the FCC work closely in spectrum management, particularly within the IRAC. The FCC, through its liaison to the IRAC, is a party to most IRAC proceedings and can learn of developing NTIA policies in time to provide guidance or propose changes as necessary. In turn, the FCC consults with the IRAC on non-government spectrum issues involving shared or exclusive government bands. Prior to formal request for public comment, the FCC often consults with the IRAC on draft notices of inquiry and notices of proposed rulemaking. The FCC's liaison to the IRAC also receives comment from the IRAC members during meetings, as recorded in the IRAC minutes. The IRAC generally reaches consensus on FCC proposals, and in most cases, both NTIA and the FCC take action in accordance with the consensus. From time to time, NTIA also files formal comments with the FCC on behalf of the Executive Branch, and occasionally NTIA and one or more of the agencies will file separate formal comments.

Another important point of contact between NTIA and the FCC is in the FAS, the IRAC subcommittee charged with coordinating operating frequencies for government radio stations. The FCC representative, as a full voting member, submits proposals for private sector use of spectrum in exclusive or shared government bands or in other situations that might involve federal operations. The FCC consider