Testimony of Assistant Secretary Irving on Federal Management of the Radio Spectrum

Mr. Chairman and Members of the Subcommittee:

Good morning Mr. Chairman and members of the Subcommittee. It is a pleasure to have this opportunity to testify before you today. As the President's chief advisor on telecommunications policy and the manager of Federal Government's use of the spectrum, the National Telecommunications and Information Administration (NTIA), in the Department of Commerce, has long sought ways to promote efficient spectrum use in the United States -- both by Federal and non-Federal users.

INTRODUCTION

Spectrum is a precious and finite national and international resource that must be shared by the public and private sectors. The rapid pace of technological development has caused congestion in the prime spectrum bands now in use. With the growing need to raise funds for the U.S. Treasury and to identify more spectrum for new technologies, the proper allocation of spectrum between the Federal users (under the authority of the President and managed by NTIA) and the private sector (under the jurisdiction of the FCC) has become a central issue.

The increased demand for spectrum today -- and especially the potential for the FCC to auction spectrum to the private sector -- makes essential reexamination of the appropriate allocation of spectrum between Federal and non-Federal users from both a domestic and international perspective. As I will discuss in more detail shortly, weighing the public benefits from spectrum-based Federal missions against the benefit of freeing up spectrum for private sector use is a complex and difficult task -- but one that we must confront in deciding which spectrum uses are best for this country.

Today, I wish to describe how NTIA ensures that Federal spectrum is used efficiently and continues to identify spectrum for reallocation to the private sector. NTIA also promotes policies to ensure efficient spectrum usage by the private sector. For example, NTIA was one of the principal proponents urging Congress to give the FCC auction authority. We worked with Congressman Oxley and others to develop such spectrum auction legislation. NTIA has also proposed a spectrum auction methodology to the FCC that would generate higher auction revenues and a more efficient assignment of licenses. NTIA believes that it can make additional contributions in this area to enhance the future revenue potential of the auction process.

I wish to emphasize at the outset, however, that to evaluate fully the potential for raising revenue from reallocation of additional Federal spectrum to the private sector, we must understand the difficult trade-offs involved. Federal agencies use spectrum to provide critical public services. And, there is virtually no prime spectrum lying fallow. In addition, international treaty allocations and obligations must be taken into account. Finding spectrum to reallocate for private sector use, where possible, requires either that Federal users become more efficient or relocate to other bands, or both. But these steps will take time and can be costly -- potentially necessitating the purchase of new equipment and the outlay of substantial resources to relocate Federal operations without disrupting these important public services. As discussed below, NTIA supports proposals to permit private sector payment to Federal agencies that relocate their operations or become more efficient to free up spectrum for private sector use.

FEDERAL SPECTRUM USE IS PUBLIC USE

The Federal Government uses spectrum on a daily basis to provide critical and diverse public services, such as national defense, emergency rescue efforts, air traffic safety, law enforcement, disaster relief, energy production and distribution, space exploration, and protection of our national parks. The public benefits of Federal spectrum use deserve special mention. Not surprisingly, the Department of Defense (DOD) is the Federal Government's single largest user of spectrum: our entire defense depends on DOD having adequate spectrum for worldwide strategic communications between and among the four armed services, nuclear command and control, satellite surveillance, radar, and other critical functions. To provide just one example of how invaluable Federal spectrum use can be, Captain Scott O'Grady was rescued in Bosnia after he established communications over a military band allocated to the Federal Government.

The National Weather Service also relies on spectrum to accomplish its missions, deploying satellites and radar systems that use Federal spectrum to track weather patterns. During Hurricane Andrew, Federal spectrum was used to coordinate the establishment of a military broadcasting station for distribution of relief, assistance, and other information to the Hurricane's victims.

Federal law enforcement organizations, such as the Secret Service, the FBI, and the U.S. Capitol Police all require radio spectrum to perform their functions. Rescue efforts by Federal and local law enforcement personnel in response to the bombing of a Federal building in Oklahoma City were greatly facilitated through the use of Federally allocated spectrum and related equipment.

In the last few years, coordination of frequencies by NTIA and other Federal agencies allowed land mobile and other communications capabilities to be deployed to help fight extensive forest fires and earthquakes in the western United States. Another example of Federal spectrum use benefitting everyone in this room is our national air traffic control system. The FAA needs adequate spectrum for ground to air communications as well as radar tracking to deal with the growing demand for air travel.

All of the foregoing illustrations -- in addition to myriad other Federal Government uses -- have intrinsic value to the public. This value is embodied in the Federal Government's spectrum-dependent efforts in providing for a working and effective national defense and saving thousands of human lives each year. (For your benefit, a more extensive description of Federal spectrum usage has been provided in an attached report prepared by NTIA, entitled: "Federal Spectrum Management: How the Federal Government Uses & Manages the Spectrum.")

NTIA IS THE FEDERAL SPECTRUM MANAGER AND
SERVES AS THE PRESIDENT'S TELECOMMUNICATIONS ADVISER

Throughout its history as the Federal spectrum manager, NTIA has ensured that the existing and future spectrum needs of the Federal Government have been met. With the increasing congestion in prime spectrum bands, NTIA has focused more in recent years on ways to enhance efficient spectrum use and to accommodate the private sector's need for more spectrum. Federal spectrum efficiency and reallocation of spectrum are among NTIA's most important initiatives.

Exclusive Federal Spectrum Use Is Minimal. It is important to note that contrary to industry claims, Federal agencies do not hold vast and valuable spectrum exclusively. They hold spectrum only to the extent needed to perform their missions. As you can see on the chart, the Federal Government has access on an exclusive basis to only 1.4 percent of the spectrum allocated below 300 GHz. Non-Federal entities, on the other hand, use approximately 5.5 percent of the spectrum below 300 GHz exclusively. Federal and non-Federal users share the remaining 93.1 percent of allocated radio spectrum below 300 GHz. (More detailed data regarding the actual amount of spectrum used by the Federal Government in different bands is provided in the attachments entitled: (1) "Federal Spectrum: Efficient Management and Public Benefits" and (2) "NTIA Spectrum Information Fact Sheet" and attached charts, which have all been provided to members of this Subcommittee today.)

The Federal Government Has Achieved Great Spectrum Efficiency. The Federal Government has made major strides towards achieving greater spectrum efficiency. In most cases, Federal efficiency standards are more stringent than those adopted by the private sector for comparable non- Federal applications. For example, NTIA has adopted Federal standards for receivers, which play an important role in efficient spectrum use, while the private sector has declined to establish stringent receiver standards in many instances. The Government has also adopted a variety of measures to increase Federal users' spectrum efficiency. It is implementing trunking and narrowband technology, which doubles the number of channels in up to three major Federal land mobile bands and promotes sharing with the private sector.

Moreover, Federal agencies are using spectrum overlay techniques, which have permitted increased sharing between the Federal and private sector users. By allowing private industry to share previously exclusive Government spectrum, we have also facilitated the creation of new businesses. For example, garage door openers and car alarm system businesses proliferated once they could share DOD spectrum.

By integrating its research, policymaking, and standards-setting functions, NTIA continues to develop and promote the use of new technologies and techniques that allow for more efficient Federal spectrum usage. Over time, NTIA's efficiency initiatives could free up additional spectrum for FCC auctions, thereby making spectrum available to private industry and creating jobs and economic opportunity for Americans.

NTIA Has Reallocated Much Spectrum to the Private Sector. NTIA has also worked to reallocate spectrum to the private sector. When Congress in a bipartisan agreement directed NTIA in 1993 to identify 200 MHz of Federal spectrum to be reallocated for increased and exclusive private sector use, NTIA rose to the task. NTIA identified, in accordance with Congress's deadline, 235 MHz of spectrum for reallocation -- almost 20% more than had been originally requested by Congress. All of this spectrum is prime spectrum, located below 5 GHz, that supports a broader range of wireless services than higher band spectrum. Provided that uses for this spectrum meet the FCC's competitive bidding authority criteria, it could eventually be subject to auction.

While reallocation of 235 MHz is the most recent illustration of NTIA's reallocation activity, NTIA has reallocated much other Federal spectrum to private sector use. Indeed, since NTIA's inception in 1978, it has reallocated more than 5,000 MHz of Federal spectrum to allow greater private sector use, some of which has been transferred to exclusive private sector use and some of which has been made available for more sharing. This spectrum has been used to provide many types of new satellite services, including digital audio broadcast, little low earth orbiting (LEO) satellites, fixed satellite services, and more recently feeder links for little LEOs.

Presently, we are evaluating other Federal, Federal/non-Federal shared, and non-Federal spectrum for reallocation; uses of new technologies, such as narrowband and spread spectrum; and future Federal and non-Federal spectrum needs. In the upcoming year, NTIA also plans to conduct a study to examine new approaches to Federal spectrum management. We are about to implement the use of software enabling Federal agencies to better determine their actual spectrum needs.

Federal Spectrum Management Functions Should Remain in the Department of Commerce. These important Federal spectrum management functions should remain in the Executive Branch and should not be transferred to an independent agency, such as the FCC. The FCC's experience lies in management of the private sector's use of spectrum, which requires the FCC to respond to private industry needs.

In contrast, the use of spectrum by DOD (and other Federal agencies) is critical to crucial public services and cannot be valued in financial terms. Federal spectrum management should thus be kept distinct from the decisions made by the FCC in commercial allocation matters, which may often conflict with the Federal agencies' needs. Also, assigning this function to an agency that generally operates outside the established Executive Branch coordination process could threaten important Federal missions. Further, because the FCC is an independent agency, transferring Federal management to the FCC could raise concerns regarding interference with the President's constitutional authority over national defense.

NTIA Has Promoted Policies for Improved Private Sector Use. Complementing our spectrum management functions, NTIA continues to play a major role in developing and advocating domestic and international spectrum policy. As mentioned earlier, NTIA was at the forefront of calls for a market-based approach to spectrum management and grant of auction authority to the FCC to assign spectrum licenses and released a major report advocating spectrum auctions as early as February, 1991. Market-based approaches help provide solutions to difficult spectrum allocation questions. NTIA, for example, supported FCC efforts to authorize "voluntary reallocation" among users, which is the basis for the FCC's reimbursement policy for incumbent microwave users in the bands allocated for personal communications services (PCS).

In addition to raising significant revenue for the U.S. Treasury, auctions provide a fast and fair way for the Government to award licenses to those entities willing to make the best use of them. Furthermore, NTIA believes that more revenue could be earned if current auction rules are modified. Accordingly, fine- tuning the auction process could further serve as a means to assist with deficit reduction.

NTIA SUPPORTS PRIVATE SECTOR PAYMENT FOR REALLOCATION COSTS

The task of reallocating Federal Government spectrum to the private sector and enhancing the Government's spectrum efficiency could be made easier if the private sector is allowed to pay the costs incurred by Federal agencies when they relocate or become more spectrum efficient. The costs of relocating Federal operations are significant. For example, NTIA estimates, based on information provided by various Federal agencies, that the aggregate cost for relocation of all Federal operations from the 235 MHz spectrum band will amount to half a billion dollars. We thus believe that a mechanism allowing for private sector payment of such Federal Government relocation costs could facilitate early relocation of some Federal operations. Congress should therefore seriously consider implementing proposals that would allow private sector entities to compensate displaced Federal users for early relocation to alternative spectrum or media.

We look forward to working with Congress on the issues raised by this hearing. Improved spectrum usage by both the public and private sectors can yield great benefits in terms of services to the public and increased revenue for the U.S. Treasury. At the same time, difficult choices will be necessary in deciding on how best to allocate spectrum between the Federal and non-Federal uses in the future, while maintaining our international obligations.