WASHINGTON-The Federal Communications Commission, lacking solid options and clear direction from the Bush administration, likely will be forced to postpone a final decision in July on spectrum for third-generation wireless systems.
While FCC officials have publicly stated they want to decide the 3G spectrum issue by July 30, a deadline tied to the Clinton 3G directive last October, privately there is serious concern among telecom regulators about whether a decision can-or should-be made by that date. The July deadline was established in large part to make it possible for the FCC to meet a September 2002 auction deadline set by Congress in 1997. Despite looming 3G deadlines, there could be some leeway for the FCC. Last year, Senate Budget Committee Chairman Pete Domenici (R-N.M.) gave his blessing for a delay of the 700 MHz auction that was to take place in 2000 but now is scheduled to be held this September. The FCC may need political cover or legislation to get out from under 3G deadlines that it may not be able to meet without undercutting U.S. wireless policy objectives.
Meanwhile, the 3G spectrum issue is gaining steam on Capitol Hill. On Wednesday, the House Government Reform Committee will hold a hearing on military readiness and commercial competition for spectrum, bandwidth and other resources. The House Armed Services Committee will hold a similar hearing on May 22.
Sen. James Inhofe (R-Okla.), chairman of the Senate Armed Services subcommittee on military readiness, also plans a hearing on spectrum requirements of the armed forces. Inhofe has asked the General Accounting Office and the Congressional Budget Office to examine the impact of further loss of military spectrum.
But renewed congressional attention to military spectrum requirements belies undercurrents of a serious problem between Congress and the Pentagon that ultimately could undermine the Defense Department’s efforts to retain spectrum sought by the mobile-phone industry.
Lawmakers with defense oversight, according to congressional sources, are growing increasingly angry about Defense Secretary Donald Rumsfeld’s attempts to impose corporate-style civilian control at the Pentagon and his reported distrust of military top brass and congressional overseers.
As such, according to sources, the Pentagon risks losing the support of influential members of Congress who are in a position to help it. “DoD may have already lost the battle,” said one source.
At the FCC, a delay would work to the advantage of the mobile-phone industry, which is trying to turn around the damaging impact of two government studies that cast serious doubt on securing access to the 1700 MHz and 2500 MHz spectrum bands for 3G. The World Radiocommunication Conference identified the two bands, as well as the 700 MHz band, for 3G last year in Turkey.
The forces conspiring against an FCC 3G spectrum ruling in July are many and powerful.
First, the Bush administration is not close to resolving the complex spectrum dispute that pits the Commerce Department against the Defense Department. Moreover, the Pentagon’s spectrum policy will not be clear until Rumsfeld completes a top-to-bottom review of the military.
The DoD spectrum review is being headed by former defense secretary James Schlesinger, currently Mitre Corp.’s chairman of the board. Assisting Schlesinger are John Hamre, former deputy defense secretary and currently president of the Center for Strategic and International Studies; William Lynn III, former DoD comptroller and currently vice president of DFI International; and others.
Complicating matters further is the fact that key Bush appointments-particularly, the National Telecommunications and Information Administration director and the assistant secretary of defense for command, control, communications & intelligence-have yet to be made. The individuals who eventually fill the two positions will play key roles in the 3G spectrum tug-of-war, though the final decision likely will be negotiated between the White House and Congress.
Two names mentioned for NTIA head are Patricia Paoletta, a former House Commerce Committee aide who today is vice president of government relations for Level 3 Communications, and Howard Waltzman, a former counsel to the same committee.
Also, the three new Bush-appointed FCC nominees-after expected confirmation by the Senate later this spring or summer-may need time to study the 3G spectrum issue. All of the variables appear to make it impossible for the FCC to meet the July 30 deadline on 3G spectrum, according to industry and government officials.
The mobile-phone industry claims it needs additional spectrum for advanced, Internet-friendly mobile phones that in the future will offer consumers a mix of multimedia services at vastly higher data speeds than today.
The big problem, though, is military, educational, religious and broadband Internet licensees currently occupy the 3G frequency bands.
In coming weeks, the mobile-phone industry will advocate delaying the 3G decision as part of stepped-up lobbying at the FCC. The cellular industry, according to industry sources, believes public statements by FCC Chairman Michael Powell on the 3G spectrum fight with the Pentagon have been damaging to the cause.
Moreover, according to sources, the industry is concerned that FCC staffers have given up on securing 1700 MHz for 3G from the Department of Defense
FCC lobbying will be headed up by Dianne Cornell, who recently left the FCC as a top wireless regulator to join the Cellular Telecommunications & Internet Association.
The mobile-phone industry is putting the finishing touches on draft legislation it will be shopping on Capitol Hill in coming weeks. The legislation would have three main components: It would postpone until after September 2002 congressionally mandated auctions of 1700 MHz and 2100 MHz spectrum; call for the Pentagon to turn over the 1710-1850 MHz band to the private sector; and establish a spectrum trust fund that guarantees billions of dollars to relocate 1700 MHz military users to other frequency bands and thus helps modernize military radio communications.
The mobile-phone industry, despite the overhang of two negative 3G spectrum reports, has succeeded in getting the Bush administration and Congress focused on the issue.
Sen. Judd Gregg (R-N.H.), chairman of the Senate Commerce appropriations subcommittee, last week warned that the United States will fall behind Asia and Europe on third-generation wireless development if the Pentagon does not relinquish radio frequencies to industry.
“My concern is that Defense not keep spectrum while Asia and Europe move ahead” on 3G, Gregg told RCR Wireless News following a hearing on the Commerce Department’s budget.
When questioned by Gregg on whether the Department of Defense is willing to transfer 1700 MHz spectrum to mobile-phone carriers for 3G, Commerce Secretary Donald Evans was careful not to make any predictions.
“I’m not in a position to know how receptive DoD will be,” said Evans. “I think we need to get all the principals at the table and talk through it.”
Evans said he met last Monday with FCC chairman Powell, and has spoken previously with Rumsfeld on the 3G spectrum controversy. “I’ve taken it upon myself to make sure Chairman Powell and Secretary Rumsfeld are very focussed on this issue,” said Evans. Evans has met twice with mobile-phone industry officials on 3G this year.
The Pentagon claims it cannot share spectrum with the mobile-phone industry. Wireless carriers and equipment manufacturers insist their studies indicate some 3G sharing is possible.
The mobile-phone industry’s first preference is the 1700 MHz band, which the Pentagon and other government agencies occupy.
“It’s [the 1700 MHz band] where the rest of the world is,” said Steven Berry, senior vice pre
sident of government affairs at CTIA.
Gregg, Sen. Ted Stevens (R-Alaska) and key House members have written Rumsfel
d and urged him to consider, within the context of Pentagon reform, potential military benefits from giving up spectrum in exchange for radio communication modernization.
Sen. Chuck Hagel (R-Neb.), a former wireless businessman, recently added his voice to that group.
“There is a common-sense balance that we need to attain in spectrum allocation,” said Hagel in a May 2 letter to Rumsfeld.
