WASHINGTON-Sources say Defense Secretary Donald Rumsfeld has prepared a letter for President Bush that will stop just short of opposing the transfer of military spectrum in the 1700 MHz band to the mobile-phone industry, a major blow to efforts of carriers and manufacturers to secure frequencies for third-generation wireless systems.
It was unclear at press time whether the letter, which would be Rumsfeld’s first official policy pronouncement on the politically combustible issue, had reached the White House yet. According to one source, the Rumsfeld letter was hung up at the Office of Management and Budget.
An OMB spokeswoman said she had no information on the letter. Apparently several different drafts of the Rumsfeld letter were in play at one point, but sources said all the versions carried the same message. Rumsfeld is expected to raise concerns about the fact that no alternative spectrum has been identified for the Pentagon if the Department of Defense were to relocate military radio systems to other frequencies. Under law, the cellular industry is obligated to underwrite certain frequency changes by federal agencies.
The mobile-phone industry, which is aggressively lobbying Congress and the White House to acquire spectrum from the Pentagon, has framed its argument in terms of a “win-win” proposition whereby cellular carriers would spend billions of dollars to modernize military communications facilities as part of the frequency relocation effort in exchange for obtaining the 1700 MHz band.
Government studies have cast serious doubt on the prospects of military-industry shared use of the 1700 MHz band. Mobile-phone industry studies are far more optimistic about joint use of the band.
Sources say the Rumsfeld letter likely will ask whether all options to find private-sector spectrum for 3G-a mobile Internet wireless technology whose commercial viability has been questioned-have been exhausted. At least one version of the Rumsfeld letter makes no mention of relocation costs or reimbursement, a deliberate omission intended to downplay the money component and to underscore military readiness as the real issue at stake.
Failure to secure the 1700 MHz band-one of three frequency ranges identified for 3G by the World Radiocommunication Conference last year in Turkey-would be devastating. The mobile industry favors the 1700 MHz band over the 700 MHz and 2500 MHz bands-also globally designated for 3G-for high-speed, Internet mobile-phone service of the future. The 1700 MHz is expected to be used around the world for 3G, which makes it ideal in terms of roaming and reduced equipment production costs.
Like the 1700 MHz band, the 700 MHz and 2500 MHz bands are occupied by incumbents: broadcasters, schools, churches and broadband Internet carriers that also want to keep their airwaves and will not give them up without a fight. The Federal Communications Commission has all but ruled out the 2500 MHz band for 3G after determining that sharing and relocation were not feasible.
That Rumsfeld is speaking out on the spectrum issue before he completes a top-to-bottom review of the Department of Defense could reflect increased pressure he is feeling internally and from Congress on spectrum and other issues. Some in Congress have warned Rumsfeld that DoD risks losing the 1700 MHz band to industry if he remains disengaged on the issue. Pentagon top brass are opposed to being evicted from the 1700 MHz band. Up to now, Rumsfeld-who is well acquainted with the 3G spectrum debate-has not signaled where he stands one way or the other.
Because he is taking heat from Capitol Hill, top brass and others for trying to assert firm civilian control at DoD and being secretive in his military reform review, Rumsfeld might now feel obligated to make some conciliatory expression of solidarity: that is, joining with admirals and generals in protesting any surrender of additional spectrum to the wireless industry.
Since 1993, at the order of the then-Democratically controlled Congress, the Pentagon and other federal agencies have been forced to turn over 235 megahertz to the private sector. Facing a steep budget deficit at the time and seeking to rapidly inject more competition into the wireless industry, large chunks of government spectrum were transferred to the FCC to be auctioned. In the past several years, the FCC has raised more than $20 billion from license sales. To this day, the Pentagon resents having been forced to hand over spectrum to the cellular industry. That, combined with the fact that the commercial wireless industry needs the 1700 MHz, has created a gargantuan political issue for the Bush administration.
The Cellular Telecommunications & Internet Association declined to comment on the Rumsfeld letter.
