WASHINGTON-While policy-makers struggle to balance commercial spectrum needs and national security, the outcome of industry efforts to secure the military’s 1700 MHz band for third-generation wireless systems could be influenced greatly by Pentagon budgetary constraints, international pressure, presidential politics and last Friday’s stunning court ruling against the Federal Communications Commission.
As the spectrum brawl between industry and DoD heats up, it is becoming increasingly clear that a mix of variables-beyond spectrum and nation security-are not only at play, but possibly critical to the administration’s final decision on 3G.
In some respects, these dark-horse issues have the potential to help mobile-phone firms in their quest for DoD frequencies.
The first variable involves Pentagon spending and defense reform policies, which Defense Secretary Donald Rumsfeld came under fire for at a Senate Armed Services Committee hearing last Thursday. It was the first appearance on Capitol Hill for Rumsfeld since his confirmation hearing earlier this year. Rumsfeld, while supported by GOP lawmakers generally, found himself repeatedly unable to answer questions from Democrats and GOP lawmakers alike. After the hearing, Committee Chairman Carl Levin (D-Mich.) told reporters he was surprised by Rumsfeld’s lack of knowledge on certain matters.
Rumsfeld needs billions of dollars to overhaul the military, money that Sen. Jack Reed (D-R.I.) said was not factored into the $1.35 trillion tax cut and possibly will not be available to DoD. Some of that money would help pay for a space-based national missile defense, which key Democrats oppose.
With money tight, Rumsfeld may be forced to give serious consideration to industry’s offer to pay to move military radio systems from the 1700 MHz band to other frequencies. The cost of such an undertaking, which top brass vehemently oppose, could cost more than $10 billion.
Indeed, Rumsfeld conceded DoD might have to make concessions across the board. “We’re going to have to make certain trade-offs,” he told lawmakers. Rumsfeld’s influence in the administration might not be as significant as some had expected.
Even if he decides to back top brass and fight to keep the 1700 MHz band, it is by no means certain he will prevail. Recent Bush actions, particularly decisions to cease bombing exercises on the Puerto Rican island of Vieques and to protect the U.S. steel industry, suggest the president is not afraid to veer from conservative policy or to offend Republicans if it can help him politically a few years from now.
The 1700 MHz band-owing to global popularity-is favored by U.S. industry over the other two bands (2500 MHz and 700 MHz) identified for 3G by the World Radiocommunication Conference last year in Turkey.
Rumsfeld, conducting a top-to-bottom defense review, has not officially taken a position on the spectrum controversy. Following the hearing, Rumsfeld sidestepped questions on the spectrum spat.
The cellular industry, which has drafted a bill directing the secretary of commerce to give the 1700 MHz band to industry in return for frequency relocation compensation, is lobbying Congress and the administration aggressively for support. DoD has stepped up lobbying to keep the 1700 MHz band.
Last week, the stakes got higher for industry and DoD after a federal appeals court voided a $17 billion government auction of wireless licenses that benefit major mobile-phone firms-like Verizon Wireless, AT&T Wireless Services Inc. and Cingular Wireless Inc.-which say they need more spectrum for 3G.
The mobile-phone industry signaled Friday it would try leveraging the court defeat to acquire more spectrum from others, like DoD. The court ruling could increase bid prices for 3G licenses at next year’s scheduled auction, more money that industry could promise DoD in return for the 1700 MHz band.
But other factors could be just as influential. CITEL, the telecom arm of the Organization of American States, recently indicated a preference for operating 3G systems at 1700 MHz in Central America and South America. Canada appears headed in that direction as well, adding to international pressure on the United States to deploy 3G at 1700 MHz.
There soon could be two new, major policy-makers in government with 3G at the top of their agendas. President Bush has appointed former TRW Inc. executive John Stenbit as assistant defense secretary for command, control, communications and intelligence, and last Thursday nominated Nancy Victory, a communications lawyer, to head the National Telecommunications and Information Administration.
