Background

To a large degree, spectrum management policies flow from the technical characteristics of radio spectrum. Although the radio spectrum spans nearly 300 billion frequencies, 90 percent of its use is concentrated in the 1 percent of frequencies that are below 3.1 gigahertz. The crowding in this region has occurred because these frequencies have properties that are well suited for many important wireless technologies, such as mobile phones, radio and television broadcasting, and numerous satellite communication systems.
The process known as spectrum allocation has been adopted, both domestically and internationally, as a means of apportioning frequencies among the various types of uses and users of wireless services and preventing radio congestion, which can lead to interference. Interference occurs when radio signals of two or more users interact in a manner that disrupts the transmission and reception of messages. Spectrum allocation involves segmenting the radio spectrum into bands of frequencies that are designated for use by particular types of radio services or classes of users, such as broadcast television and satellites. Over the years, the United States has designated hundreds of frequency bands for numerous types of wireless services. Within these bands, government, commercial, scientific, and amateur users receive specific frequency assignments or licenses for their wireless operations. The equipment they use is designed to operate on these frequencies.
During the last 50 years, developments in wireless technology have opened up additional usable frequencies, reduced the potential for interference, and improved the efficiency of transmission through various techniques, such as reducing the amount of spectrum needed to send information. While this has helped limit congestion within the radio spectrum, competition for additional spectrum remains high. Wireless services have become critically important to federal, state, and local governments for national security, public safety, and other functions. At the same time, the consumer market for wireless services has seen extraordinary growth. For example, mobile phone service in the United States greatly exceeded the industry’s original growth predications, as it jumped from 16 million subscribers in 1994 to an estimated 110 million in 2001.

	Framework for Spectrum Management

The legal framework for allocating radio spectrum among federal and non- federal users emerged from a compromise over two fundamental policy questions: (1) whether spectrum decisions should be made by a single government official, or a body of decision-makers; and (2) whether all non- federal users should be able to operate radio services without qualification, or if a standard should be used to license these operators. The resulting regulatory framework—dividing spectrum management between the President and an independent regulatory body—is rooted both in the President’s responsibility for national defense and in the fulfillment of federal agencies’ missions, and the encouragement and recognition by the federal government of the investment made by private enterprise in radio and other communications services.
The first federal statute to establish a structure for spectrum management—the Radio Act of 1912—consolidated licensing authority with the Secretary of Commerce. However, the act proved to be deficient in addressing the burgeoning growth of radio communications and ensuing interference that occurred in the late 1910s and 1920s. Specifically, the Secretary of Commerce lacked the authority to use licensing as a means of controlling radio station operations, or to take actions to control interference, such as designating frequencies for uses or issuing licenses of limited duration. In recognition of such limitations, deliberations began in the 1920s to devise a new framework for radio spectrum management. Although there was general agreement that licensing should entail more than a registration process, there was debate about designation of the licensing authority and the standard that should govern the issuance of licenses.
The Radio Act of 1927, reflecting a compromise on a new spectrum management framework, reserved the authority to assign frequencies for all federal government radio operators to the President and created the Federal Radio Commission (FRC) to license non-federal government operators. Composed of five members from five different regions of the country, FRC could assign frequencies, establish coverage areas, and establish the power and location of transmitters under its licensing authority. Further, the act delineated that a radio operation proposed by a non-federal license applicant must meet a standard of “the public interest, convenience and necessity,” and that a license conveyed no ownership in radio channels nor created any right beyond the terms of the license.FRC’s authorities were subsequently transferred to the Federal Communications Commission (FCC), and the FRC was abolished upon enactment of the Communications Act of 1934, which brought together the regulation of telephone, telegraph, and radio services under one independent regulatory agency. The 1934 act also retained the authority of the President to assign spectrum to and manage federal government radio operations.
The need for cooperative action in solving problems arising from the federal government’s interest in radio use was recognized in 1922 with the formation of the Interdepartment Radio Advisory Committee (IRAC), comprised of representatives from the federal agencies that use the most spectrum. IRAC, whose existence and actions were affirmed by the President in 1927, has continued to advise whoever has been responsible for exercising the authority of the President to assign frequencies to the federal government. In 1978, the President’s authority for spectrum management of federal government users was delegated to NTIA, an agency of the Department of Commerce. IRAC assists NTIA in assigning frequencies to federal agencies and developing policies, programs, procedures, and technical criteria for the allocation, management, and use of the spectrum.
Over the past 75 years, since the 1927 act formed our divided structure of spectrum management, there is historical evidence of cooperation and coordination in managing federal and non-federal users to ensure the effective use of spectrum. For example, FCC and IRAC agreed in 1940 to give each other notice of proposed actions that might cause interference or other problems for their respective constituencies. Further, FCC has always participated in IRAC meetings and NTIA frequently provides comments in FCC proceedings that impact federal radio operations. And, as I will discuss later, FCC and NTIA also work together with the Department of State to formulate a unified U.S. position on issues at international meetings that coordinate spectrum use regionally and globally. However, as demand for this limited resource increases, particularly with the continuing emergence of new commercial wireless technologies, NTIA and FCC face serious challenges in trying to meet the growth in the needs of their respective incumbent users, while accommodating the needs of new users.

	Facilitating Spectrum Allocations

The current shared U.S. spectrum management structure has methods for allocating spectrum for new uses and users of wireless services, but these methods have occasionally resulted in lengthy negotiations between FCC and NTIA over how to resolve some allocation issues. Since nearly all of the usable radio spectrum has been allocated already, accommodating more services and users often involves redefining spectrum allocations.
One method, spectrum “sharing,” enables more than one user to transmit radio signals on the same frequency band. In a shared allocation, a distinction is made as to which user has “primary” or priority use of a frequency and which user has “secondary” status, meaning it must defer to the primary user. Users may also be designated as “co-primary” in which the first operator to obtain authority to use the spectrum has priority to use the frequency over another primary operator. In instances where spectrum is shared between federal and non-federal users—currently constituting 56 percent of the spectrum in the 0-3.1 GHz range—FCC and NTIA must ensure that the status assigned to users (primary/secondary or co-primary) meet users’ radio needs, and that users abide by rules applicable to their designated status.
Another method to accommodate new users and technologies is “band- clearing,” or re-classifying a band of spectrum from one set of radio services and users to another, which requires moving previously authorized users to a different band. Band-clearing decisions affecting either only non-federal or only federal users are managed within FCC or NTIA respectively, albeit sometimes with difficulty. However, band- clearing decisions that involve radio services of both types of users pose a greater challenge. Specifically, they require coordination between FCC and NTIA to ensure that moving existing users to a new frequency band is feasible and not otherwise disruptive to their radio operation needs.While many such band-clearing decisions have been made throughout radio history, these negotiations can become protracted. For example, a hotly debated issue is how to accommodate third-generation wireless services. FCC also told us that the relationship between FCC and NTIA on spectrum management became more structured following the enactment of legislative provisions mandating the reallocation of spectrum from federal to non-federal government use.
To address the protracted nature of some spectrum band-clearing efforts, some officials we interviewed have suggested establishing a third party— such as an outside panel or commission, an office within the Executive branch, or an inter-agency group—to arbitrate or resolve differences between FCC and NTIA. In some other countries, decisions are made within one agency or within interagency mechanisms that exist for resolving contentious band-clearing issues. For example, the United Kingdom differs from the U.S. spectrum management structure in that a formal standing committee, co-chaired by officials from the Radiocommunications Agency and the Ministry of Defense, has the authority to resolve contentious spectrum issues.
Another proposed mechanism is the preparation of a national spectrum plan to better manage the allocation process. The Omnibus Budget Reconciliation Act of 1993 required NTIA and FCC to conduct joint spectrum planning sessions. The National Defense Authorization Act of 2000 included a requirement for FCC and NTIA to review and assess the progress toward implementing a national spectrum plan. Top officials from FCC and NTIA said that neither requirement has been fully implemented. However, they indicated their intention to implement these directives.

	Challenges in Preparing for World Radiocommunication Conferences

A central challenge for the United States in preparing for WRCs, at which international spectrum allocation decisions are made, is completing the preparatory actions to ensure that the U.S. is able to effectively negotiate for international allocations that best serve the interests of domestic federal and non-federal spectrum users. The management of our domestic spectrum is closely tied to international agreements on spectrum use at regional and global levels. Domestic spectrum allocations are generally consistent with international allocations negotiated and agreed to by members of the International Telecommunication Union (ITU). The spectrum allocation decisions reached at these international conferences can affect the direction and growth of various wireless communications services and have far-reaching implications for the multi-billion dollar wireless communications industry in this country and abroad.
While the first international radio conferences were aimed at interference avoidance for early radio uses, such as maritime safety, meeting this same objective has become increasingly challenging throughout the last century with the proliferation of services and the number of nations adopting communications that utilize the radio frequency spectrum. For example, the emergence of new radio applications with international ramifications, such as broadcasting, radio navigation, and satellite-based services, has increased the need to reach agreements to prevent cross border signal interference and maximize the benefits of spectrum in meeting global needs, such as air traffic control. At the same time, the number of participating nations in these negotiations has risen dramatically—from 9 nations in the first conference held in 1903, to 65 nations in 1932, to 148 at the conference held in 2000—along with the frequency of conferences (now held every 2 to 3 years), and the number of agenda items negotiated at a conference (e.g., 11 in 1979; 34 in 2000). There has also been a movement toward regional cooperation at WRCs. Because decisions on WRC agenda items are made by vote of the participating countries—with one vote per country—uniform or block voting of nations in regional alignment has emerged to more effectively advance regional positions.
The State Department coordinates and mediates the U.S. position for the WRC and leads the U.S. delegation to the conference through an ambassador appointed by the President. We found strong agreement among those we interviewed that it is important for the United States to develop its position in advance of the conference in order to have time to meet with other nations to gain international support for our positions. However, we heard differences of opinion about the United States’ preparatory process for the conferences. U.S. positions on WRC agenda items are developed largely through separate processes by FCC and NTIA with the involvement of their respective constituencies. To obtain input from non-federal users, FCC convenes a federal advisory committee comprised of representatives of various radio interests (e.g., commercial, broadcast, private, and public safety users), and solicits comment through a public notice in the Federal Register. NTIA and federal government users can and do participate in the FCC process. To obtain the views of federal spectrum users, IRAC meets to provide NTIA with input on WRC agenda items. Although IRAC’s WRC preparatory meetings are closed to the private sector due to national security concerns, non-federal government users may make presentations to IRAC to convey their views on WRC agenda items. Any differences of opinion between FCC and NTIA on the U.S. position must ultimately be reconciled into a unified U.S. position on each WRC agenda item. In cases where differences persist, the ambassador acts as a mediator to achieve consensus to form a position.
State Department and FCC officials told us that the work of FCC and NTIA with their respective constituencies and with each other in preparation for a conference leads to U.S. positions on WRC agenda items that are thoroughly scrutinized, well reasoned, and generally supported among federal and non-federal parties. In contrast, some non-federal officials told us that the NTIA process does not allow the private sector adequate involvement in the development of U.S. positions for the WRC. Also, some federal and non-federal officials said that since each agency develops its positions through separate processes, it takes too long to meld the two toward the end of the preparatory period. For example, to speed up our preparatory process, the former U.S. Ambassador to the 2000 WRC recommended merging the separate FCC and NTIA preparatory groups to get an earlier start at working with industry and government users to reach a consensus on U.S. positions regarding WRC agenda items.
Differing views also have been expressed on how we appoint an individual to head the U.S. delegation. Since the early 1980s, the President has appointed an ambassador to head the U.S. delegation to WRCs for a time period not exceeding six months. The former U.S. Ambassador to the 2000 WRC said that ambassador status is generally believed to confer a high level of support from the administration, and it is viewed as helping to achieve consensus in finalizing U.S. positions and enhancing our negotiating posture. However, the former ambassador also said that the brief tenure of the appointment leaves little time for the ambassador to get up to speed on the issues, solidify U.S. positions, form a delegation, and undertake pre-conference meetings with heads of other delegations to promote U.S. positions. In addition, the ambassador said there is concern about the lack of continuity in leadership from one conference to the next, in contrast to other nations that are led by high-level government officials who serve longer terms and may represent their nations through multiple conferences. Leaders of national delegations with longer terms are perceived as being more able to develop relationships with their counterparts from other nations, helping them to negotiate and build regional and international support for their positions. On the other hand, NTIA officials expressed the view that the ambassador’s negotiating skill was of equal importance to the duration of the appointment.

	Encouraging Efficient Federal Spectrum Use

NTIA has several activities to encourage efficient spectrum use by the federal government, but does not have assurance that these activities are effective. NTIA is required to promote the efficient and cost-effective use of the federal spectrum that it manages—over 270,000 federal frequency assignments at the end of 2000—“to the maximum extent feasible.” NTIA has directed agencies to use only as much spectrum as they need.
NTIA’s process for assigning and reviewing spectrum places primary responsibility for promoting efficiency in the hands of the individual agencies because the determination of agencies’ spectrum needs depends on an understanding of their varied missions. Moreover, the large number of frequency assignments that require attention (NTIA processes between 7,000 and 10,000 assignment action requests—applications, modifications, or deletions—from agencies every month on average) makes it necessary to depend heavily on the agencies to justify and review their assignment needs.
NTIA authorizes federal agency use of the spectrum through its frequency assignment process. As part of this process, NTIA requires an agency to justify on its application that it will use the frequency assignment to fulfill an established mission and that other means of communication, such as commercial services, are not appropriate or available. In turn, agencies generally rely on mission staff to identify and justify the need for a frequency assignment and complete the engineering and technical specifications for the application. NTIA and IRAC review the application to ensure, among other things, that the assignment will not interfere with other users. Once NTIA has authorized spectrum use by agencies, it requires that the agencies review their frequency assignments every 5 years to determine that the assignments are still needed and meet technical specifications. NTIA said that it may delete assignments that have not been reviewed for more than 10 years.
Officials from the seven federal agencies in our review told us that they attempt to use spectrum as efficiently as possible, but five of them are not completing the required five-year reviews in a timely or meaningful way. According to agency officials, this is due to shortages of staff available to complete the review or because completing the reviews are a low agency priority. For example, a spectrum manager for a major agency division has over 1,000 frequency assignments that have not been reviewed in 10 years or more. A spectrum manager in another agency said that the agency has eliminated all field staff responsible for assisting with the five-year reviews, which has impaired the timeliness and quality of the reviews. The spectrum manager for a third federal agency said that he was sure that the agency was not using all of its frequency assignments, but he added that conducting a comprehensive review would be cost prohibitive and generate limited benefits to the agency. However, we note that although the agencies may not reap benefits from conducting these reviews, if these reviews result in the release of unused or underutilized spectrum, other federal and non-federal users could benefit.
Although NTIA’s rules and procedures also include NTIA monitoring programs designed to verify how spectrum is used by federal agencies, NTIA no longer conducts these programs as described. For example, at one time, the Spectrum Management Survey Program included NTIA site visits to verify if agency transmitters were being used as authorized. NTIA said that although this program helped correct frequency assignment information and educate field staff on NTIA requirements, it is not currently active due to NTIA staff shortages. In addition, the Spectrum Measurement Program made use of van-mounted monitoring equipment to verify that federal agencies were utilizing assigned frequencies in accordance with the assignment’s requirements. NTIA said that although this program provided useful information, the van-mounted verification has been discontinued due to lack of resources. As a result of the limited nature of the assignment and review programs and decreased monitoring, NTIA lacks assurance that agencies are only using as much spectrum as they need.
NTIA also seeks to promote efficiency by advocating spectrum conservation through research and technical initiatives, but some of these activities face implementation problems. Two examples illustrate the potential and the limitations of these types of efforts. First, NTIA, with the approval of IRAC, has required all federal agencies to upgrade land-based mobile radios by setting deadlines for halving the spectrum bandwidth used per channel (in essence, freeing up half of each band currently in use) for radios in certain highly congested bands—a process called narrowbanding. This requirement has the potential to greatly expand the spectrum available for land mobile telecommunications, but some agencies said that they are struggling to meet the deadline due to a lack of sufficient staff and funding. Several agencies in our review said they will not complete the upgrades before the deadline. For example, the Chief Information Officer for one agency that is a member of IRAC compared the requirement to an unfunded mandate, and indicated that his office did not have the financial resources needed to upgrade the tens of thousands of radios that fall under the requirement.
A second example of a technological initiative is a NTIA-sponsored pilot program for federal agencies in six cities in the early 1990s to establish a spectrum sharing method for voice radio communications, called trunking, which conserves spectrum by putting more users on each radio channel. According to NTIA, some agencies resisted the program because it was more costly for agencies to participate in trunking than it was for them to use their own channels. In addition, some agencies said the trunking systems did not meet their mission needs. NTIA added that the program was only completely successful in Washington, DC, where agency demand for frequency assignments, and therefore spectrum congestion, is extremely high. We found efforts to encourage this technology in other countries as well. In the United Kingdom, providers of emergency services are being encouraged to join a trunking system. Once the new system has proved to be capable of meeting their needs, certain public safety users will incur financial penalties if they do not use this system. Additionally, in one province in Canada, a variety of public safety users have voluntarily begun developing a trunking system in order to use their assigned spectrum more efficiently in light of the fees they must pay for this resource.
NTIA also told us that the congressionally-mandated spectrum management fees agencies must pay also help to promote the efficient use of spectrum. These fees are designed to recover part of the costs of NTIA’s spectrum management function. The fees began in 1996 and amounted to about $50 per frequency assignment in 2001. NTIA decided to base the fee on the number of assignments authorized per agency instead of the amount of spectrum used per agency because the number of assignments better reflects the amount of work NTIA must do for each agency. Moreover, NTIA stated that this fee structure provides a wider distribution of cost to the agencies. Although NTIA officials said that spectrum fees provide an incentive for agencies to relinquish assignments, it is not clear that this promotes efficient use of spectrum, in part because agencies may be able to reduce assignments without returning spectrum. For example, a spectrum manager for a federal agency said that the spectrum fee has caused the agency to reduce redundant assignments, but that it has not impacted the efficiency of the agency’s spectrum use because the agency did not return any spectrum to NTIA as a result of reducing its assignments.
We have learned that other countries are moving toward using payment mechanisms for government spectrum users that are specifically designed to encourage government users to conserve their use of spectrum, rather than to recover the cost of managing the spectrum. Both Canada and the United Kingdom are reviewing their administrative fee structures at this time with the intent of encouraging spectrum efficiency.

	Additional GAO Work on Spectrum Management

We are conducting additional work on the management of the radio spectrum to determine how the current rules and regulations governing spectrum holders affect the rollout of new technologies and services and the level of competition in markets that utilize spectrum. To address these and other related issues, we are building on the information presented here today concerning U.S. rules and regulations governing spectrum management. We are interviewing an array of providers of mobile telephone, satellite, paging services, broadcasters, NTIA, other federal agencies, and public safety representatives. Tomorrow we are hosting a panel with experts from several of these sources to elicit additional input on these and other issues.

Summary:
What GAO Found

As new technologies that depend on the radio spectrum continue to be developed and used more widely, managing the spectrum can grow increasingly challenging. The current legal framework for domestic spectrum management evolved as a compromise over the questions of who should determine the distribution of the spectrum among competing users and what standard should be applied in making this determination. Although initially, all responsibility for spectrum management was placed in the executive branch, this responsibility has been divided between the executive branch for managing federal use and an independent commission for managing non-federal use since 1927 . The current shared U.S. spectrum management system has processes for allocating spectrum, but these processes have occasionally resulted in lengthy negotiations between the Federal Communications Commission and the National Telecommunications and Information Administration (NTIA) over allocation issues. The United States also faces challenges in effectively preparing for World Radiocommunication Conferences. NTIA has several activities to encourage efficient spectrum use by federal agencies, but it lacks the assurance that these activities are effective. NTIA is required to promote efficiency in the federal spectrum it manages, which included more than 270,000 federal frequency assignments at the end of 2000. To do this, NTIA directs federal agencies to use only as much of the spectrum as they need.