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[Senate Hearing 107-1107]
[From the U.S. Government Publishing Office]

                                                       S. Hrg. 107-1107

                   SPECTRUM MANAGEMENT: IMPROVING THE
                      MANAGEMENT OF GOVERNMENT AND
                  COMMERCIAL SPECTRUM DOMESTICALLY AND
                            INTERNATIONALLY

=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 11, 2002

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation

                    U.S. GOVERNMENT PRINTING OFFICE
92-638                      WASHINGTON : 2005
_____________________________________________________________________________
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

              ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska
    Virginia                         CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana            KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon                    SAM BROWNBACK, Kansas
MAX CLELAND, Georgia                 GORDON SMITH, Oregon
BARBARA BOXER, California            PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina         JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri              GEORGE ALLEN, Virginia
BILL NELSON, Florida
               Kevin D. Kayes, Democratic Staff Director
                  Moses Boyd, Democratic Chief Counsel
      Jeanne Bumpus, Republican Staff Director and General Counsel

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 11, 2002....................................     1
Statement of Senator Allen.......................................    56
Statement of Senator Brownback...................................     6
Statement of Senator Burns.......................................     4
Statement of Senator Ensign......................................     8
Statement of Senator Hollings....................................     2
    Prepared statement...........................................     3
Statement of Senator Inouye......................................     1
Statement of Senator McCain......................................     4
Statement of Senator Stevens.....................................     8
Statement of Senator Wyden.......................................     7

                               Witnesses

Dodd, Christopher S., U.S. Senator from Connecticut..............    11
    Prepared statement...........................................    12
Guerrero, Peter F., Director, Physical Infrastructure Issues, 
  U.S. General Accounting Office, Accompanied by Terri Russell, 
  Senior Analyst, GAO............................................    13
    Prepared statement...........................................    16
Jeffords, James M., U.S. Senator from Vermont....................     9
    Prepared statement...........................................    10
Price, Steven, Deputy Assistant Secretary for Spectrum, Space, 
  Sensors, and C3, Office of the Secretary, Department of Defense    25
    Prepared statement...........................................    27
Sugrue, Thomas J., Chief of Wireless Telecommunications Bureau, 
  Federal Communications Commission..............................    40
    Prepared statement...........................................    42
Victory, Nancy J., Assistant Secretary of Commerce for 
  Communications and Information and Administration, National 
  Technical Information Administration, Department of Commerce...    33
    Prepared statement...........................................    36

                                Appendix

Response to written questions submitted by Hon. Max Cleland to:
    Peter Guerrero...............................................    65
    Steven Price.................................................    71
    Nancy J. Victory.............................................    80
Response to written questions submitted by Hon. Byron L. Dorgan 
  to:
    Steven Price.................................................    73
Response to written questions submitted by Hon. Ernest F. 
  Hollings to:
    Peter Guerrero...............................................    66
    Steven Price.................................................    73
    Nancy J. Victory.............................................    81
Response to written questions submitted by Hon. Daniel K. Inouye 
  to:
    Peter Guerrero...............................................    67
    Steven Price.................................................    79
    Nancy J. Victory.............................................    85

 
    SPECTRUM MANAGEMENT: IMPROVING THE MANAGEMENT OF GOVERNMENT AND 
          COMMERCIAL SPECTRUM DOMESTICALLY AND INTERNATIONALLY

                              ----------                              

                         TUESDAY, JUNE 11, 2002

                               U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:38 a.m. in room 

SR-253, Russell Senate Office Building, Hon. Daniel K. Inouye, 
Chairman of the Subcommittee, presiding.

          OPENING STATEMENT OF HON. DANIEL K. INOUYE,
                    U.S. SENATOR FROM HAWAII

    Senator Inouye. This hearing will continue to explore the 
complex issues concerning spectrum management in an effort to 
help us move forward and develop a national spectrum management 
policy. Piecemeal proposals to allocate and reallocate spectrum 
are not in our Nation's best interests. In addition, the 
ongoing war against terrorism has shed new light on Government 
spectrum needs.
    The testimony before the Committee today should provide 
useful information as we work to develop a legislative 
framework for managing spectrum. The particular issues before 
us today include: one, improving the process for assigning and 
allocating spectrum; two, reimbursing Government users for 
their reallocation costs if they are required to relinquish 
their spectrum for commercial uses; three, increasing U.S. 
participation in the World Radio Conference process; and four, 
the status of third generation wireless service.
    Since 1993 the Government users have been required to turn 
over portions of their spectrum for use by commercial users. In 
order to facilitate this process, many have suggested that 
Government users should be reimbursed through auction proceeds 
for reallocation costs they incur in order to move to new 
spectrum blocks or consolidate their existing operations.
    As we will hear today, there are also proposals to use 
auction proceeds for other beneficial purposes. In July of last 
year the Communications Subcommittee studied the need to make 
available spectrum for third generation wireless service. 
However, it seems that almost a year later we are not much 
closer to a resolution of this matter.
    Recent postponement of spectrum auctions reinforces the 
need to develop a national spectrum policy, one that supports 
the development for emerging technologies while meeting the 
needs of Government users.
    Spectrum allocation is not only a domestic issue. It has 
become an important international issue. The U.S. must work to 
improve its participation in the World Radio Conference to 
successfully negotiate spectrum use internationally.
    As we consider these issues and work to improve the 
Nation's management of spectrum, regulators must recognize the 
need to exercise leadership on and more effectively address 
these increasingly complex spectrum use and management issues. 
Spectrum management is important to both Government and 
commercial users. Incumbents and new entrants continue to seek 
additional spectrum to upgrade existing wireless technologies 
as well as introduce new ones.
    Given the growing importance of wireless technologies to 
consumers and Government users, we must rise to the challenge 
and resolve these issues to best serve our Nation's interests. 
We must face these challenges head-on. In developing a new 
spectrum management approach, it is my hope that regulators 
will strive to stand in each other's shoes by viewing the 
issues not only from the perspective of their constituencies, 
but also from the perspective of those competing interests.
    We must approach this issue creatively and bring forward 
new ideas to comprehensively address our Nation's spectrum 
allocation.
    With that said, I welcome the witnesses and look forward to 
their testimony. We are most honored to have with us as our 
first witness----
    Senator McCain. Are we going to have opening statements?
    Senator Inouye. Oh, I am sorry, yes. May I call upon the 
Chairman of the Committee, Senator Hollings.

             STATEMENT OF HON. ERNEST F. HOLLINGS, 
                U.S. SENATOR FROM SOUTH CAROLINA

    The Chairman. Thank you, Mr. Chairman. I will file my 
statement for the record and simply say that our Committee is 
indebted to you for your leadership and for your calling the 
hearing here on this spectrum issue. The fact is that this 
Committee is charged primarily with the responsibility of 
communications in this country of ours and yet we do not have a 
spectrum policy.
    I serve on the Budget committee and every time we get a 
shortfall they say, well, let us sell some spectrum. It is used 
for any and everything except the advancement of 
communications. Yet at the same time we have got the demands, 
we have got the educational demands. There is an interesting 
initiative by our friends Mr. Larry Grossman and Newt Minow. 
There is the need, of course, for broadband. There is the need 
for the wireless.
    Of course, foremost is the need of our Department of 
Defense. As the chairman of the Defense Appropriations 
Subcommittee, I know that you have got that foremost in mind. 
So what I would like in this hearing is to begin to determine 
just exactly the needs of the Defense Department. They will 
fight at those needs.
    I was on the Budget committee when Rumsfeld was Secretary 
under President Ford and as chairman of a task force on defense 
for the budget, I found they had put 2 percent cut insurance. 
They had all the budgets come through. They had gotten their 
submission ready to send to the Congress and then they just 
added 2 percent on the premise that, wait a minute, the 
Congress is going to cut us, so we want to get what we want and 
the best way to do it is to put cut insurance on there of 
billions of dollars.
    So I know how that crowd works. We in turn have got to 
study it carefully and make sure they have got all they need, 
but begin as an industrialized nation to develop an expansion 
of the spectrum usage here in the United States. As an 
industrialized country, we probably have less spectrum 
allocated than any in the world.
    Thank you very much.
    [The prepared statement of Senator Hollings follows:]

            Prepared Statement of Hon. Ernest F. Hollings, 
                    U.S. Senator from South Carolina

    I commend Senator Inouye for holding this hearing. I believe that 
we are at a cross roads in spectrum management. We are essentially 
faced with two choices--continue managing spectrum as we have in the 
past or develop an improved framework for addressing the increasingly 
complex spectrum issues that we face. I think it is incumbent on 
everyone, policy makers, regulators, commercial users, government 
users, new service providers, as well as manufacturers to candidly 
engage the difficult issues facing the nation regarding spectrum use 
and management, and work together to resolve those issues in a fair and 
creative manner.
    One of the important issues that must be addressed is finding and 
making spectrum available for third generation wireless service. 
Clearly, to successfully meet this challenge, re-allocations of 
spectrum, in addition to upgrades in technology to make better use of 
the spectrum, will be required. Although this presents crucial 
challenges for policy makers, such steps must be taken if we are going 
to meet the growing market and technological needs of both government 
and commercial users of spectrum.
    Freeing up more spectrum is not only critical for the offering of 
3G service by wireless carriers, but also necessary for U.S. 
international competitiveness, and making new and innovative wireless 
services available to U.S. consumers. In fact, recent consumer data on 
wireless use demonstrates the need for additional wireless services. It 
noted that in the last 6 months of 2001 alone, U.S. consumers used more 
minutes than in all of 2000, and that by 2005, wireless usage is 
expected to equal more than 40 percent of all U.S. telecom minutes. As 
it stands, carriers are beginning to implement new wireless mobile data 
applications which will become increasingly important to consumers and 
how we conduct commerce.
    Because of these important needs and developments, I must say that 
I am disappointed with the lagging pace of finding spectrum for 3G 
service. After spectrum bands were identified for 3G service at the 
last world radio conference, president Clinton, in October of 2000, 
directed all federal agencies to work with the FCC and the private 
sector to identify spectrum that could be used for 3G service 
domestically. Even though it's been almost two years since that charge, 
we have still not made much progress on the issue.
    Now there is a new proposal on the table. NTIA, along with DoD, is 
examining whether the 1710-1770 MHz portion can be used for 3G service. 
At the same time, the FCC is examining whether the 2110-2170 MHz band 
can be reallocated for 3G service. Although this current proposal 
represents a start, given its potential to provide 120 MHz of spectrum, 
it, nevertheless, is 80 mhz short of the 200 MHz that the international 
telecommunications union concluded is required for 3G service.
    I expect that, in addition to the other issues that this hearing 
will address, it will provide us with a clearer understanding of what 
it will take to meet the challenge of making spectrum available for 3G 
service. I understand that if DoD has to relinquish spectrum that it is 
currently using as well as to relocate or modify its operations, it 
will need to be reimbursed for its costs and may need additional 
spectrum in which to relocate its operations. I also understand that 
there are some existing wireless commercial users that may be affected 
by efforts to find spectrum for 3G services. While both of these issues 
are not easy ones, we are willing to work with everyone to find a 
solution, and clearly our national security cannot be jeopardized by 
this process.
    Spectrum undoubtedly is an increasingly scare resource. In this 
environment, there are only a few ways to find more spectrum. Our 
choices are reallocating spectrum from existing users, or developing 
technologies that can use spectrum more efficiently or use spectrum in 
frequency bands that are unusable today. As we move forward, all 
stakeholders must be willing to explore and pursue all options. With 
that said, I welcome the witnesses and look forward to hearing their 
testimony.

    Senator Inouye. I thank you, sir.
    Senator McCain.

                STATEMENT OF HON. JOHN McCAIN, 
                   U.S. SENATOR FROM ARIZONA

    Senator McCain. Thank you, Mr. Chairman. I want to thank 
you and Senator Hollings for holding this hearing. I am 
particularly grateful that this is a full Committee hearing, 
reflecting the importance of this issue for both national 
defense and our economy.
    I would like to associate myself with the comments of 
Senator Hollings. Today there are even greater spectrum demands 
for both commercial and Government uses that make the task of 
managing this resource increasingly challenging and the 
importance of doing so effectively increasingly vital to our 
national interests.
    There are over 130 million wireless customers in the United 
States today, triple the number of wireless users in 1996. We 
all know the promise of 3G technology and it is important that 
we continue to foster the growth and development of these new 
and innovative technologies. However, we are still in a war. 
Threats to the security of the United States are there. It 
makes more urgent the task of reorganizing our military and the 
people, weapons, technology, and planning necessary to ensure 
the success of our world leadership. Clearly spectrum plays a 
very vital role in that effort.
    I believe it is critical, as the Chairman said, for our 
military forces to be properly equipped with the latest 
technology to keep America's edge on the twenty-first century 
battlefield. More importantly, our military forces must have 
the resources necessary to complete their mission during time 
of war.
    That is why, Mr. Chairman, I think it is important that we 
get a definitive statement and assessment of needs by the 
military as well as public safety and transportation interests, 
so we can ensure that their views are heard as we strike a fine 
balance for finding and allocating spectrum for 3G and other 
future wireless services, while ensuring our military forces 
and other public users have enough spectrum for current and 
future needs.
    I think there is some time sensitivity associated with this 
issue, Mr. Chairman, as more and more clamor for the spectrum, 
increased by commercial and other interests. I hope we can set 
the parameters and policies, which so far we have been unable 
to do, nor has the administration presented to my knowledge.
    I thank you, Mr. Chairman.
    Senator Inouye. Thank you.
    Senator Burns.

                STATEMENT OF HON. CONRAD BURNS, 
                   U.S. SENATOR FROM MONTANA

    Senator Burns. Mr. Chairman, thank you very much for 
today's hearings. I think this is the first shot really or the 
first step that we have, after looking at this situation, that 
we find ourselves in spectrum policy and especially in offering 
any kind of reform. Clearly there are many dimensions in this 
information age, but none more important than the use and the 
availability of spectrum. This issue at hand is not simply the 
allocation of spectrum for 3G or third generation, but also how 
to create a process for managing this valuable commodity in 
such a way to ensure national security, ensure commerce, but 
most of all to propel our transition into the next phase of the 
digital era, where information is truly available to all 
Americans regardless of geography.
    I became convinced more than ever of the need of 
comprehensive spectrum reform after recently traveling to Asia 
over this last Memorial Day recess. During my trip in Korea and 
Japan, I met with top legislators, telecommunications CEOs, and 
was quite impressed with the products and the services 
available to their consumers.
    Unfortunately, while consumers in Korea and Japan choose 
from a wide variety of third generation services, the rollout 
in the United States has been slow and it has been very choppy. 
Clearly, this is no accident as the amount of commercially 
available spectrum in Asia is twice that available to the 
industry in the United States. Making innovative wireless 
services available to consumers should be a national priority 
of every country.
    Unfortunately, the situation regarding spectrum allocation 
is far different in the United States. Put simply, we do not 
manage our spectrum well. At the heart of my concerns about our 
allocation of spectrum is the very auction process itself. The 
current process has resulted in creating a win-at-all-costs 
mentality among bidders that often results in widely inflated 
bids that cripple the companies that gain access to the 
spectrum. I can say something about auctions.
    I also remain troubled by views of spectrum as a sort of a 
national resource, to be exploited for maximum budgetary 
impact. We have seen the results of this kind of thinking both 
in Europe and here at home, which instead of maximizing revenue 
has often resulted in bankruptcies and endless hours, days, 
months, and years in the courtrooms.
    Rather, spectrum should be viewed as a technology which is 
the key to the future of the new generation of services for 
American companies and consumers.
    I have a variety of other concerns, including whether 
current division of spectrum authority should be between two 
agencies. Currently the two heads of the FCC and the NTIA are 
coordinating well, but from an institutional standpoint and 
perspective I fear the division leads to bureaucratic turf 
battles and inevitable delay.
    I am also interested in placing greater emphasis on our 
preparations for our participation in the World Radio 
Communications Conference.
    With these concerns in mind, last year I requested a 
comprehensive GAO report on spectrum allocation last year, 
along with my colleagues Senator Kerry and Senator Hollings. 
This report, which is unprecedented in its scope, will be 
completed this summer. I will use those findings as a basis to 
guide some of my thinking in preparing a comprehensive spectrum 
reform bill later on this year. This is a huge issue.
    Comprehensive spectrum reform has the potential to create 
numerous high tech jobs, to jump start the current ailing 
technology sector of our United States economy. We need to 
create a spectrum plan that will focus on managing spectrum in 
a rational way, balancing the needs of industry and Federal 
agencies. The emphasis of this plan must focus on developing 
innovative new wireless technologies.
    I would also state at this point, working with my Chairman, 
Mr. Inouye, and the full Committee Chairman Mr. Hollings, I 
look forward to the challenges that we will have to face in 
developing a fair, balanced resolution to this issue.
    I look forward to the testimony of the witnesses today. 
Thank you, Mr. Chairman, for this hearing, both Mr. Chairmen. I 
feel like it is probably one of the more vital things that we 
will do in this summer session.
    Senator Inouye. I thank you very much.
    Senator Brownback.

               STATEMENT OF HON. SAM BROWNBACK, 
                    U.S. SENATOR FROM KANSAS

    Senator Brownback. Thank you, Mr. Chairman. I just want to 
add a couple comments to what has already been said.
    One is that--and I think this has been made by the Chairman 
and others--Congress has permitted spectrum auctions, intended 
as an efficient and objective means of licensing spectrum, to 
become a mere tool for raising revenue. On that I want to raise 
my voice as a part of the chorus saying that is just a wrong-
headed way to go. I do not think we ought to look at this as a 
way to raise money. We should be looking at it as an overall 
policy issue.
    We should consider deposits of auction revenues in the 
Treasury as an added bonus, not the primary goal of spectrum 
auctions. However, since the passage of the Balanced Budget Act 
of 1997 we have clearly lost sight of these principles.
    The transition to digital television was intended to be a 
cooperative, market-driven process. Yet 2006 was set in the 
statute for the transition to come to a close. We made this 
decision in 1997, not because it was realistic, but because 
such a decision was required for budgetary purposes. Now, think 
about that. We decided in 1997 that this transition would end 
in 2006. Did we know that that was going to take place? Did we 
think that was a fully appropriate period of time? It was 
primarily driven by budgetary needs.
    The end result is Congressional impatience with the DTV 
transition, even though it has probably proceeded without undue 
delay considering the level of investment that is required, the 
technological hurdles, and the policy resolutions required, 
too.
    Also, we have been forced to address issues that, quite 
frankly, should never have been raised, such as the 700 
megahertz debacle. Today's reliance on spectrum auctions for 
revenue generation and not solely for spectrum assignment 
cannot continue. With that, I want to again add my voice to 
what the Chairman and others have already said.
    I want to make one other note on a nascent issue that is 
developing here. The notion of, at this point in time, setting 
aside spectrum auction revenues for non-spectrum management-
related purposes is not a good concept for us to engage at this 
point in time. Again as I have stated, the first goal of 
spectrum auction revenue should be the management of the 
spectrum itself, and not raising revenue for non-spectrum 
management-related purposes.
    Issues such as reimbursement for relocation must be 
addressed and assisted through the use of auction revenues that 
have been received. We have major transition issues that are 
going to be involved in comprehensive spectrum management 
reform and I think that is the more valuable place for us to be 
looking to focus these resources, rather than create another 
driver, causing us to push constantly for the sale of spectrum 
for a purpose other than the management of the spectrum itself.
    I think if we engage nonspectrum-management-related 
purposes, you are just going to get another pusher in the 
system to sell more spectrum, and I do not think that is wise 
in us looking for an overall spectrum management policy.
    I appreciate the hearing. I think it is a good topic. I 
hope it is one that we can get aggressively engaged upon. Thank 
you, Mr. Chairman.
    Senator Inouye. Thank you very much.
    Senator Wyden.

                 STATEMENT OF HON. RON WYDEN, 
                    U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you, Mr. Chairman. I too join in 
praising you and Senator Hollings for this hearing. I think 
that spectrum policy is the single most important issue in the 
telecommunications field. I think that when we look back 5 or 
10 years from now at all the telecommunications issues that we 
are debating, I think we are going to say that spectrum policy 
issues had the most significant impact.
    I am of the view that probably the best way to promote real 
competition is through wireless, probably the best way to get 
significant additional service to rural areas is through 
wireless. But the only way you are going to do that is to 
reform the system of spectrum policy in this country. It is 
unquestionably a Jurassic system. Virtually nothing has changed 
since the 1920s, when spectrum was used for radio and radio 
only.
    I would sum it up by way of saying that inefficiency is now 
built into the system. So what I would like us to do as we 
examine this issue--and we will certainly be spurred by the GAO 
study this summer--is to say that the heart of a new spectrum 
policy should be to create new incentives to use spectrum in an 
innovative way, in a creative way, to share it, rather than in 
effect pull it close to you and hoard it.
    Essentially, today's system encourages people just to hold 
everybody hostage and get the best ransom you can for it. I 
think we can do much better. As of now those incentives are 
lacking in the commercial area, they are lacking in the 
Government area, they are lacking with respect to the military. 
I think that is what we need to zero in on. I look forward to 
working with you and our colleagues to do it.
    Senator Inouye. Senator Stevens.

                STATEMENT OF HON. TED STEVENS, 
                    U.S. SENATOR FROM ALASKA

    Senator Stevens. Thank you very much, Mr. Chairman. I will 
be short.
    I am sorry, I do not know if anyone else has mentioned 
this, but I do think we should congratulate Chairman Powell of 
the FCC for his spectrum policy task force. He is taking steps 
to expedite the broadcast digital conversion. I think we should 
take knowledge of the fact that the administration is working 
on a spectrum proposal to create a trust fund for spectrum 
proceeds to facilitate the movement of Defense and other 
agencies from the spectrum they currently use.
    But I also would like to remind the Committee that the 
World Radio Conference identified the global harmonized 
spectrum for the third generation uses, including global 
roaming, and the spectrum of 1755 to 1850 is occupied by DoD. 
It would be my hope that you would remember to have a 
classified hearing for Members of this Committee so they can 
obtain information on that spectrum and understand the pace at 
which it could possibly be moved.
    Senator Brownback mentioned the pace of change here. 
Clearly, even with the money that is contemplated by the 
administration's spectrum trust fund, the cost of moving that 
spectrum is much greater than anyone, unless they have had the 
classified briefings, realize. So I think, while I entirely 
support the concept of finding some way to move the agencies 
off this spectrum and meeting particularly the international 
needs for the third generation, I do believe we should be clear 
what we are doing and not rush into this.
    Thank you very much.
    Senator Inouye. Thank you.
    Senator Ensign.

                STATEMENT OF HON. JOHN ENSIGN, 
                    U.S. SENATOR FROM NEVADA

    Senator Ensign. Thank you, Mr. Chairman. I want to 
compliment you and Senator Hollings for this hearing today. I 
also am pleased that the administration has recognized the need 
for a comprehensive spectrum policy.
    A lot has been said and I just want to make two points from 
my observations. Third generation wireless is absolutely 
critical to America's future. How it is handled in expediting 
the spectrum clearing process is very important, especially 
spectrum held by the Defense Department.
    Unfortunately, when we have looked at spectrum auctions, we 
focus on our budgetary means, not how many jobs will be created 
and how much revenue will come into the Federal treasury from 
deploying new technologies into the marketplace. It is 
unfortunate that current spectrum policy does not take future 
economic impact into account.
    With regard to the 700 megahertz issue that was previously 
mentioned. It is a textbook example of what can go wrong when 
we do not have a forward-looking, comprehensive spectrum 
management policy. We should continue working to establish such 
a policy, and I look forward to working with my colleagues on 
the Committee to accomplish this goal. It is a mistake to go 
ahead with the June 19th auction. We can do much better in 
managing our previous spectrum, and I am continuing to work 
with some of my colleagues to come up with a compromise so that 
the June 19, 700 megahertz auction does not go forward. I 
believe it would be a mistake to do so at this time, and I hope 
the Senate will soon act to dispose of this issue.
    So I look forward to working with my colleagues on the 
issue of spectrum management. I think wireless issues are 
exciting issues. They are difficult issues for us to 
understand, but I also agree that we should hold a classified 
briefing to better understand the military aspects.
    So thank you, Mr. Chairman.
    Senator Inouye. Thank you, Senator.
    Now may I call upon the Honorable James M. Jeffords, 
Chairman of the Committee on Environment and Public Works, and 
the Honorable Chris Dodd, member of the United States Senate 
and senior member of the committee on Foreign Relations. 
Senator 
Jeffords.

             STATEMENT OF HON. JAMES M. JEFFORDS, 
                   U.S. SENATOR FROM VERMONT

    Senator Jeffords. Thank you, Mr. Chairman. I certainly 
appreciate the hearing. I already learned a good deal about the 
complexities that we are dealing with.
    I commend Senator Hollings for holding the hearing to 
address the important issues relating to spectrum management, 
such as public safety and auctions. I appreciate your courtesy 
in allowing me to make a brief statement before attendance to 
another committee.
    First, let me briefly say I appreciate Senator Hollings' 
attention to emergency personnel and first responders and their 
communications needs. In the Environment and Public Works 
Committee, we have heard about how our interoperability issues 
prevented first responders from communicating with each other 
on September 11th. I know when I arrived at the Pentagon the 
day after, I talked with the responders who came from all over 
the country and they said--I asked them: What is the one 
problem that you noted most? They said: We could not talk to 
each other. This obviously is a critical problem when people 
are trying to operate in those circumstances.
    The EPW Committee has reported out a bill that would direct 
FEMA to study the steps necessary to establish a nationwide 
emergency communications system. I thank Senator Hollings for 
his interest and look forward to working with him and Senator 
McCain and other Members of this Committee to ensure that the 
responders have a first-rate system in place that really 
augments our Nation's preparedness.
    Let me now talk about the education component and other 
aspects that I believe is relevant to the hearing. The American 
people are the owners of the spectrum and it is a national 
resource that has enormous value. Our citizens should see a 
direct and specific benefit from the use of their commonly 
owned property. The electromagnetic spectrum can serve a 
compelling national priority supporting education. There are 
several options. An education trust fund established with a 
percentage of the proceeds from the public asset of the 
spectrum could and should be designed to meet these needs. 
Distance learning options have tremendous potential and are 
already utilized around the world and in this country.
    Also, health care the potential for bettering our health 
care options are tremendous with respect to the utilization of 
the spectrum. The Digital Opportunity Investment Trust Fund Act 
authored by Senator Dodd is one approach that would help 
support education efforts with revenue from spectrum auctions. 
I am proud to join my friend from Connecticut as a co-sponsor 
of this provision.
    While the spectrum is literally as intangible as air, it is 
a national public resource every bit as real as our Federal 
park lands. We in the Government are the only managers of this 
resource and must not take that responsibility lightly. The 
Federal Government must be responsible for maximizing 
utilization of the spectrum for the best public purposes.
    The Congressional Research Service estimates that at least 
$40 billion will come into the Federal coffers from spectrum 
auctions, have come since the auctioning began in the early 
1990's. That money has already been spent. The Congressional 
Broadcast Office estimates that the Federal Government will 
take in an additional $27 billion in proceeds from the spectrum 
auctions between now and the year 2007.
    I ask respectfully that you keep our Nation's educational 
needs in mind as you consider the overall Federal management of 
the spectrum. Historically, Congress has stepped in to make 
substantial Federal investments in education innovation at 
critical times. A fellow Vermonter, Senator Justin Morrill, 
headed the concept of using a public asset for education in the 
mid-1800's. The Morrill Act established through a gift of 
public land to each State our Nation's land grant colleges. The 
Morrill Act resulted in unprecedented access to higher 
education for all, including historic black colleges.
    The GI Bill put higher education within the reach of 
millions of veterans from World War Two and later military 
conflicts. The launching of Sputnik prompted passage of the 
National Defense Education Act. The act brought increased 
funding to help Americans compete with the Soviet Union in 
scientific and technical fields and the improvements of 
education, mathematics, and foreign language training.
    I believe Congress has an opportunity to step in and again 
bolster the quality of our educational system. We have an 
educational emergency in our Nation. We are lagging far behind 
our critical competitors in math and science. The President's 
new testing initiative will make this very, very clear this 
fall.
    So I look forward to working with Senators Hollings, 
McCain, and all of my colleagues on this Committee to link 
education to the spectrum for the highest public good.
    [The prepared statement of Senator Jeffords follows:]

Prepared Statement of Hon. James M. Jeffords, U.S. Senator from Vermont

    Thank you Senator Inouye, Senator Hollings, Senator McCain, and 
other Members of the Commerce Committee, for giving me the opportunity 
to testify today. I commend Senator Hollings for holding this hearing 
to address important issues relating to spectrum management such as 
public safety and auctions. I appreciate your courtesy in allowing me 
to make a brief statement before my attendance is required at another 
hearing.
    First, let me briefly say I appreciate Senator Hollings' attention 
to emergency personnel and first responders and their communications 
needs. In the Environment and Public Works (EPW) Committee we have 
heard about how interoperability issues prevented first responders from 
communicating with each other on September 11th. The EPW Committee has 
reported out a bill that would direct FEMA to study the steps necessary 
to establish a nationwide emergency communication system.
    I thank Senator Hollings for his interest and look forward to 
working with him and Senator McCain and the other Members of this 
Committee to ensure first responders have a first rate system in place 
that augments our nation's preparedness.
    Let me now talk about an education component that I believe is 
relevant to this hearing. The American people are the owners of the 
spectrum, and it is a national resource that has enormous value.
    Our citizens should see a direct and specific benefit from the use 
of their commonly owned property. The electromagnetic spectrum can 
serve a compelling national priority of supporting education. An 
education trust fund, established with a percentage of the proceeds 
from the public asset of the spectrum, could and should be designed to 
meet these needs.
    The Digital Opportunity Investment Trust Act authored by Senator 
Dodd is one approach that would help support educational efforts with 
revenue from spectrum auctions. I am proud to join my friend from 
Connecticut in this effort as a cosponsor.
    While the spectrum is literally as intangible as air, it is a 
national public resource every bit as real as our federal park lands. 
We in the government are the only managers of this resource and must 
not take that responsibility lightly.
    The Federal Government must be responsible for maximizing the 
utilization of the spectrum for the best public purpose.
    The Congressional Research Service estimates that at least $40 
billion dollars have come into federal coffers from spectrum auctions 
since auctioning began in the early 1990's. That money has already been 
spent.
    The Congressional Budget Office estimates the Federal Government 
will take in an additional $27 billion in proceeds from spectrum 
auctions between now and the year 2007.
    I ask respectfully, that you keep our nation's educational needs in 
mind as you consider the overall federal management of the spectrum. 
Historically, Congress has stepped in to make substantial federal 
investments in education innovation at critical times.
    A fellow Vermonter, Senator Justin Morrill, had the concept of 
using a public asset for education in the mid 1800's. The Morrill Act 
established, through a gift of public land to each state, our nation's 
land grant colleges. The Morrill Act resulted in unprecedented access 
to higher education for all.
    The GI Bill put higher education within the reach of millions of 
veterans from World War 2 and later military conflicts.
    The launching of Sputnik prompted passage of the National Defense 
Education Act. This Act brought increased funding to help America 
compete with the Soviet Union in scientific and technical fields and 
the improvement of science, mathematics, and foreign language training.
    I believe Congress has the opportunity to step in and again and 
bolster the quality of our educational system.
    I look forward to working with Senator Hollings, Senator McCain, 
and all of my colleagues on this Committee to link education and the 
spectrum for the highest public good.

    Senator Inouye. Thank you very much, sir.
    Now may I call upon Senator Dodd.

            STATEMENT OF HON. CHRISTOPHER S. DODD, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Dodd. Mr. Chairman, I will just ask unanimous 
consent to have this very, very brief statement.
    Senator Inouye. Without objection.
    Senator Dodd. First of all, we appreciate immensely you 
giving us an opportunity to appear before you this morning. 
Just by the mere presence of the many Members of this 
Committee, it demonstrates the interest in the subject matter, 
and obviously the interest goes even beyond the Committee here. 
This is a critically important issue. Senator Inouye, we know 
of your longstanding interest in it. Senator Hollings, 
obviously Senator McCain and others.
    I have spoken with John I think a couple of years ago about 
the idea of some sort of a trust fund, using the Morrill Act as 
an example. I found that a fascinating historical reference. 
Here in the middle of the Civil War, Abraham Lincoln along with 
Justin Morrill of Vermont decided that they would sell public 
lands in the West and use the revenues from that to establish 
land grant colleges. A rather innovative and far-sighted idea, 
if you would, considering what the demands of the era and the 
time were.
    The GI Bill that has been mentioned by my colleague Senator 
Jeffords is another example. There was an earlier example in 
1787, the Northwest Ordinance Act, which I am sure Senator 
Wyden is familiar with, which demanded in fact that States 
establish some sort of public school education policy as a 
result of efforts there.
    All we are suggesting here with this bill I think has been 
incorporated by a lot of what you have said already, and that 
is the idea of utilizing these public resources. This is sort 
of the land of the twenty-first century, if you will, the 
spectrum. Not to rush it, not to do it, auction it for the sake 
of auctioning it for revenues, but to see to it that we use 
this land, if you will, in a way that is going to contribute to 
the wealth and health of a Nation.
    One of the ideas is obviously education. There are others. 
Obviously, the first responders' needs, interconnectability, is 
critically important; defense needs. Possibly a trust, which we 
are talking about here, would give us the greatest options in 
making determinations how best to use those resources, rather 
than having it just dumped into the general revenues where they 
can get lost in terms of some of the vital needs we are talking 
about.
    So Larry Grossman and Newton Minow you have mentioned, 
Senator Hollings, already as being people I know have talked to 
many people here in the Senate and others over many years about 
the idea that Senator Jeffords and I have offered here briefly 
in the last couple of days as one idea. I know the Committee 
will consider not only our ideas but others as you talk about 
this legislation.
    We are just grateful for the opportunity to testify here 
before you this morning. It is a little bit off the exact theme 
you have raised, but we appreciate the chance to express our 
views on this issue.
    [The prepared statement of Senator Dodd follows:]

     Prepared Statement of Christopher S. Dodd, U.S. Senator from 
                              Connecticut

    Chairman Hollings, Ranking Member McCain, and Members of the 
Committee, I appreciate the opportunity to make some brief remarks 
today in support of innovative approaches to education and information 
technology in the 21st century. I am pleased to be joined today by my 
good friend and colleague, Senator Jeffords.
    Today, the Committee is beginning a formal inquiry into spectrum 
auctions and relocation and how best to manage this critical resource 
for maximum benefit. This issue is complex and I do not purport to be a 
technical expert. However, it is my belief that the spectrum is one of 
our last great natural resources and should be used for the greater 
public good. Innovative technologies could revolutionize lifelong 
learning and provide educational content to those individuals that 
might otherwise be denied access. Simply put, the goal is to link our 
cultural, historical and educational heritage, without commercial 
regard. Technological advances and infrastructure improvements are only 
as good as the depth and breadth of content available to enhance our 
lives.
    It is estimated by CBO that more than $20 billion could be 
available from the sale and licensing of the spectrum. Some of these 
revenues could be used to build a Digital Opportunity Investment Trust 
to achieve this educational goal.
    Yesterday, Senator Jeffords and I introduced S. 2603, the Digital 
Opportunity Investment Trust Act, a bill designed to lay a framework 
for this vision.
    Throughout history, Congress has taken bold steps and invested 
resources to ensure that Americans were ready to overcome obstacles and 
face challenges head-on. Whether it be the 1787 Northwest Ordinance 
which set aside public lands for schools in every state, the 1862 
Morrill Act which established land-grant colleges, or the 1944 GI-Bill, 
all of these bold initiatives expanded educational opportunities for 
the masses. It is again time to take a giant step forward. Now, we have 
the chance to build on those past initiatives and adapt and enhance 
educational opportunities for the 21st century.
    The legislation we set forth is designed to spur debate and 
interest in a visionary educational proposal for the 21st century. It 
is a framework for discussion and by no means set in stone. I know the 
Committee has an ambitious agenda, but I hope that members take a look 
at this proposal over the coming weeks. I do not expect that you would 
have any comments today, but I do look forward to working with you in 
the future.

    Senator Inouye. Any questions?
    Senator Burns. Senator Dodd, the land grant colleges was a 
great idea, but they did not sell the public lands.
    Senator Dodd. They gave it away.
    Senator Burns. No, they did not give them away. Each 
section is assigned--out of each range there is a certain 
amount of sections that those revenues continue today to 
support land grant colleges. They were never sold, but the 
revenues derived from those resources found on those lands 
support land grant colleges.
    Senator Dodd. I stand corrected, but the concept is--you 
endorse the concept, though, Senator?
    Senator Burns. I fully endorse it.
    Senator Inouye. Any further questions?
    [No response.]
    Senator Inouye. If not, thank you very much, Senator 
Jeffords and Senator Dodd.
    May I now call upon a panel made up of the Director of the 
Physical Infrastructure Issues, U.S. General Accounting Office, 
Mr. Peter Guerrero; the Deputy Assistant Secretary for 
Spectrum, Space, Sensors, and C3, Office of the Secretary of 
Defense, Mr. Steven Price; the Assistant Secretary of Commerce 
for Communications and Information and Administration, National 
Telecommunications and Information Administration, U.S. 
Department of Commerce, Ms. Nancy J. Victory; and Chief of 
Wireless Telecommunications Bureau of the Federal 
Communications Commission, Mr. Thomas J. Sugrue.
    May I first call upon Mr. Guerrero.

      STATEMENT OF PETER F. GUERRERO, DIRECTOR, PHYSICAL 
        INFRASTRUCTURE ISSUES, U.S. GENERAL ACCOUNTING 
         OFFICE, ACCOMPANIED BY: TERRI RUSSELL, SENIOR 
                          ANALYST, GAO

    Mr. Guerrero. Thank you, Mr. Chairman. With me today is 
Terri Russell, Senior Analyst working for the GAO on these 
important issues.
    I appreciate the opportunity to testify on our ongoing work 
on spectrum management. As you know, managing the radio 
frequency spectrum has become more challenging as new 
technologies have developed and are used more widely. My full 
statement, which I will submit for the record, contains GAO's 
preliminary observations in this regard.
    I would now like to talk about the current U.S. approach to 
spectrum management and some of the challenges we face. The 
current legal framework for domestic spectrum management 
emerged over a period of decades. As you know, spectrum 
management authority resides in two agencies, requiring close 
coordination and cooperation to ensure that the national 
interest is served. The National Telecommunications and 
Information Administration within the Department of Commerce is 
responsible for managing Federal spectrum use. The Federal 
Communications Commission has responsibility for managing all 
non-Federal spectrum use.
    While this shared approach has generally served us well, 
some allocation decisions are becoming more difficult, 
resulting in lengthy negotiations. This situation exists 
because nearly the entire usable spectrum is currently 
occupied.
    Short of improvements in technology that allow for more 
efficient use of existing spectrum, one of two things must 
generally happen to accommodate new demands: one, more of the 
available spectrum will need to be shared; or two, existing 
spectrum users will need to be reallocated to other frequencies 
to make room for others. Moving users is usually contentious 
and requires that comparable spectrum be found for incumbents 
and that resources are available for system and equipment 
changes. An example of this difficulty in making allocation 
decisions is the ongoing effort to identify spectrum to 
accommodate third generation wireless services.
    During the course of our review, some officials we 
interviewed suggested establishing a third party, such as an 
outside panel or a commission, an office within the executive 
branch, or an interagency group, to arbitrate or resolve these 
types of differences. In some other countries such decisions 
are made within one agency or within interagency mechanisms 
that exist for resolving such matters.
    Recognizing also that better planning could help address 
these issues, Congress itself has directed both the FCC and 
NTIA to conduct joint spectrum planning sessions and assess the 
progress towards implementing a national spectrum plan. 
However, top officials from both FCC and NTIA said that neither 
requirement has been fully implemented, but recently confirmed 
at a national summit on spectrum their intention to implement 
these directives.
    Now I would like to turn to the challenges we face in 
preparing for international negotiations. We looked at these 
challenges as the U.S. prepares for the World 
Radiocommunication Conference coming up next year, where 
decisions are made on how to allocate spectrum internationally. 
In recent years, U.S. preparations for these conferences have 
become more complex as the number of conferences, participating 
nations, and agenda items have all increased.
    For example, while only 9 nations participated in the first 
World Radio Communication Conference in 1903, some 148 nations 
participated in the 2000 conference. With more at stake and 
more nations participating, the U.S. needs the votes of other 
nations in order to get the U.S. positions adopted by the 
conference. We found strong agreement among those we 
interviewed on the importance of developing an early U.S. 
negotiating position to allow sufficient lead time to meet with 
other nations to gain their support for our positions.
    However, we heard differences of opinion about the 
effectiveness of the current U.S. preparatory process. 
Currently, both FCC and NTIA develop separate positions on 
conference agenda items through separate processes. With State 
Department coordination, the agencies then get together to 
develop a unified U.S. position. While ensuring stakeholder 
input and producing well-scrutinized proposals, this separate 
but parallel process can also take time, especially when agenda 
items are contentious.
    In response to concerns about timeliness, the former U.S. 
ambassador to the 2000 conference recommended merging the 
separate processes to get an earlier start and to harmonize 
industry and Government positions for these negotiations.
    Differing views have also been expressed on the appointment 
process used to choose an individual to head the U.S. 
delegation. Since the early 1980s, the President has appointed 
a temporary U.S. ambassador with a term of 6 months to head our 
delegation. Again, the former U.S. ambassador to the 2000 
conference observed that the brief tenure of the appointment 
leaves little time to get up to speed on the issues, to 
solidify U.S. positions, to form a delegation, and to undertake 
the preconference meetings with heads of other delegations.
    In addition, the ambassador said there is concern about the 
lack of continuity and 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.
    Now I would like to turn to the Department of Commerce's 
efforts to promote efficient spectrum use by Federal agencies. 
We reviewed how NTIA, within the Department of Commerce, works 
to promote efficient spectrum use by Federal agencies. While 
NTIA has established several processes and undertaken a number 
of actions, it lacks assurance that these activities are indeed 
effective. There are a number of reasons for this.
    First, staffing and resource limitations often prevent 
agencies from completing required periodic reviews intended to 
assure that assignments are still needed. Staffing and funding 
limitations have also forced NTIA to eliminate monitoring 
programs intended to verify that agencies are using spectrum as 
specified in their assignments.
    Second, the adoption of more efficient technologies has 
proven to be challenging. Along these lines, NTIA has required 
Federal agencies to adopt what is called narrowband technology. 
This technology would considerably increase the number of 
channels available for land-based mobile communications. 
However, some agencies are currently struggling to meet this 
requirement due to the lack of sufficient staff and funding. 
Specifically 4 of the 7 agencies we reviewed said they would 
not complete their upgrades before the deadline.
    Finally, NTIA officials told us that existing spectrum 
management fees designed to recover part of the costs of NTIA's 
spectrum management functions provide agencies with a financial 
incentive to remove inactive assignments. However, it is not 
clear that these fees, about $50 per assignment, actually 
promote efficient use of spectrum. For instance, agencies can 
reduce the number of assignments without returning unneeded 
spectrum.
    In conclusion, Mr. Chairman, I would like to add that we 
will be reporting to you in detail on all of these matters 
later this summer. In addition, we are conducting further work 
on how current rules and regulations governing spectrum 
allocation and use affect the rollout of new technologies and 
services and the level of business competition.
    As a part of this work to be completed next year, we are 
interviewing an array of business, Government, and public 
safety users of spectrum. Tomorrow at GAO we will be hosting a 
panel of national spectrum experts. We are also collecting 
information from spectrum managers in a dozen countries in an 
effort to learn more about other spectrum management 
approaches.
    This concludes my statement. I would be pleased to answer 
any questions you have.
    [The prepared statement of Mr. Guerrero follows:]

      Prepared Statement of Peter F. Guerrero, Director, Physical 
 Infrastructure Issues, U.S. General Accounting Office, Accompanied by
                   Terri Russell, Senior Analyst, GAO

    Mr. Chairman and Members of the Committee:
    I am pleased to be here to report on the preliminary observations 
from our work on radio spectrum management issues. The radio spectrum 
is the medium that makes possible wireless communications of all sorts, 
such as cellular and paging services, radio and television 
broadcasting, radar, and satellite-based services. As new technologies 
that depend on the radio spectrum continue to be developed and used 
more widely, managing the spectrum has grown increasingly challenging. 
The radio spectrum can become congested if too many users operate on it 
in an uncoordinated manner. Moreover, because spectrum has no 
geographical boundaries, the domestic management of spectrum is closely 
tied to international agreements on spectrum use. Therefore, the radio 
spectrum must be carefully managed, both on a national and 
international level, to meet the needs of a constantly increasing 
variety of services and users. One important task of spectrum 
management is the allocation of spectrum, or the apportionment of 
spectrum between the different types of uses and users of wireless 
services. As demand for spectrum has grown, this task has become more 
difficult, raising complex questions that cannot be easily answered.
    At the request of this Committee, we have interviewed agency and 
industry officials and reviewed relevant documents to address the 
following issues: (1) the evolution of the current legal framework for 
domestic spectrum management; (2) how well the current U.S. spectrum 
management structure facilitates the allocation of spectrum; (3) what 
challenges the United States faces in preparing for World 
Radiocommunication Conferences (WRC), at which decisions are made on 
how to allocate spectrum internationally; and (4) how the federal 
government encourages efficient use of spectrum by federal agencies
    Our work is ongoing and will result in a report to be issued this 
summer. We reviewed the legislative history and relevant agency 
manuals, policies, and regulations, and interviewed officials 
responsible for spectrum management from the Federal Communications 
Commission (FCC), National Telecommunications and Information 
Administration (NTIA), and Department of State, and key wireless 
industry representatives. In addition, to determine how the federal 
government uses and manages spectrum, we interviewed officials from the 
following seven agencies: the Department of Energy, the Department of 
the Interior, the Federal Aviation Administration, the Coast Guard, the 
Department of Justice, the Federal Emergency Management Administration, 
and the National Aeronautics and Space Administration.
    In summary, our preliminary observations are as follows:

   The current legal framework for domestic spectrum management 
        evolved as a compromise over the questions of who should 
        determine the distribution of 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, since 
        1927 this responsibility has been divided between the executive 
        branch for managing federal use (currently, the President has 
        delegated this responsibility to the National 
        Telecommunications and Information Administration), and an 
        independent commission for managing non-federal spectrum use 
        (at first the Federal Radio Commission and since 1934, its 
        successor, the Federal Communications Commission). The standard 
        to be applied in managing non-federal government spectrum is 
        ``the public interest.'' Under this divided management 
        framework, no one entity has ultimate decision-making power 
        over all spectrum users; the two agencies must coordinate and 
        cooperate in order to determine how to accommodate different 
        users competing for spectrum.

   The current shared U.S. spectrum management structure has 
        processes for allocating spectrum for new uses and users of 
        wireless services, but these processes 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 of doing this used by FCC and NTIA is 
        to increase the amount of shared spectrum. In shared spectrum, 
        more than one type of service or user may utilize the 
        frequencies in the allocation. For example, according to NTIA, 
        56 percent of the spectrum in the 0-3.1 GHz range is now shared 
        between federal and non-federal users. Another method of 
        redefining allocations, called band clearing, involves moving a 
        service or user from one area of spectrum to another in order 
        to make room for a new service or user. Occasionally, these 
        methods are contentious and protracted, such as the continuing 
        efforts to reallocate spectrum for third-generation advanced 
        wireless services. Some government officials and 
        nongovernmental representatives we interviewed discussed the 
        possibility of designating a third party to arbitrate between 
        FCC and NTIA in such circumstances and the need for better 
        planning to help increase coordination between the two agencies 
        in their shared management of this resource.

   The United States faces challenges in effectively preparing 
        for World Radiocommunication Conferences, at which decisions 
        are made regarding the allocation of spectrum internationally, 
        to ensure that the United States can best serve the interests 
        of domestic spectrum users. Timely preparation has become more 
        important and challenging due to increases in the frequency of 
        conferences, the number of participating nations (each of which 
        has one vote), and the number of items on conference agendas 
        that countries vote on to change the international rules for 
        spectrum use. In addition, regional blocks have emerged, with 
        countries pooling their votes to promote their position on 
        agenda items. Under the current structure, FCC and NTIA develop 
        positions on agenda items through separate processes that 
        involve the users of the spectrum they manage. The positions 
        reached during these two processes must be merged into a 
        unified U.S. position. An ambassador is appointed by the 
        President for a period not exceeding six months to facilitate 
        the development of this unified position and lead the U.S. 
        delegation in negotiating for the adoption of U.S. positions at 
        the World Radiocommunication Conference. In our meetings with 
        government officials and wireless industry representatives, we 
        heard differing opinions about (1) the ability of the United 
        States to develop a unified position early enough to promote 
        that position effectively and (2) the manner in which we 
        appoint an ambassador to head the U.S. delegation.

   NTIA has several activities to encourage efficient spectrum 
        use by federal agencies, but it lacks 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 spectrum as they need. Because agencies have different 
        mission-based needs and because there are a large number of 
        frequency assignments that require attention, NTIA's frequency 
        assignment and review processes place the primary 
        responsibility for promoting efficiency in the hands of the 
        agencies. NTIA requires that agencies justify their need for 
        spectrum and review most spectrum assignments every 5 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 because of staff 
        shortages and other agency priorities. Moreover, although NTIA 
        has established monitoring programs to verify how agencies are 
        using spectrum, it said that some of these programs are 
        inactive because of staff and funding shortages. NTIA also 
        conducts research and technical initiatives that are designed 
        to promote efficiency by conserving spectrum, but NTIA said 
        some of these efforts have been difficult to implement. In 
        addition, NTIA states that its spectrum management fees, which 
        were designed to recover part of the costs of NTIA's spectrum 
        management functions, provide agencies with a financial 
        incentive to remove inactive assignments. However, it is not 
        clear that these fees promote efficient use of spectrum because 
        agencies can reduce the number of assignments without returning 
        spectrum.

   In addition to these issues, the Committee requested that we 
        review 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. As 
        part of this work, we will look at how other countries manage 
        spectrum. Although our review of these issues will not be 
        completed until early 2003, I will briefly discuss our ongoing 
        work at the end of this statement.
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. \1\ 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.
---------------------------------------------------------------------------
    \1\ Radio waves are a form of electromagnetic radiation that 
propagates in space as the result of particle oscillations. The number 
of oscillations per second is called frequency, which is measured in 
units of hertz. The terms ``kilohertz'' refers to thousands of hertz 
and ``gigahertz'' to billions of hertz. The radio spectrum comprises a 
range of frequencies from 3 kilohertz to around 300 gigahertz.
---------------------------------------------------------------------------
    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. \2\ The equipment they use is designed to 
operate on these frequencies.
---------------------------------------------------------------------------
    \2\ Part 15 of FCC rules permits the operation of authorized low-
power wireless devices without a license from FCC or the need for 
frequency coordination. The technical standards contained in Part 15 
are designed to ensure that there is a low probability that these 
unlicensed devices will cause harmful interference to other users of 
the radio spectrum. 47 C.F.R. Sec. 15 (2001).
---------------------------------------------------------------------------
    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 
nonfederal 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 
nonfederal 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 \3\--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, \4\ 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. \5\
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    \3\ 37 Stat. 302 (1912). The Radio Act of 1912 was enacted, in 
part, to fulfill U.S. obligations incurred by the first international 
radio treaty. Congress had passed an earlier federal statute, the 
Wireless Ship Act, 36 Stat. 629 (1910), as amended, 37 Stat. 199 
(1912), to address a first use of radio--safety of ships at sea. In 
1904, President Roosevelt adopted a recommendation of the first known 
inter-agency board to address radio use by the federal government 
placing all government coastal radio facilities under the U.S. Navy's 
control.
    \4\ The Secretary of Commerce could not refuse to grant a license 
upon proper application under the Act as held by a court and two 
attorneys general opinions. See 29 Op. 579 (1912); 35 Op. 126 (1926); 
Hoover v. Intercity Radio Co., Inc; 286 Fed. 1003 (D.C. Cir., 1923). 
The Secretary had no power to make regulations additional to those in 
the act. See United States v. Zenith Radio Corporation et al., 12 F. 
(2d) 614 (N.D. Ill., 1926); Carmichael v. Anderson, 14 F. 2d 166 (W.D. 
Mo. 1926). The 1912 act did not regulate broadcasting. See Tribune Co. 
v. Oak Leaves Broad. Station, Inc., et al., reported in the 
Congressional Record on December 10, 1926 (Cong. Rec. Vol. 68, Part I, 
pp. 216-219).
    \5\ This debate went on over several years as the Department of 
Commerce convened four radio conferences (1922-25) attended by 
manufacturers, broadcasters, civilian and military government users, 
and other stakeholders to make recommendations addressing overcrowding 
of the airwaves. Designation of the Secretary of Commerce as the sole 
licensing authority, one of the recommendations from the conferences, 
was a matter of contention in congressional debate on new legislation.
---------------------------------------------------------------------------
    The Radio Act of 1927, \6\ 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. \7\ 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.
---------------------------------------------------------------------------
    \6\ 44 Stat. 1162 (1927). Under the act, the FRC was granted 
licensing authority for one year to resolve interference problems and 
then was to become an appellate body to address disputes with the 
Secretary of Commerce who was to assume licensing duties. However, the 
FRC's one-year tenure was extended three times by Congress, the last 
for an indefinite term pending new legislation.
    \7\ Prior to the 1927 Radio Act, an Illinois state court issued a 
decision to enforce a property right to a radio frequency under the 
principle of ``right of user.'' Tribune Co. v. Oak Leaves Broad. 
Station, Inc., et al., (Cir. Ct., Cook County, Ill. 1926), reprinted in 
68 Cong. Rec. 216 (1926).
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    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. \8\ 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. \9\ In 1978, the President's 
authority for spectrum management of federal government users was 
delegated to NTIA, an agency of the Department of Commerce. \10\ 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.
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    \8\ When originally formed in 1922, the inter-agency committee was 
known as the ``Interdepartment Advisory Committee on Governmental Radio 
Broadcasting.''
    \9\ Under the Radio Act of 1927, the President's spectrum 
management authority was delegated--and IRAC reported through--first, 
the Secretary of Commerce, and then, beginning in 1932, the FRC 
(replaced by the FCC in 1934). In 1940, an inter-agency Defense 
Communications Board was formed to coordinate the relationship of all 
branches of communication to the national defense; IRAC reported 
directly to the Board as of 1941 until the Board was abolished in 1947. 
Since 1951, the President's spectrum management authority, coupled with 
telecommunications policy advice, has been delegated, and IRAC has 
reported through: the Telecommunications Advisor to the President 
(1951); the director of the Office of Defense Mobilization (1953); the 
director of the Office of Civil Defense Mobilization (1958); the 
director of Telecommunications Management (1962); the director of the 
Office of Telecommunications Policy (1970); and NTIA (1978).
    \10\ President Carter's Executive Order 12,046, issued in 1978, 
abolished the Office of Telecommunications Policy, transferred its 
functions to the Department of Commerce, and established an Assistant 
Secretary for Communications and Information. Subsequently, the 
Department formally established NTIA and Congress codified NTIA and its 
mission into law. See The Telecommunications Authorization Act of 1992, 
106 Stat. 3533 (1992).
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    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 
\11\ 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.
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    \11\ Although FCC once served as a representative to IRAC, its role 
in IRAC was transformed in 1952 to that of liaison.
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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 \12\--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.
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    \12\ NTIA also reported that 42 percent of the shared allocations 
between federal and nonfederal users in the 0 to 3.1 GHz range are 
shared on a ``co-primary'' basis.
---------------------------------------------------------------------------
    Another method to accommodate new users and technologies is 
``bandclearing,'' 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, 
bandclearing 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. \13\ 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. \14\ 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. \15\
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    \13\ The Strom Thurmond National Defense Authorization Act for the 
Fiscal Year 1999, P.L. 105-251, Oct. 17, 1998, authorized federal 
entities to accept compensation payments when they relocate or modify 
their frequency use to accommodate non-federal users of the spectrum. 
The National Defense Authorization Act for Fiscal Year 2000, P.L. 106-
65, Oct. 5, 1999, specified a number of conditions that have to be met 
if spectrum in which DoD is the primary user is surrendered. The act 
requires NTIA, in consultation with FCC, identify and make available to 
DoD for its primary use, if necessary, an alternate band(s) of 
frequency as replacement for the band surrendered. Further, if such 
band(s) of frequency are to be surrendered, the Secretaries of Defense 
and Commerce, and the Chairman of the Joint Chiefs of Staff must 
jointly certify to relevant congressional committees that such 
alternative band(s) provide comparable technical characteristics to 
restore essential military capability.
    \14\ For more information on spectrum use decisions for third-
generation wireless services, see Defense Spectrum Management: More 
Analysis Needed to Support Use Decisions for the 1755-1850 MHz Band 
(GAO-01-795, August 20, 2001).
    \15\ Omnibus Budget Reconciliation Act, P.L. 103-66, Aug. 10, 1993, 
mandated that bands of frequencies not less than 200 MHz be transferred 
from use of the federal government to non-federal users. NTIA was 
directed to make a report on the identification and recommendation for 
reallocation of frequency bands; utilize specific criteria in making 
recommendations; issue a preliminary report upon which public comment 
on proposed reallocations would be solicited; obtain analyses and 
comment from FCC on reallocations; and transfer frequency bands within 
specified time frames. It required FCC to gradually allocate and assign 
frequencies over the course of ten years. The Balanced Budget Act, P.L. 
105-33, Aug. 5, 1997, imposed a stricter deadline for NTIA to identify 
for reallocation and FCC to reallocate, auction, and assign licenses by 
September 2002 for an additional 20 MHz of spectrum. (Eight MHz of 
spectrum was subsequently reclaimed per congressional direction. See 
section 1062 of the National Defense Authorization Act for Fiscal Year 
2000, P.L. 106-65, Oct. 5, 1999.)
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    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. \16\ 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. \17\ Top officials from FCC and NTIA said that neither 
requirement has been fully implemented. However, they indicated their 
intention to implement these directives.
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    \16\ 47 U.S.C. Sec. 922.
    \17\ P.L. 106-65, 113 Stat. 767 (1999).
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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). \18\ 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.
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    \18\ ITU is a United Nations specialized agency. The federal 
government considers the ITU the principal competent and appropriate 
international organization for the purpose of formulating international 
treaties and understandings regarding certain telecommunications 
matters.
---------------------------------------------------------------------------
    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. 
\19\
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    \19\ One of the U.S. delegation's objectives stemming from its 
experience at the 2000 WRC is to work more closely with participating 
countries in our own region in preparing for the 2003 conference.
---------------------------------------------------------------------------
    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. \20\
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    \20\ Recommendations to Improve United States Participation in 
World Radiocommunication Conferences, Ambassador Gail S. Schoettler, 
U.S. Head of Delegation, World Radiocommunications Conference 2000, 
June 27, 2000.
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    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. \21\ 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.
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    \21\ 22 U.S.C. Sec. 3942. This provision of law enables the 
President to confer the personal rank of ambassador on an individual in 
connection with a special mission for the President not exceeding six 
months in duration. The President need only transmit to the Senate 
Committee on Foreign Relations a written report on the appointment; 
confirmation by the Senate is not needed.
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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 \22\ 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.
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    \22\ 47 U.S.C. Sec. 903(d)(1).
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    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. \23\ 
NTIA said that it may delete assignments that have not been reviewed 
for more than 10 years.
---------------------------------------------------------------------------
    \23\ Certain aeronautical and military frequency assignments are 
required to be reviewed every 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. \24\
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    \24\ The issue of unused spectrum is not exclusive to federal 
agencies. A recent self-reported survey of some private radio bands by 
FCC resulted in the return of over 30,000 unused spectrum licenses.
---------------------------------------------------------------------------
    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. \25\ 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.
---------------------------------------------------------------------------
    \25\ In 1992, Congress directed NTIA to adopt and implement a plan 
for federal agencies with existing mobile radio systems to use more 
spectrum-efficient technologies. 47 U.S.C. Sec. 903(d)(3). In 1993, 
NTIA provided Congress with a report--Land Mobile Spectrum Efficiency: 
A Plan for Federal Government Agencies to Use More Spectrum-Efficient 
Technologies--that included the narrowbanding plan.
---------------------------------------------------------------------------
    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. \26\ 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.
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    \26\ In addition to cost constraints, federal agencies can choose 
not to use an existing land mobile system if the agency can justify 
that it needs its own system to meet its mission requirements. For 
example, GAO agreed with NTIA that the Navy was in the best position to 
assess whether it needed its own land mobile system to meet its 
mission.
---------------------------------------------------------------------------
    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. \27\ 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.
---------------------------------------------------------------------------
    \27\ A bandwidth-based approach would have forced the Air Force to 
pay the majority of the fees because of the large amount of spectrum 
the radars they operate use. However, each radar transmitter requires 
only one assignment.
---------------------------------------------------------------------------
    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.
    We are also collecting information from spectrum managers in 
approximately 12 other countries. We are interested in learning about 
their regulatory structure, including their assignment processes, the 
amount of flexibility allowed spectrum users, the existence of 
secondary markets, and their rules regarding interference. In addition, 
we are interested in determining what incentives--market-based or 
administrative--are employed to encourage government and non-government 
users to conserve spectrum. We will also seek to determine what impact 
these regulators think their actions are having on consumer prices, the 
deployment of new technology, the rollout of new services, and the 
level of competition. From this work, we hope to summarize alternative 
approaches to spectrum management used around the world and to identify 
similarities and differences between these approaches and those used in 
the United States.
    Mr. Chairman, this concludes my prepared remarks. I would be 
pleased to answer any questions you or other Members of the Committee 
may have.

    Senator Inouye. Thank you very much, Mr. Guerrero.
    Now may I call upon Mr. Price.

          STATEMENT OF STEVEN PRICE, DEPUTY ASSISTANT 
        SECRETARY FOR SPECTRUM, SPACE, SENSORS, AND C3, 
         OFFICE OF THE SECRETARY, DEPARTMENT OF DEFENSE

    Mr. Price. Thank you. Mr. Chairman and Members of the 
Committee: I would like to thank you for inviting me today and 
also thank you for your remarks earlier, most of which the 
Department fully agrees with. The Department of Defense 
appreciates that your Committee is looking at spectrum 
management issues.
    Spectrum is the lifeblood of our military. Every ship at 
sea, every airplane conducting missions, every forward-deployed 
young man or woman, especially in hard-to-reach locations, 
depends on radios and spectrum to conduct their missions and to 
return home safely. A Special Forces team leader operating 
during Operation Enduring Freedom in Afghanistan recently told 
me: ``We could go in there naked with flipflops and as long as 
we have good radios we could do our job.''
    Information clearly is one of our most important weapons. A 
Department of Defense spectrum requirements analysis completed 
prior to the September 11th and therefore likely to be an 
underestimate predicted Department of Defense spectrum usage 
growth of more than 90 percent by 2005. This did not take into 
account new demands in the arena of homeland defense, such as 
potential spectrum-related missions like military support for 
major events, as was the case during the Olympics in Salt Lake 
City, protection of critical infrastructure and emergency 
response.
    In short, the Department of Defense spectrum needs are 
growing rapidly and the Department does not believe that the 
future needs of our transformed, network-centric military can 
be met without access to additional spectrum allocations.
    DoD spectrum policy is guided by certain core principles. 
First, spectrum is critical to DoD. As I have mentioned, it is 
a core enabler of what we do. Therefore, we should not allow 
lack of sufficient spectrum to be a constraint on our war-
fighters.
    Second, spectrum is, as has been mentioned, a vital 
national resource. We understand that our needs must be 
balanced with other national needs. Our view is that such a 
balance must recognize that essential defense needs must have 
top priority.
    The third spectrum policy is that we recognize that we must 
be a good and responsible spectrum user. We must, as was 
mentioned earlier, justify how we use our spectrum and how much 
spectrum we need. In fact, we do strive to be as efficient a 
user as we can be.
    But it is important to understand that when talking about 
needs and efficiency our use is very different from that of 
commercial enterprises. The commercial sector seeks low-cost, 
high-revenue solutions. Therefore, busy signals are acceptable. 
I understand and accept that fact. In fact, when I ran a 
publicly traded wireless company years ago I did exactly that. 
But such cannot be the case for our military, because our calls 
must get through, whether they are guiding precision guided 
munitions or alerting a soldier of harm. Where lives are the 
stake, there is no margin for error.
    Despite how critical spectrum is to DoD's mission, our 
access to it is under attack. This is evidenced by the current 
viability study for 3G services. Losing needed spectrum is like 
losing any other vital resource. It costs the Department both 
in current capability and future opportunity, both directly and 
through reallocation of dollars to mitigate the damage. Each 
time we are forced to adjust training in the United States away 
from operational norms to accommodate domestic frequency 
restraints, our training realism and effectiveness suffers.
    The uncertainty caused by relocation attacks pose serious 
risks for our long-term planning. Will we be required to move? 
Will we get the money to move? Will we need to retrain? Will we 
retrain in time to be prepared to deploy in an emergency? Will 
we need to change our concepts of operations to account for 
degraded capabilities? Will we be able to get host nation 
approval to use the systems in the new frequency bands in all 
parts of the world we might need to do so? Will our allies who 
bought interoperable systems to work with us and who are now 
required to modify their systems because of our domestic 
constraints do so, and who will pay their bill? And on and on.
    DoD bears the risk of cost overruns for moving. We bear the 
risk of overcoming technical challenges and, most importantly, 
we bear the risk of failure of our equipment due to hasty 
relocation decisions.
    In the Department of Defense we have a duty to the young 
men and women who defend our country. We have a duty to ensure 
that they have the tools they need to do their job. We believe 
we owe them policies to ensure that lack of access to spectrum 
is not a constraint on their capabilities.
    Thank you for your time. I look forward to working with you 
and the other witnesses on these important issues.
    [The prepared statement of Mr. Price follows:]

  Prepared Statement of Steven Price, Deputy Assistant Secretary for 
      Spectrum, Space, Sensors, and C3, Office of the Secretary, 
                         Department of Defense

1. Introduction
    I would like to thank the Members of this Committee, and 
particularly Chairman Inouye, for holding this hearing on spectrum 
management and use. I think that our experiences in Afghanistan 
indicate just how important this issue is to our armed forces.
    DoD's spectrum needs are increasing due to new operational 
concepts, including more extensive use of Unmanned Aerial Vehicles, as 
well as evolving strategies that require joint, dispersed forces to 
have greater connectivity in the ``last tactical mile.'' One of the 
platforms used in Operation Enduring Freedom is the Predator. This new 
type of military system is an Unmanned Aerial Vehicle (UAV). Because 
the plane is unmanned, it must be controlled and operated remotely. 
That means it is entirely dependent on spectrum, both for flight 
control and to pass along information. Without spectrum the Predator 
would, in aviator parlance, ``go stupid''--it could neither fly nor be 
able to pass on information or images, which is its core function. In 
Afghanistan, we used Predators to laser-designate targets for bombers, 
and the Air Force is even testing how well Predators can fire laser-
guided missiles. Many experts see Predators and other UAVs as being in 
a similar developmental phase as manned aircraft were in the 1920s and 
30s. This is, of course, great news because we can do so much, without 
risking lives, in reconnaissance, targeting and now even firing of 
weapons. There is, however, a cost to all of this, and that cost is in 
spectrum. These UAVs absolutely depend on spectrum; if they don't have 
it, they fall out of the sky.
    The Predator example is just one indication of how spectrum is 
crucial for DoD's entire mission, including homeland security. Fully 
sufficient spectrum is essential in accomplishing national defense 
missions, and ensuring that the Department of Defense retains such 
spectrum it needs is a top national priority.
    Mr. Chairman, as I will discuss in more detail in my testimony, 
spectrum is integral to our nation's defenses. It is critical to the 
success of national security policy at home and abroad. We must be able 
to inform you, the commercial sector and the general public of that 
importance as we try to balance the relative values of competing 
interests.
    Spectrum is the lifeblood of the Department of Defense. Every ship 
at sea, every airplane conducting missions, every forward-deployed 
young man or woman--especially in hard to reach locations--depends on 
radios and spectrum to conduct missions and to return home safely. 
Captain Jason Armerine, a Special Forces Team Leader during Operation 
Enduring Freedom, spoke about his experience in the early days of the 
Afghanistan campaign: ``We could go in there naked with flip-flops and 
as long as we have good radios, we could do our job.''
    This will be even truer in the future, as DoD's ongoing 
transformation to a network-centric military will add new demands. A 
DoD spectrum requirements analysis, completed prior to September 11, 
2001 (and therefore likely to be an underestimate) predicted DoD 
spectrum usage growth of more than 90 percent by 2005. In addition, 
there will be new demands in the arena of homeland defense. These will 
likely include new spectrum related missions, such as military support 
for major events (such as was the case in the 2002 Winter Olympics in 
Salt Lake City), protection of critical infrastructure and emergency 
response.
    Spectrum is one of our nation's most valuable natural resources. It 
is not uncommon for us to use land or real estate analogies to describe 
spectrum. We use terms like ``beachfront property''--that's how 
valuable it is. The reason it is so valuable is that it enables so much 
of the technology that many people look to in order to solve many 
problems. The communications and information revolution has now 
resulted in commercially successful technologies unimagined several 
years ago: such as, tiny wireless phones, wireless local area networks 
(LANs), Internet access from virtually anywhere in the world.
    But these technologies are even more important to the military 
because of the lack of any wired alternative in many military 
operations. Wireless technologies are particularly important for our 
military forces' operations because of their increasingly mobile and 
flexible nature. The ongoing revolution in military affairs/operations 
has made information the key component of warfare. Mass of force no 
longer has the power it once did because our tactics are more 
sophisticated, as are our warfighters and the equipment they carry. The 
revolution in personal communications that civilians have experienced 
is mirrored by a similar revolution in military communications. We can 
make a phone call or access the Internet on a landline, but the ship 
captain, bomber pilot or tank commander has no other option but 
wireless communications. And because of the way we fight, that 
information is more important than ever, both to the troops in the 
field and to the commanders--whether they are in theater or 12,000 
miles away.
    The pressure on government spectrum will not end. Wireless 
technologies will continue to proliferate. While 3G services have yet 
to be widely deployed, there is already industry discussion of 4G and 
5G technologies, as well as widespread wireless LANs. We should resist 
the convenient arguments that these burgeoning technologies should be 
supported by reallocation of more government spectrum--we must arrive 
at a sound spectrum policy that allows our commercial interests to 
coexist with public interests.
2. DoD Use of Spectrum
    Spectrum enables almost every function that DoD performs. Whenever 
mobile platforms--whether satellites, ships or trucks--exchange 
information, spectrum is involved. I would like to go through some 
examples of this just to give you a flavor of what we are really 
talking about here. Military strategists around the world--and, in 
fact, the American public--have seen first-hand in Afghanistan how the 
United States has been able to defeat an extraordinarily determined 
enemy in some of the world's most inaccessible terrain. We have 
demonstrated the advantage to our nation of asymmetric warfare, relying 
upon networked satellites, UAVs, air support, precision-guided weapons 
and Special Forces on the ground. The accuracy of precision-guided 
weaponry is dependent on our GPS satellite system and on UAVs that can 
spot the enemy very effectively. The weapons guidance systems are 
entirely dependant on radio spectrum. Where sky-based surveillance 
alone does not provide our forces and their allies with sufficient 
knowledge of circumstances on the ground, we have relied on radio-based 
communications between our ground-based forces and air-based forces, 
and indeed, the Central Command in Tampa, Florida. What we have is an 
extraordinarily complex electromagnetic ecosystem. Indeed, I would 
posit that it is one of the most complex electromagnetic ecosystems in 
the world, all functioning exceptionally well under battlefield 
conditions. The preparations for this Afghanistan scenario, and its 
enactment itself, are based in large measure on spectrum in the bands 
from 1755 MHz to 1770 MHz--precisely the bands that industry has 
targeted over the past year. Let me describe some of the critical DoD 
systems that operate in these bands.
    The uplinks that control all DoD and intelligence satellites--more 
than 120 satellites representing a cumulative investment of about $100 
billion--use spectrum in the 1755-1850 MHz band. These satellites 
perform communications, positioning and timing, surveillance and 
reconnaissance, weather observation, and other functions crucial to 
warfighting and to decision-making. The telemetry, tracking and command 
systems for all of these satellites resides in the critical 1755-1770 
band which is still under consideration. In addition to the satellite 
control function, the 1755-1850 MHz band also serves as an uplink to 
provide processed weather data and navigation timing information to DoD 
satellites for down linking to DoD users on a worldwide basis.
    DoD's GPS satellites have become crucial parts of the national 
civilian/military infrastructure, supporting global navigation and 
positioning requirements for air, land and sea vessels. Today in 
Afghanistan, GPS supports everything from precision-guided munitions to 
Special Forces operations. Precision targeting done by special 
operations forces is virtually impossible without GPS.
    Battlefield radio relay systems also use the 1755-1850 MHz spectrum 
and form the long-haul backbone of the Army and Marine tactical 
Internets. They let our ground forces share situational awareness and 
coordinate their operations in real time across the extended 
battlefield, as well as with ships offshore.
    In terms of training our forces, the Air Force and Navy aircrew 
combat training system are also heavily dependent on the 1755-1850 MHz 
spectrum. This system provides realistic training to our aircrews that 
cannot be gained in flight air combat simulators, while allowing 
supervisors to make critical assessments of their performance and give 
feedback to improve that performance. This is one of the main reasons 
that American pilots are the best-trained combat pilots in the world. 
We can ill-afford to send marginally trained aircrews into combat; on 
the first night of an air war there can be no learning curve. A major 
impact of reduction of spectrum allocated to federal uses is the effect 
on training and, consequently, combat readiness. The comprehensive 
training required to achieve and maintain combat readiness is essential 
for the effective deployment of our forces for both homeland defense 
and wartime conditions. This training includes the development of 
operational tactics and doctrine to ensure that our forces operate at 
maximum capabilities.
    The following is an excerpt of a March 11, 2002 Aviation Week 
article on this topic, which shows how important a role bandwidth and 
spectrum played in our current operations:

         For example, a Rivet Joint (airplane) orbiting over Pakistan 
        or a signals intelligence satellite in space picks up a 
        communication indicating Al Qaeda activity in some corner of 
        Afghanistan. That sigint ``tipper'' is sent to the (combined 
        air operations center). Operators there look for the fastest 
        intelligence platform--Joint Stars, AWACS or P-3, for example--
        and send it to the hot spot to begin controlling the local 
        engagement using its wide area sensors. Meanwhile, a slower 
        Predator (unmanned plane) is turned and starts taking its acute 
        but narrow field-of-view sensors to the scene. . . The Predator 
        shows up and relieves the manned aircraft, which moves off to 
        the next problem. The UAV then provides precise target 
        coordinates to an AC-130 gunship or a strike aircraft.

    Virtually all of these systems played a key role in the Allied 
victory in Kosovo and are now being used in Afghanistan in the war on 
terror. The success of these operations would be unlikely without 
satellite-based communications, navigation, and reconnaissance, without 
well-trained combat aircrews, without precision-guided weapons, and 
without tactical radio relay systems.
    In an era of reduced force structure and increased mission 
responsibilities these systems serve to enhance significantly our 
operational capabilities. Enhanced knowledge of the battlefield (or, 
situational awareness) and precise engagement capabilities obtained 
from these spectrum-dependent force-multiplier systems protect our 
forces throughout the full range of U.S. involvement, from combat to 
peacekeeping and humanitarian operations.
    I want to say in the most unequivocal way possible that the loss or 
degradation of our ability to perform these crucial functions would 
have severe consequences for national security. It would result in 
mission failures and increased casualties in future operations, as well 
as the loss of vital intelligence information to the President and 
senior leaders. As Secretary Rumsfeld and then Chairman of the Joint 
Staff Shelton wrote to Senator Daschle on August 27, 2001, ``Access to 
the radio frequency spectrum is essential to our success in all future 
real-world operations. Lack of adequate spectrum will jeopardize our 
national security.''
    Access to sufficient spectrum will be even more important to our 
military in the future. All of our transformational priorities depend 
on it. Spectrum supports the six goals from the Quadrennial Defense 
Review. Access to bandwidth and spectrum help the military:

   Protect our bases of operation and our homeland
   Deny enemies sanctuary
   Project power in denied areas
   Leverage information technology
   Enhance information operations, and
   Maintain our unhindered access to space

    Just as in the civilian world, the military is seeing a quantum 
leap in the demand for spectrum. Transformation is driving this and 
will continue to drive it. Without sufficient spectrum, there is no 
transformation. And without transformation, our military forces may not 
be able to maintain the crucial edge needed to confront and defeat the 
nation's 21st Century enemies.
    Much of DoD's spectrum use is unique. Unlike the commercial 
sector's drive for low cost, high revenue solutions, the DoD's core 
belief is that where lives are at stake, there is no margin for error--
the ``call'' must get through. When an aircraft is guiding a precision 
weapon, or a commander is relaying life-saving information to troops on 
the ground, there cannot be ``busy'' signals. Some spectrum use that 
industry might label as ``inefficient'' is actually designed for anti-
jam systems, low probability of intercept, and other ``counter counter-
measures.'' For the military, ``efficient spectrum use'' often 
translates into ``guaranteed information delivery'' and because of 
that, commercial standards that allow a certain percentage of built-in 
busy signals or dropped calls cannot be tolerated. Nor, in many cases, 
are commercial measures of efficiency useful.
    Another example of DoD's unique use is that we often operate many 
different emitters in close proximity to each other. Our AWACS command 
and control aircraft uses 50 antennas to track other platforms, 
communicate and direct the battlefield. If one system on the airplane 
were changed it would affect all of the others. How this kind of 
equipment interacts with each other is really a science. The issue is 
complicated when talking about warships, such as aircraft carriers, 
that have a large number of emitters and also handle live ordnance on 
the decks--electromagnetic energy can in some cases cause ordnance to 
detonate. The Joint Spectrum Center does a great deal of analysis in 
this area, mitigating interference between different pieces of 
equipment and ensuring that there are no harmful effects of radiating 
the equipment. Without their efforts radiating emitters near each other 
would be hazardous with the risk of interference substantial.
3. DoD Spectrum Principles
    DoD spectrum policy is guided by certain core principles. First, 
spectrum is a vital national resource. DoD understands that its needs 
must be balanced with other national needs. Therefore, it supports a US 
spectrum policy that balances military and economic security. DoD 
believes that the balance of authority between the President's spectrum 
manager, the NTIA, and the Federal Communications Commission, as 
implemented at a practical level, helps to achieve the appropriate 
balance. That balance must recognize that the Department of Defense 
must have sufficient spectrum to meet the nation's defense needs. This 
is a longstanding principal of national spectrum management and it 
should continue.
    Second, spectrum is critical to DoD. It is a core enabler of what 
we do, and it is indispensable to national security. Therefore, we 
should not allow lack of sufficient spectrum to be a constraint on the 
US warfighter or on military capabilities. DoD spectrum needs should be 
driven by military requirements and capabilities, not spectrum 
allocations.
    Third, DoD recognizes that it must be a good spectrum user. DoD 
must strive to be as efficient a spectrum user as it can be. For 
example, DoD is in the process of implementing an internal 
reorganization to create the Defense Spectrum Office. This is a new 
entity, co-located with the service frequency management offices, that 
will among other things focus on spectrum efficient technologies and 
promote inter-service sharing of spectrum assets.
    Fourth, DoD intends to continue investing in new, spectrum-
efficient technologies. It will continue to seek to use technology to 
alleviate DoD's and the commercial sector's long-term needs for 
additional spectrum. DoD has been a major contributor to the birth of 
proven spectrum efficient technologies, including CDMA and software 
defined radio, and those that show potential, such as ultra wideband. 
Significant research is ongoing within DoD in search of efficient 
technologies. This research includes extensive work on such topics as 
adaptive spectrum usage, frequency and bandwidth agility, phased-array 
antenna configurations, interference mitigation techniques, congestion 
control technologies and numerous networking projects. In addition, DoD 
continually seeks to better manage its spectrum allocations. For 
example, it will seek to move fixed use assignments out of lower 
frequency bands and into bands less suitable for mobile applications.
    Fifth, DoD commits to actively supporting US policies and interests 
in international organizations and multinational and bilateral 
negotiations for spectrum allocation and use. The Department of Defense 
works with the State Department and other federal agencies on 
international negotiations regarding spectrum allocations and related 
matters, under the auspices of the International Telecommunication 
Union and regional telecommunication and related international 
organizations and with other countries on bilateral matters. The cycle 
of preparations is a permanent, ongoing process leading up to World 
Radiocommunication Conferences, which are held about every three years.
4. Spectrum Management Process
    DoD is a user--a large user--of frequency spectrum. We understand 
that our role is not that of a regulatory body, and we believe that the 
FCC and NTIA are the proper bodies to address national spectrum policy. 
Nonetheless, we welcome participating in the discussion and in 
formulating a national spectrum strategy. We believe that the current 
spectrum management process creates imbalances and asymmetric risks for 
the incumbent uses. These must be set straight through effective use of 
a rational, long-term spectrum management policy that mirrors national 
priorities. In developing those priorities, DoD believes it is 
important to have a spectrum management system that recognizes national 
defense as a top priority in spectrum allocation, that DoD needs long-
term certainty and reliability of access to spectrum, and that, in 
those cases in which spectrum is reallocated from defense use to 
commercial use, DoD should not bear all the costs and risks associated 
with the reallocation.
    There's another element involved in these allocation decisions as 
well. The risks to the incumbents are entirely asymmetric: this is true 
whether DoD is being asked to move, as with 3G, or to accommodate a 
new, potentially disruptive technology, as with UWB. When the 
incumbents are asked to move, they bear the risks that the new 
allocation will not be free of interference, that the costs will be 
greater than predicted, and that the technical characteristics will not 
be as beneficial to the use. The party asking for the incumbent to 
relocate bears none of these risks and costs.
    The uncertainties caused by the constant threat of relocation poses 
serious issues for our long-term planning. Will we be required to move? 
When will we get the money to move? Will we need to retrain? Will we 
retrain in time to be prepared to deploy in an emergency? Will we need 
to change concepts of operations to account for degraded capability? 
Will we be able to get host nation approval, when needed, to use 
systems in the new frequency band in all parts of the world where we 
might need to do so? Will our allies who bought inter-operable systems 
now also be required to modify their equipment? And if so, who pays 
their bills? Will the new spectrum be free of interference? And on and 
on.
    The issue is not simply one of increased money to pay costs of 
moving; the Department of Defense bears the risk of overcoming these 
and any technical and regulatory challenges. And most importantly, we 
bear the risk of potential failure of our equipment caused by hasty 
relocation decisions. Due to the nature of our responsibilities in 
keeping this country free and safe and protecting the lives of the 
young men and women who serve in our military, a relocation that 
compromises our essential capability is unacceptable.
5. Third Generation Wireless
    In October 2001, NTIA, FCC, DoD and other Executive Branch agencies 
developed a plan to assess spectrum for advanced wireless services. DoD 
has been supporting this viability effort and it is still ongoing. A 
few points must be understood in this context. First, the process is a 
viability assessment that is examining current uses of the bands and 
feasibility of sharing or relocating certain users. The goal is to 
reach solutions that best serve the national interest--balancing 
commercial goals with national security and public safety interests. 
Second, the Viability Assessment's Terms of Reference require that the 
parties take into account changing DoD needs following the September 11 
attacks. Since that tragic date, DoD has accelerated its move to a 
transformed, mobile, networked and flexible military. In addition, it 
has a new mission for homeland defense, as evidenced by the creation of 
Northern Command, a new combatant commander for the continental United 
States. Spectrum needs associated with NorthCom currently are being 
examined. These new homeland missions may include protection of 
critical infrastructure and support for major events. I note that last 
week the President asked the Congress to work with him to create a 
Cabinet-level agency for homeland defense. In short, DoD's potential 
need for access to additional spectrum--not to mention its need to 
maintain existing allocations--must be considered in the viability 
assessment. Third, I'd like to commend the staffs of the FCC and NTIA 
for their tireless and skilled work throughout this viability 
assessment.
    The 1755-1770 band has superior features that make it a vital 
resource for military applications. The band's characteristics uniquely 
enable small antennas, sufficient antenna beam widths for simple 
reliable link establishment and sustainment, low power transmissions 
that support extended communications ranges and high data-rate 
channels. No other spectrum band presently available to the Government 
and not overcrowded possesses all of these attributes.
    In addition, the US employs the same military systems as many of 
our allies and coalition partners around the world--in fact many of 
them procured systems specifically to interoperate with ours. Any 
decision to modify equipment or change the band-operating capabilities 
would be detrimental to our allies. Requiring them to pay for new 
equipment merely because of a US domestic spectrum allocation decision 
would be problematic.
    All major DoD systems in the band have received, or are in the 
process of receiving, host nation coordination, where needed. These are 
negotiated on a bilateral basis and allow DoD to operate our systems in 
the national territories of our allies and coalition partners. In one 
case, it took the US Central Command six years to get host nation 
approval to operate our tactical radios in a specific, important 
country. Were we required to move out of 1755-1770, that clock would 
start anew and--who knows for how long--those radios would be unusable 
in that theater and in other key countries.
    Some of the systems that use spectrum in the 1755-1770 MHz band 
are: space operations; Tactical Radio Network Systems; Air Combat 
Training Systems; and Precision Guided Munitions. Space operations are 
particularly difficult, expensive and time-consuming to relocate 
because some of the satellites using the band are not due to be 
replaced until 2017 and once launched, satellites cannot simply be 
``retuned.'' So they either must have access to the band until then, or 
the new licensee must pay for new satellites well ahead of the end of 
their scheduled service life, at great additional and unnecessary cost. 
Air Combat Training Systems are used to train pilots and are critical 
for use in training aircrews before deployments to combat zones--all 
deploying aircrew use these systems for realistic training. Precision 
Guided Munitions (PGMs) make modern air warfare possible. As the name 
implies, they allow for precision targeting that enables pilots to 
accurately deliver their weapons from farther outside the range of the 
enemy threat. They also increase the effectiveness and lethality of 
airpower, making operations like Enduring Freedom in Afghanistan and 
Allied Force in Kosovo possible. And they greatly reduce the risk of 
collateral damage caused by a weapon veering off-course. In short, PGMs 
have revolutionized air power.
    Our aircrews must ``train like they fight.'' They must be allowed 
to drop live ordnance on training ranges in the United States, and they 
must have unimpeded access to the spectrum required to do so. I would 
also note that DoD retains access to the 1710-1755 MHz band at 16 
protected sites. One important function that takes place at these 16 
sites is Aeronautical Telemetry which takes place at 10 of the 16 sites 
and is most commonly associated with testing of airborne equipment. The 
telemetry downlinks can be from manned or unmanned aircraft, missiles 
or other ordnance devices. Aircraft operations are expensive and often 
not easily replicated, therefore the signals are robust to prevent loss 
of data resulting in a wide area of potential interference. Access to 
the spectrum at all of these sites is essential and shows how some of 
the impacts from previous reallocations have been mitigated.
    DoD believes that the burden must be on the proponent of any new 
spectrum allocation to prove that they really need that spectrum. In 
the 3G debate, it is not clear how much new spectrum is really 
necessary. Some companies have begun to deploy 3G services without 
additional spectrum allocation. Many argue that the FCC's lifting of 
spectrum caps, and steps allowing wireless carriers to share spectrum, 
have mitigated the requirement for new spectrum allocations.
    DoD understands the importance of a vibrant industrial base, 
including the wireless sector. However, especially in uncertain times, 
policy makers must protect our national security and ensure that 
spectrum limitations are not a constraint on our warfighters.
    DoD is open to finding solutions, provided DoD's interests and 
requirements are met. Such solutions must include identification of 
comparable spectrum for displaced DoD functions, full compensation for 
costs incurred and the requisite time to transition. These are not new 
requirements, and we believe they are reasonable.
    Third-Generation wireless is by no means the only spectrum-
dependent technology for which spectrum needs must be balanced with 
those of national security. One of the newest spectrum-dependent 
technologies competing for spectrum access is Ultra Wideband. Unlike 
traditional wireless technologies, UWB consists of radio pulses that 
emanate, at low-power levels, across a wide range of spectrum bands. 
Thus, as a result of the FCC's April 2002 Report and Order, UWB will 
operate, on a non-licensed basis, across many different spectrum bands, 
in which hundreds of government and commercial users are licensed to 
provide hundreds of vital and needed wireless services--including vital 
military and public safety systems. Never before have the FCC and the 
NTIA authorized unlicensed use of a horizontal slice of spectrum, 
including certain so-called restricted bands. The effect on DoD and 
other incumbent users will be evaluated as UWB services are deployed.
6. Comparable Spectrum and Cost Reimbursement
    Section 1062(b) of the National Defense Authorization Act for 
Fiscal Year 2000 (47 U.S.C. 921 note), provides that ``[if], in order 
to make available for other use a band of frequencies of which it is a 
primary user, the Department of Defense is required to surrender use of 
such band of frequencies, the Department shall not surrender use of 
such band'' until several conditions are met. First, the FCC and the 
NTIA must make available to DoD ``for its primary use, if necessary, an 
alternative band or bands of frequencies as a replacement for the band 
to be so surrendered.'' Second, the Secretaries of Defense and 
Commerce, and the Chairman of the Joint Chiefs of Staff, must jointly 
certify to the congressional armed services and commerce committees 
that ``such alternative band or bands provides comparable technical 
characteristics to restore essential military capability that will be 
lost as a result of the band of frequencies to be so surrendered.''
    DoD's certification takes into account whether the replacement 
spectrum for different DoD systems has suitable technical 
characteristics and similar regulatory status so that the displaced 
function can be performed with no degradation in capability. In 
considering spectrum replacement issues, it is important to emphasize 
that spectrum is not fungible. Different parts of the spectrum have 
different physical characteristics. For example, some bands allow for 
propagation through foliage, and others through buildings. DoD has 
often chosen the particular bands of spectrum that DoD currently 
occupies for the particular physical characteristics of that band. The 
reallocation process should provide the DoD systems with the same 
regulatory status as the systems had in the spectrum replaced. And 
unless DoD keeps the same priority as well as the comparable technical 
characteristics, a move from a band where DoD is primary user to a band 
where DoD is not the primary user would not preserve DoD's essential 
operational capabilities with respect to that spectrum.
    With respect to the costs to DoD--that is, the cost to American 
taxpayers--when DoD yields spectrum to commercial users and moves to 
replacement spectrum, the law (47 U.S.C. 923) provides that the 
commercial users will pay DoD in advance for the costs of relocating 
operations to the replacement spectrum, including the costs of any 
modification, replacement or reissuance of equipment, facilities, 
operating manuals, or regulations. NTIA's Final Rules to implement 
these statutory requirements will be published in the Federal Register. 
I commend the NTIA and other IRAC agencies' personnel for their hard 
work over two and one-half years in developing a workable set of Rules.
    In addition, the Administration is considering submitting a 
proposal to Congress s to revise the current cost reimbursement 
statutory provisions in order to streamline the cost reimbursement 
process and ensure full cost reimbursement to effected government 
agencies. It is currently developing legislation to implement this 
proposal. We are working with OMB, NTIA and other Executive Branch 
agencies in such efforts.
    Cost reimbursement is a critical issue--but DoD's concern over 
relocation is not merely a cost issue. To some extent, that risk is 
quantifiable and therefore not as troubling as the potential risk to 
our operations, which I outlined earlier, including the risk that our 
systems won't operate, or will operate improperly. These are tough 
issues and issues that take a tremendous amount of time and effort--
effort that could be channeled into serving our warfighters.
7. Conclusion
    In closing, we must keep in mind that spectrum is vital to our 
national security. It is also the critical resource required for 
transformation of our military forces to meet the challenges of the 
21st century and beyond. Spectrum is the very medium through which our 
military defends our security. I am sure that you will agree that this 
is its highest purpose.
    In the Department of Defense, we have a duty to the young men and 
women who defend our country. We have a duty to ensure that they have 
the tools, including spectrum, that they need to do their job. We owe 
them policies to ensure that lack of access to spectrum is not a 
constraint on their war fighting capability.
    I look forward to working with you, our colleagues in other parts 
of the government, and members of the private sector to develop a 
national spectrum policy that preserves spectrum access for national 
security while balancing commercial interests. We must continue to 
ensure that our military has ample spectrum to defend our nation and 
our ideals.

    Senator Inouye. Thank you, Mr. Price.
    May I call on Ms. Victory, please.

STATEMENT OF NANCY J. VICTORY, ASSISTANT SECRETARY OF COMMERCE 
FOR COMMUNICATIONS AND INFORMATION AND ADMINISTRATION, NATIONAL 
                           TECHNICAL 
           INFORMATION ADMINISTRATION, DEPARTMENT OF 
                            COMMERCE

    Ms. Victory. Thank you, Mr. Chairman and Members of the 
Committee, for inviting me here to testify on the important 
topic of spectrum management.
    Spectrum is an invisible but indispensable building block 
for America's future. It is a natural resource that can fuel 
economic growth. It is a key to our Nation's digital defense 
and our citizenry's safety. It is a wireless link that can 
enable anyone anywhere to access the marvels of the World Wide 
Web.
    But spectrum management is under stress and strain from 
concurrent challenges. There is the challenge of constantly 
evolving technological capabilities. There is the challenge of 
threats to security and safety. There is the challenge of 
static processes and legacy regulations in a dynamic field. 
Finally, there is the challenge of the finite nature of the 
radio spectrum.
    As reflected by the interest of this Committee, spectrum 
management is one area where we have to get it right and keep 
getting it right. Too much of our country's future is riding on 
it to do anything less.
    In early April, I convened a 2-day spectrum summit at the 
Department of Commerce with experts from Government, industry, 
academia. The purpose of the summit was to explore new and 
innovative ideas for spectrum policy and management approaches. 
I was particularly pleased with the extensive participation of 
the Federal Communications Commission, including Chairman 
Michael Powell and Commissioners Kathleen Abernathy and Kevin 
Martin. David Gross, the lead State Department official for 
international telecommunications policy, also participated.
    The results of the summit were very revealing. Among the 
major problems with spectrum management identified were gaps in 
governmental coordination, the length and complexity of the 
allocation process, inefficient uses of spectrum in the absence 
of efficiency-stimulating incentives, challenges in making room 
for new services and technologies, and lack of clarity about 
spectrum rights and the Federal spectrum management process.
    From the spectrum summit I believe several basic spectrum 
management goals emerged. First, the U.S. Government agencies 
involved in spectrum management--NTIA, the FCC, and the State 
Department--must work collaboratively as one spectrum team to 
serve our Nation's collective interests. Chairman Powell and I 
have taken first steps to improve our inter-agency 
communications and to take a more forward-looking approach to 
accommodate advances in technology within our domestic 
spectrum.
    Chairman Powell, Deputy Assistant Secretary Gross and I 
have also been discussing how we can better coordinate to 
improve our international outreach as we prepare for 
international fora like the World Radio Communications 
Conferences held every 3 years.
    Second, we should be developing policies that encourage 
spectrum efficiency. NTIA has long advocated and required the 
use of spectrum-efficient technologies by Federal agencies. For 
example, NTIA has developed and the Federal agencies are now 
implementing a transition to narrowband technology to relieve 
the congestion in the land-mobile radio bands used by the 
Government. NTIA and the Federal public safety agencies have 
also developed technical standards for receivers to minimize 
interference and increase overall spectrum efficiency. We are 
also exploring innovative new technologies, including those 
that will permit radios to select their operating frequencies, 
decrease power, and adjust coverage based on sensing the 
operating environment and dynamically selecting unused 
channels.
    Third, we must establish forward-looking policies that 
enable technological advances and eliminate legacy regulations 
that stand in the way of innovation. One such promising reform 
in this area is the FCC's proceeding to create secondary 
markets that would permit parties to lease their spectrum to 
others, to put otherwise unused spectrum to its most efficient 
use. Another is the accommodation of frequency-flexible 
wireless systems, such as those under the 802.11 standard, on 
an unlicensed basis.
    Taking steps to make room for new technologies is key, 
including through migration or relocation to higher frequency 
bands. NTIA is currently finalizing rules for Federal agencies 
to be reimbursed by the private sector for relocation costs, as 
well as working on a legislative proposal referenced in the 
President's 2003 budget to create a reimbursement fund from 
spectrum auction proceeds.
    Fourth, we must have policies that ensure the deployment of 
robust wireless networks that are prepared for the worst crises 
and able to deliver the very best of services to the American 
people. The events of September 11th demonstrated how 
critically important communications capabilities are for our 
Nation's first responders. Interoperability among these 
agencies is essential to their ultimate success.
    NTIA is attempting to assist in achieving this goal through 
research at our Boulder, Colorado, lab and through education 
and outreach. At this very moment, NTIA and the Public Safety 
Wireless Network Program are co-hosting a summit here in 
Washington to focus on current and emerging solutions for 
achieving interoperability.
    While we wrestle with building a sound spectrum management 
framework for the future, the demands of the present increase 
unabated. NTIA is currently working with the FCC, the 
Department of Defense, and other Federal agencies to 
accommodate the demand for spectrum for third generation or 3G 
wireless services. A viability assessment on making the 1710 
through 1770 and 2110 to 2170 megahertz bands available for 3G 
is scheduled for release later this month.
    At the same time, DoD has predicted that its spectrum usage 
will grow by more than 90 percent by 2005. Wireless systems are 
critical to our national defense, not only as DoD deploys our 
troops abroad, but also as it conducts critical training 
operations here in the United States. These requirements need 
to be recognized and addressed as we move forward in 
encouraging innovation and efficiencies in the public sector.
    We also need to resolve issues in the 700 megahertz band in 
a manner that makes clear when and how these frequencies will 
become available for new wireless services. An equitable and 
efficient solution for relocating incumbents in these bands is 
possible, and the administration looks forward to working with 
the FCC and Congress to ensure such policies are developed in a 
timely fashion.
    Finally, we need to address our spectrum allocation and 
licensing policies to address the special needs and challenges 
of the Nation's rural areas.
    Mr. Chairman and Members of the Committee, the radio 
spectrum is vital to our national security and to our economic 
security. I look forward to working with Congress in developing 
the best possible spectrum management policies for the future. 
Thank you again for inviting me to testify and I would be happy 
to answer any questions you may have for me.
    [The prepared statement of Ms. Victory follows:]

Prepared Statement of Nancy J. Victory, Assistant Secretary of Commerce 
    for Communications and Information and Administration, National 
      Technical Information Administration, Department of Commerce

    Thank you, Mr. Chairman. I would like to thank you and the Members 
of the Committee for inviting me here to testify on the important topic 
of spectrum management. I am Nancy J. Victory, Assistant Secretary for 
Communications and Information, U.S. Department of Commerce.
    Spectrum is an invisible, but indispensable building block for 
America's future. It is a natural resource that can fuel economic 
growth. It is key to our nation's digital defense and our citizenry's 
safety. It is a wireless link that can enable anyone, anywhere to 
access the marvels of the worldwide web.
    Spectrum management is under stress and strain from concurrent 
challenges. There is the challenge of constantly evolving technological 
capabilities. There is the challenge of threats to security and safety. 
There is the challenge of static processes and legacy regulations in a 
dynamic field. And finally, there is the challenge of the finite nature 
of the radio spectrum.
    As reflected by the interest of this Committee and its Members, 
spectrum management is one area where we have ``to get it right'' and 
``keep getting it right.'' Too much of our country's future is riding 
on it to do anything less.
The Spectrum Summit
    In early April, I convened a high-level 2-day Spectrum Summit 
meeting at the Department of Commerce. The purpose of the Summit was to 
explore new and innovative ideas to develop and implement spectrum 
policy and management approaches. The focus was upon ways to encourage 
spectrum efficiency; provide spectrum for new technologies; and improve 
the effectiveness of the domestic and international spectrum management 
processes.
    Recognizing that improving the national spectrum management process 
is a multifaceted undertaking that neither government nor the private 
sector can do alone, I invited a variety of experts in spectrum 
management from government, industry, and academia to share their 
thoughts in this area. I was also particularly pleased with the 
extensive participation of the Federal Communications Commission in our 
two-day Summit. Chairman Michael Powell and Commissioners Kathleen 
Abernathy and Kevin Martin helped moderate panels with me.
    The first day of the Summit consisted of panel discussions by 
government and private sector spectrum users, economists and academic 
analysts who follow spectrum issues, and technologists and futurists. 
The second day of the Summit entailed three simultaneous breakout 
sessions focusing on spectrum management, spectrum efficiency, and 
international issues. The results of the Spectrum Summit were very 
revealing. Among the major problems identified were:

   Gaps in governmental coordination--NTIA, FCC & State;

   Length and complexity of the allocation process;

   Inefficient uses of spectrum and the absence of efficiency 
        stimulating incentives;

   Challenges in making ``room'' or ``homes'' for new services 
        and technologies; and

   Lack of clarity about spectrum rights and the federal 
        spectrum management process.

    A common criticism was that the process is usually too reactive--
waiting until the technology is ready to be deployed before beginning 
the allocation process, rather than anticipating future spectrum needs. 
There was also significant discussion on the hurdles the current system 
erects that limit the ability to promote sharing and encourage 
relocations to accommodate new needs or capabilities. Panelists 
indicated that the allocation process too often pits advocates of new 
technology against incumbents, instead of focusing on win-win outcomes 
that preserve existing rights while facilitating new uses.
The Future of Spectrum Management
    From the Spectrum Summit, I believe several basic goals emerged. 
First, the U.S. Government agencies involved in spectrum management--
NTIA, the FCC, and the State Department--must work collaboratively as 
``One Spectrum Team'' to serve our Nation's collective interest. 
Secondly, we should develop policies that encourage spectrum 
efficiency. Third, we must establish forward-looking policies that 
enable technological advances and eliminate legacy regulations that 
stand in the way of innovation. And fourth, we should ensure that we 
have policies that ensure the deployment of robust wireless networks 
that are prepared for the worst of crises and able to deliver the very 
best of services to the American people. Let me describe what I mean by 
each of these in a bit more detail.

    1. ``One Spectrum Team''

    The Summit was the first effort to bring NTIA, the FCC and the 
State Department together in a collective look at common challenges. As 
head of NTIA, I have responsibility for managing the federal government 
spectrum. As head of the FCC, Chairman Powell has responsibility for 
managing non-federal spectrum. As the lead State Department official 
for international telecommunications policies, David Gross, the U.S. 
Coordinator and Deputy Assistant Secretary, has responsibility for 
representing U.S. spectrum interests abroad. Our roles are different, 
but ultimately interdependent.
    To promote an improved spectrum management process for the country, 
Chairman Powell, David Gross and I have established a ``One Team'' 
spectrum management approach. Specifically, to enhance NTIA and FCC 
cooperation, Chairman Powell and I have taken the first steps to 
improve our interagency communications and to take a more forward-
looking approach to accommodate advances in technology. These 
improvements will enable our agencies to be more ``proactive'' and 
``predictive'' in spectrum management.
    Deputy Assistant Secretary Gross, Chairman Powell and I have also 
been discussing how we can better coordinate to improve our 
international outreach as we prepare for international fora. This is 
increasingly important to U.S. interests as many aspects of spectrum 
management are addressed in such international bodies. In particular, 
our ability to reach consensus with other countries in the Americas 
prior to such meetings helps ensure that U.S. policy views have a 
greater likelihood of success, given the oftentimes unified positions 
of the European or Asian-Pacific nations. This is most significant in 
such fora as the World Radio Communication Conferences (WRC) held by 
the International Telecommunication Union (ITU) every three years. The 
ITU develops international radio regulations that have treaty status. 
We are also discussing ways in which we can begin the development of 
U.S. positions earlier in the process, including whether the 
appointment of the U.S. head of delegation for each WRC should be made 
sooner in the process to allow for the most effective representation of 
U.S. interests at these meetings.
    Last, but not least, NTIA is examining ways to improve its own 
processes. We have recognized that the frequency authorization and 
coordination process through which government frequency assignments are 
made depend upon an inefficient paper-based system. In NTIA's Fiscal 
Year 2003 budget, we are requesting the funds to streamline this 
process into an electronic frequency selection, coordination and 
authorization system.

    2. Spectrum Efficiency, Not Spectrum Waste

    Effective spectrum management must include policies that create 
incentives for spectrum efficiency. NTIA has long advocated the use of 
more spectrum efficient technologies. For example, NTIA has developed 
and the Federal agencies are now implementing a transition to 
narrowband technology to relieve the congestion in the land mobile 
radio bands used by the Government. Under NTIA regulation, Federal 
agencies will convert to narrowband technology in certain land mobile 
frequencies by 2005 and in all others by 2008. This should effectively 
double the number of frequencies available to Federal agencies. 
Narrowbanding, where technically possible, holds great promise for 
increasing the number of channels available to all users of the 
spectrum.
    NTIA and the Federal public safety agencies have also advocated the 
adoption of technical standards for receivers to minimize interference 
and increase overall spectrum efficiency. State and local public safety 
entities are also recognizing the importance of establishing receiver 
standards to minimize interference. The adoption of receiver standards 
allows transmitters and receivers to operate closer to each other in 
the spectrum, thereby increasing the overall efficiency of the use of 
the band. NTIA has worked with several private sector organizations to 
establish receiver standards, including standards for Global 
Positioning Satellite (GPS) System receivers and VHF maritime mobile 
radios.
    Federal agencies have also found that trunked systems can improve 
spectrum efficiency. In particular, trunked systems can be used for 
limited areas with a high concentration of use and for campus 
environments. Examples of sites particularly appropriate for trunked 
systems are Federal prisons, hospitals, laboratories, and training 
facilities.
    Innovative new technologies, including those using adaptive 
frequency, power, and antenna capabilities, for example, also hold 
great promise in improving spectrum efficiency. Frequency adaptive 
technology will permit radios to adaptively select their operating 
frequencies based on sensing the operating environment and dynamically 
selecting unused channels. This permits an enhanced opportunity to 
share channels, a more efficient use of the spectrum. NTIA will be 
looking for additional opportunities for promoting and maximizing 
spectrum efficiency.

    3. Forward-Looking Policies Enabling New Uses and Efficiencies

    Current spectrum management practices often require users to seek 
permission from either the FCC or NTIA before changing the services 
offered over their licensed frequencies. This process can impose time-
consuming approval processes that engender lengthy delays. The 
unintended consequence can be to discourage, rather than enable, new 
spectrum uses.
    As a policy matter, agencies with spectrum management 
responsibility--NTIA and the FCC--must continually reexamine their 
policies and rules to eliminate those that have become obstacles to 
innovation and to more efficient uses of the spectrum. To the greatest 
extent possible, we should be forward-looking in our policies and 
practices to remove procedural roadblocks to important federal and 
public advances.
    One promising spectrum management reform is the FCC's proceeding on 
creating secondary markets for spectrum use. The proposed secondary 
markets rules would permit parties to ``lease'' their spectrum to 
others--encouraging the development of secondary markets in order to 
put spectrum to its most efficient use. This concept is not entirely 
new. As the FCC's rulemaking notes, de facto leasing already takes 
place in some circumstances, such as for Instructional Television Fixed 
Services, where parties are allowed to sell excess capacity. Leasing is 
also permitted with satellite time and through the relatively new band 
manager licensing regime. The secondary markets concept would broaden 
these limited leasing venues and extend the benefits of leasing 
arrangements across more of the spectrum. If fully developed, it could 
even lead to dynamic trading of spectrum rights among parties in real 
time, on an ``as needed'' basis.
    I also supported the FCC's repeal of the spectrum cap on commercial 
mobile radio services. The FCC adopted an order last December to repeal 
the cap as of January 1, 2003 and to raise the cap to 55 MHz in all 
markets in the interim. This will permit carriers to assemble spectrum 
where appropriate to meet capacity needs and to deploy broader 
bandwidth services. The spectrum limits were simply too rigid to allow 
for changing needs and capabilities.
    New frequency flexible and low power technologies offer tremendous 
opportunities for innovative, new services. We need to ensure that 
wireless systems, such as those under the 802.11 standard, can flourish 
on an unlicensed basis. Frequency flexible systems will challenge our 
current block allocation structure and we must ensure that they can be 
accommodated without needless government micromanagement.
    One of our top priorities at NTIA is to work with the FCC to 
examine policies to alleviate the current congestion below 3 gigahertz 
(GHz). Over 93 percent of all FCC licenses and Federal Government 
frequency assignments are in the 0 to 3 GHz range. Among other things, 
spectrum managers should be examining ways to encourage migration to 
higher frequency bands as the technology permits. Such policies should 
include clear incentives for relocation to higher bands, where 
possible.
    In 1998, Congress enacted such a tool to permit Federal agencies to 
be reimbursed by the private sector for the costs associated with 
relocating from certain frequencies bands below 3 GHz, as well as any 
future reallocation of spectrum from the Federal government to private 
sector uses. Working with the FCC and the Federal agencies, NTIA has 
finalized these rules and they will be published in the Federal 
Register shortly. The President's Budget for Fiscal Year 2003 contained 
a legislative proposal to streamline this reimbursement process by 
creating a fund from spectrum auction proceeds to reimburse the 
affected Federal agencies. The Department of Commerce expects to 
transmit this proposal to Congress this summer.

    4. Preparing for the Worst and Delivering the Best

    The events of September 11, 2001, demonstrated how critically 
important communications capabilities are for our nation's first-
responders--the public safety and emergency response men and women who 
protect and serve our country and our communities. Now, more than ever, 
we must ensure that our wireless facilities are robust and constructed 
to withstand physical and cyber-attacks. It has been made exceedingly 
clear that spectrum-based communications can be an indispensable link 
and lifeline in time of crisis.
    NTIA has had a long and active role in providing spectrum for our 
nation's law enforcement and emergency response activities. Special 
attention was focused on public safety and multi-agency communications 
interoperability following the bombing of the Federal office building 
in Oklahoma City when state, local and federal police agencies had 
difficulty communicating with each other. In 1996, NTIA and the FCC co-
sponsored the Public Safety Wireless Advisory Committee (PSWAC) report, 
which provided recommendations on public safety issues through the year 
2010. As a result of the report, NTIA established the Public Safety 
Program to address the long-range spectrum requirements of federal 
public safety agencies, develop a strategy to provide sufficient 
spectrum for growth of the current services, and to provide for 
advanced technology and interoperability.
    Interoperability is shorthand for ensuring that different 
organizations with different radio systems operating on different 
frequencies are able to communicate immediately and effectively with 
each other. This is a complex problem that requires procedures and 
spectrum management tools to convert a potential Tower of Babel into a 
common communications language and an agreed upon process for linking 
different branches of government and different agencies together in a 
chaotic environment. NTIA is attempting to assist in tackling this 
problem in several ways.
    First, within NTIA, we have one of the world's leading 
telecommunications research laboratories located in Boulder, Colorado--
the Institute for Telecommunication Sciences (or ITS). ITS is NTIA's 
chief research and engineering arm, but it also serves as a principal 
federal resource for solving the telecommunications concerns of other 
federal agencies, state and local governments, and private associations 
and organizations. Among other things, ITS has been particularly 
involved in identifying solutions to the public safety interoperability 
issue, including developing standards for public safety digital land 
mobile radio systems
    Moreover, at this very moment, NTIA and the Public Safety Wireless 
Network Program (PSWN), jointly managed by the Departments of Justice 
and Treasury, are co-hosting the Public Safety Interoperability 
Technology Summit here in Washington. The Summit focuses on current and 
emerging solutions for achieving interoperability to better inform 
public safety officials on their technology choices. NTIA will also be 
looking for additional ways to assist the public safety community to 
reach a fully interoperable future.
Current Challenges--Accommodation of New Wireless Technologies
    While we wrestle with building a sound spectrum management 
framework for the future, the demands of the present increase unabated. 
The search for new homes for new services--whether through new 
allocations, relocation of incumbents, or advanced sharing techniques--
involve inherently nettlesome issues. Let me identify several of the 
key challenges that are facing all of us involved in spectrum decision-
making.

    1. Third Generation Wireless (``3G'')

    Over the past decade, there has been a tremendous growth worldwide 
in the use of cellular-based wireless telecommunications systems. The 
Department of Commerce and NTIA believe that this global growth will 
continue and that it is incumbent upon U.S. policymakers to find the 
spectrum to accommodate the demand for these new services.
    NTIA is currently working with the FCC, the Department of Defense 
(DoD) and other Federal agencies to accommodate the demand for spectrum 
for third generation or 3G wireless services. The 3G systems advanced 
by industry propose to provide mobile and satellite-based broadband 
capabilities. While current cellular and PCS wireless systems are 
expected to evolve to 3G technology over time, there is a strong desire 
from the wireless industry for additional spectrum now to establish 3G 
networks.
    In recognition of this growth and the trend toward global markets 
for wireless services, the ITU has considered the spectrum requirements 
for evolving 3G systems, which is internationally termed International 
Mobile Telecommunications-2000, or IMT-2000. The ITU forecast that 160 
MHz of additional spectrum would be required for 3G systems over and 
above that spectrum already used for 1- and 2G systems. At WRC-2000, 
the ITU identified several frequency bands that could be used for IMT-
2000 systems, leaving individual administrations the right to implement 
any of the bands in any time frame, for any service or technology, and 
using any portion of the identified bands that they deemed appropriate 
to satisfy national requirements.
    Since 2000, NTIA, the FCC, and the Federal agencies have been 
working cooperatively to take certain actions to identify spectrum for 
3G services. After extensive public outreach and work with industry and 
affected agencies on technical analyses of the various band options, 
NTIA and the Federal agencies are now focusing specifically on the 
1710-1770 MHz band, while the FCC is focusing on the 2110-2170 MHz 
band. A viability assessment on making both of these bands available 
for 3G is scheduled for release later this month.

    2. Digital Defense of National Security

    The events at home and abroad have underscored the importance of 
wireless communications capabilities to our national defense and 
critical infrastructure. The digital era of electronic links is a 
mission critical component of our military and security systems. Every 
branch of our armed services depend on radios and spectrum-dependent 
systems to conduct its missions. Information gained from these wireless 
systems is one of our nation's most effective weapons in today's war. 
DoD has predicted that its spectrum usage will grow by more than 90 
percent by 2005. DoD must have access to these frequencies, not only 
when it deploys our troops abroad, but also to conduct critical 
training operations here in the United States. These requirements need 
to be recognized and addressed as we move forward in encouraging 
innovation and efficiencies in the public sector.

    3. The 700 MHz Band

    The Administration has also supported the FCC's postponement of the 
auction of the spectrum in the upper 700 MHz band to permit Congress 
and the FCC to develop the policies necessary to ensure certainty as to 
when and how this spectrum will become available for new wireless 
services. The Administration recognizes the important role that 
broadcasting continues to play in the lives of all Americans and the 
challenges associated with the digital conversion. At the same time, 
spectrum is needed for new wireless services that provide new 
communications opportunities to American families, businesses, and 
public safety providers. An equitable and efficient solution for 
relocating incumbents in these bands is possible and the Administration 
looks forward to working with the FCC and Congress to ensure such 
policies are developed in a timely fashion.

    4. Rural Wireless Needs

    Spectrum policies designed for the nation as a whole sometimes fail 
to recognize and address the special problems and challenges of the 
country's rural areas. Spectrum allocation and licensing policies need 
to be regularly reevaluated to assess whether they are fully and 
adequately meeting the needs of all Americans, including those in rural 
areas.
Conclusion
    Mr. Chairman and Members of the Committee, the radio spectrum is 
vital to our national security and to our economic security. I look 
forward to working with Congress in developing the best possible 
spectrum management policies for the future. Thank you again for 
inviting me to testify. I welcome any questions you may have for me.

    Senator Inouye. Thank you very much, Ms. Victory.
    Now may I call on Mr. Sugrue.

            STATEMENT OF THOMAS J. SUGRUE, CHIEF OF 
          WIRELESS TELECOMMUNICATIONS BUREAU, FEDERAL 
                   COMMUNICATIONS COMMISSION

    Mr. Sugrue. Good morning, Mr. Chairman, Members of the 
Committee. I am Tom Sugrue, Chief of the Wireless Bureau at the 
FCC, and I welcome the opportunity to appear before you today 
to discuss the important issue of spectrum policy.
    As everyone's comments this morning have recognized, the 
radio spectrum is a critically important resource. Our Nation 
has become extremely dependent on a wide variety of spectrum-
based services. In terms of spectrum needs, however, this 
wireless revolution is becoming a victim of its own success. 
The simple truth is that as our Nation grows increasingly 
dependent on wireless technology, spectrum demand is stressing 
the supply, and that has made spectrum management a difficult 
task for Government.
    The overarching challenge of spectrum policy is to ensure 
the public interest is best served by balancing competing 
demands for this scarce resource. Spectrum policy is not 
static. It requires the difficult task of predicting spectrum 
needs not just for today, but for the next generation. Twenty-
five years ago when the Commission first allocated spectrum for 
cellular telephone services, no one, neither the FCC nor the 
industry, realized how rapidly this sector would grow. In a now 
often-told story, a prominent consulting firm projected for 
AT&T that even under the most optimistic assumptions, there 
would be at most 1 million cell phone subscribers in the United 
States by the end of the twentieth century. It is reported that 
ATT took that prediction into account when it agreed to have 
the cell phone licenses stay with the Bell operating companies 
at the time of divestiture.
    Senator Wyden, you mentioned the potential for competition 
from wireless technologies. I think if the Department of 
Justice had appreciated the competitive potential of this 
technology, they would have made a different choice in deciding 
which side of that divestiture border those licenses should go.
    Well, by the year 2000, there were actually 110 million 
cell phone subscribers, so that projection was off by 109 out 
of 110. But to be fair, the FCC did not do much better in its 
own crystal balling. When we allocated additional spectrum for 
this market in 1994--that is the PCS allocation of 120 
megahertz--that was based on a projection of 54 million 
wireless subscribers by the year 2000. So even though we were 
only projecting 6 years in advance, the Commission's estimates, 
which were well within the mainstream of expert opinion at the 
time, were still off by 100 percent.
    The problem is not that we had stupid people making these 
predictions. They were the best and brightest in the field at 
the time. The problem is that the dynamic nature of 
telecommunications markets, and especially the wireless markets 
today, render even expert predictions inherently unreliable. In 
turn, this makes a traditional command and control approach to 
spectrum management increasingly problematic.
    The FCC's recent experience has been to move to flexible 
policies that allow the market to adjust without constant 
Government intervention, to promote innovation, competition, 
and efficiency in commercial wireless markets.
    The commission also recognizes that it must ensure that the 
needs of non-commercial users, such as public safety agencies, 
are met. In this regard, over the last several years, the FCC 
has been working actively to ensure public safety entities have 
access to sufficient spectrum and can operate on a non-
interference basis.
    After spectrum has been allocated and assigned, the 
Commission is committed to ensuring that it is used 
efficiently. Periodically, the Commission revisits existing 
allocations and reallocates spectrum that can be put to a more 
economic use. Through this often complex, controversial 
process, the Commission has reallocated more than 300 megahertz 
of spectrum in recent years.
    In addition, because some users of spectrum, such as public 
safety and private wireless, do not face the same market-driven 
opportunity costs to use spectrum efficiently as commercial 
users face, the Commission has taken additional steps to ensure 
efficient spectrum use by these users. For example, the 
Commission adopted explicit efficiency standards for public 
safety in the 700 megahertz band and is right now in the 
process of conducting its first-ever audit of public safety and 
private radio services licensed on frequencies below 512 
megahertz.
    Well, even as I enumerate some of the actions the 
Commission has taken already to improve the use of the radio 
spectrum, I know we can do better. As Chairman Powell has 
observed, the Commission's traditional top-down approach to 
spectrum allocations may be too reactive for the current 
Internet-speed market. Traditional FCC rules often limit the 
use of specific bands to particular types of services or even 
specific technologies, making it difficult to shift spectrum 
from one use to another. In the current environment, spectrum 
allocation decisions often do not effectively push spectrum to 
its highest-valued and most efficient use.
    To address these issues, Chairman Powell recently created a 
spectrum policy task force which will provide a report to the 
Commission in October of this year. Moreover, the challenge of 
spectrum management is one of process as well as substance. As 
the current FCC Wireless Bureau Chief and a former Deputy 
Administrator of NTIA, I am particularly cognizant of the need 
for efficient coordination between the two agencies. Indeed, 
while there is a lot of coordination on a day to day basis, one 
major current project is the interagency staff level effort to 
examine and develop possible spectrum options for advanced 
wireless systems, including so-called 3G systems. These systems 
would support much higher data rates than the current 
generation of services.
    This effort under NTIA's leadership is being vigorously 
pursued at this time. There is no doubt it is a complex 
problem, but the staff is working hard to bring its 
recommendations forward to the decision makers at our 
respective agencies in the near future.
    Mr. Chairman, I would like to thank you again for this 
opportunity to appear before you today. I look forward to 
working with you and Members of the Committee and answering any 
questions you might have for me.
    [The prepared statement of Mr. Sugrue follows:]

       Prepared Statement of Thomas J. Sugrue, Chief of Wireless 
      Telecommunications Bureau, Federal Communications Commission

    Mr. Chairman, Ranking Member, and Members of the Committee:
    Good morning. I am Tom Sugrue, Chief of the Wireless 
Telecommunications Bureau at the Federal Communications Commission 
(FCC). I welcome this opportunity to appear before you today to discuss 
the important issue of spectrum policy.
    I am sure that all of us on this panel and everyone on this 
Committee recognizes radio spectrum is a critically important resource 
that is in very high demand. State and local public safety officials 
rely on wireless technologies to help them respond in emergencies; 
consumers rely on wireless technologies to keep in touch with family 
and friends and to improve their overall quality of life; broadcasters 
provide news and entertainment over the air and are moving to 
spectrally efficient digital transmission; businesses rely on wireless 
technologies to communicate with an increasingly mobile workforce; and 
our national defense agencies rely on wireless technologies to provide 
security to the country. In short, our nation has become dependent on 
spectrum-based services, which have brought great benefits in the form 
of enhanced efficiency, greater security, and an overall improvement in 
the quality of life of our citizens.
    In terms of spectrum needs, though, the wireless revolution is 
becoming a victim of its own success. The simple truth is that, as our 
society grows increasingly dependent on wireless technology and 
services, spectrum demand is stressing the supply, and that has made 
spectrum management a difficult task for government. This is true even 
though technology advances are enabling more efficient use of the radio 
spectrum. This is true even though the Commission has taken significant 
steps to provide its licensees with additional flexibility, allowing 
them to better respond to market demands and changes. This is true even 
though the Commission has reclaimed underutilized spectrum on numerous 
occasions. Thus, the overarching challenge of spectrum policy is to 
ensure the public interest is best served by balancing competing 
demands for scarce spectrum while striving to promote competition 
through the deployment of new technologies.
    Moreover, the challenge of spectrum management is one of process as 
well as substance. As the current FCC Wireless Bureau Chief and a 
former Deputy Administrator of the National Telecommunications and 
Information Administration (NTIA), I am particularly cognizant of the 
need for efficient coordination between the two agencies. In addition, 
U.S. domestic spectrum policies exist within the broader context of 
international spectrum agreements with other countries around the world 
and specific operational coordinations, especially with Canada and 
Mexico.
    Spectrum policy is not static. It is difficult to accurately 
predict spectrum needs not just for today, but for the next generation. 
Indeed, most users and service providers believe they will continue to 
need more spectrum in the coming years. Twenty-five years ago, when the 
Commission first allocated spectrum for cellular telephone services, no 
one--neither the FCC nor the industry--realized how rapidly this sector 
would grow. Cell phones were perceived principally as a car phone 
service and not personalized communications devices that people would 
carry with them throughout the day. In a now often told story, a 
prominent carrier estimated that at most there would be one million 
cell phone subscribers in the United States by the end of the 20th 
century. This reportedly was why the carrier agreed to have its 
cellular licenses go with the Bell Operating companies at the time of 
divestiture. Well, by the year 2000, there were actually 110 million 
cell phone subscribers. And to be fair, the FCC did not do much better 
with its ``crystal ball.'' The FCC's allocation of additional spectrum 
for this market in 1994--the Personalized Communications Service (PCS) 
allocation of 120 MHz--was based on a projection of 54 million wireless 
subscribers by the year 2000. So, even though it only was projecting 
six years in advance, the Commission's estimates were still off by 100 
percent in anticipating the actual demand for these services. Although 
technological advances can improve spectrum efficiencies, they are not 
a panacea and may not offset the increased need for spectrum. The FCC's 
recent experience has shown that flexible policies that allow the 
market to adjust without constant government intervention are essential 
in the dynamic world of wireless communications.
    Though spectrum management can be a demanding undertaking, we have 
seen the benefits of successful spectrum policies to the American 
people. For example, when the Commission auctioned that 120 MHz of 
spectrum for PCS, that action and the build-out of new networks 
transformed mobile telephony from a tight duopoly to an actively 
competitive market with multiple providers, and from a luxury for 
business and high-income users to a mass market service. Prior to the 
PCS auction in 1995, there were approximately 24 million commercial 
mobile subscribers. Today, there are over 130 million subscribers and 
over 80 percent of the American public lives in counties that have five 
or more competitors. Moreover, since 1995, the average price per minute 
for consumers has been cut by about three quarters. Sound spectrum 
policies that promote flexibility, competition, and innovation clearly 
contributed to the marketplace success of PCS.
    Spectrum policy has been and continues to be one of the core 
functions of the FCC, and I am now pleased to discuss the FCC's role in 
this regard and its efforts to manage the spectrum more efficiently.
    An important principle underlying the FCC's recent approach to 
spectrum allocation and assignment on the commercial side is that the 
market should be the primary determinant in the success or failure of a 
new technology or service. In that vein, the FCC has made substantial 
use of the auction authority granted by Congress in 1993 and made 
mandatory for most services, including commercial broadcasting, in 
1997. All FCC licenses are potentially subject to auction except public 
safety, public broadcasting, and international satellites. As Congress 
anticipated, our experience has shown that auctions award spectrum to 
applicants that value it most, are fast and objective, and compensate 
the public for use of a valuable and scarce resource.
    In addition, the Commission has favored flexibility in its 
licensing rules in order to permit licensees to respond to market 
demands and changes. In most recent allocations, the Commission 
generally has limited its technical and operational rules to those 
necessary to ensure that harmful interference is avoided. In addition, 
the Commission permits disaggregation and partitioning so that if a 
licensee finds that it wishes to transfer some of its spectrum or part 
of its licensing area, it can do so without relinquishing its entire 
license. The Commission is currently examining ways to improve 
opportunities to access spectrum through other mechanisms, including 
secondary markets.
    Though the Commission's initial allocation and assignment process 
creates the primary market for wireless services, the Commission has 
recognized the importance of secondary markets as well as the 
importance of allowing spectrum resources to be used most efficiently. 
The Commission permits licensees to transfer their licenses to other 
entities, subject to Commission approval. We process the great bulk of 
these transactions rapidly, consistent with the needs of a dynamic, 
competitive market. We also are looking at whether there is a need to 
stimulate greater use of secondary market transactions to promote the 
efficient use of spectrum. Also, in several bands, the Commission has 
authorized the use of ``band managers,'' which are licensees that act 
as spectrum lessors with market incentives to ensure efficient use of 
spectrum, especially among private spectrum users.
    The Commission also recognizes that it must ensure that the needs 
of non-commercial users, such as public safety agencies, are met. In 
this regard, over the last several years, the FCC has taken a number of 
significant steps to ensure public safety entities have access to 
sufficient spectrum. For example, the Commission has implemented the 
Congressional directive to ensure that a portion of the 700 MHz band is 
used for public safety. The Commission set aside ten percent of the 
band for public safety interoperability services and, based on input 
from the public safety community, adopted rules to promote nationwide 
interoperability in that band. In addition, the Commission has a 
proceeding underway to address concerns about interference to public 
safety in the 800 MHz band. Also, earlier this year, the FCC allocated 
50 MHz of spectrum in the 4.9 GHz band for fixed and mobile wireless 
services and designated the band for use in support of public safety. 
The Commission recognized that this allocation and designation has the 
potential to provide public safety users with additional spectrum to 
support new broadband applications such as high-speed digital 
technologies and wireless local area networks for incident scene 
management. The spectrum also can support dispatch operations and 
vehicular or personal communications.
    After spectrum has been allocated and assigned for use, the 
Commission is committed to ensuring that the spectrum is used 
efficiently. Periodically, the Commission revisits existing spectrum 
allocations and reallocates underutilized spectrum, either through 
relocation of existing operations to different--usually higher--
frequency bands, by removing existing services altogether, or by 
providing incentives for communications facility substitutions--for 
example, switching from radio operations to fiber optic cable. Through 
this often complex and controversial process, the Commission has 
reallocated more than 300 MHz of spectrum. This spectrum is located 
below 3 GHz--an especially prime area of the radio spectrum that is 
suitable for a multitude of applications but especially valuable for 
mobile uses. One good example of the Commission's spectrum reclamations 
is when, in our Emerging Technologies proceeding, we reclaimed more 
than 200 MHz of spectrum from private fixed microwave services and made 
that spectrum available for new services, including the 120 MHz for 
licensed PCS that I mentioned earlier. In addition, we have required 
some of our licensees to make do with less in order to make room for 
new and beneficial uses. One such example is when the Commission 
reduced the allocation of the broadcast auxiliary service (the 
Commission's term for the service used by those ubiquitous broadcast TV 
trucks) from 120 MHz to 85 MHz.
    In addition, because some users of spectrum, such as public safety 
and private wireless, do not face the same market-driven opportunity 
costs to use spectrum efficiently as commercial users face, the 
Commission has taken additional steps to ensure efficient spectrum use 
by these users. For example, the Commission has undertaking 
``refarming,'' which involves the migration of certain private and 
public safety users to more spectrally efficient technologies. In some 
bands, such as 700 MHz public safety bands, the Commission has adopted 
specific efficiency standards. In addition, the Commission is in the 
process of conducting its first-ever audit of public safety and 
business/industrial radio services licensed on frequencies below 512 
MHz. This has been an enormous undertaking to verify the construction 
and operational status of over 400,000 call signs. As a result, over 
31,000 licenses have been recovered to date. Licensees who do not 
respond to FCC letter of inquiry during this audit ultimately risk 
losing their license.
    Even as I enumerate some of the actions that the Commission has 
already taken to improve utilization of the radio spectrum, we can do 
better. As Chairman Powell has observed, the Commission's current 
``command and control'' approach to spectrum allocations may be too 
reactive for the current, Internet-speed market, and often spectrum 
allocation decisions do not effectively push spectrum to its highest 
and most efficient use. To address these issues, Chairman Powell 
recently created a Spectrum Policy Task Force. Some of the objectives 
of the task force include studying options for a more market-oriented 
spectrum allocation policy, examining ways to clearly define spectrum 
interference and usage rights, reviewing methods of aggressively 
promoting spectral efficiency, and reserving and protecting access to 
sufficient spectrum for public safety. The task force has sought public 
comment on these and other spectrum policy issues, will conduct 
multiple workshops this summer to facilitate discussion regarding 
spectrum policies, and will provide a report to Commission by October 
of this year. Chairman Powell supports systemic reevaluation of 
spectrum policy as we know it today. Without a doubt, the Commission is 
struggling to keep pace with market innovations.
    The FCC is not the sole manager of the radio spectrum. A 
significant amount of the spectrum is in bands that are shared with 
both federal and non-federal users. In these bands we need to 
coordinate with the Office of the Secretary of the Department of 
Commerce or, more specifically, NTIA's Interdepartment Radio Advisory 
Committee (IRAC).
    Generally, the IRAC coordination process operates smoothly. 
Approximately 85,000 items are coordinated annually--these include 
approximately 5,000 non-government license applications and 
approximately 80,000 federal government authorizations. In addition, 
last year, Commission staff coordinated with IRAC on approximately 50 
items that were acted on by the full Commission--these include, among 
other things, rulemakings and waivers. Almost all of the items 
addressed in the IRAC process involve issues that are successfully 
resolved through established coordination procedures among the relevant 
agencies.
    Moreover, there are many instances in which we work cooperatively 
with NTIA and other executive branch agencies that fall outside of the 
formal coordination context. Usually these efforts arise in the context 
of implementing spectrum transfers from federal government to non-
federal government users. These efforts are not inconsequential. 
Despite the fact that particular spectrum may be earmarked for 
transfer, a lot of issues remain in the details associated with the 
transfer--issues like timing of the availability of the spectrum, the 
geographic extent of grandfathered federal operations, interference 
protection criteria, and reimbursement procedures for federal 
government operations that may need to be relocated to different 
frequencies. Indeed, often through these cooperative, interagency 
efforts we have achieved positive results. For example, originally 50 
MHz of spectrum at 4.6 GHz was earmarked for transfer from federal 
government to non-federal government use. In part, the 4.9 GHz band was 
substituted for this spectrum as the result of concerns raised by the 
U.S. Navy about possible interference in frequencies adjacent to the 
transfer frequencies.
    The FCC and NTIA currently are working vigorously through an 
interagency staff-level effort to examine and develop possible spectrum 
options for advanced wireless systems, including so-called third 
generation (3G) wireless services. These systems would support much 
higher data rates than the current generation of services and hold the 
promise for enabling services such as connection to the Internet while 
away from your normal work station or computer. This effort, under 
NTIA's leadership, is also evaluating the potential for sharing between 
advanced wireless systems and current spectrum users, including 
government users, as well as reviewing possible options for relocation 
spectrum. There have been numerous stafflevel meetings with 
representatives from executive branch agencies in an effort to have a 
full and productive dialog about the multitude of technical issues 
associated with the spectrum identified as potential bands for new 
uses. There is no doubt that this is a complex problem, but the staff 
is working hard to bring its recommendations forward to the decision-
makers at our respective agencies in the near future.
    In addition, we recognize that U.S. domestic spectrum policies 
exist within the broader context of international spectrum agreements 
with other countries around the world. For example, the Commission is 
participating in the State Department-led June 2003 World 
Radiocommunication Conference (WRC)--a treaty-level forum held by the 
International Telecommunication Union (ITU) to decide on allocation of 
spectrum. The Commission began its preparations for the 2003 WRC in 
December 2000, just six months after the 2000 WRC held in Istanbul, by 
organizing its industry WRC 2003 Advisory Committee. The Commission has 
recently completed the ninth meeting of the WRC Advisory Committee and 
approved proposals for all but a few of the 39 WRC Agenda items. The 
Commission is working with NTIA and the State Department to reconcile a 
few outstanding proposals to finalize the U.S. Government positions. 
The Commission also is participating in the State Department-led 
process of building international support for the U.S. positions in the 
year remaining before the WRC-03.
    I would like to thank you, Mr. Chairman, for the opportunity to 
appear before you today. I look forward to working with you and other 
Members of this Committee on these important U.S. spectrum management 
policies. I would be pleased to answer any questions you might have.

    Senator Inouye. I thank you very much, Mr. Sugrue.
    Because of my primary assignment on the Defense 
Appropriations Committee, I will focus much of my questioning 
to matters relating to the Department of Defense. Mr. Price, 
what frequency bands are most heavily utilized and for what 
requirements?
    Mr. Price. Well, we use all of our frequency bands and we 
have to justify those periodically, every 5 years, to NTIA, 
each of the different assignments and allocations we get. It is 
fair to say that, as I mentioned in my verbal testimony, we do 
not use all of our spectrum all of the time, nor do the 
commercial folks. At 2:00 in the morning not a lot of people 
are using them.
    The key attribute for frequency in the U.S. for the 
Department of Defense, prior to the undefined-as-yet homeland 
mission, has been for training and testing. The Department's 
principle is that we train like we fight. So having 100 percent 
reliability and 100 percent certainty when it is needed is the 
critical aspect.
    So the overall question is we feel, and we have done a 
number of studies, that we use our spectrum, all of our 
spectrum. Almost all of our spectrum is shared, if not with the 
commercial--more than half of it is with commercial users. A 
large chunk of it is with other Federal Government users. Even 
in the military-only bands, it is shared within the services.
    Senator Inouye. Now, you brought up training. Do you 
currently have limited access to spectrum required to carry out 
training exercises and system testing, and if so how do you 
derive enough spectrum to carry out exercises?
    Mr. Price. Through the incredible hard work of the young 
men and women in our military, sir. We have been increasingly 
spectrum-constrained. It is not unlike the commercial sector, 
if you asked if you took away their T1 lines and gave them 
dial-up lines could they operate their business as effectively. 
Wireless, because our last tactical mile is often not 
connected, whether it is on a ship or on a plane, wireless is a 
critical component of our last mile.
    I will give you one other specific example. In the flight 
test telemetry arena where, as you know, we get a lot of data 
on new platforms, the Department of Defense had 80 megahertz 
devoted to flight test telemetry. Because of spectrum 
reallocations, that amount of bandwidth, frequency, is now down 
to 25 megahertz. That severely impacts our ability to test the 
performance of air platforms.
    If there is one F-22 in training today in southern 
California, we must cease all other operations of air 
platforms, including the B-1, including the Global Hawk UAV, at 
Vandenberg, China Lake, and other ranges. So one small example 
of how our training and testing--I can give you a whole series 
of examples, but one example of how we are constrained in the 
U.S.
    Senator Inouye. Why is the 1710-1850 megahertz bandwidth of 
critical importance to your military communications, 
intelligence, and platforms?
    Mr. Price. Thank you for asking that, sir. As anyone at 
this table clearly knows and I think all you and your staff, 
the frequency below 3 gigahertz is really what's considered 
beachfront property--very valuable, particularly for mobile 
applications. We use a lot of frequency for radars and the like 
in the upper portions of the band. But this beachfront 
property, and particularly the 1710 to 1850 area, has a number 
of unique propagation characteristics that make it very 
valuable for the Department of Defense.
    The band enables small antennas and it has sufficient beam 
widths for simple, reliable link establishments and 
preservation, which helps us do low probability of intercepts 
and some of the things that the Department of Defense requires. 
It supports low-power transmissions for extended ranges of 
communications. Since we have joint dispersed forces, we need 
extra, more ranges than you might expect, and for high data 
rates. So that is a band that is beachfront property, very 
valuable for our satellite communications, precision guided 
munitions, air training, tactical data links--a whole series of 
uses within the Department.
    Senator Inouye. Finally for this segment, what spectrum 
have you lost over the last few years and what effect has this 
had on your operations? And what impact have prior spectrum 
sales had on your ability to carry out your war-fighting 
effort?
    Mr. Price. In 1993, over 1993, the Government lost 247 
megahertz. That has not actually been allocated yet, so DoD in 
a number of cases, and other Federal agencies, are still there, 
but, so to speak, the clock is ticking. So to some extent we do 
not fully know the implications. But it is important to 
understand that there are direct and indirect effects.
    The direct effects are clearly there is this system here--
the Marines have a number of radios that they have had to 
figure out where to relocate. There are things like that. But 
then, as I mentioned, there are other kinds of effects--the 
host nation approval that I mentioned. When I was down at 
Special Forces Command at SOCOM and CENTCOM in Tampa a few 
weeks ago, there is a radio in the 1755 to 1770 band that took 
in a particular country in CENTCOM's area of operations, AOR, 6 
years to get host nation approval. So now, after 6 years, we 
are able to use that radio in that band. To the extent that we 
are required to move, that clock starts again. So how long will 
it take before we can use that radio in that band?
    So the impact is things like that; on our allies who bought 
interoperable systems that now are told: Well, you bought these 
interoperable systems to operate with us; now, because of 
commercial pressures, we are moving; you should move too. Their 
defense budgets are challenged. Things like that.
    But there are also the indirect effects. I actually have 
some people looking at it, but the amount of time that we 
spend--and I am not complaining; people are happy and working 
hard--on spectrum reallocation issues, it is an inordinate 
amount of time. It is really not to a large extent moving the 
ball forward. If we are at the, to use a football expression, 
at the 40 yard line and want to get to the goal line, this 
brings us back to the 50 and then we have to get back to the 
40. We are not moving the ball forward. We are not helping the 
war fighter and helping further our military requirements. At 
best we are fighting and spending resources to stay where we 
were.
    So predictability and certainty are the two principal 
things that DoD would like out of any spectrum management plan. 
A number of the reallocations have impacted our operations.
    Senator Inouye. Senator Burns.
    Senator Burns. Mr. Price, I wish you had answered the first 
question. What spectrum is the most heavily used and which 
spectrum is the least used?
    Mr. Price. Well, it is a hard question to answer, sir.
    Senator Burns. It should not be, because you said you have 
got acres of studies.
    Mr. Price. We do, but heavily used when? We have studies of 
during training, during exercises. We use tactical radios in a 
lot of different places. We always use the TT and C, the 
telemetry tracking and command, for the satellites. But if I 
had to answer the question, I would say the spectrum that we 
have below 3 gigahertz, of which exclusive Federal use is about 
15 percent and about half of ours is shared, is really the 
sweet spot where we are looking, not only today, but as we move 
to a network-centric force, where we would like every war 
fighter to be able to have voice, data, video, power to the 
edge.
    Senator Burns. When we start into this, when we start into 
this thing, because this is going to be a monumental issue, and 
I am very supportive of a classified hearing with DoD and their 
uses, we do not want to drift into areas where we should not 
drift into, but I think that information is going to be 
warranted before we make any final decisions on how we want to 
manage this.
    Thank you for that. I am concerned that our preparations 
for the World Radio Communications Conference are inadequate 
right now. I am really worried about that. For instance, the 
President appoints an ambassador to head the U.S. delegation to 
a term of only 6 months. Given the monumental complexity and 
the contentiousness of international spectrum coordination, 
this seems to be a job suited for OJT more than anything else. 
This is really--you have to be a quick study on an issue this 
big, and then the retention of it. Then just about the time you 
understand what spectrum really is, then you have to move on.
    I am the only person--keep in mind, I am the only person in 
this United States Congress that believes that spectrum is not 
a national resource. It is a technology. We commandeered it 
just through the business of, we are going to regulate it and 
make sure everybody stays in their lanes whenever they are 
assigned to it. We commandeered it. So I am the only one, and I 
am the only man in this whole town who believes that, probably 
the whole Nation, and I will believe it until they stick me in 
the ground, because we commandeered it and we commandeered it 
mostly for budgetary reasons. That is a terrible reason to do 
that.
    But anyway, that is another thing. Should we change the 
process of appointing the ambassador--Ms. Victory, you can 
probably answer or respond to this--to ensure some continuity 
in the leadership? If not, what other reform would you 
recommend to improve the preparations for these international 
conferences? They become very important. I know you just 
returned from one and I look forward to your report on that.
    But I think this is a very important area.
    Ms. Victory. Well, clearly the short term of the WRC 
ambassador is something that has been identified repeatedly 
over the last couple of years as an issue for further study. I 
do not think anyone has really done that further study yet. I 
think it should be done, because it is a challenging job.
    But there are really two points of view with respect to the 
WRC ambassador. You do have some who believe that it is 
important for that individual to have full knowledge of the 
issues and have relationships with the ministers abroad in 
order to be able to effectively cut those deals. On the other 
side of the coin, you also have folks saying very emphatically 
that this has to be a very politically connected person within 
the White House who can make the hard decisions, when you have 
differing viewpoints among agencies or among constituencies, as 
to which is going to be the U.S. view.
    So I agree that that is an issue for further study. At this 
point the administration has not made a recommendation for 
changing the nature of that position. But I think that that is 
one area to be looked into further.
    In terms of other things that can be done to improve the 
preparation, clearly one is, as we have mentioned, starting the 
process earlier in developing the U.S. position. That is 
something that NTIA and FCC have attempted to do in preparation 
for this upcoming WRC next year. In fact, one month after the 
last meeting was over NTIA and FCC began their process of 
starting to meet with the constituencies to talk about what 
issues are coming up for the next round.
    Indeed, that has been very helpful because at the last CTEL 
meeting among the various countries in the Western Hemisphere 
the United States was really the only one that had their 
tentative list of issues. The good news about that is we are 
then able to be the one that the other countries follow. When 
we lay out our positions first, we have a better chance of 
having the other countries sign onto our positions or sign onto 
them with tweaks, as opposed to playing catch-up and not having 
our issues on the table first.
    So I think for this next WRC we are going to be very well 
prepared. But you are right, the ambassador status remains an 
issue that should be looked into further.
    Senator Burns. Mr. Guerrero, you seem like I ticked part of 
your curiosity there. Do you want to respond to that?
    Mr. Guerrero. Yes, Senator, thank you. As you heard in our 
statement and in our work, we will be reporting on this issue 
specifically, and we have some of the same concerns that you 
articulated.
    I would just want to lay out, although we do not make 
specific recommendations on what to do about this at this time, 
I would say there are several principles that we need to keep 
in mind as we move forward in making this process more 
effective. One is we have to make sure that whatever process we 
choose produces a position that is timely. These conferences 
involve nations voting. Each nation has one vote in these 
conferences. For the U.S. vote to count, it is really important 
for us to do our homework. It is important for us to have our 
positions laid out in advance and to have worked with other 
nations to form the kinds of alliances and support that we need 
for our position. So timing is of the essence.
    The second is the continuity of the focus and the 
sustainability of that focus. The 6-month term is an issue 
there.
    The third is the expertise that we bring to bear in terms 
of focusing on that process.
    So however we organize this, we have to make sure that we 
have those three principles in mind: that there is enough 
continuity, sustainability of focus, and expertise, and that 
the preparation process that is used, whatever it is, is 
completed in a timely manner so that we can be ahead of the 
curve in terms of developing our positions and working with 
other countries.
    Senator Burns. The NTIA is required by law to promote 
efficient use of spectrum use by the Federal Government. I 
understand that NTIA has directed Federal agencies to use only 
as much spectrum as they need. It also requires each agency to 
conduct a 5-year review of its spectrum use, to justify the 
allocation.
    In testimony offered by the GAO today, however, it was 
noted, and I noted in your testimony, that very few of these 
reviews have been done. The major agency division has over 
1,000 frequency assignments that have not been reviewed in 10 
years or more. Another spectrum manager in another agency said 
that all field staff responsible for conducting the 5-year 
reviews have simply been eliminated. Are these isolated 
examples? What sorts of enforcement mechanisms are in place to 
ensure that the agencies are indeed being held accountable for 
their efficient spectrum?
    I noticed in your testimony, Mr. Guerrero, that we just--is 
it a lack of resources or what is the problem here? Because we 
are going to have to have those studies. I know it has been one 
of your toughest challenges in finalizing this report.
    Mr. Guerrero. Senator Burns, I would say there are probably 
three important issues here. One is a lack of resources and it 
is really a lack of staffing at the Federal agencies level. The 
Federal agencies have experienced difficulty attracting the 
expertise necessary to manage spectrum. It requires unique 
engineering expertise and background.
    Also, as with many Federal agencies, they are faced with 
the retirement of those people who are on their staff now who 
are expert. For example, at Commerce roughly 40 percent of 
those spectrum management individuals who are on board now are 
eligible or will be eligible over the next 5 years to retire. 
So it is a staffing issue. Holding agencies accountable for 
doing these periodic reviews and ensuring that spectrum is 
being used appropriately requires that you have the expertise 
and resources, and some Federal agencies have told us they do 
not.
    Secondly, for Federal agencies to use their spectrum 
allocations more efficiently, they need resources for the 
technologies that would allow them to do that. Nancy Victory 
talked about narrowbanding and I mentioned it in my statement. 
That is a technology that has the ability to significantly 
improve the efficiency of the equipment that is currently being 
used in certain applications in land-mobile radio.
    Unfortunately, several of the 7 agencies we reviewed have 
not gotten the support they need in the budget process to 
purchase this equipment and they are behind the curve in terms 
of meeting the requirement to narrowband. So that is a resource 
issue.
    Finally, and I agree with the FCC on this point, spectrum 
management is fundamentally a very, very difficult thing to 
manage from the top down in a command-control type of 
structure. It is critically important that there be incentives 
in place for behaviors that encourage efficient and effective 
use of spectrum. Generally, those incentives on the Federal 
side are lacking.
    I mentioned in my statement that the fees that are now 
charged Federal agencies for their spectrum assignments are 
really meant to only cover part of NTIA's spectrum management 
administrative costs. They are not meant to provide an 
incentive for federal agencies to use spectrum more 
efficiently. So we need to also look at what kinds of 
incentives can we put into the system so we can better manage 
the 270,000 federal assignments. It is almost impossible to do 
that in a command-control environment.
    Senator Burns. Would you like to respond to that, Ms. 
Victory?
    Ms. Victory. Yes. I think you have put your finger on a 
couple of important points here. You know, it does take a lot 
of resources to be constantly monitoring what all the Federal 
agencies are doing. Within NTIA we do try to do periodic 
reviews, but one of the things we are trying to explore are 
incentives for good behavior.
    We actually had a very interesting discussion when we had 
our spectrum summit back in April. We had one of the officials 
from the U.K. who came over, and they are experimenting with an 
interesting approach for spectrum efficiency for non-auctioned 
services and Government services. Specifically they are 
charging an annual fee of a substantial nature that the 
Government agencies need to pay and that licensees of non-
auction services need to pay. The idea is that if the figure is 
significant enough it is going to cause people to review and 
decide whether or not they really need to retain the spectrum.
    Obviously, the devil is in the details as to how you create 
that mechanism and how you ensure that it continues to provide 
incentives. It was a very interesting discussion. The U.K. 
official was relating their experience so far and it is very 
limited because the fee is something that they have just 
implemented. That is just one of a number of ideas, and I think 
the direction we really need to move in is to look at what 
sorts of spectrum-efficient incentives can we place not only on 
Government licensees, but on those in the private sector as 
well, to manage their own spectrum efficiently.
    Senator Burns. This is the initial hearing on this issue 
and we are just trying to lay the groundwork on where do we go 
from here and how do we establish a relationship that we can 
formulate policy. I think it is very important to the Chairman. 
I know it is important to this Senator on how we proceed.
    Thank you, Mr. Chairman. I will have some more questions 
later.
    Senator Inouye. Thank you.
    Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman.
    Let me begin by asking you about some of the new 
technologies that may alter some of the assumptions about 
spectrum allocation. Software-defined radio may permit devices 
that do not use, for example, a fixed slice of spectrum, but 
instead adapt to whatever spectrum is available at the time. 
Ultra-wideband uses quick pulses of energy across a wide 
frequency range, sharing spectrum with more traditional 
spectrum users.
    I think I would like to begin by saying what is your sense 
of how these new technologies may change the way the country 
thinks about spectrum management and how should that affect 
today's debate? Do you want to begin with that, Mr. Sugrue?
    Mr. Sugrue. Those technologies are very exciting and 
potentially very profound for how we approach spectrum 
management. If they fulfil all their potential, as some of 
their most enthusiastic advocates describe them, they could be 
the silver bullet to some extent. In other words, they could be 
so flexible, so adaptive to the spectrum environment in which 
they find themselves, as you describe, they could search out--I 
am talking about software-defined radio right now--search out 
what frequency is available at a particular time and use that, 
so that some of the traditional approaches we use of 
allocation, block allocations and assignments, may prove to be 
obsolete or even counterproductive.
    The Commission has proceedings on software-defined radio 
and adopted some rules to permit the development to go there. 
By the way, as an operational matter it is still a ways from 
being as flexible and adaptive in real time as I describe. But 
there is a lot of work and the Defense Department is actually 
doing a lot of work in this area.
    One benefit from all the work our friends on the military 
side do on spectrum matters is that over time some of that, 
indeed a lot of that, will filter into the commercial sector in 
constructive ways.
    There are regulatory issues that do crop up. The recent 
disputes about ultra-wideband, for example, were an example of 
that. The ultra-wideband proponents said: We can spread our 
signal across multiple bands, and no one would even know we are 
there, because the only interference would be below the noise 
level. People in those bands who were concerned about them 
said: We do not believe that or we do not have confidence of 
that, and if it does not work that way and we have 
interference, some very bad things could happen.
    So it is not quite a slam-dunk yet, and technological 
debates will have to take place. But I think they are very 
exciting and, as I said, potentially very profound.
    Some of the issues we would have to deal with, for example, 
on a software-defined radio, if you were outside this building 
and you had a software-defined radio, found a frequency that 
was licensed to, say, a particular carrier and you were not a 
customer of that carrier, could you just grab it and use it on 
the ground that, well, it is available, it is not being used 
now? Is there a payment mechanism that would have to be in 
place?
    So there are a number of nontechnological issues that would 
have to be addressed going forward. But we are very excited 
about the potential.
    Senator Wyden. Ms. Victory, Mr. Price, and then I want to 
ask about one other area. Ms. Victory.
    Ms. Victory. Well, I think you have raised what some of the 
challenges are with new ways of thinking about dealing with new 
technologies. Those are certainly challenges that we need to 
tackle because it is very important.
    But I wanted to highlight that, with respect to dealing 
with our spectrum management challenges, there are really three 
approaches. One is to make more spectrum, which sounds silly 
but is actually possible because with new technology you are 
constantly expanding the bounds of what is useable. Indeed, I 
have met with one company that is using lasers to try to bridge 
that last mile, and they are outside the bounds of what is 
currently the regulated spectrum. They are being very efficient 
by doing that.
    Another way is to share, and I think some of these new 
technologies are prime examples for providing us with new, more 
efficient and more effective ways to share. Yes, there are 
regulatory challenges in dealing with that, but that is clearly 
a very promising approach.
    Then finally, there is more efficient technology--using 
less of what you have to provide the service. I think we need 
to pursue all three approaches. I know the FCC is looking along 
those lines and so is NTIA.
    Mr. Price. Sir, I agree wholeheartedly that ultimately this 
spectrum--there is only so much beachfront property and we want 
more and the commercial industry wants more, public safety 
wants more. So we fully support a national plan, but ultimately 
a national plan is going to have to set priorities.
    My personal view is that you are right, technology will 
solve the allocation issues. The Department of Defense is 
spending hundreds of millions of dollars on spectrum-efficient 
kinds of technology, technology that I cite in my written 
statement some of the ways: frequency and bandwidth agility, 
phased array antenna configuration, interference mitigation 
techniques, congestion control.
    We have a number of programs at DARPA, one called XG which 
looks for the holes that are not being used. We have a 
program--well, the Department, as you know, is one of the 
founders of ultra-wideband, which you mentioned, CDMA, 
software-defined radio. We are looking at that. We have 
started--DARPA has started a program called NETX looking at 
ultra-wideband, to see how it can be used and how it can 
coexist with defense systems.
    The Defense Science Board last month kicked off its study 
on wideband RF and wideband communications. Our office along 
with the Air Force and others are looking at laser 
communications for satellites.
    So there are a number of different areas where technology I 
believe will significantly help the Department and the 
commercial sector.
    Senator Wyden. The reason I asked about technology is I 
think there is the potential here for some real breakthroughs. 
But I will tell you that, no matter how far we get with these 
new technologies, we are still not going to be able to address 
this issue as the American people deserve without some 
fundamental changes in the way we make this policy. For 
example--I want to address this to you, Mr. Sugrue, and Ms. 
Victory--I think what is going on at the FCC and what the 
administration is doing in this area is very useful and very 
constructive.
    But my concern is that at the pace that we are going here, 
this will be the longest-running battle since the Trojan War, 
because as I look at it the FCC is essentially going band by 
band. So this is going to mean proceedings on proceedings and 
more proceedings, I think just for years and years.
    I think what the administration is doing, Ms. Victory, with 
respect to looking at other countries, the U.K. and the various 
studies under way, is also very useful. But my sense is that 
this is just going to take eons to get it done at this rate. In 
particular, I think we all know what needs to be done. The 
commercial side lacks adequate incentives with respect to 
sharing spectrum and flexibility and the same is true on the 
Government side. We all recognize that commercial uses and 
governmental uses are different and the incentives that will be 
needed on both sides are different as well.
    I think my question here is, Ms. Victory, would it not make 
sense for the administration now to set down with the Congress 
on a bipartisan basis, with Chairman Inouye and Chairman 
Hollings, Senator Stevens, the leaders in this area, roll up 
our sleeves and say: We are now going to move together over the 
next 6 months, say, to come up with a comprehensive reform 
plan?
    My guess is that you can do a big chunk of this 
administratively. There may be some areas where legislation is 
needed, but I think you could do a big chunk of this 
administratively. The Congress is anxious to do this. There is 
not anything partisan about that. That way we get beyond this 
sort of process like we are seeing at the FCC on the commercial 
side, where we just go band by band by band, and it is going to 
take forever.
    You and I have talked about this. I have talked about it 
with Chairman Powell. I just think we ought to recognize that 
is what it is going to take here, and I would be interested in 
getting your reaction on the record with respect to this point.
    Ms. Victory. I would agree with you that the piecemeal 
approach is not the end game. I think we are stuck with the 
piecemeal approach to deal with some of the current challenges 
that are now in front of us. But I do agree that we need to 
have an overall approach. That is one of the reasons we kicked 
off our spectrum summit in April, and we are trying to work 
with Chairman Powell. We would be pleased to sit down with the 
Members of this Committee to do some brainstorming, because if 
we are going to have a creative approach to this it may be that 
some legislative changes are necessary in addition to 
administrative changes. So we would be pleased to sit down with 
this Committee.
    Senator Wyden. When do you think we can say, all right, we 
have looked at a number of these issues, the FCC is going at it 
band by band; now we are going to have a bipartisan effort, the 
Congress and the administration, to address this in a 
comprehensive way?
    Maybe, Mr. Sugrue, you would like to get into this as well. 
But I would like both of your opinions, because I think until 
we make that fundamental judgment, we are going to find it very 
hard to make the kind of progress the country wants.
    I think this is the communications ball game. I know a lot 
of people in the telecom sector would not agree with this 
comment I am going to make, but I think those fights are 
yesterday. I think this is where it is at, folks, and I think 
we ought to recognize it. I think we ought to get on with it. 
If I had my first choice, I would not leave until Mr. Sugrue 
and Ms. Victory said, we want to work with Chairman Inouye and 
Senator Stevens to come up with a bipartisan plan. I am not 
going to maul you or anything like that this morning, but that 
is what I think really needs to be done.
    Mr. Sugrue, your reaction?
    Mr. Sugrue. Well, I think you can leave now, Senator, 
because I think we are happy to work with you and the Committee 
on developing such a plan. I do not mean to be flip about it. 
But we do have this--Chairman Powell just announced the 
spectrum policy task force, which is working on a very 
accelerated schedule. In fact, our first feedback from people 
when we put out our public notice was: How do you expect us to 
answer these questions, considering how broad they are and how 
deep they are in terms of spectrum management policy, in 30 
days? That was the comment cycle.
    What we are telling people is: You do not have to answer 
every question in that PN. Pick out the five that are the most 
important to you and address them, and we will work it over the 
summer.
    We have been proceeding with a number of reforms band by 
band. Secretary Victory mentioned spectrum leasing as a reform, 
which would increase the flexibility, allow spectrum to move 
more easily, and use a marketplace mechanism. People use land 
as an analogy. Leasing is used, obviously, all the time in 
land. We have been permitting leasing on a band by band basis.
    I think we are at the point where that has some virtue, in 
that it gives us an experience base, both as to how it works in 
the real world, also a regulatory and legal base to go forward. 
I think the Commission is working on generalizing that approach 
for the entire bands that the Commission oversees.
    Senator Wyden. How different would the allocation system 
look 3 years from today if we just said, okay, FCC, continue to 
do your own thing the way you are doing it?
    Mr. Sugrue. Well, if you left us to our own devices, I 
think we would be moving towards significant reforms in the 
direction I think that you indicated. At least that would be my 
anticipation. I do not want to prejudge what the Commission or 
any particular Commission would do.
    The trend is certainly toward greater flexibility. That is, 
rather than say you have to put this service in these megahertz 
and then if it turns out the marketplace does not reward that 
service, then you have got to come back, do ``Mother may I, 
FCC, may I change this from a mobile service to a fixed 
service, may I change this from a one-way service to a two-way 
service?'' That takes 2 years because people, potential 
competitors, come in and say: No, that would be terrible, you 
cannot let that happen, or whatever.
    Just say ``No, you can do one-way, two-way, mobile, 
fixed.'' We try to write general interference rules. 
Practically all the allocations we have done, at least in the 
3\1/2\ years I have been here, have been in that direction. We 
could probably pick out one or two exceptions for various 
special reasons, but that clearly is the trend.
    But you are quite right, there is a legacy. The entire band 
has been pretty much allocated, at least the most valuable 
parts of the band, and a lot of those legacy rules are very 
specific, very technology-specific, and very inflexible.
    Senator Wyden. I am going to wrap up with this, Mr. 
Chairman.
    Ms. Victory, I think Mr. Sugrue just made my point in his 
last answer. This is an individual who I know is dedicated and 
committed to these changes, and it is in your testimony. When I 
asked him what it would be like in 3 years under the FCC's 
current system, he essentially--in fact, his exact words: We 
will be moving towards significant reforms. Not this will be 
completed, that will be completed. We will be moving towards 
significant reforms.
    I will close by saying I think we can do better. Would it 
not make sense to take a kind of more comprehensive approach 
and begin that now? Maybe what you do is you go at it on a two-
track system. You continue these various piecemeal kind of 
efforts, but we also say we are going to go at it with the 
Congress to try to put in place the kind of comprehensive 
reform effort that can allow Mr. Sugrue to answer that question 
differently than he just did.
    I want him to be able to say, for example, that in 3 years 
we completed this and this, in year 4 and 5 we want to do this 
and this. I think his last answer, from a good man who believes 
in this, sort of highlights what needs to be done here.
    Mr. Sugrue. May I amend my answer to the past tense: Moved.
    [Laughter.]
    Ms. Victory. I agree with Tom's comments. And I agree with 
yours as well. I think you should be moving on a two-track 
system. We should be thinking the big thoughts as to what the 
end game is and be moving quickly to get that in place. We 
stand ready to work with you on that.
    But we also will need to deal with these current challenges 
that come up while we are working on our overall solution. So 
we are happy to work with this Committee.
    Senator Wyden. Thank you, Mr. Chairman.
    Senator Inouye. Thank you.
    Senator Allen.

                STATEMENT OF HON. GEORGE ALLEN, 
                   U.S. SENATOR FROM VIRGINIA

    Senator Allen. Thank you, Mr. Chairman. I thank you for 
calling this hearing today and thank all the witnesses. I am 
sorry I could not be here. We had a Foreign Relations Committee 
meeting at the same time with the Prime Minister of Israel 
Ariel Sharon.
    I do want to associate myself--and I have been looking at 
notes, but listening to Senator Wyden's remarks, and do 
associate myself with the sentiments that he expressed and the 
importance of moving and acting. Obviously, we are going to 
have to study and be considerate of all the different aspects 
of the spectrum allocation management issue.
    I understand that Senator McCain had mentioned how 
important this is and it needs to be reemphasized how much 
growth, substantial growth, there has been in the wireless 
industry, both internationally and in the United States. Better 
quality of service, greater functionality in product offerings, 
and faster transmission speeds largely account for the large 
increase in public electromagnetic spectrum demand.
    According to the Cellular Telecommunications and Internet 
Association, there are over 130 million wireless subscribers in 
the United States, triple the number of subscribers in 1996. 
Additionally, traffic volume--and this is why we have to move--
the traffic volume in terms of minutes of use has grown by more 
than 75 percent a year for the past 2 years, and there is no 
reason to believe that that trend will not continue.
    In the international marketplace, Third generation wireless 
services are providing high-speed Internet access. Analysts 
predict approximately 1 billion subscribers will make use of 3G 
networks in a decade's time, and full services based on 3G 
technologies are expected to be available in most countries by 
the year 2006, offering downloads speeds--and this is what I 
think is great--download speeds of up to 2 megabits per second.
    Now, clearly spectrum is becoming one of the most valuable, 
scarce resources now and obviously in the near future. I would 
like to underscore two points that I think are most important 
in considering any overarching spectrum management policy. 
First, it is important to emphasize that the world community is 
moving forward with third generation wireless services with or 
without the United States. I am one who is very competitive and 
wants the United States to stay in the competitive lead. The 
reason we are strong in some regards is because creativity 
flourishes in this country, much of it from the private sector.
    Now, it is up to the Congress as well as the FCC, NTIA, and 
the Department of Defense together to make sure there are not 
any impediments to the growth and the progress of this 
country's wireless capability for consumers and enterprise. We 
need to make sure that the United States stays competitive 
internationally.
    Additionally and importantly, third generation wireless 
services have the potential to significantly impact the 
broadband deployment and access problems throughout rural areas 
of the United States. We have talked about incentives and I 
support the Rockefeller broadband tax credit because it is 
technology-neutral, and it is not just going to address DSL and 
the local co-op. There is a lot of dirt you have to dig up and 
to the extent you mix the wire or the fiber with wireless is 
the way that I think rural areas we will be able to bring 
broadband access to people in rural markets. That is a method 
that I think is a cost-effective method of delivering those 
broadband services.
    Secondly, with regard to any spectrum reallocation it is 
important that we act responsibly towards essential security 
incumbents. We can argue what is essential. In my view one of 
the main reasons the States and the people created the Federal 
Government was for national defense. So essential security 
incumbents, especially national security interests, need to be 
taken into account.
    With that said, there are reallocation plans being 
considered which offer incumbents responsible approaches to 
relocation. Now, I think it is a bit of a legal fiction in the 
way that the Federal Government looks at things to look as if 
the incumbents have a property right to their spectrum 
allocation. I have and will continue to support the 
administration's proposal for a relocation trust fund where the 
incumbents receive a portion of the auction revenues to pay for 
both the relocation costs and any necessary system upgrades.
    Based on our country's current demand for wireless services 
and the additional benefits for third generation service, I 
think it is increasingly important and the time is really now 
to move. It is not going to get done this year, but it needs to 
start. We need to know what we are doing. By this time next 
year, we need to know what the game plan is, the strategic 
plan, and it needs to be formally executed.
    It is important, I think, while we do this to harmonize the 
United States in this effort with the rest of the world. We 
need to increase the public spectrum consistent with 
international providers and also to make sure that we are 
competitive with international providers.
    With that said, Mr. Chairman, I would like to ask a few 
questions here, first of Mr. Price. This is a follow-up 
question on your questions previously asked of Deputy Secretary 
Price. It has to do with the frequency band that is used most 
by the Department of Defense.
    Most of the rest of the world operates in the 1700 to 1800 
megahertz bands for wireless commercial use. The major 
difference between the United States and the rest of the world 
is the use of the portion from 1755 to 1850 megahertz. In the 
rest of the world that band is used primarily for commercial 
use, where in the U.S. that band is allocated to the Department 
of Defense.
    Now, let me ask you this just as a technical matter. When 
the Department of Defense operates or is operating overseas, 
has the Department of Defense experienced any interference with 
international users in this band?
    Mr. Price. We experience interference with many of our 
systems in many different theaters all the time. One of the 
tasks of the frequency management and communications folks, the 
J-6's at the combatant commanders, is to work those problems 
out with the host nations. As I mentioned earlier, we had one 
tactical radio that is actually in the band that you are 
referring to, that took us in Central Command, CENTCOM's area 
of operations, 6 years to get host nation approval. But we have 
gotten it.
    So in direct answer to your question, we are very 
comfortable that the systems we have in the band from 1755 up 
to 1850. we have very workable, very real negotiated bilateral 
solutions, so that the systems that are there can work in those 
bands internationally for the long term. So we are comfortable 
with that. We have developed those.
    One of the concerns about moving is if we move to another 
band, how long--will it take 6 years? Again, will we restart 
the clock? Where will we go and how long will it take to get 
the same operational competition?
    So the Department of Defense has never said that is it, we 
will not move, we are stopping, head in the sand, that is it. 
We are very active with these folks in the 3G viability study. 
But one of the things we have said--two of the things we have 
said is: one, over time we believe that as we transform and 
move to a network-centric force we will need more spectrum, not 
less. We are feeling spectrum-constrained. So we need to think 
through how much additional spectrum we will need over the long 
term to meet our constitutional obligations.
    It is an important point. So I think that probably sums up 
where we come out.
    Senator Allen. Well, the question on this then becomes, on 
the relocation, I understand you may need more spectrum and so 
forth. A lot of times, as you well know, and I guarantee you 
the presiding Chairman today understands this as well, that 
sometimes for national security interests the military does not 
have time to be renegotiating and trying to get the spectrum or 
the band area to operate efficiently. They need to move quickly 
and cannot dawdle for proper efficiency in communications.
    The question really becomes if we relocate to another band, 
will that other bandwidth eventually be utilized for commercial 
purposes in some other part of the world. That is why this 
whole effort needs to be coordinated, and it will be actually 
beneficial to work with our NATO allies and other countries.
    But the reality is at this point, I doubt if the rest of 
the world is going to change their commercial use of the 
spectrum area between 1755 and 1850. So it is really a question 
of whether we relocate or they relocate. Some of this really 
gets back to what Senator Wyden was saying and whether or not 
there are advances in technology. It is an engineering, a 
technology or a technologist engineering matter to get more 
information or greater utilization of existing spectrum.
    Do you all--and I guess I would ask Ms. Victory or Mr. 
Sugrue or any of the witnesses--What incentives, what could we 
do as a Government to incent advances in technology? This is 
kind of a follow-up on Senator Wyden's lack of patience. And I 
do not think there is anything wrong with having a lack of 
patience. I am impatient with this as well. I think we need to 
be moving quickly.
    Are there any things that we can do to incent a greater 
utilization of existing bandwidth, which would actually help 
the Department of Defense? I am not going to want to take it 
from the Department of Defense, they are a necessity which is 
important for our freedoms and our protection.
    So do you have any suggested incentives or policies that we 
could put forward so that we can better utilize existing 
spectrum bands?
    Mr. Sugrue. Well, yes, Senator, two sets of ideas. One has 
to do with greater reliance on market forces. That is, along 
the line I was discussing with Senator Wyden, providing 
licensees with greater flexibility in both the use they put to 
the spectrum, that the spectrum can be used, and also 
flexibility in terms of being able to transfer some or all of 
their rights under a license, on which we have some 
flexibility, but it is constrained in certain ways.
    The reason that would encourage flexibility is--pardon me, 
innovation--is if you come up with a new idea right now you 
have got to find a band to put it in and then you have got to 
find a licensee. Well, first of all, some bands, you are not 
allowed to put that in, if it is for a particular use or, as I 
said, even a particular technology. Then we have to go through 
a regulatory proceeding to do that, even though introducing a 
new technology, you think that should be apple pie and 
motherhood. It often is not, for various strategic or tactical 
reasons of various licensees. So we get involved in a big 
brouhaha, legal challenges, and so forth.
    If we just said you can put any technology in there and 
allowed the market to reallocate those resources, not without 
being subject to Government oversight, but hands off a little 
bit more than we have had in the past, I think that would go a 
long way.
    Another approach would be, frankly, a little bit more 
interventionist, by actually writing rules. This dichotomy is 
set out in the public notice that the spectrum policy task 
force released last week: Should we have rules on spectrum 
efficiency, for example, that say you have to use, you have to 
hit some measure of spectrum efficiency? For example, in the 
public safety bands at 700 megahertz we did specify; 25 
kilohertz is the standard voice channel on a public safety 
system. We said you had to start at 12.5, in other words twice 
that, and you have to migrate to 6.25 over time, and there is a 
schedule to do that.
    We could do comparable things in the commercial side. Our 
approach has generally been on the commercial side we try to 
provide the right market incentives for that and on the public 
safety and private side we often feel we have to intervene 
somewhat.
    By the way, the public safety agencies typically are in 
favor of at least reasonable spectrum efficiency standards, in 
part because a lot of their spectrum is shared, so if one 
agency is using spectrum inefficiently that detracts from the 
pool that is available for all of them. So I think it is a win-
win there.
    Senator Allen. Well, thank you.
    Is there any legislation, Mr. Chairman--or I would ask Mr. 
Sugrue--so far as the first point, I think that it makes sense 
that if you have Government agencies the Government can have 
greater oversight or intervention to make sure that they are 
not utilizing--it is a question of Government efficiency, 
really, in a technological sense.
    Is there any legislation proposed and has it been subject 
to any comment on your first point, as far as the greater 
flexibility and utilization of existing granted bandwidth?
    Mr. Sugrue. On market mechanisms? I think for the most part 
we have some discretion. I will look over my shoulder. I am 
looking at our Deputy Chief who is in charge of the auction 
program and she would chastise me if I did not mention our 
auctions authority expires in 2007 and we would lose that very 
effective market-based mechanism in assigning licenses, which 
is a little different than what you talk about, but it is part 
of the toolkit we have. So an extension of that at an 
appropriate time would be useful.
    But I can give that some thought and we can get back to you 
on that.
    Senator Allen. Well, again, I do not think that we are 
going to solve it this year, but this Committee hearing is very 
important. We have had a previous one in this Committee earlier 
in the session, but I think that we need to build momentum for 
solutions and getting this solved.
    As far as 2007, whether we make it an Oklahoma land rush 
approach or continue with the way it is, that remains to be 
seen. The most pressing issue is this. I look forward the 
working with you. I know Senator Burns has great concerns on 
this as well, and I look forward to working with him, you, Mr. 
Chairman, Senator Wyden, and others.
    Yes, Mr. Price. I see you want to say something to me or to 
share with the rest.
    Mr. Price. Thank you, sir. I just want to make a couple of 
quick points. Going back to the last question, I heard the 
point. I would just caution you a little bit, if I may, on the 
harmonization issue worldwide, some would say an argument, some 
would say rhetoric. I think it is a little bit more myth than 
reality that the world is harmonized around any bands.
    I think it is fair to say that if you actually look at 
specifics, the world is waiting for the United States to see 
where, to some extent, where we go. In fact, where other 
countries have put 3G, in many cases it is where the U.S. has 
2G. So our view is that harmonization should occur, but it 
should occur through technology. You already have tri-band 
radios. The Department of Defense is working on software-
defined radios. Our JTRS core platform will have 33 different 
wave forms, so you can go in almost any band with a single 
radio. In our view it obviates the need to harmonize just 
through spectrum bands.
    The second point is you mentioned property rights. It is 
not our place to get into an argument about whether or not 
spectrum is property rights. That is the folks to my left to 
get into that argument. But the important thing for the 
Department and I think as people think through a national 
spectrum plan is the need for incumbents to have predictability 
and certainty. The risks of should we move, will we have to 
relocate, where will we relocate, it affects us; as you 
mentioned, it affects the host nation; it affects NATO; it 
affects our allies, our coalition partners.
    I was in a meeting yesterday for 3 hours with the Joint 
Strike Fighter program office, a large new program, a large 
program at the Department of Defense. These planes will be 
flying, I do not know the exact year, some 10 years out. They 
have already identified the spectrum bands they are going to be 
in for over 20 different uses: radars, command and control, 
communications. Those have not even been close to being 
procured yet and yet we have already picked the spectrum bands.
    So to have predictability and long-term certainty as to 
where we are going to operate is a fundamental issue that DoD 
fears going forward.
    Senator Allen. Well, I am glad you shared those views with 
us, not just me, with all of us, because I do not think any of 
this will ever arise or occur in the event that the Department 
of Defense feels, justifiably, that it is harming their 
essential mission, which is the primary mission of the Federal 
Government. I think that a lot of the technological advances 
actually will be coming from the military. The fact that our 
military is so technologically advanced, especially with our 
air superiority and superiority on the seas, is what is 
allowing us to fight this war on terrorism with minimal 
casualties to ourselves as well as minimal casualties for 
indirect hits on nontargets.
    I do think it is important that there is a predictability 
for the military as you deploy and procure the systems in the 
future. It is also important, predictability and credibility, 
for the private sector if people are going to be investing 
millions, if not billions, of dollars on various platforms or 
enterprises, to know that when they do deploy it it is not just 
going to be flippantly changed by the Government.
    The flexibility ideas that Mr. Sugrue is talking about has 
no harm whatsoever to the Department of Defense. It is a 
creative way of maybe allowing the private sector to do what 
you are envisioning, as far as the way to switch from maybe a 
dozen different spectrum bands. I realize the DoD concerns are 
important and it can never be emphasized too much. However, I 
do think that we are getting behind in 3G, and 3G is very 
important internationally. I think it is also important for our 
economic competitiveness as a country and has the potential to 
be very helpful in rural areas as far as getting high-speed or 
broadband to rural areas.
    I know that is not necessarily a primary concern of the 
Department of Defense, but it is important for homeland 
opportunities.
    Yes, Ms. Victory.
    Ms. Victory. Senator, since you had emphasized 
predictability and certainty as something that you also hear 
from the private sector, I just wanted to mention that I hear 
it from both sides as well. Government agencies want 
predictability and certainty and so does the private sector. I 
think one of the challenges in spectrum management is trying to 
provide that predictability and certainty, when technology and 
consumer demand and Government demand is anything but.
    So I think that we are constantly trying to do a little bit 
of a balancing here. But I think the predictability and 
certainty would be a lot easier if technology was static and 
consumer demand was static and Government ideas were static. 
But I think the challenge that we all face is that this is a 
very dynamic environment and trying to come up with that 
predictability and certainty in this environment is going to be 
extremely hard.
    Senator Allen. Well, we certainly do not want any static 
thought in Government. We do not want static approaches in the 
private sector. The status quo is not good enough in this area 
or anywhere else. The advances in technology are wonderful for 
our quality of life, for communications, for security and all 
the rest. So when you have a situation that is so dynamic as 
this, where there are things that are in constant motion and 
every new day there is a new improvement and a better way of 
doing thing, that is exciting.
    In a situation such as that, what you have to have are 
guiding principles which people can operate in. Now, obviously 
for the military, their guiding principles are national 
security. For the private sector, you have guiding principles 
or rules that will allow them to adapt to change, to innovate, 
and to improve within a credible, stable situation.
    That is where we have to look at this as a philosophical 
approach of how are we going to address this. That is why I 
think the idea of the creativity or the flexibility, making 
sure, though, that they are not squatting. In other words, it 
is being utilized when it is a Government service, so they are 
not squatting or slow or static and utilizing more than they 
are wasting. In the private sector, maybe if you could give 
them greater opportunity, greater flexibility. If they do not 
want to use it, maybe they can sublease it, so to speak.
    So I look forward to working with all of you. I think it 
can be achieved. It will not be easy, but if there is a will 
there is a way, and we have to adapt, we have to innovate, and 
we must improve.
    Thank you all. Thank you, Mr. Chairman.
    Senator Inouye. Thank you very much, Senator.
    Because of the complexity of the issue before us and 
because of the uncertainty and the ambiguity of the policy, if 
we are to have an impact on this issue, this will be the first 
of a whole series of hearings. We have yet to hear from other 
interested parties.
    Accordingly, the record will be kept open for this hearing 
for 3 weeks, and during that time if you have any corrections, 
addendums, or suggestions or statements that you would like to 
place in the record. It will be open to the Members of this 
Committee to submit more questions if they so wish.
    I have just one question I would like to ask Mr. Price 
before we adjourn. I am certain that after September the 11th 
home security missions resulted in more extensive use of the 
spectrum by your Department. In conducting combat air patrol 
missions over the cities as part of Operation Noble Eagle, did 
you experience any difficulties in coordinating spectrum 
operations with civil authorities, like the FAA?
    Mr. Price. Almost shockingly, we did not. That was because 
within hours the FCC, FAA, NTIA, Department of Defense worked 
together around the clock to coordinate extensive use of 
military aircraft over the United States. There were also NATO 
AWACS planes as well as U.S. planes. It was a very complex 
ecosytem of military aircraft that were protecting the skies, 
not only for the first few days, but for a number of months.
    It took a significant coordination within the interagency--
there were no rules, no regulations. This was just hard-working 
people--to help coordinate that, and subsequently helped 
coordinate when there was military support to the 2002 Winter 
Olympics in Salt Lake, helped coordinate when there were 
National Guard and other troops at airports around critical 
infrastructure.
    These were uses that had not heretofore been anticipated. 
We did not necessarily have spectrum where we had used it in 
the past, assignments or allocations. But the hard work of a 
number of people within the Government allowed that to work 
very smoothly.
    Senator Inouye. I wish to commend you for that. Do you 
think that this coordination should be made part of rules and 
regulations?
    Mr. Price. Well, we're talking through how to work similar 
kinds of issues as they arise and should they arise. Not only 
airplanes but first responder kinds of events. I do not know if 
it is rules, regulations, but we are thinking through all those 
processes within the Government.
    Senator Inouye. It would appear that in this crisis 
everyone saw the need for coordination and collaboration. Do 
you think this can happen again in the crisis we face today?
    Mr. Price. I believe so.
    Senator Inouye. With that high note, I thank you very much.
    [Whereupon, at 11:42 a.m., the Committee was adjourned.]

                            A P P E N D I X

      Response to Written Questions Submitted by Hon. Max Cleland 
                           to Peter Guerrero

    Question 1. Do you believe there currently exists a non-partisan 
person or group who can objectively review spectrum recommendations and 
uses? If not, do you believe such a person or group would be helpful?
    Answer. Our work to date has not directly looked at whether a 
person or group outside of the current spectrum management process is 
needed. However, we are currently gathering information from spectrum 
management organizations in several countries and have found that the 
organization of spectrum management functions varies considerably. In 
the U.K., for example, the United Kingdom Spectrum Strategy Committee 
(UKSSC) addresses issues that affect all spectrum managers within the 
UK Similarly, we found that in Canada, an entity known as the Radio 
Advisory Board, which includes trade groups and government 
representatives, is very important in gaining consensus and developing 
recommendations on spectrum policy issues that are provided to Canada's 
spectrum managers. We are continuing to gather information for several 
other countries as well, and will report in January on these issues.

    Question 2. Do you believe this country has in place an efficient 
spectrum use plan? Why or why not?
    Answer. Virtually none of the federal or commercial officials we 
interviewed said that the U.S. has a national spectrum plan or 
strategy. FCC officials told us that while FCC does planning on 
specific spectrum issues, it does not plan comprehensively by itself 
and there has been no comprehensive, coordinated interagency planning 
by FCC and NTIA. They noted that the closest thing to a national 
spectrum strategy is the process used by FCC, NTIA, and the State 
Department to reach consensus on a U.S. position for agenda items for 
World Radiocommunication Conferences.
    There is debate, however, as to the usefulness of long-term 
planning. A key problem is the difficulty of predicting future trends 
in wireless services. For example, FCC officials noted that the growth 
in cell phone and PCS deployment was much greater than either FCC or 
the industry anticipated in the early 1990s. Emerging technologies may 
not develop as planned and could result in wasted spectrum if plans are 
not flexible. For this reason, FCC prefers to rely on market forces as 
much as possible. For its part, NTIA has done studies of long-term 
federal spectrum needs. Overall, there is a consensus around the 
importance of defining core values and goals for spectrum management, 
while retaining flexibility to allow for technical innovation.

    Question 3. Cost of moving from one band of spectrum to another is 
an issue. However, do you believe that if a move could result in 
greater efficiency, then it could result in actual cost savings?
    Answer. It is certainly possible for the savings from greater 
spectrum efficiency to outweigh the cost of moving. However, it can be 
a difficult issue to estimate these relative costs and benefits. In a 
well-developed market environment, market forces provide information 
about the relative costs and benefits of alternative arrangements. With 
spectrum resources, however, these markets are not fully developed. 
Moreover, for some users, including the Department of Defense and 
certain other government agencies, the financial evaluation of 
alternative means of achieving a particular mission capability would be 
extremely complex even if additional market information were available. 
Our January 2003 report will be looking at whether there are feasible 
ways of valuing spectrum when market information is not available.

    Question 4. How long do you think it would take to do a 
comprehensive examination of our domestic spectrum plan?
    Answer. GAO believes that a comprehensive spectrum evaluation could 
be important, and we are examining this issue for our January 2003 
report. We believe that an appropriate analysis should address the 
multitude of spectrum-related issues the Congress faces today, because 
these issues are highly interrelated. Moreover, an effective analysis 
requires the involvement of all interested parties. The United Kingdom 
completed a comparable review in one year. A study in the US could take 
more or less time depending on the resources devoted to the review.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Ernest F. Hollings 
                           to Peter Guerrero

    Question 1. What can be done to improve U.S. participation in the 
World Radiocommunication conferences?
    Answer. A central challenge for United States spectrum management 
is preparing for the WRC. This has become more difficult in recent 
years because of increases in the frequency of conferences, the number 
of attendees, and the size of conference agendas. Federal and non-
federal spectrum experts have suggested a number of improvements to our 
WRC preparatory process.

   Appointing the head of the U.S. delegation earlier. Many 
        experts believe that the appointment of an ambassador to head 
        the U.S. delegation to the WRC just six months before the 
        conference does not leave enough time for them to adequately 
        prepare for the conference and resolve any disagreements in the 
        U.S. position. Appointing an ambassador for a longer term, or 
        having a career civil servant head the delegation could address 
        this problem. However, each of these choices also has 
        drawbacks. Appointing an ambassador for a longer term would 
        involve a potentially time-consuming Senate confirmation 
        process. A career official, on the other hand, would lack White 
        House connections and ambassadorial status. State Department 
        officials also said that the ambassador title provides a good 
        tool for recruiting top non-government candidates. The 
        government may have found an informal way around the short term 
        of the appointment. For the last several international 
        conferences, the government has tried to identify the person 
        that is to become the ambassador and involve her/him in 
        conference planning prior to the 6-month appointment. For 
        example, this approach was effectively used for the 2000 WRC 
        ambassador, State Department officials said that she was told 
        that she would be appointed to the position and given a 
        temporary telecommunications policy position in the White House 
        four months prior to her appointment. That allowed her to learn 
        the issues and observe WRC preparatory meetings, but she could 
        not lead the meetings until her formal appointment about 5 
        months before the conference.

   Setting deadlines for achieving important WRC preparatory 
        objectives. Federal officials said that some of the difficult 
        issues regarding the U.S. position for WRC agenda items are not 
        resolved until the eve of a WRC, when the need to reach a 
        decision has become urgent. Setting firm deadlines for 
        formulating and finalizing the U.S. position for an upcoming 
        conference could help to force earlier action. However, setting 
        deadlines could have drawbacks. It is unclear how such 
        deadlines would be enforced. In addition, some of the U.S. 
        positions rely on reaching consensus with the other countries 
        in our regional telecommunications body, which will not be 
        governed by U.S. deadlines.

   Merging the separate NTIA and FCC preparation processes. 
        NTIA and FCC currently develop the U.S. position for WRCs 
        through separate processes. At the end of the WRC preparatory 
        process, the two positions must be merged into a unified U.S. 
        position. In order to accomplish this, FCC and NTIA must work 
        out any disagreements they have with the assistance of the 
        Department of State. WRC 2000 Ambassador believes that merging 
        the separate processes into one WRC planning process could help 
        resolve disagreements in the U.S. position earlier in the 
        preparatory process. However, NTIA said that the separate 
        processes are needed because much of government side of 
        spectrum policy and use is classified.

    Question 2. Congress has, in the past, called for the FCC and NTIA 
to engage in national spectrum planning. What did GAO learn about the 
status of implementing these plans and based on GAO's review what 
concerns have been raised with respect to establishing a national 
spectrum plan?
    Answer. Although FCC and NTIA conducted individual planning efforts 
of various sorts, they said that they have not fully complied with 
requirements to engage in joint national spectrum planning. However, 
the agencies have both recently indicated that they plan to comply 
through increased joint coordination and planning. For example, FCC and 
NTIA could use the momentum from recent NTIA Spectrum Summit and the 
new FCC Spectrum Task Force to fulfill their requirements for joint 
national spectrum planning.
    Please refer to the prior answer to Senator Cleland for further 
views on a national spectrum plan.

    Question 3. Do federal agencies have spectrum that is under or un-
utilized? If so, how can this spectrum be identified and better 
utilized?
    Answer. Our review did not focus on identifying unused or underused 
federal government spectrum, and we did not find any specific examples 
of such. However, NTIA does not have assurance that its activities to 
encourage efficient spectrum use among federal government agencies are 
effective. It has eliminated all of its monitoring programs due to 
staff and resource shortages, and it depends on agencies that are also 
struggling with staff and resource shortages to review their spectrum 
assignments as required. As a result of staff shortages, many of the 
agencies we reviewed are behind in conducting their reviews and/or do 
not conduct robust reviews of their spectrum use.
    Improving the quality and timeliness of frequency assignment 
monitoring and reviews would increase accountability for efficient use 
among federal agencies, but it may not be possible to centrally manage 
hundreds of thousands of frequency assignments in an effective way. 
NTIA may want to consider creating incentives at the user level to 
encourage spectrum conservation. Our continuing work on spectrum 
management is looking into the question of how other countries pursue 
efficiency in government use. For example, 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. NTIA currently requires 
agencies to pay spectrum fees (about $50 per frequency assignment), but 
the purpose of the fees is to recover part of the costs of NTIA's 
spectrum management function, rather than provide an economic incentive 
for effective spectrum use.
    Once unused or underused spectrum assignments are identified 
through monitoring, reviews, or some sort of incentive, they can be 
deleted from the Government Master File--NTIA `s spectrum database--
making them immediately available for other uses.

    Question 4. In your statement, you noted that some federal agencies 
were unable to complete the required spectrum management reviews 
because of staffing and resource shortages. How serious is this 
staffing problem?
    Answer. We found that the staffing and resource shortages were 
significant for some agencies. Several agencies told us that their 
staff had been reduced during a time when requirements of their offices 
were increasing. This problem may be getting worse. Several of the 
agencies we reviewed are facing recruitment and retention problems and/
or are facing the retirement of key spectrum management staff Several 
agencies said that the staffing problems caused them to reduce the 
timeliness and depth of their frequency assignment reviews. Some 
frequency managers said that this could lead to mistakes or inefficient 
spectrum use. Specifically, two agencies we reviewed have conducted 
spectrum management workforce needs assessments that showed their 
staffing levels to be inadequate.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Daniel K. Inouye 
                           to Peter Guerrero

    Question 1. What can be done to improve the current coordination 
process between the FCC and NTIA and more effectively allocate spectrum 
and better balance the needs of commercial and government users?
    Answer. FCC and NTIA could improve their coordination by fully 
implementing the congressional mandate to conduct joint spectrum 
planning and meeting on a more regular basis to coordinate spectrum 
issues. Although they are making progress through the NTIA Spectrum 
Summit and the FCC Spectrum Task Force, FCC and NTIA have not yet fully 
implemented these requirements.
    The current allocation process depends on FCC and NTIA being able 
to reach consensus, but this is often difficult because the entire 
usable spectrum has already been allocated. As a resul4 reallocation 
negotiations between FCC and NTIA can become lengthy and difficult. To 
help force a decision, some officials we interviewed have suggested 
establishing a third-party to arbitrate or resolve differences between 
FCC and NTIA. However, FCC officials said that there could be 
complicated legal issues of establishing an arbitrator over an 
independent commission like the FCC. In some other countries, decisions 
are made within one agency or within interagency mechanisms that exist 
for resolving contentious allocation issues. Our continuing spectrum 
work focuses, in part, on the regulatory structure for spectrum 
management in 12 other countries. It will be published in early 2003.

    Question 2. The President's FY 2003 Budget calls for a new process, 
a ``Spectrum Relocation Fund,'' for reimbursing government users for 
costs incurred when they are required to relocate to different spectrum 
blocks.
    ``The Administration will propose legislation to streamline the 
current process for reimbursing Federal agencies that must relocate 
from Federal spectrum which has been reallocated for auction to 
commercial users. Under current law, winning bidders must negotiate 
with Federal entities upon the close of an auction and reimburse the 
agencies directly for their relocation costs. The Administration 
proposes to streamline this process by creating a central spectrum 
relocation fund. Auction receipts sufficient to cover agencies' 
relocation costs would be paid into the fund, and Federal agencies 
would be reimbursed for their relocation costs out of the fund.'' 
Budget of the U.S. Government, Fiscal Year 2003, Appendix, Page 241.
    The Administration has not yet submitted language to Congress.
    Do you have any specific concerns about how such a Fund to 
reimburse government users for relocation costs might work?
    Answer. Generally, providing some certainty that government users 
would be reimbursed for having to relocate from existing spectrum 
assignments could facilitate their willingness to move. There are a 
number of ways to provide such compensation; this proposed fund is just 
one approach that appears to mitigate the burden industry would face in 
individually negotiating reimbursement amounts with each affected 
agency. Generally, whatever approach is used to compensate federal 
agencies, it is important to establish up front what control the 
Congress wants to maintain over these funds. For example, if this type 
of fund were to be used, Congress might want to maintain control over 
it by requiring agencies to obtain annual appropriations.
    Also, it seems from the description in the budget that the 
reimbursement under current law is negotiated in addition to the 
auction receipts. If the proposal is to have the reimbursement paid out 
of the auction receipts, the government may be receiving less overall 
as a result. It might be desirable to specify that the auction bids are 
to include amounts to finance the relocation.

    Question 3. Do you believe that the proposal to use auction 
proceeds to reimburse government users as outlined in President Bush's 
budget would make the spectrum management process more effective and 
efficient?
    Answer. Using auction proceeds to reimburse government users for 
moving to other parts of the spectrum would help to facilitate such 
moves to the extent that cost is a determining factor. However, other 
factors can be just as determinative as cost and even more difficult to 
resolve. For instance, government users may need to be given spectrum 
that has comparable technical qualities to the spectrum they are 
vacating in order to meet mission requirements. Also, because much of 
the spectrum is shared, interference issues may make it difficult to 
move users to other parts of the spectrum where incumbents are already 
operating. In addition, considerable time may be needed to effect a 
move, even if adequate reimbursement funds were available, as in the 
case of satellite-based systems where new satellites might need to be 
built and launched in order to obtain new frequency assignments.

    Question 4. There is some discussion that the Relocation Fund could 
be established as a trust fund. However, monies in Trust Funds are 
sometimes used for other budgetary purposes. How can legislators ensure 
that monies will be available for government users to address their 
relocation costs since in some instances it could take years for a 
government user to complete its relocation?
    Answer. Trust funds are one of several accounting mechanisms used 
to link earmarked receipts with the expenditure of those receipts. 
Concerns have been raised that, because the actual earmarked cash in 
such funds is commingled in the Treasury with other receipts and used 
to pay whatever bills the government currently has on hand, the federal 
government has inappropriately diverted funds for purposes other than 
what was intended. Treasury accounts for earmarked monies by crediting 
these collections to the appropriate funds, in this case, the 
Relocation Fund. Although monies are commingled in the Treasury, 
amounts equal to the earmarked funds are available when needed for the 
purposes for which they are earmarked. In most cases the trust funds 
are given special, nonmarketable Treasury securities in return for the 
cash. These are claims on the Treasury (i.e., IOUs) that can be 
redeemed in the future to obtain the cash needed to be spent on the 
intended purposes. History provides no evidence to suggest that the 
U.S. would not honor these obligations as it does its other 
obligations.
    However, trust funds are not the only mechanism for earmarking 
funds. Special funds are also used for the same purpose of tracking 
receipts and spending for programs that have specific revenues 
earmarked for their use. The only difference between a ``special'' fund 
and a ``trust fund'' is the word ``trust'' in the legislation 
establishing the account. GAO has said that the use of the term ``trust 
``fund is confusing to the public, primarily because in the federal 
budget the meaning of the term ``trust'' differs significantly from its 
private sector usage. The federal government does not have a fiduciary 
responsibility to the trust beneficiaries and can raise or lower future 
trust fund collections and payments or change the purposes for which 
the collections are used by changing existing laws. Use of a term that 
is not identical to a private sector term with a different meaning 
could clear up some of the public's confusion. For example, using the 
term ``special fund'' instead of trust fund could eliminate the 
confusion.
    Finally, a permanent earmarking of auction receipts limits 
Congress's ability to change priorities, especially if the trust or 
special fund has a permanent appropriation. If Congress did not wish to 
restrict its budget flexibility to such an extent, it could retain some 
control over the earmarked funds. For example, when the various 
transportation trust funds were created, Congress dedicated receipts to 
particular purposes but retained annual control, through the 
appropriations process, over the timing of the expenditures.

    Question 5. The United States seems to be at a disadvantage in the 
World Radio Conference (WRC) process with respect to other countries 
such as those in Europe. How can Congress ensure that the U.S. develops 
a U.S. position as well as names its delegation in a timely manner and 
prior to a WRC, thereby allowing for sufficient time to lobby other 
parts of the world?
    Answer. Federal and non-federal spectrum experts have suggested a 
number of improvements to our WRC preparatory process.

   Appointing the head of the U.S. delegation earlier. Many 
        experts believe that the appointment of an ambassador to head 
        the U.S. delegation to the WRC just six months before the 
        conference does not leave enough time for them to adequately 
        prepare for the conference and resolve any disagreements in the 
        U.S. position. Appointing an ambassador for a longer term, or 
        having a career civil servant head the delegation could address 
        this problem. However, each of these choices also has 
        drawbacks. Appointing an ambassador for a longer term would 
        involve a potentially time-consuming Senate confirmation 
        process. A career official, on the other hand, would lack White 
        House connections and ambassadorial status. State Department 
        officials also said that the ambassador title provides a good 
        too/for recruiting top non-government candidates. The 
        government may have found an informal way around the short term 
        of the appointment. For the last several international 
        conferences, the government has tried to identify the person 
        that is to become the ambassador and involve her/him in 
        conference planning prior to the 6-month appointment. For 
        example, this approach was effectively used for the 2000 WRC 
        ambassador, State Department officials said that she was told 
        that she would be appointed to the position and given a 
        temporary telecommunications policy position in the White House 
        four months prior to her appointment. That allowed her to learn 
        the issues and observe WRC preparatory meetings, but she could 
        not lead the meetings until her formal appointment about 5 
        months before the conference.

   Setting deadlines for achieving important WRC preparatory 
        objectives. Federal officials said that some of the difficult 
        issues regarding the U.S. position for WRC agenda items are not 
        resolved until the eve of a WRC, when the need to reach a 
        decision has become urgent. Setting firm deadlines for 
        formulating and finalizing the U.S. position for an upcoming 
        conference could help to force earlier action. However, setting 
        deadlines could have drawbacks. It is unclear how such 
        deadlines would be enforced. In addition, some of the U.S. 
        positions rely on reaching consensus with the other countries 
        in our regional telecommunications body, which will not be 
        governed by U.S. deadlines.

   Merging the separate NTIA and FCC preparation processes. 
        NTIA and FCC currently develop the U.S. position for WRCs 
        through separate processes. At the end of the WRC preparatory 
        process, the two positions must be merged into a unified U.S. 
        position. In order to accomplish this, FCC and NTIA must work 
        out any disagreements they have with the assistance of the 
        Department of State. WRC 2000 Ambassador believes that merging 
        the separate processes into one WRC planning process could help 
        resolve disagreements in the U.S. position earlier in the 
        preparatory process. However, NTIA said that the separate 
        processes are needed because much of government side of 
        spectrum policy and use is classified.

    Question 6. Should the ambassador to a WRC be appointed at least a 
year instead of 6 months prior to the conference? Should there be a 
State Department employee designated to drive consensus with respect to 
the U.S. position prior to and until the ambassador is appointed?
    Answer. As noted above, many experts believe that the appointment 
of an ambassador to head the U.S. delegation to the WRC just six months 
before the conference does not leave enough time for them to adequately 
prepare and resolve any disagreements in the U.S. position.
    The U.S. ambassador to the 2000 WRC suggested establishing a high-
level civil servant as the permanent deputy head of delegation within 
the Department of State. While that has not happened, the current 
Deputy Assistant Secretary of State for International Communications 
and Information Technology has taken the lead in chairing WRC 
organizational meetings and is mediating disagreements between FCC and 
NTIA until an ambassador is named.

    Question 7. Should the State Department be required to establish a 
timetable for resolving issues, establishing consensus and lobbying 
other countries prior to WRC? If a timetable is established, what 
incentives can be used to ensure that NTIA, the FCC, and industry work 
to meet the timetables?
    Answer. As noted above, federal officials said that some elements 
of the U.S. position on WRC agenda items are not resolved until the eve 
of the conference. Part of the ambassador's role is to facilitate the 
process of consensus-building and compromise. Setting firm deadlines 
for formulating and finalizing the U.S. position may help to force 
earlier resolution of these issues, since the presumption would be that 
the ambassador would make the final call on any positions unresolved 
when the deadline passed. However, setting deadlines could have 
drawbacks. It is unclear how such deadlines would be enforced. In 
addition, some of the U.S. positions rely on reaching consensus with 
the other countries in our regional telecommunications body, which will 
not be governed by U.S. deadlines.

    Question 8. Do you have any other concerns about coordinating a 
U.S. position for the World Radio Conference? What can be done to 
address these concerns?
    Answer. Besides the challenges to the preparatory process we 
identified, we were also told that the United States does not implement 
WRC agreements in a timely manner. Although the U.S. can informally 
implement WRC agreements, none of the agreements reached at the 1992, 
1995, 1997, or 2000 WRCs have been formally ratified by the Senate. The 
Department of State said that the delays were necessary because of the 
policy overlap in recent WRCs. In addition, NTIA officials said that 
FCC has occasionally changed parts of WRC agreements causing adverse 
impacts to government and the scientific community's use of the radio 
spectrum. FCC officials, however, stated that they occasionally 
interpret WRC agreements differently than NTIA. We continue to look 
into this issue and will report on it in our final report in August.

    Question 9. GAO has indicated that while NTIA has attempted to 
promote spectrum efficiency, there is no accountability to ensure 
government users are using spectrum efficiently. Also GAO found that 
many federal agencies are understaffed with respect to employees who 
could assist agencies to manage spectrum. The FCC has recently 
indicated its need to increase its number of engineers.
    Does NTIA believe that increasing engineers in federal agencies 
could assist agencies in better managing spectrum as well as improving 
spectrum efficiency?
    Answer. NTIA officials said that some IRAC member agencies seem to 
have a shortage of engineering expertise in their spectrum management 
departments. For example, NTIA officials noted that the Coast Guard has 
been unable to provide the needed engineering support for maritime 
issues at the World Radiocommunication Conferences. We spoke with 
officials from the U.S. Coast Guard and they confirmed this shortage of 
engineering support for international conferences and said that they 
are working to improve the situation. We asked NTIA whether increasing 
the number of engineers could help agencies manage their spectrum more 
efficiently. NTIA is currently looking at this matter and told us they 
will respond to you directly.

    Question 10. Is there anything else that can be done to increase 
the level of accountability with respect to government users and 
spectrum efficiency?
    Answer. NTIA places primary responsibility for promoting efficiency 
in the hands of the individual agencies because they are in the best 
pos ition to know their spectrum needs. Yet, because agencies are 
resource constrained they do not often conduct spectrum reviews in a 
timely or meaningful way. For example, one agency has over 1,000 
frequency assignments that have not been reviewed in 10 years or more. 
NTIA, itself has eliminated its oversight of agency spectrum due, in 
part, to resource shortages. Reactivating these oversight programs, 
which NTIA said provided important and useful information about 
agencies ` spectrum use, would increase accountability among the 
federal agency users. NTIA could also make a greater effort to enforce 
its five-year review requirement for federal agency frequency 
assignments.
    However, these efforts alone may not be sufficient given the 
hundreds of thousands offrequency assignments to be managed. NTIA may 
want to consider creating incentives at the user level to encourage 
spectrum conservation. Our continuing work on spectrum management is 
looking into the question of how other countries pursue efficiency in 
government use. For example, 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. NTIA currently requires agencies to pay 
spectrum fees (about $50 perfrequency assignment), but the purpose of 
the fees is to recover part of the costs of NTIA's spectrum management 
function, rather than provide an economic incentive for effective 
spectrum use.
                                 ______
                                 
      Response to Written Questions Submitted by Hon. Max Cleland 
                            to Steven Price

    Question 1. Do you believe there currently exists a non-partisan 
person or group who can objectively review spectrum recommendations and 
uses? If not, do you believe such a person or group would be helpful?
    Answer. Under current law, the Assistant Secretary for of Commerce 
for Communications and Information (Administrator, National 
Telecommunications and Information Administration, or NTIA) is 
responsible for cooperating with the Federal Communications Commission 
(FCC), to develop long-range plans for improved management of all 
electromagnetic spectrum resources and to jointly determine the 
National Table of Frequency Allocations. One of the primary functions 
of the NTIA is to manage the spectrum use by the Federal Government, 
while one of the primary functions of the FCC is manage spectrum use by 
non-Federal Government entities. Therefore, the NTIA and FCC, by nature 
of their defined roles, share the responsibility for managing the 
nation's spectrum. The coordination between NTIA and the FCC, which 
each represent different constituencies, allows the balancing of 
different priorities and the compromises inherent in managing a scarce 
resource. There is currently no single ``person or group'' that has 
sole responsibility for determining spectrum allocation, but all of the 
agencies of the Federal Government have a role in shaping allocation 
decisions and spectrum policy.
    DoD supports a spectrum management process that allows for planning 
and setting of national priorities. Development and enforcement of a 
national, long-term spectrum plan that would set national priorities 
would afford the incumbent user a higher degree of predictability and 
certainty that currently exists. DoD's view is that in such a plan, 
essential national security needs would have highest priority.

    Question 2. The cost of relocating due to switching spectrum bands 
can be significant. Reimbursement proposals are being developed in 
order to reimburse government users when they move. What affect do you 
think reimbursement has on the success of auctions and the amount that 
commercial users are willing to pay for spectrum?
    Answer. Under current law (the FCC's auction authorities and 47 USC 
923(g)), successful spectrum auction bidders are required to pay into 
the General Treasury the amount of their winning bid and, separately, 
negotiate with and pay to federal agencies the costs of relocating 
federal incumbent systems prior to the actual relocation. In general, 
we believe that auction winners view reimbursement of relocating 
incumbents as a cost of doing business and an expected ``capital'' 
expense. This approach, however, has the benefit of ensuring that new 
spectrum users, rather than the general public, will pay the costs of 
relocating existing federal government spectrum users. To the extent 
that the objective of spectrum auctions is to raise money for the U.S. 
Treasury, the current law also has the benefit of avoiding hidden costs 
to the U.S. Treasury of spectrum auctions and enhancing the validity of 
Congressional Budget Office scoring.
    The goal of cost reimbursement should be to fully reimburse the 
incumbent for all actual costs--direct and indirect--associated with 
moving to new spectrum. The reimbursement should include all costs, 
including for example training and testing of new systems and the cost 
of calculating all the expenses required in such a move.
    It must be emphasized, however, that the issue of finding and 
securing comparable spectrum is inextricably linked to the issue of 
relocation. Current federal law, section 1062(b) of the National 
Defense Authorization Act for Fiscal Year 2000 (47 U.S.C. 921 note), 
provides that ``[if, in order to make available for other use a band of 
frequencies of which it is a primary user, the Department of Defense is 
required to surrender use of such band of frequencies, the Department 
shall not surrender use of such band'' until several conditions are 
met. First, the NTIA must make available to DoD ``for its primary use, 
if necessary, an alternative band or bands of frequencies as a 
replacement for the band to be so surrendered.'' Second, the 
Secretaries of Defense and Commerce, and the Chairman of the Joint 
Chiefs of Staff, must jointly certify to the congressional armed 
services and commerce committees that ``such alternative band or bands 
provides comparable technical characteristics to restore essential 
military capability that will be lost as a result of the band of 
frequencies to be so surrendered.'' We note that the statute does not 
apply to the 1710-1755 MHz band. The statute would apply to the 16 
protected sites within the 1710-1755 MHz band if they were required to 
move.
    Thus, any relocation compensation regime must dovetail with DoD's 
requirements for comparable spectrum. Indeed, the identification of 
comparable spectrum must be completed before any practical assessment 
of relocation costs can be attempted. This provision of the law is a 
vital protection for national defense and helps ensure the continuing 
operational quality of military communications systems.
    The availability and suitability of comparable spectrum that will 
meet ongoing and growing DoD needs will always be a critical factor in 
determining relocation costs. And the level of such costs is likely to 
be a key influence in attracting potential bidders, setting potential 
bidding floor prices, and otherwise conducting a successful auction.
    A final point is that the issue of switching or relocating from 
spectrum bands is far more than a cost issue. Clearly, cost is 
important but DoD focuses on operational impacts: will we be able to 
operate as efficiently, will we be relocated in time should that 
national call on our warfighter to act, will we remain interoperable 
with allies and other Coalition partners who use the same frequencies 
we currently do, will we be able to garner the crucial host nation 
approvals to operate our systems within the new frequencies to which we 
are relocated. These are important issues--and ones that are distinct 
from cost reimbursement--that must be taken into account during 
relocation discussions.

    Question 3. As you know the International Telecommunications Union 
(ITU) designated two bands of spectrum for international harmonization 
of Third Generation or 3G use. European and Asian countries are able to 
secure this spectrum for this use. However, the U.S. has government and 
commercial entities operating in these bands. Specifically, with regard 
to the DoD users, if our troops are using one band of spectrum to 
communicate domestically, will they be able to communicate with 
American troops abroad who will not be using the same spectrum bands?
    Answer. Member States and Sector Members of the International 
Telecommunication Union have actually identified multiple bands that 
countries are able to consider for the implementation of Third 
Generation (3G) systems. At the World Administrative Radio Conference 
of 1992 (WARC-92), the bands 1885-2025 MHz and 2110-2200 MHz were 
identified (230 MHz total). Almost every European country and all major 
Asian countries have allocated these two bands for the initial 
implementation of 3G capabilities and have conducted auctions to 
implement the allocation to our knowledge. No country is planning at 
this time to establish initial 3G systems in the 1755-1850 MHz band 
that is designated in the U.S. for Federal Government systems and on 
which the Department of Defense is critically dependent.
    The World Radiocommunication Conference of 2000 (WRC-2000) did 
identify additional bands to those identified at WARC-92. These bands 
were 806-960 MHz, 1710-1885 MHz, and 2500-2690 MHz (total for WRC-2000 
of519 MHz). The total of bands identified by the ITU at both WARC-92 
and WRC-2000 is 749 MHz. The U.S. Federal band that falls within these 
ITU identified bands is the 1755-1850 MHz band (95 MHz total). Within 
the ITU and regional working bodies, most countries are indicating a 
preference to follow the initial 3G implementations in the WARC-92 
bands with expansion in the WRC-2000 band of 2500-2690 MHz and not the 
U.S. Federal band of 1755-1850 MHz. Many of these same countries have 
existing second-generation cellular systems operating in the 1710-1885 
MHz band.
    U.S. forces do currently use the 1755-1850 MHz band both 
domestically and abroad. The use of the band abroad is possible due to 
several factors. DoD carefully works with foreign governments and their 
military to coordinate frequency usage for our systems, ensuring 
foreign spectrum users do not cause or suffer from interference from 
DoD systems. In addition, DoD negotiates host nation agreements with 
many countries across the globe to use this spectrum abroad. Finally, 
for certain systems in some locations we use spectrum other than 1755-
1850 MHz--spectrum not available to DoD in the U.S..
    Often, reaching understandings with host nations takes considerable 
time and requiring DoD to move out of its current spectrum assignments 
in this band would necessitate DoD to seek and negotiate new host 
nation agreements in a different band, some of which might not be 
achievable. Retaining these bands for DoD use is the most effective and 
efficient manner to protect access to spectrum for our nation's 
warfighters.

    Question 4. Do you believe this country has in place an efficient 
spectrum use plan? Why or why not?
    Answer. Efficiency in spectrum use is a continuing challenge. 
Spectrum management continually needs to be adapted to meet changing 
needs and new technologies. Greater spectrum efficiency should be a 
goal common to all users of the radio spectrum and this is an area of 
continuing examination for both the FCC and NTIA. Moreover, there are 
justifiable variations in views regarding spectrum efficiency and 
system reliability. From a DoD perspective, efficient spectrum use 
takes on a very different meaning than it might to a commercial 
operator. A dropped call or message from an American soldier in the 
field, or a misguided instruction to a smart bomb, takes on 
implications well beyond those of the average dropped wireless call. 
While the DoD does and must operate its spectrum-based systems as 
efficiently as it can, it does so in circumstances where there is no 
margin for error. This requires us to plan for our spectrum use in a 
very different fashion than others might. To DoD, efficiency means 100% 
certainty and reliability of access; this is not the same standard used 
by commercial entities.
    As manager of the Federal Government's use of the radio spectrum, 
NTIA continues to encourage Federal agencies to deploy the most 
spectrum-efficient technology to meet their missions. At the same time, 
efficiency is but one factor NTIA considers when making decisions 
involving the specialized and critical missions that many Federal 
agencies perform, including national security, law enforcement and 
public safety. Others include the economic costs and the degree to 
which the mission requirements can be met. New technologies, including 
software defined radios and dynamic frequency selection, hold great 
promise for significant future advances in spectrum utilization by the 
Federal Government, and ultimately through technology transfer, by the 
private sector. NTIA also advocates adoption by the FCC of policies 
that promote spectrum-efficient use by the private sector, including 
secondary markets and careful accommodation of ultra wide band systems.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Byron L. Dorgan 
                            to Steven Price

    Question 1. Does the Department of Defense believe that commercial 
satellites have an important role to play in meeting its communications 
needs? If so, what can be done to ensure that this important industry 
remains competitive and viable?
    Answer. The Department historically looks at a variety of methods 
to satisfy long haul communication requirements and the commercial 
sector has been an integral part of such capabilities. We expect this 
trend to continue, if not accelerate, for the foreseeable future. 
Commercial satellite services should be valuable and useful complements 
to government-owned assets.
    The military's current satellite assets are making a very real 
contribution to Operation Enduring Freedom. The scope and speed of 
joint operations would be impossible without MILSATCOM systems. But it 
is equally clear that the U.S. military cannot, and will not, rely 
solely on DoD space assets for its satellite communications. This means 
there will have to be an ongoing partnership with the U.S. commercial 
satellite industry in order to satisfy the demand for military 
bandwidth.
    We all must be concerned about creating the proper conditions for a 
vibrant U.S. satellite industry.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Ernest F. Hollings 
                            to Steven Price

    Question 1. Last year, NTIA concluded that it would be difficult 
for DoD to share the entire 1710-1850 MHz band and NTIA is now focusing 
its efforts to address sharing in the 1710-1770 portion of the band. 
Would you both agree that the scaled-back plan means that there is less 
impact on specific DoD systems--compared to the original plan? (For 
example, three of the systems that operate in the 1710-1850 MHz band do 
not operate in the 1710-1770 MHz portion of the band.) So, in general 
terms, the specific DoD systems would be better accommodated by the 
October 2001 NTIA plan?
    Answer. The DoD would agree that the most recent NTIA plan would 
have less of an impact on DoD systems compared to the original plan 
which considered the impacts that would result from loss of the entire 
1710-1850 MHz band. The DoD would also agree that, in general terms, 
specific DoD systems would be better accommodated by the October 2001 
NTIA plan. Currently DoD is participating in the NTIA-FCC 3G viability 
assessment process within the 17 10-1770 MHz band. DoD has a vast 
number of permanent and temporary assignments in the 1755-1770 band 
alone. These include important systems used for satellite control, 
precisions guided munitions, tactical communications, tactical data 
links, air combat training and other uses. Further, it is one of the 
few places that DoD can look to when considering new mobile 
applications and weapons platforms. The unique propagation 
characteristics of the band is ideally suited for military use in that 
it enables small (therefore light-weight) antennas, supports low power 
transmissions for extended range and allows sufficient beam widths for 
simple, reliable link establishment and preservation.
    Moreover, times and circumstances have changed since the original 
NTIA plan. Given the events of September 11 plus DoD's aggressive moves 
to a transformed, network centric military, DoD believes that over time 
it will need access to more, not less, spectrum in order to continue to 
meets its mission.

    Question 2. It appears from DoD's testimony that DoD remains 
concerned about the potential reallocation of the 15 megahertz (between 
1755-1770 MHz) from the DoD to commercial use. In broad terms, is this 
concern with a ``net-loss'' of DoD spectrum based on your expectation 
that the DoD will be seeking to implement additional wireless systems?
    Answer. Current law provides that comparable spectrum must be 
identified in order to insure that there is no ``net loss'' of 
capability to DoD. DoD has always stated that it would analyze any 
comparable spectrum that could be used if required to move. DoD's 
concern in the 1755-1770 study is that no comparable spectrum has yet 
been identified and therefore the capability will be lost.
    As I mentioned in my testimony, DoD is concerned about the specific 
systems that would be affected by the reallocation of 1755-1770. The 
major class of systems that would be affected is satellite telemetry, 
tracking and command systems which reside in this band. These systems 
allow operators to communicate with airborne satellites. As you know, 
airborne satellites are not re-tunable and very expensive to replace in 
advance of the end of their service life. Other systems that would be 
affected include Precision Guided Munitions and Tactical Radio Relay, 
which is a battlefield communications system.

    Question 3. I also understand that DoD's concern is not just with 
the number of megahertz, but obtaining spectrum below 3 GHz. Are you 
concerned about this spectrum because the spectrum below 3 GHz has 
certain propagation characteristics such as penetrating foliage and 
buildings?
    Answer. Yes, spectrum below 3GHz is highly valued for military 
operations given its unique technical characteristics that dovetail 
with DoD's need for reliable, all weather, ad hoc wireless 
communications that can afford our warfighters communications with the 
lowest probability of detection.
    Current law provides that comparable spectrum must be identified in 
order to insure that there is no ``net loss'' of capability to DoD. 
This is necessary to meet the Department's operational requirements. 
DoD has always stated that it would analyze any proposed comparable 
spectrum that could be used if our systems are required to move. DoD's 
concern in the 1755-1770 study is that no comparable spectrum has yet 
been identified. Technical analysis would need to be done to determine 
if spectrum above 3 GHz could be ``comparable spectrum'' for spectrum 
below 3 GHz. It is true, however, that spectrum below 3 GHz does have 
unique propagation characteristics of the band is ideally suited for 
military use in that it enables small (therefore light-weight) 
antennas, supports low power transmissions for extended range and 
allows sufficient beam widths for simple, reliable link establishment 
and preservation.
    The spectrum DoD uses for a particular system is carefully chosen 
based on the physical properties such as, propagation characteristics, 
power required, antenna sizes, etc. Different regions of the spectrum 
have different properties and DoD optimizes system design by choosing 
particular frequencies. None of DoD choices for frequencies are 
accidental; they are purposeful and carefully thought out. Moving 
particular functions from one frequency band to another may or may not 
be feasible based on the physical properties of the new spectrum and 
the engineering decisions and compromises that these properties compel.

    Question 4. If DoD is able to share the 1710-1770 MHz band with 3G 
service, what would be the estimated cost of modifying or relocating 
DoD's operations in order to accommodate 3G service? How long would it 
take for DoD to modify or relocate its operations?
    Answer. The key element in determining the cost to relocate DoD 
operations is the identification of replacement spectrum that meets 
operational requirements and that, as provided for in the National 
Defense Authorization Act, Fiscal Year 2000 (Pub. L. 106-65), has 
``comparable technical characteristics to restore essential military 
capability'' (``comparable spectrum''). To date, replacement spectrum 
that could be considered comparable for all of the systems that would 
be relocate/modified has not been identified. Accordingly, any cost 
estimates provided prior to such identification are a guess. We note 
also that relocation may often mean the development of new systems. The 
normal development and acquisition cycle for DoD systems is 8 to 12 
years depending upon the complexity of the system and what other DoD 
systems the replacement systems must interoperate with.
    The costs associated with modifying or relocating operations from 
the 1755-1770 MHz band are likely to be on the order of the cost 
estimates provided for segmentation options of the 1755-1850 MHz band, 
which could reach several billion dollars. The timelines for relocating 
systems out of this band are also significantly longer than for the 
1710-1755 MHz relocations with some systems requiring more than ten 
years to complete relocation.

    Question 5. Does DoD share the 1710-1770 MHz band with wireless 
providers in other countries? If so could you identify the kind of 
wireless services and/or technologies and in which countries are these 
wireless services and/or technologies operating? If DoD does share the 
band internationally with other wireless providers, what techniques 
does the DoD employ in order to protect each of DoD's wireless 
operations (i.e. Satellite; Conventional Fixed Microwave; Tactical 
Radio Relay; and Precision Guided Munitions) and accommodate each of 
the non-DoD wireless services?
    Answer. DoD does share the use of the 1710-1770 MHz band in some 
other countries with commercial wireless services. The primary 
commercial systems that operate in this band on a widespread basis are 
second-generation cellular telephone systems. Some countries, such as 
Japan have also employed this band for national purposes similar to the 
U.S.. The DoD is able to coexist in this band in other countries with 
second-generation cellular systems due to several factors. These 
include the fact that second generation cellular systems do not create 
sufficient energy levels to cause significant interference to DoD 
systems, DoD systems typically operate at training facilities that are 
remote from extensive cellular networks, and frequency coordination 
procedures are employed to avoid harmful interference between DoD 
systems and host country commercial systems. These coordination 
procedures have been painstakingly established over the years, and any 
alteration of spectrum use by DoD would necessitate a time-consuming 
and costly duplication of negotiations around the world to re-establish 
coordination agreements involving the new DoD bands.
    In addition, DoD has been able to negotiate host nation 
arrangements to use this spectrum abroad and is confident that 
retaining these bands for DoD use is the most effective and efficient 
manner to protect access to spectrum for our nation's warfighters.

    Question 6. There were seven basic categories of military systems 
that were being studied by NTIA, FCC and DoD in the entire 1710-1850 
MHz band. Those systems are: Air Combat Training; Land Warrior; Combat 
Identification for the Dismounted Soldier; Satellite; Conventional 
Fixed Microwave; Tactical Radio Relay; and Precision Guided Munitions. 
However, NTIA and DoD are currently exploring the option of using the 
1710-1770 MHz band for 3G service. I understand that three of these 
systems Air Combat Training; Land Warrior; and Combat Identification 
for the Dismounted Soldier do not use spectrum in the 1710-1770 bands. 
Is it correct to assume that since there is no overlap for these three 
systems, there is no potential for harmful interference from the 3G 
service operating in the 1710-1770 MHz band?
    Answer. Unfortunately, these assumptions are not correct. The Air 
Combat Training systems air-to-ground air frequencies are above 1770 
MHz, but the ground-to-ground links that transfer the aircraft data to 
and from the Master Station use frequencies below 1770 MHz. However, 
these ground links could be relocated to other federal frequency bands 
if necessary.
    The Land Warrior system uses frequencies between 1772 MHz and 1822 
MHz with a bandwidth of 20 MHz. This means that the lowest channel of 
Land Warrior uses spectrum from 1762 MHz to 1882 MHz, with a center 
frequency of 1772 MHz. The second channel also overlaps the 1755-1770 
MHz band, so reallocation of the 1755-1770 MHz band would mean the loss 
of two of the 11 channels possible, or about 18 per cent of the 
system's capability.
    The Combat Identification for the Dismounted Soldier system has 
been superceded by the Individual Combat Identification System (ICIDS). 
ICIDS operates in the 1755-1850 MHz band. The reallocation of the 1755-
1770 MHz band would mean the loss of 150 channels out of a possible 950 
channels, or about 16 per cent of the system's capability.
    The Land Warrior and the Combat Identification for the Dismounted 
Soldier systems do depend to some extent on operations within the 1755-
1770 MHz band. The loss of access to this spectrum would constrain the 
operations of either system, possibly requiring a redesign to restore 
full system capabilities. No acceptable alternate bands were identified 
for the relocation of the Land Warrior or Combat Identification 
systems.

    Question 7. Satellite systems are one of the seven major DoD 
systems in the 1710-1770 MHz band. To be specific, I understand that 
the satellite systems at issue is the Satellite Control Stations--the 
satellite up-link for Tracking Telemetry & Control (TT& C). These 
satellite stations operate between 1761-1842 MHz. So, under the current 
NTIA proposal, commercial carriers and DoD would use the 1761-1770 MHz 
band at the same time. I understand that under NTIA  current proposal, 
the only commercial use permitted in the 1710-1770 MHz would be 
relatively low-powered cell phones and not the higher-powered cellular 
towers. Is that the case?
    Answer. NTIA has not made a specific proposal regarding 3G 
accommodation. NTIA has examined several options for the accommodation 
of 3G services in the 17 10-1850 MHz band. All these options have been 
analyzed under the assumption that the mobile component of the 3G 
system (e.g., the low-powered, hand-held phone) would transmit in the 
lower part of the band, including 1710-1770 MHz, and the 3G base 
stations would transmit in the higher part of the band (above 2110 
MHz).

    Question 8. With respect to the operation of DoD satellite systems 
in the 1755-1770 MHz portion of the band, NTIA in its Final Report at 
October of 200l recognized the ``the potential interference is within 
the range of prudent risk management.'' As a result, the commercial 
mobile systems operating at 1710-1770 MHz will have no adverse impact 
on the military satellite systems. However, there could be interference 
from the satellite systems into the commercial mobile systems. Is this 
correct? Given that NTIA has concluded that potential interference into 
DoD's satellite operations in the 1755-1770 MHz portion of the band is 
within range of prudent risk management, is it correct that commercial 
cell phones would not interfere with DoD satellite systems--but, that 
DoD satellite systems could interfere with commercial cell phones that 
might be near a satellite base station?
    Answer. Assuming the cell phones are in 1755-1770 MHz as discussed 
above, that is what the analysis shows.
    The major source of potential interference between the two systems 
would be from Federal ground-based satellite control stations into 3G 
base stations. These 3G base stations receive on the frequency on which 
the hand-held phones transmit. The high-power satellite control 
stations could cause interference up to 300 kilometers, in a worst-case 
situation. Terrain shielding between the base station and the satellite 
control station, and the fact that the satellite control station 
antennas move when tracking the satellites, serve to mitigate the 
interference.

    Question 9. In this situation would commercial systems have the 
burden of not interfering with DoD satellite systems and are there 
mitigation techniques that can be used to protect DoD satellite 
operations?
    Answer. New entrants into a frequency band generally have the 
burden of protecting the incumbent users. In this case, 3G operators 
would have to protect Department of Defense operations. Among other 
problems, the Department of Defense satellites have a wide view of the 
Earth and will receive signals from a large number of hand-held phones 
in the United States. Shielding is not an option since the phones must 
be in sight of a cell base station tower. Moreover, Department of 
Defense requirements will likely increase over time requiring greater 
protection and accommodation by 3G operators. The concern is how to 
address this issue if harmful interference is caused to Department of 
Defense satellites. Possible mitigation techniques would be to limit 
the number of mobile phones transmitting simultaneously on satellite 
channels, and by using smaller cell sizes so the power transmitted from 
the mobile phones would be lower.

    Question 10. DoD's Fixed Microwave Systems operate throughout the 
1710-1770 MHz band and would need to be moved to other spectrum before 
commercial systems could use the spectrum. I understand that the DoD in 
its February 2001 Report on the original NTIA spectrum plan indicated 
that alternative, comparable spectrum is available for the Fixed 
Microwave Systems:
    ``A significant amount of frequency spectrum is already allocated 
to the Government on an exclusive basis for Fixed Service operations in 
higher frequency ranges. The 4400 to 4990 MHz and 7125 to 85 MHz bands 
are already employed by the DoD for fixed point-to-point microwave 
communications.'' DoD IMT 2000 Assessment, Appendix E, Page 9
    Do you agree with the finding that there is comparable spectrum 
available for these systems?
    Answer. The report cited in the question indicates that the 4400-
4940 MHz band is NOT comparable spectrum to the 1710-1770 MHz band. 
Among other factors, the fact that fixed, point-to-point microwave 
systems operate in both bands does not imply that the bands are 
comparable. The 4400-4940 MHz band is characterized by a much more 
severe propagation environment in which to operate radio communication 
systems than the 1710-1770 MHz band. Some of these engineering 
challenges include, multi-path, ducting, fading, and atmospheric 
absorption. Substantial non-recurring engineering funds will be 
required to assess systems on a case-by-case basis as part of a 
frequency band transition. This factor was implicitly recognized during 
NTIA and FCC deliberations when commercial licensees in the 2500-2690 
MHz band unanimously rejected both the 3600 MHz and 4940 MHz bands as 
spectrum into which they could move, because of technical 
characteristics and for other reasons.
    In addition, it should be pointed out that almost all of these 
alternative bands are already used extensively and relocating systems 
to these bands may be impossible. A recent survey, conducted by the 
Range Commanders Council found there are no available assignments in 
the 4400-4940 MHz band for the Southwest United States--an area where 
many of the major DoD test centers such as White Sands Missile Range, 
Ft. Huachuca, and the Yuma Proving Grounds are located.

    Question 11. If there is comparable spectrum available, what would 
DoD need in order to relocate these operations, what would be the cost 
to relocate these operations, and how much time would it take for such 
relocations?
    Answer. Relocation cost and schedule are critically dependent on 
the band selected for relocation. Since the 4400-4940 MHz band has not 
been identified as comparable spectrum to the 1710-1770 MHz band and 
since no other spectrum has been so identified, no accurate cost 
estimates exist.
    However, if comparable spectrum were identified each existing fixed 
point-to-point microwave link would have to be addressed individually. 
Assuming no additional constraints, such as environmental impacts, 
which is a very aggressive assumption, it is anticipated that it will 
require at least 2-4 years to change the operating frequency of each of 
the fixed microwave point-to-point systems operating in the 1710-1770 
MHz band. Additional non-recurring engineering funds will be required 
if these systems are operated in other than nearby frequency bands.

    Question 12. Is it true that many of these systems are in very 
remote areas of our nation, which might facilitate a phased approach to 
re-location?
    Answer. The draft report cited in the question indicates that a 
high-powered weapons control system now operates in the 4400-4940 MHz 
band, and successful relocation of fixed microwave systems from the 
1710-1770 MHz band into the 4400-4940 MHz band is problematic. The 
1710-1770 MHz band systems and the high-powered weapons control systems 
operate in the SAME areas of the country, so remoteness of operations 
is not a consideration. Some of the ranges such as White Sands Missile 
Range, Utah Test and Training Range, and the DOE Nevada Test Site are 
located in what were once considered very remote areas. The increasing 
population of the Southwestern United States has caused population 
centers to be established in locations ever closer to the borders of 
decades old DoD test ranges. Unfortunately, their location does not 
make them immune from interference that may result from the lack of 
available frequency guard bands or adequate transmitter power control.
    As a prime example, in the mid 1980's the DoD built a system to be 
used at Ft. Erwin, CA, an extremely remote location at the time, that 
operates in the 800 MHz band. The proliferation of cellular telephone 
service in that frequency band and increased vehicular traffic in this 
area has resulted in severe limitations and restrictions on the use of 
this system that continues to affect testing and training at this 
range.
    The important consideration is that all systems now operate in 
close physical proximity and would operate over the same frequencies if 
the reallocation were accomplished. An analysis tool named ``Spectrum 
XXI'' was utilized to identify the potential for relocating the 1710-
1770 MHz band systems into the 4400-4940 MHz band. Parameters contained 
in a frequency assignment database are utilized by this tool to produce 
preliminary estimates of the spectrum potentially available to a 
system. The tool does not consider system operational characteristics 
or detailed performance characteristics, and databases do not always 
contain classified systems. Additional analysis must be accomplished to 
include these effects. After further consideration, the final version 
of the draft report (to be published late June or early July) cited in 
the question removes all references to relocating systems into the 
4400-4940 MHz band.

    Question 13. Another of the seven DoD systems in the 1710-1770 MHz 
band is referred to as ``Tactical Radio Relay'' wireless communications 
system that can be set up for a battlefield to provide vital 
communications. I understand that these radios can be ``tuned'' to 
different spectrum frequencies--allowing them to be used throughout the 
1710-1850 MHz band. In other words, the DoD could use these radios in 
spectrum between 1770 and 1850 MHz, without interfering with commercial 
use in 1710-1770 MHz (as contemplated by the October 2001 NTIA plan). 
Is this correct? If it is correct, what would be the cost of retuning 
these radios and how long would it take to retune the radios?
    Answer. The reduction of available spectrum from 1710-1850 MHz to 
1770-1850 MHz will be particularly detrimental to the operations of the 
Marine Corps and Navy Digital Wideband Transmission System (DWTS) which 
are Tactical Radio Communication systems. Due to interference from 
other systems, the operations of the Navy and Marine Corps DWTS are 
generally restricted to 1710-1850 MHz. Reducing the available spectrum 
to 1770-1850 MHz would severely impact training exercises using these 
mission critical radios since the same radio transmit/receiver 
frequency separation (minimum 63 MHz frequency separation between its 
transmit and receive frequencies) for co-site situations can be as 
great as 25 MHz. The Marine Corps routinely co-locates multiple radios 
in all large-scale exercises and training scenarios which are conducted 
frequently. A single node terminating just two links may require 
slightly more than 88 MHz of spectrum, so therefore, limiting our use 
to the 1770-1850 MHz (aggregate of 80 MHz) band cannot accommodate our 
communication requirements.
    Question 14. DoD uses spectrum in the 1710-1770 MHz band, at least 
in part, for Precision Guided Munitions. Here in the U.S., training 
with Precision Guided Munitions relies on spectrum in this band. I 
understand that the DoD has deployed these systems not only here in the 
U.S., but in many locations around the world--including areas of 
Europe. In Europe, I understand that there is already extensive use of 
the 1710-1770 MHz band for commercial wireless operations.
    What can you tell us about how the DoD handles the potential for 
interference into precision guided munitions operations overseas? If 
DoD's precision guided munitions system affected by wireless systems in 
other countries can work around European commercial traffic--can DoD do 
the same here in the U.S.?
    Answer. To the best of our knowledge Air Force and Navy units in 
Europe have not reported any interference problems from wireless 
systems. In addition, Air Force units in Europe report that they do not 
employ any specific or general interference work-arounds.
    The U.S. European Command has negotiated frequency usage agreements 
through NATO and bilateral agreements for frequency use in each 
European nation. DoD PGM use in peacetime in Europe is limited to 
training scenarios but that training is significantly limited to 
prevent interference to the wireless systems. The overwhelming majority 
of proficiency training and exercise missions--for both U.S. and Allied 
forces--occur here in the U.S. because of the access to the air ranges 
and the frequency band, so the potential for interference from wireless 
systems here in the U.S. to affect our armed forces is much greater 
here than overseas. Also, live firing of PGMs, essential to U.S. and 
Allied combat crew performance, is only done in the U.S.

    Question 15. If DoD's Precision Guided Munitions could be 
interfered with by commercial cell phones--is this a potential 
vulnerability overseas?
    Answer. PGM data link system vulnerabilities are classified and can 
be made available where appropriate. However, one should note that the 
same potential vulnerabilities would apply, regardless of where the PGM 
data links are employed. Additionally, the National Telecommunications 
and Information Administration (NTIA) study released to the public 
described generalized training impacts to PGMs.

    Question 16. I also want to understand the specific nature of 
potential interference issues. Is it the case that commercial cell 
phones would interfere with Precision Guided Munitions? Or is it that 
Precision Guided Munitions might interfere with commercial cellphones? 
Does DoD `s systems or the commercial wireless systems bear the burden 
of not interfering?
    Answer. The PGMs currently in question (AGM-130 and E/GBU-15) use 
two simultaneous frequencies for command and video transmission 
respectively. Without delving into system specifics, we can say that 
one channel is susceptible to interference and the other is likely to 
cause interference. In most cases PGM data link systems would overpower 
commercial systems. The burden in the United States for not interfering 
depends upon the details of how the spectrum is allocated. For example, 
if the 1755--1850 MHz band remains allocated on an exclusive basis to 
the Federal Government, then the question is moot. If the U.S. 
reallocates the spectrum to the nonfederal sector on an exclusive 
basis, then any Federal use would be on--at best--a noninterference 
basis to any civil systems.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Daniel K. Inouye 
                            to Steven Price

    Question 1. If DoD is required to share or vacate some portion of 
the 1710-1770 MHz band so that it can be used for third generation 
wireless service, to what spectrum would DoD be able to relocate? How 
much would such a move cost DoD?
    Answer. Current law provides that comparable spectrum must be 
identified in order to insure that there is no ``net loss'' of 
capability to DoD. DoD has always stated that it would analyze any 
comparable spectrum that could be used if required to move. To this 
date no comparable spectrum has been identified by NTIA to which DoD 
could move. Without knowledge of to what band DoD might be asked to 
move it is not possible to provide a cost estimate for moving.

    Question 2. The President's FY2003 Budget calls for a new process, 
a ``Spectrum Relocation Fund, ``for reimbursing government users for 
costs incurred when they are required to relocate to different spectrum 
blocks.
    ``The Administration will propose legislation to streamline the 
current process for reimbursing Federal agencies that must relocate 
from Federal spectrum which has been reallocated for auction to 
commercial users. Under current law, winning bidders must negotiate 
with Federal entities upon the close of an auction and reimburse the 
agencies directly for their relocation costs. The Administration, 
proposes to streamline this process by creating a central spectrum 
relocation fund. Auction receipts sufficient to cover agencies' 
relocation costs would be paid into the fund, and Federal agencies 
would be reimbursed for their relocation costs out of the fund.'' 
Budget of the U.S. Government, Fiscal Year 2003, Appendix, Page 241.
    The Administration has not yet submitted language to Congress.
    Do you have any specific concerns about how such a Fund to 
reimburse government users for relocation costs might work?
    Answer. We are working closely with the Office of Management and 
Budget, the National Telecommunications and Information Administration 
and other interested federal agencies put forward an Administration 
proposal that streamlines the reimbursement process in a manner that 
both benefits successful auction bidders and incumbent spectrum users 
that are required to relocate and ensures the continued, seamless 
operational transition of federal systems to new spectrum. The 
principal of cost reimbursement should be to fully reimburse the 
incumbent for all actual costs--direct and indirect--associated with 
moving to new spectrum. The reimbursement should include all costs, 
including for example training and testing of new systems and the cost 
of calculating all the expenses required in such a move. We believe 
that any proposal must provide both additional certainty as to 
reimbursement costs to successful bidders and assurance that relocating 
federal government incumbents are made whole (in terms of costs of 
relocation and maintaining operational capacities). We also believe it 
is vital to ensure that federal system operators have first priority in 
reimbursement from the fund, before additional monies are diverted for 
other public policy needs.

    Question 3. Do you believe that the proposal to use auction 
proceeds to reimburse government users as outlined in President Bush's 
budget would make the spectrum management process more effective and 
more efficient?
    Answer. Use of auction proceeds to reimburse federal government 
users in itself does not make the spectrum management process more 
effective or more efficient. Rather, spectrum is a national asset that 
must be used to, among other purposes, carry out national security, 
public safety, law enforcement and other critical public services. Cost 
reimbursement can help to ensure that changes in federal spectrum 
allocations do not adversely impact these critical public services and 
that the broad based costs of changing spectrum uses are appropriately 
taken into account when such decisions are made. However, we should 
resist the temptation to view a reimbursement trust fund as a panacea 
for dealing with complex spectrum policy issues, which include 
maintaining sufficient spectrum access for critical public services and 
national security. Indeed, any mechanism which appears to make 
relocation easier, but which does not address key issues of comparable 
spectrum and preventing the loss of critical government capabilities 
may, in fact, harm the national interest.

    Question 4. There is some discussion that the Relocation Fund could 
be established as a trust fund. However, monies in Trust Funds are 
sometimes used for other budgetary purposes. How can legislators ensure 
that monies will be available for government users to address their 
relocation costs since in some instances it could take years for 
government a user to complete its relocation?
    Answer. We look forward to working with the Congress and with the 
Office of Management and Budget and other parts of the Executive branch 
to craft legislation and appropriate Executive branch implementation 
procedures that ensure that federal government entities are provided 
with all funds necessary to successfully relocate when spectrum is to 
be made available through auction to commercial users. As the question 
implies, it is DoD's view that a trust fund should be trustworthy (i.e. 
a fund that the incumbent spectrum user can rely on for full 
reimbursement of all costs associated with relocation). Government 
users should have top priority to receive sufficient funding to ensure 
their successful relocation without the loss of crucial national 
security and public safety capabilities.

    Question 5. Do you have any concerns about coordinating a U.S. 
position for the World Radio Conference? What can be done to address 
these concerns?
    Answer. As with U.S. preparation for past WRC and WARC conferences, 
there is a role for all stakeholders in the spectrum allocation 
process, including government agencies that rely on spectrum resources, 
as well as the U.S. telecommunications industry, which also relies on 
the WRC process, in part, for its growth and profitability. In an era 
in which the demand for spectrum is extremely high, all stakeholders 
must realize that the U.S. position going into a WRC will be based upon 
the needs and views of government and commercial users alike. As in the 
past, the current WRC preparation process is proceeding upon this basic 
understanding, which is the foundation for any consistent approach to 
developing a national position. We are confident that the country will 
be well represented by its delegation to the next WRC, and look forward 
to continuing to work with the State Department, the NTIA, the FCC and 
our colleagues in the U.S. telecommunications industry to make sure 
that diverse and important U.S. interests are wellserved.
                                 ______
                                 
      Response to Written Questions Submitted by Hon. Max Cleland 
                          to Nancy J. Victory

    Question 1. Do you believe there currently exists a non-partisan 
person or group who can objectively review spectrum recommendations and 
uses? If not, do you believe such a person or group would be helpful?
    Answer. Both the Federal Communications Commission (FCC) and the 
National Telecommunications and Information Administration (NTIA) are 
charged with managing the nation's radio spectrum resources in the 
public interest and perform their respective responsibilities in a 
cooperative manner to ensure that the spectrum is used for its highest 
and best purpose whether by the Federal agencies or private sector 
users. The NTIA Organization Act (47 U.S.C. Sec. 901(c)(4)) 
specifically charges NTIA with fostering full and efficient use of 
telecommunications resources, including effective use of the radio 
spectrum by the Federal Government, in a manner that encourages the 
most beneficial use of such resources in the public interest. In 
performing its spectrum management responsibilities on the President's 
behalf, NTIA is always mindful that the spectrum policy decisions it 
makes must be consistent with both the national security and economic 
security of the nation and understands the importance of balancing both 
commercial and Government perspectives for better policy outcomes.
    Since most use of the radio spectrum is shared between Government 
and non-government users, NTIA and the FCC work together to ensure that 
the needs of all constituents are met. I do not believe that an outside 
entity capable of reviewing these decisions currently exists or that 
the addition of one to the spectrum management process would result in 
better or more timely decisions.

    Question 2. Do you believe this country has in place an efficient 
spectrum use plan? Why or why not?
    Answer. Efficiency in spectrum use is a continuing challenge. 
Spectrum management continually needs to be adapted to meet changing 
needs and new technologies. Greater spectrum efficiency should be a 
goal common to all users of the radio spectrum and this is an area of 
continuing examination for both the FCC and NTIA. As manager of the 
Federal Government's use of the radio spectrum, NTIA continues to 
encourage Federal agencies to deploy the most spectrum-efficient 
technology to meet their missions. At the same time, efficiency is but 
one factor NTIA considers when making decisions involving the 
specialized and critical missions that many Federal agencies perform, 
including national security, law enforcement and public safety. Others 
include the economic costs and the degree to which the mission 
requirements can be met. New technologies, including software defined 
radios and dynamic frequency selection, hold great promise for 
significant future advances in spectrum utilization by the Federal 
Government, and ultimately through technology transfer, by the private 
sector. NTIA also advocates adoption by the FCC of policies that 
promote spectrum-efficient use by the private sector, including 
secondary markets and accommodation of ultrawideband systems.

    Question 3. How long do you think it would take to do a 
comprehensive examination of our domestic spectrum plan?
    Answer. The National Table of Allocations, which represents the 
United States's spectrum plan, is comprised of over 40 radio services 
spread out over 900 frequency bands. A comprehensive re-examination of 
all of these services and bands would be a time-consuming and resource-
intensive undertaking. This task would be complicated by the fact that 
a number of our domestic spectrum allocations are the subject of 
international agreement and harmonization (e.g., frequencies used 
internationally for commercial aviation and space communication). 
Moreover, the rapid advances of technology often completely change the 
relative requirements of the services studied during the course of 
their study.
    The FCC and NTIA, therefore, currently conduct examinations of 
those services and bands as circumstances dictate, usually in areas of 
congestion or where growth is expected, or to accommodate a new 
technology or service. NTIA has examined various aspects of the Federal 
Government's ability to meet its spectrum requirements, including the 
use of radars, land mobile radio, and fixed microwave systems. These 
studies generally focus on the identification of current or foreseeable 
problems (such as congestion), future spectrum demands for these 
services, and spectrum efficiency policy initiatives.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Ernest F. Hollings 
                          to Nancy J. Victory

    Question 1. Last year, NTIA concluded that it would be difficult 
for DoD to share the entire 1710-1850 MHz band and is now focusing its 
efforts to address sharing in the 1710-1770 portion of the band. Would 
you both agree that the scaled-back plan means that there is less of an 
impact on specific DoD systems--compared to the original plan? (For 
example, three of the systems that operate in the 1710-1850 MHz band do 
not operate in the 1710-1770 MHz portion of the band.) So, in general 
terms, the specific DoD systems would be better accommodated by the 
October 2001 NTIA plan?
    Answer. I would agree that the current focus on the 1710-1770 MHz 
portion of the 1710-1850 MHz band for accommodation of third generation 
(3G) mobile systems is, in part, due to a recognition of the greater 
impact on certain Department of Defense systems if the entire band had 
remained under consideration. An interagency working group led by NTIA 
and the FCC is currently completing a viability assessment of the 1710-
1770 MHz portion of the band for 3G use in the United States, which, 
upon completion, will provide a clearer picture of the impact on the 
Department of Defense.

    Question 2. What if any spectrum below 3 GHz that can be made 
available for DoD systems if it is determined that DoD must share the 
1710-1770 MHz band with commercial users, and as a result, DoD will 
need additional spectrum?
    Answer. NTIA has not yet identified any band of spectrum below 3 
GHz to accommodate Department of Defense systems if they must be 
relocated from 1710-1770 MHz band. Current efforts are focused on ways 
in which the band can be shared without such relocation to other 
spectrum bands. This viability assessment will be completed shortly.

    Question 3. What can be done to improve the U.S. preparatory 
process for reaching consensus and naming a U.S. delegation with 
respect to the World Radio Conference? What can the NTIA do to improve 
its participation in this process?
    Answer. The keys to the United States' success at any World Radio 
Conference (WRC) are coordinated efforts by U.S. Government and 
industry stakeholders in the early formulation of U.S. positions and 
unified and consistent advocacy of those positions in the months 
preceding the conference in both governmental and industry fora. WRCs 
occur on a three-year cycle. In recognition of the increasing 
complexity and importance of the issues addressed in these conferences, 
the U.S. Government has initiated the preparatory process much earlier 
in the cycle to give the United States the ability to formulate its 
positions and to obtain domestic consensus. For example, preparations 
started for WRC 2003 almost immediately after the close of the last 
conference, and most of the U.S. proposals have been completed--nearly 
a year early. The United States can now actively begin to promote U.S. 
positions in bilateral meetings and regional fora. These regional fora 
have become important venues in which the United States has been able 
to persuade neighboring countries of our common interests, garner 
support for U.S. proposals, and build strong coalitions.
    NTIA is an active participant in all areas of WRC preparation, 
focusing principally on those issues on which NTIA has particular 
expertise. To promote the improved spectrum management process for this 
country, including WRC preparations, NTIA, the FCC and the Department 
of State, have established a ``One Team'' spectrum management approach. 
Specifically, we have taken the steps to improve our interagency 
communications and to coordinate our international outreach efforts.

    Question 4. What do you consider the critical items for the US 
Government to support on behalf of US commercial industry at WRC-03 and 
why?
    Answer. NTIA will support all U.S. proposals to WRC-2003 as key 
members of the U.S. delegation. There are a number of issues that 
appear to be particularly important to certain segments of the U.S. 
industry, including, but not limited to, identification of frequency 
bands within the fixed satellite service to permit the ubiquitous 
deployment of future high density satellite earth stations; 
authorization of satellite communications within the 14 GHz band to 
permit Internet connectivity aboard commercial aircraft; the resolution 
of certain issues affecting the Global Positioning System (GPS); and 
accommodation of radio local area networks in the 5 GHz band.

    Question 5. What are you and your colleagues in Government doing to 
ensure U.S. commercial interests are advanced at WRC-03?
    Answer. Government members of the U.S. delegation, including NTIA 
representatives, actively advocate U.S. positions at the WRC, including 
those of particular interest to U.S. commercial stakeholders. This 
advocacy includes garnering support for these positions in all 
bilateral meetings and regional fora in the months leading up to the 
WRC. It also includes advancing these positions through the Committee 
meetings and plenary sessions of the conferences themselves.

    Question 6. GAO noted that some federal agencies were unable to 
complete the required spectrum management reviews because of staffing 
and resource shortages. How serious is this staffing problem at NTIA 
and other federal agencies? What can Congress do to address this issue?
    Answer. NTIA can verify that several Federal agencies have not 
completed five-year reviews of their frequency assignments; however, we 
cannot independently verify whether Federal agencies with whom GAO 
spoke have experienced staffing or resource shortages that have 
prevented them from conducting these reviews. With respect to 
additional spectrum management resources for NTIA, the President's 
Budget for Fiscal Year 2003 contains an initiative that would provide 
funding to permit NTIA to review and improve its overall performance of 
spectrum management duties.

    Question 7. I understand that spectrum below 3 GHz is congested in 
part because it has certain characteristics that are useful in a mobile 
environment. Are there any incentives that Congress should be 
contemplating that would encourage the development of technology that 
makes better use of spectrum above 3 GHz and more efficient use of 
spectrum below 3 GHz?
    Answer. The spectrum below 3 GHz does have favorable propagation 
characteristics for a variety of commercial, private sector and 
governmental uses. One of our top priorities at NTIA is to work with 
the FCC to examine policies to alleviate the current congestion below 3 
GHz. Over 93 percent of all FCC licenses and Federal Government 
frequency assignments are in the 0 to 3 GHz range. Among other things, 
spectrum managers should be examining ways to encourage migration to 
higher frequency bands as the technology permits. Such policies should 
include clear incentives for relocation to higher bands, where 
possible.
    In 1998, Congress enacted such a tool to permit Federal agencies to 
be reimbursed by the private sector for the costs associated with 
relocating from certain frequencies bands below 3 GHz, as well as any 
future reallocation of spectrum from the Federal Government to private 
sector users. Working with the FCC and the Federal agencies, NTIA has 
finalized these rules, which were published in the Federal Register on 
June 17, 2002. Moreover, the President's Budget for Fiscal Year 2003 
contained a legislative proposal to streamline this reimbursement 
process by creating a fund from spectrum auction proceeds to reimburse 
the affected Federal agencies. The Department of Commerce expects to 
transmit this proposal to Congress this summer.
    The President has also proposed broadening and making permanent the 
research and experimentation (R&E) tax credit. The R&E tax credit could 
encourage private sector investment in research on advanced 
technologies that would provide greater spectrum efficiency or allow 
all spectrum users to utilize frequencies in the higher, less congested 
spectrum bands.

    Question 8. If DoD is able to share the 1710-1770 MHz band with 3G 
service, what would be the estimated cost of modifying or relocating 
DoD's operations in order to accommodate 3G service? How long would it 
take for DoD to modify or relocate its operations?
    Answer. There is no current estimate of the modification or 
relocation costs for Department of Defense systems if they shared the 
1710-1770 MHz band with 3G mobile systems. NTIA, in coordination with 
the Department of Defense and industry, is analyzing the sharing 
potential with Department of Defense systems that operate in the band. 
The costs for such sharing could vary depending on which systems would 
have to be modified or relocated and the spectrum to which such systems 
would be relocated.
    The time required for modifying or relocating Department of Defense 
systems depends on the specific systems that must be moved or modified. 
Earlier 3G studies estimated that any satellite system relocations 
would take the longest time, since satellites would operate until their 
end-of-life or as late as 2017. The estimates indicated that 
conventional fixed systems can be moved within two to four years and 
other systems within two to five years.

    Question 9. There were seven basic categories of military systems 
that were being studied by NTIA, FCC and DoD in the entire 1710-1850 
MHz band. Those systems are: Air Combat Training; Land Warrior; Combat 
Identification for the Dismounted Soldier; Satellite; Conventional 
Fixed Microwave; Tactical Radio Relay; and Precision Guided Munitions. 
However, NTIA and DoD are currently exploring the option of using the 
1710-1770 MHz band for 3G service.
    I understand that three of these systems Air Combat Training; Land 
Warrior; and Combat Identification for the Dismounted Soldier do not 
use spectrum in the 171 0-1770 bands. Is it correct to assume that 
since there is no overlap for these three systems, there is no 
potential for harmful interference into these systems from the 3G 
service operating in the 1710-1770 MHz band?
    Answer. Unfortunately, these assumptions are not correct. The Air 
Combat Training systems air-to-ground air frequencies are above 1770 
MHz, but the ground-to-ground links that transfer the aircraft data to 
and from the Master Station use frequencies below 1770 MHz. However, 
these ground links could be relocated to other federal frequency bands 
if necessary.
    The Land Warrior system uses frequencies between 1772 MHz and 1822 
MHz with a bandwidth of 20 MHz. This means that the lowest channel of 
Land Warrior uses spectrum from 1762 MHz to 1782 MHz, with a center 
frequency of 1772 MHz. The second channel also overlaps the 1755-1770 
MHz band, so reallocation of the 1755-1770 MHz band would mean the loss 
of two of the 11 channels possible, or about 18 per cent of the 
system's capability.
    The Combat Identification for the Dismounted Soldier system has 
been superceded by the Individual Combat Identification System (ICIDS). 
ICIDS operates in the 1755-1850 MHz band. The reallocation of the 1755-
1770 MHz band would mean the loss of 150 channels out of a possible 950 
channels, or about 16 per cent of the system's capability.

    Question 10. Satellite systems are one of the seven major DoD 
systems in the 1710-1770 MHz band. To be specific, I understand that 
the satellite systems at issue is the Satellite Control Stations--the 
satellite up-link for Tracking Telemetry & Control (TT&C). These 
satellite stations operate between 1761-1842 MHz. So, under the current 
NTIA proposal, commercial carriers and DoD would use the 1761-1770 MHz 
band at the same time.
    I understand that under NTIA's current proposal, the only 
commercial use permitted in the 171 0-1770 MHz would be relatively low-
powered cell phones and not the higher-powered cellular towers. Is that 
the case?
    Answer. NTIA has not made a specific proposal regarding 3G 
accommodation. NTIA has examined several options for the accommodation 
of 3 G services in the 1710-1850 MHz band. All these options have been 
analyzed under the assumption that the mobile component of the 3G 
system (e.g., the low-powered, hand-held phone) would transmit in the 
lower part of the band, including 1710-1770 MHz, and the 3G base 
stations would transmit in the higher part of the band (above 2110MHz).

    Question 11. With respect to the operation of DoD satellite systems 
in the 1755-1770 MHz portion of the band, NTIA in its Final Report at 
October of 2001 recognized the ``. . . the potential interference is 
within the range of prudent risk management.'' As a result, the 
commercial mobile systems operating at 1710-1 770 MHz will have no 
adverse impact on the military satellite systems. However, there could 
be interference from the satellite systems into the commercial mobile 
systems.
    Is this correct? Given that NTIA has concluded that potential 
interference into DoD's satellite operations in the 1755-1770 MHz 
portion of the band is within range of prudent risk management, is it 
correct that commercial cell phones would not interfere with DoD 
satellite systems--but, that DoD satellite systems could interfere with 
commercial cell phones that might be near a satellite base station?
    Answer. The conclusion that interference would be ``within the 
range of prudent risk management'' does not mean that NTIA has 
concluded that there would be no interference to Department of Defense 
satellites. It means that NTIA believes that the interference could be 
managed to an acceptable level, though NTIA is not an expert source on 
Department of Defense mission analysis. Since the release of NTIA's 
March 2001 report, industry has increased its estimate of the number of 
hand-held phones that may be operating. In this regard, potential 
interference to Department of Defense satellites may need to be re-
analyzed using new data.
    The major source of potential interference between the two systems 
would be from Federal ground-based satellite control stations into 3G 
base stations. These 3G base stations receive on the frequency on which 
the hand-held phones transmit. The high-power satellite control 
stations could cause interference up to 300 kilometers, in a worst-case 
situation. Terrain shielding between the base station and the satellite 
control station, and the fact that the satellite control station 
antennas move when tracking the satellites, serve to mitigate the 
interference.

    Question 12. In this situation would commercial systems have the 
burden of not interfering with DoD satellite systems and are there 
mitigation techniques that can be used to protect DoD satellite 
operations?
    Answer. New entrants into a frequency band generally have the 
burden of protecting the incumbent users. In this case, 3G operators 
would have to protect Department of Defense operations. Among other 
problems, the Department of Defense satellites have a wide view of the 
Earth and will receive signals from a large number of hand-held phones 
in the United States. Shielding is not an option since the phones must 
be in sight of a cell base station tower. Moreover, Department of 
Defense requirements will likely increase over time requiring greater 
protection and accommodation by 3G operators. The concern is how to 
address this issue if harmful interference is caused to Department of 
Defense satellites. Possible mitigation techniques would be to limit 
the number of mobile phones transmitting simultaneously on satellite 
channels, and by using smaller cell sizes so the power transmitted from 
the mobile phones would be lower.

    Question 13. DoD's Fixed Microwave Systems operate throughout the 
1710-1770 MHz band and would need to be moved to other spectrum before 
commercial systems could use the spectrum. I understand that the DoD in 
its February 2001 Report on the original NTIA spectrum plan indicated 
that alternative, comparable spectrum is available for the Fixed 
Microwave Systems:
    ``A significant amount of frequency spectrum is already allocated 
to the Government on an exclusive basis for Fixed Service operations in 
higher frequency ranges. The 4400 to 4990 MHz and 7125 to 85 MHz bands 
are already employed by the DoD for fixed point-to-point microwave 
communications.'' DoD IMT 2000 Assessment, Appendix E, Page 9
    Do you agree with the finding that there is comparable spectrum 
available for these systems?
    Answer. NTIA agrees that there is alternative spectrum available to 
relocate the Government's conventional fixed microwave systems now 
located in the 1710-1770 MHz band, including Department of Defense 
links. As the Department of Defense notes in its IMT 2000 Assessment, 
it already operates fixed point-to-point microwave systems in other 
Government exclusive bands.

    Question 14. If there is comparable spectrum available, what would 
DoD need in order to relocate these operations, what would be the cost 
to relocate these operations, and how much time would it take for such 
relocations?
    Answer. Like all Federal agencies that would be required to 
relocate fixed microwave operations from the band, the Department of 
Defense would need adequate resources to cover the costs of such 
relocation. Implementing current law, NTIA recently issued rules that 
would require new licensees to compensate federal agencies that 
relocate their operations to make frequency spectrum available for 
commercial use. See 67 Fed. Reg. 41182 (June 17, 2002). The President's 
Budget for Fiscal Year 2003 contained a legislative proposal to 
streamline this reimbursement process by creating a fund from spectrum 
auction proceeds to reimburse the affected Federal agencies.
    NTIA has estimated that the average cost of relocating a 
conventional fixed microwave system would be approximately $350,000 per 
frequency assignment. The Department of Defense currently has 289 such 
for a total of approximately $101 million in relocation costs. The time 
for relocation, from reimbursement, is estimated to be from two to four 
years.

    Question 15. Is it true that many of these systems are in very 
remote areas of our nation, which might facilitate a phased approach to 
re-location?
    Answer. For Department of Defense systems, many of the fixed links 
are in rural or remote areas. There may be merit to a priority list of 
links to be relocated, but the interdependence of links within a system 
must be established before any phased approach is planned. The 
integrity of systems must be maintained at all times.

    Question 16. Another of the seven DoD systems is referred to as 
``Tactical Radio Relay'' wireless communications system that can be set 
up for a battlefield to provide vital communications. I understand that 
these radios can be ``tuned'' to different spectrum frequencies--
allowing them to be used throughout the 1710-1850 MHz band. In other 
words, the DoD could use these radios in spectrum between 1770 and 1850 
MHz, without interfering with commercial use in 1710-1770 MHz (as 
contemplated by the October 2001 NTIA plan). Is this correct? If it is 
correct, what would be the cost of retuning these radios and how long 
would it take to retune the radios?
    Answer. The Tactical Radio Relay system (TRR) tunes from 1350 MHz 
to 1850 MHz in 125 kHz steps. TRRs could technically be retuned to 
avoid channels between 1710 MHz and 1770 MHz. However, this would 
reduce the number of available channels by approximately 500 channels 
and could affect the usefulness of the TRR system for military training 
operations.

    Question 17. DoD uses spectrum in the 171 0-1770 MHz band, at least 
in part, for Precision Guided Munitions. Here in the U.S., training 
with Precision Guided Munitions relies on spectrum in this band. I 
understand that the DoD has deployed these systems not only here in the 
U.S., but in many locations around the world--including areas of 
Europe. In Europe, I understand that there is already extensive use of 
the 1710-1770 MHz band for commercial wireless operations.
    What can you tell us about how the DoD handles the potential for 
interference into precision guided munitions operations overseas? If 
DoD's precision guided munitions system affected by wireless systems in 
other countries can work around European commercial traffic--can DoD do 
the same here in the U.S.?
    Answer. NTIA is not qualified to completely answer questions on 
this subject, and much of the technical and operational information 
regarding Precision Guided Munitions (PGMs) is classified. It is our 
understanding that PGM training is conducted primarily in the United 
States. Air units deployed overseas using PGMs use them operationally. 
PGMs have been used in the Persian Gulf war, in the Balkans, and in 
Afghanistan. In an operational situation, some interference can be 
expected, and could reduce the efficiency of the munition.

    Question 18. If DoD's Precision Guided Munitions could be 
interfered with by commercial cell phones--is this a potential 
vulnerability overseas?
    Answer. NTIA is not qualified to answer questions related to 
Department of Defense weapons vulnerability.

    Question 19. I also want to understand the specific nature of 
potential interference issues. Is it the case that commercial cell 
phones would interfere with Precision Guided Munitions? Or is it that 
Precision Guided Munitions might interfere with commercial cell phones? 
Is it DoD systems or the commercial wireless systems that bear the 
burden or not interfering?
    Answer. As I understand it, there is a slight potential for 3G 
mobile hand-held phones to interfere with PGMs, but the main 
interference problems would arise from PGMs into receiving 3G base 
stations. Commercial operators would have to accept any harmful 
interference to their operation of 3G systems caused by Department of 
Defense operations of PGMs in the authorized protected sites and would 
also be required to protect such Department of Defense operations from 
interference.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Daniel K. Inouye 
                          to Nancy J. Victory

    Question 1. What can be done to improve the current coordination 
process between the FCC and NTIA and more effectively allocate spectrum 
and better balance the needs of commercial and government users?
    Answer. In early April, NTIA and the FCC co-hosted a Spectrum 
Summit to focus on these issues. At the Summit, we elicited the views 
of expert panelists from industry, government, and academia on the 
spectrum management process and how it can be improved to serve all 
stakeholders and users. Among the major problems identified were: gaps 
in governmental coordination between NTIA, the FCC, and the State 
Department; the length and complexity of the allocation process; 
inefficient uses of spectrum and the absence of efficiency-stimulating 
incentives; challenges making ``room'' or ``homes'' for new services 
and technologies; and lack of clarity about spectrum rights and the 
federal spectrum management process.
    The U.S. Government agencies involved in spectrum management must 
work together collaboratively as ``One Spectrum Team'' to serve our 
Nation's collective interests. FCC Chairman Michael Powell and I have 
established a ``One Team'' spectrum management approach where we will 
be meeting on a regular basis to discuss various spectrum issues 
including spectrum planning. This approach is an effort to improve our 
interagency communications and to take a more forward-looking approach 
to accommodate advances in technology. These improvements will enable 
our agencies to be more ``proactive'' and ``predictive'' in spectrum 
management.
    The FCC has created a special Task Force on spectrum management and 
one of the major themes of the effort is spectrum efficiency. NTIA 
plans to support the FCC's Task Force and work closely with the FCC to 
address the issues of efficiency. NTIA also plans to meet with the FCC 
to see what improvements can be made in the coordination of various 
rule-makings, the assignment/licensing process, the preparation to 
radio conferences, and long range planning. Finally, the President's 
Budget for Fiscal Year 2003 contained an initiative to review the 
entire spectrum management process and implement such reforms that 
would make the spectrum management processes more effective and the use 
of spectrum more efficient.

    Question 2. The FCC is examining whether the 2110-2170 MHz band can 
be used for third generation wireless service. Do you know of any 
difficulties that may exist in allowing 3G providers to use in this 
band?
    Answer. There are over 6,900 licenses in the 2110-2170 MHz band, 
including common carrier, radiotelephone, local television 
transmission, and paging services. The FCC has indicated that these 
stations will need to be relocated into other spectrum. The National 
Aeronautics and Space Administration (NASA) also operates a deep-space 
facility at Goldstone, California that transmits high power signals to 
space probes in the 2110-2120 MHz portion of the band. Interference to 
hand-held mobile 3G phones is possible within approximately 200 km of 
the NASA facility.

    Question 3. If DoD is required to share or vacate some portion of 
the 1710-1770 MHz band so that it can be used for third generation 
wireless service, to what spectrum would DoD be able to relocate? How 
much would such a move cost DoD?
    Answer. If Department of Defense systems are able to share the band 
with 3G systems, the cost to the Department of Defense should be 
minimal and relocation would be unnecessary. However, if the Department 
of Defense systems cannot share with 3G systems and must be relocated 
to other spectrum, NTIA has not yet identified such spectrum. For the 
most part, conventional fixed systems could be relocated to alternate 
federal spectrum, but spectrum has not yet been identified for systems 
such as tactical radio relay, air combat training systems, precision 
guided munitions, satellite control stations, Land Warrior, and the 
Individual Combat Identification System. Pending the identification of 
such spectrum, NTIA cannot provide cost estimates. The costs of 
designing and implementing new systems have many factors, one of which 
is the operating frequency that affects the costs of components, the 
power required to achieve the required range, and the antenna size.

    Question 4. The President's FY 2003 Budget calls for a new process, 
a ``Spectrum Relocation Fund,'' for reimbursing government users for 
costs incurred when they are required to relocate to different spectrum 
blocks.
    ``The Administration will propose legislation to streamline the 
current process for reimbursing Federal agencies that must relocate 
from Federal spectrum which has been reallocated for auction to 
commercial users. Under current law, winning bidders must negotiate 
with Federal entities upon the close of an auction and reimburse the 
agencies directly for their relocation costs. The Administration 
proposes to streamline this process by creating a central spectrum 
relocation fund. Auction receipts sufficient to cover agencies' 
relocation costs would be paid into the fund, and Federal agencies 
would be reimbursed for their relocation costs out of the fund.'' 
Budget of the U.S. Government, Fiscal Year 2003, Appendix, Page 241.
    The Administration has not yet submitted language to Congress.
    How would such a Fund be structured? Do you have any concerns about 
how such a Fund to reimburse government users for relocation costs 
might be structured?
    Answer. Under current law, Federal agencies that must relocate 
their radio communications operations from certain bands of Government 
spectrum that have been reallocated to private sector uses are entitled 
to reimbursement from the private sector entities that obtain licenses 
to use the spectrum through an FCC auction. Each FCC licensee is 
required to negotiate with each affected Federal agency in their new 
license area upon the close of an auction and pay the agencies directly 
for their relocation costs. Current law, however, provides that such 
payments are subject to further authorization or appropriations, and 
thus, Federal agencies would be unable to expend these payments without 
additional Congressional action.
    The proposed Spectrum Relocation Fund would replace this 
potentially complex series of negotiations and payments between Federal 
agencies and licensees with a centrally managed account from which the 
Federal agencies' relocation costs will be paid. The fund will be 
managed by the Office of Management and Budget (OMB) and funded by 
receipts from the auction of the reallocated Government spectrum. The 
Administration anticipates that the internal Executive Branch processes 
for this Fund would be similar to the processes used to administer the 
Y2K and Emergency Response Funds, also centrally managed by 0MB. The 
President's proposal also would provide Federal agencies with mandatory 
spending authority (often also called ``direct spending authority'') to 
expend these funds without requiring further Congressional action. The 
proposal would also make the funds available until expended.

    Question 5. Do you believe that the proposal to use auction 
proceeds to reimburse government users as outlined in President Bush's 
budget would make the spectrum management process more effective and 
more efficient?
    Answer. By replacing the time-consuming and potentially complex and 
costly negotiations between Federal agencies and FCC licensees with a 
centrally managed relocation fund, the proposal will benefit Federal 
agencies by providing greater certainty in recovering the costs of 
relocations; the private sector by ensuring more timely access to the 
reallocated spectrum and greater certainty about the ultimate price of 
spectrum licenses obtained at auction; and consumers by providing 
opportunities for new communications services to the public. By 
significantly streamlining the reimbursement process, the President's 
proposal will make the spectrum management process more effective and 
efficient.

    Question 6. There is some discussion that the Relocation Fund could 
be established as a trust fund. However, monies in Trust Funds are 
sometimes used for other budgetary purposes. How can legislators ensure 
that monies will be available for government users to address their 
relocation costs since in some instances it could take years for 
government a user to complete its relocation?
    Answer. The Administration does not propose to set up the Spectrum 
Relocation Fund as a trust fund. Rather, the Spectrum Relocation Fund 
will be a special fund set up for the specific purpose of ensuring that 
Federal agencies receive payment for their relocation costs. As noted 
above, the Administration intends to seek mandatory spending authority 
for the payments so that once the auction receipts are deposited in the 
Fund, funds would be immediately available to the Federal agencies to 
relocate their operations. In addition, the Administration's proposal 
would make the funds available until expended in recognition that some 
relocations could take a period of time to complete.

    Question 7. The United States seems to be at a disadvantage in the 
World Radio Conference (WRC) process with respect to other countries 
such as those in Europe. How can Congress ensure that the U.S. develops 
a U.S. position as well as names its delegation in a timely manner and 
prior to a WRC, thereby allowing for sufficient time to lobby other 
parts of the world?
    Answer. The keys to the United States' success at any World Radio 
Conference (WRC) are coordinated efforts by U.S. Government and 
industry stakeholders in the early formulation of U.S. positions and 
unified and consistent advocacy of those positions in the months 
preceding the conference in both governmental and industry fora. WRCs 
occur on a three-year cycle. In recognition of the increasing 
complexity and importance of the issues addressed in these conferences, 
the U.S. Government has initiated the preparatory process much earlier 
in the cycle to give the United States the ability to formulate its 
positions and to obtain domestic consensus. For example, preparations 
started for WRC 2003 almost immediately after the close of the last 
conference, and most of the U.S. proposals have been completed--nearly 
a year early. The United States can now actively begin to promote U.S. 
positions in bilateral meetings and regional fora. These regional fora 
have become important venues in which the United States has been able 
to persuade neighboring countries of our common interests, garner 
support for U.S. proposals, and build strong coalitions.
    The United States has been very successful in past WRCs and we are 
optimistic that we can meet our objectives for WRC-2003. Europe does 
have an advantage because European countries generally vote as a block 
(45 votes for Europe versus 1 vote for the United States). On the other 
hand, the United States has been successful in pursuing its objectives 
by developing technically sound proposals and strongly advocating their 
importance to other countries. NTIA is currently examining a wide range 
of spectrum management issues under our spectrum reform effort.

    Question 8. Should the ambassador to a WRC be appointed at least a 
year instead of 6 months prior to the conference? Should there be a 
State Department employee designated to drive consensus with respect to 
the U.S. position prior to and until the ambassador is appointed?
    Answer. Most countries in the International Telecommunication Union 
(ITU) rely completely on career ITU technical and regulatory experts. 
These people know each other and are well versed on the issues. The 
United States, on the other hand, selects an ambassador specifically 
for each WRC. The ambassador brings knowledge of the Administration's 
policy goals, but may not know the key WRC players, details of the 
issues, or have sufficient time to develop the necessary expertise. The 
ambassador's six month appointment presents a tremendous challenge for 
learning the issues, becoming part of the team in a preparation process 
that has been underway for two and a half years, and conducting 
outreach. The possibility of moving the appointment date forward should 
be considered.
    Given that the WRC ambassador cannot serve more than approximately 
6 months without Senate confirmation, the State Department could 
designate an employee to serve as interim WRC delegation head starting 
about 15 months prior to the WRC being held. The purpose of such an 
appointment would be to begin to facilitate formal outreach efforts and 
promulgate U.S. views and proposals. This would also allow 
administrative planning for the conference to begin in a timely manner. 
The interim head of delegation would also be in a good position to 
bring the appointed Ambassador rapidly ``up to speed'' on the issues. 
Nonetheless, the U.S. preparatory processes within the FCC and NTIA and 
reconciliation of their views and proposals proceeds separately from 
the appointment of the ambassador.

    Question 9. Should the State Department be required to establish a 
timetable for resolving issues, establishing consensus and lobbying 
other countries prior to WRC? If a timetable is established, what 
incentives can be used to ensure that NTIA, the FCC, and industry work 
to meet the timetables? Do you have any other concerns about 
coordinating a U.S. position for the World Radio Conference? What can 
be done to address these concerns?
    Answer. While WRCs have gotten a lot more attention over the last 
few years at the senior level, there is still room to improve 
coordination among the State Department, NTIA, FCC and other key 
agencies in promoting U.S. positions, particularly in our dealing with 
other countries. Having a more clearly defined State Department focal 
point earlier would be helpful. The general timetable for WRC 
preparatory activities is well established based on the motivation of 
federal and non-federal participants to meet regional deadlines and to 
begin promoting positions. The State Department's formulation and 
promotion of an agreed timetable would be helpful in bringing issues to 
closure and helping all parties involved to understand the process 
objectives. At the same time, some flexibility may be required to solve 
particularly difficult issues. The State Department's development of a 
WRC outreach plan would be a big step in gaining support. However, 
outreach on WRC issues, though having political components, tends to be 
highly technical and require experience in radio regulation, and cannot 
be realistically covered in broad high-level bilateral discussions on 
telecommunications in general. To be successful, outreach must be 
focused on WRC issues specifically and include experts knowledgeable on 
those issues.

    Question 10. GAO has indicated that while NTIA has attempted to 
promote spectrum efficiency that there is no accountability to ensure 
government users are using spectrum efficiently. Also GAO found that 
many federal agencies are understaffed with respect to employees who 
could assist agencies to manage spectrum. The FCC has recently 
indicated its need to increase its number of engineers.
    Does NTIA believe that increasing engineers in federal agencies 
could assist agencies in better managing spectrum as well as improving 
spectrum efficiency?
    Answer. At the most basic levels, Federal agencies need adequate 
personnel resources with the requisite expertise (telecommunication 
specialists, engineers, and computer specialists) to perform the tasks 
necessary to ensure spectrum efficiency. Various members of the 
Interdepartment Radio Advisory Committee have indicated to NTIA 
spectrum management staff that the lack of resources has affected their 
ability to address spectrum efficiency initiatives as well as to 
perform their basic tasks of processing agency requests for frequencies 
and review of spectrum management policy decisions.

    Question 11. Is there anything else that can be done to increase 
the level of accountability with respect to government users and 
spectrum efficiency?
    Answer. One mechanism NTIA uses to ensure some level of 
accountability is the review process in which each Federal agency is 
required to certify that the frequency they are authorized to use by 
NTIA is still required and the characteristics of the system using the 
spectrum are still up-to-date. Most frequency authorizations require 
this review every five years. Some agencies have indicated that they 
have been unable to perform this five-year review for lack of personnel 
resources.
    In the past, NTIA performed spectrum management surveys (as many as 
four per year) in which various locations were visited where spectrum 
was authorized. NTIA would audit these various Federal agencies to 
determine whether the agencies were using the spectrum under the 
conditions for which it was authorized. The audit was an incentive for 
agencies to ensure they were using the spectrum authorized as approved 
by NTIA. NTIA discontinued this practice a number of years ago because 
of the lack of fiscal and staff resources to perform such audits.
    To increase the level of accountability for spectrum usage within 
the Federal agencies, NTIA also imposes fees to recover a portion of 
the costs of its spectrum management responsibilities. These fees are 
assessed on the basis of the percentage of spectrum utilized by the 
Federal agencies. Along with adoption of various spectrum efficiency 
initiatives (e.g., narrowbanding for land mobile radio services), this 
fee system has reduced the number of Federal assignments over the last 
5 years by approximately seven percent. NTIA has also developed a new 
computer software program that the Federal agencies can use to prepare 
frequency assignment requests that comply with spectrum management 
rules and regulations and ensure interference-free operations with 
others in the environment. This capability is continually being revised 
based on feedback from the Federal agencies.

    Question 12. Most government and commercial users estimate that 
they will need more spectrum over the coming years as they introduce 
advanced mobile services such as consumer broadband and richer 
information for emergency responders. Given that the amount of spectrum 
for such uses is finite, will it be possible to accommodate these 
demands if spectrum efficient technologies are implemented?
    Answer. NTIA anticipates increased spectrum demand for all Federal 
agencies, particularly those with national security, public safety, and 
law enforcement missions, in the future. NTIA believes that these 
demands can only be met if new technologies are available that permit 
greater spectrum efficiencies or allow Federal agencies to migrate 
their operations to bands above 3 GHz to relieve some of the current 
congestion. New technologies, including software defined radios and 
dynamic frequency selection, hold great promise for significant future 
advances in spectrum utilization by the Federal Government, and 
ultimately through technology transfer, by the private sector. NTIA 
also advocates adoption by the FCC of policies that promote spectrum-
efficient use by the private sector, including secondary markets and 
accommodation of ultrawideband systems.

    Question 13. It is possible that the government and industry are 
not using spectrum--a valuable public resource--as well as we might. 
For instance, in some cases, they are using technologies that are more 
than 50 years old and were not designed to make efficient use of 
spectrum. In other cases, spectrum has been allocated to services that 
are not making extensive use of it. And, in still other cases, the 
spectrum has been allocated to services that could instead operate in 
other, less crowded frequency bands.
    Should we consider a regulatory or legislative approach that 
reviews spectrum allocations say every 25 years, reallocating spectrum 
that has not been efficiently used?
    Answer. Given the accelerating pace of advances in 
telecommunications technologies and the increasing demand by all users 
of the spectrum, a review of spectrum allocations should be conducted 
more frequently than every 25 years. Conversely, too short a time frame 
might tend to undermine the stability of well established 
telecommunications industries. Currently, at the international level, 
the International Telecommunication Union has adopted a policy of major 
spectrum planning conferences every two to three years to address 
specific agreed-upon topics. Domestically, reviewing spectrum 
allocations is essentially a continuous, on-going process through the 
FCC's rulemaking proceedings and parallel activities within NTIA. In 
these proceedings, current and projected spectrum needs are addressed 
as they are defined with appropriate spectrum review and allocation 
being effected as required. NTIA has for many years undertaken detailed 
reviews (called Spectrum Resource Assessments) of selected frequency 
bands to characterize the current and projected use of the identified 
bands, identified spectrum sharing and interference issues, and 
identified alternative spectrum management approaches. These studies 
provide support for NTIA's spectrum policy actions. Since each of the 
myriad telecommunications industries in the United States evolve along 
unique time scales, establishing a predetermined fixed time for 
reviewing and reallocating spectrum use may be counter-productive in 
promoting new technologies, meeting national defense and homeland 
security spectrum needs, and promoting spectrum efficiency.

    Question 14. If so, is 25 years an appropriate timeframe to 
determine whether to reallocate spectrum or is the element of risk that 
this introduces too great for the spectrum users, whether in the 
government or private industry, to bear?
    Answer. As noted above, a 25-year time frame is not appropriate 
given the accelerated pace of advances in telecommunications 
technologies.

    Question 15. Would such a requirement stifle innovation and the 
deployment of services, etc.? If not, what mechanisms would you suggest 
we employ to update spectrum allocations over time? Would we need to 
employ a different approach to promote spectrum efficient use among 
government users?
    Answer. Undertaking a major spectrum review and reallocation at 
predetermined fixed intervals might well stifle innovation and 
deployment of services. Telecommunications advances do not follow 
predetermined schedules. As discussed above, the process to update 
spectrum allocations over time is an on-going process through the FCC 
rulemaking proceedings and the spectrum management activities at NTIA. 
Conducting more focused periodic reviews by both NTIA and FCC on 
selected bands or services of interest in a manner similar to NTIA's 
Spectrum Resource Assessments would be a positive step forward.

    Question 16. Is there a quantitative mechanism to measure the 
efficiency with which spectrum is used such as the number of 
subscribers served per MHz of spectrum used? Should there be a 
different definition of efficiency for each general type of service, 
for example paging versus PCS voice services?
    Answer. NTIA uses the definition of spectrum efficiency described 
by the ITU, namely the ratio of the communications achieved to the 
spectrum space used. In practice, this definition has value when 
applied to many types of commercial communications systems such as 
cellular/wireless systems, pagers, fixed microwave, and some 
communications satellite systems. For each of these systems, the 
specific technical equations may take a different form. For example, 
for wireless systems, spectrum efficiency might be measured in terms of 
subscribers served per MHz of spectrum used per square kilometer of 
service area. However, many or most of the systems used by the Federal 
government do not fall within the scope of this type of measure of 
spectrum efficiency. These systems include, for example, radars, 
navigation, military tactical, and scientific systems. To date, no 
effective measure for spectrum efficiency has been identified for the 
latter types of systems.

    Question 17. What incentives or disincentives should be put in 
place to encourage the efficient use of spectrum? Should there be 
spectrum efficiency measurements and standards that progressively 
increase over time?
    Answer. A number of incentives have been established by both NTIA 
and the FCC, and are currently in place to encourage the efficient use 
of spectrum. The incentives adopted and/or planned by NTIA take a wide 
variety of forms including, (1) requirements to use only as much 
transmitter power as necessary to ensure a satisfactory service; (2) 
assigning new users to the most heavily used channel first before 
resorting to those less heavily used, in order to minimize the total 
spectrum space used; (3) charging an annual fee to recover costs of 
NTIA spectrum management services based on Federal frequency 
assignments, which has encouraged the release of underused or unused 
frequencies; (4) requiring that use of the radio spectrum by Federal 
agencies be justified for reasons such as specific Presidential, 
legislative, or international commitments; (5) mandating that federal 
agencies adopt narrowband technology for land mobile communications, 
releasing channels for future Federal growth; (6) adopting effective 
receiver performance standards for Federal radiocommunications 
equipment, and advocating greater use of receiver standards, in 
general, to reduce interference and allow tighter ``packing'' of 
frequency assignments; (7) promoting and conducting research into new 
spectrum efficient technologies such as software defined radios; (8) 
promoting the continued transition to more spectrum-efficient digital 
techniques; (9) adopting stringent emission standards for high power 
systems such as radars to facilitate spectrum sharing; and (10) 
promoting greater sharing among incumbent spectrum users.
    While the concept of establishing spectrum efficiency standards 
should be included in any assessment of most radio communications 
systems, this would be but one element in a more comprehensive strategy 
to improving the efficient use of the spectrum. Establishing spectrum 
efficiency standards that progressively improve with time may on the 
surface appear desirable, yet it may at the same time be viewed as 
excessive micromanaging spectrum management. Also, technical 
definitions of spectrum efficiency based on current technology may be 
less valid for new emerging technologies, thus tending to stifle new 
developments.

                                  
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