Spectrum is a natural resource used to provide a variety of communication services to businesses and consumers, as well as federal, state, and local governments. Businesses and consumers use spectrum for a variety of wireless services including mobile voice and data, WiFi- and Bluetooth-enabled devices, broadcast television, radio, and satellite services. Federal, state, and local governments’ uses of spectrum include national defense, law enforcement communication, air- traffic control, weather services, military radar, and first responder communications. IoT applications that rely on spectrum are highly diverse and include connected vehicles, devices in the home, and personal mobile devices. IoT devices communicate using wireless networks, including wide area networks that use cellular networks to cover large areas (e.g., cellular transmission), local area networks that cover about 100 meters (e.g., Wi-Fi within a house), and personal networks covering about 10 meters (e.g., Bluetooth inside a room) (see fig. 1). Each of these wireless devices, like other wireless IoT devices, communicates using spectrum, and the number of connected devices is expected to increase. In 2013, the number of devices connected to the internet globally was estimated to be over 9 billion. In 2015, the Organisation for Economic Cooperation and Development (OECD) estimated that a family of four had an average of 10 devices connected to the Internet in their household, and that this average will increase to 50 devices by 2022. As companies bring new IoT technologies and services to market and government users develop new mission needs, the demand for spectrum will increase. The frequencies, or frequency bands, of spectrum have different characteristics that make them more or less suitable for specific purposes, depending on the specific band (see fig. 2). These bands have different levels of ability to penetrate physical obstacles and cover distances, known as “propagation,” and different limits to the amount of information that they can carry, known as data capacity, and are used for different communication purposes. Low frequency bands are characterized by strong propagation, and are used by numerous IoT devices, some of which may only transmit small amounts of information such as temperature, location, or activity status. The strong propagation of low bands means they can transmit over long distances. Mid-band frequencies have higher data capacity than low bands (because, in part, frequency allocations in higher bands are larger, allowing wider channels), as well as, stronger propagation qualities than higher bands. The bands above 30 GHz have high data capacity but relatively poor propagation, to the point that bands at the highest frequencies can be easily obstructed. This spectrum is currently used by a variety of services, including satellite, fixed microwave, and radio astronomy, and is expected to be important for the next generation wireless technology (5G). FCC is the federal agency responsible for allocating spectrum for various consumer and commercial purposes, assigning spectrum licenses, and making spectrum available for use by unlicensed devices. Licensing assigns frequencies of spectrum, in a specific area, to a specific entity, such as a telecommunications company that operates a network using licensed spectrum. We refer to these bands as licensed spectrum. In some frequency bands, FCC authorizes unlicensed use of spectrum bands—generally referred to as unlicensed spectrum—that is, users do not need to obtain a license to use spectrum. Rather, users of unlicensed devices can share frequencies on a non-interference basis, such as with home wireless networks, cordless phones, and garage door openers. In addition, FCC supports federal emergency-communications activities. NTIA is responsible for establishing policy on regulating federal spectrum use, assigning spectrum bands to government agencies, and maintaining spectrum use databases. Additionally, like FCC, NTIA participates in federal emergency communications activities. NTIA also determines what spectrum bands reserved for the federal government can be made available for commercial use. In managing spectrum, one factor that FCC and NTIA consider is the potential for interference. Harmful interference occurs when two communication signals are either at the same frequencies or close to the same frequencies in the same vicinity, a situation that may lead to degradation of a device’s operation or service. Co-channel interference occurs when two communications systems operate on the same frequency assignment in the same vicinity. Adjacent band interference occurs between two communication systems operating on different, but adjacent frequencies in the same geographic area. Another source of interference can be signals on adjacent spectrum bands leaking into another band. FCC and NTIA work to make more efficient use of spectrum that has been assigned. One means of more efficiently using spectrum is to share it, between and among both federal users and commercial users. In 2017, FCC and NTIA continued oversight of the development of a new- spectrum sharing mechanism called the Spectrum Access System (SAS) in the 3.5 GHz band. Among other things, the SAS allows multiple users access to the same band at different times or places. Within this spectrum band the SAS establishes a three-tiered system of access priority, with federal and non-federal incumbent users having first priority, new non- federal users who have paid for licensed access as second priority, and other users as third priority. This system relies on the SAS to assign frequencies by determining if a frequency is in use by a higher priority user before assigning it to a lower priority user. Stakeholders representing IoT network providers, device manufacturers, users, and federal regulators consistently identified two spectrum-related challenges to the continued growth and development of IoT 1) ensuring the availability of sufficient spectrum and 2) managing the harmful interference from the increasing number of IoT devices. While not currently a crisis, the stakeholders we spoke to agreed that ensuring the availability of sufficient amounts and the right kinds of spectrum is a key challenge for supporting the growth of IoT. Specifically, stakeholders cited three dimensions of the spectrum availability challenge: the amount, the balance between licensed and unlicensed, and the variety of spectrum bands available. According to some reports, incorrectly anticipating industry needs in any of these areas could weaken IoT growth and development in the United States. Amount of spectrum: The amount of spectrum needed for IoT devices is expected to increase with their growth. According to a majority of stakeholders we interviewed, FCC will need to continue to make additional spectrum commercially available in order to meet the demand from expected rapid growth in wireless devices, including IoT devices. FCC officials told us the current amount of available spectrum will be sufficient for the growth of IoT unless devices that use a disproportionally large amount of spectrum become more prevalent. Such devices, like those that stream video, could lead to a spectrum shortage that negatively impacts IoT growth. According to several stakeholders spectrum availability will become an issue as use of these devices increases. FCC officials said that cellular providers experienced similar issues when they introduced smart phones, spurring rapid, exponential growth in consumer demand to send and receive wireless data. Despite the potential for a shortage of spectrum for IoT devices, most of the stakeholders agreed that there should not be specific spectrum set aside for IoT devices; rather, some noted spectrum policies should remain flexible, allowing licensees to determine the best use. Licensed and unlicensed spectrum: A majority of stakeholders said that the spectrum availability challenge includes making both licensed and unlicensed spectrum available. According to FCC staff, FCC is responsible for ensuring sufficient spectrum exists for commercial purposes and will continue to identify new spectrum that can be used for a variety of uses, including by IoT and other wireless devices. This identification of new spectrum includes making spectrum available on both a licensed and unlicensed basis to meet the needs of IoT and other wireless devices. For example, some devices may need to send a signal over a long distance and with a high quality of service to ensure a signal will go through, such as a fire alarm, something licensed spectrum can provide. However, for other devices, cost is a more important consideration. Licensed spectrum has costs that can come from purchasing the license or accessing the spectrum. For example, an official from a supply-chain automation company that develops radio- frequency identification tags told us the lack of inexpensive, low power networks that provide broad coverage is a challenge for their business. With such a network, the company’s tags could send out small amounts of data at intervals to help manufacturers track their goods. However, the cost of such a service is important if these tags are to attach to all size packages because paying for GPS or a wireless connections for each would make it unfeasible. According to several stakeholders, the correct balance between licensed and unlicensed spectrum is difficult to know. Spectrum bands: Several stakeholders indicated that the need to make various spectrum bands available for IoT devices contributes to the spectrum management challenge. As previously described, each band of spectrum has different characteristics, such as the ability to carry data long distances and penetrate obstacles. IoT devices have diverse spectrum needs, such as needing to send a signal over a distance or send a constant stream of information. For example, in the package delivery industry there could be IoT devices, sending signals over a distance, that read the location of the vehicle and direct the driver on a different route based on traffic and deliveries. In addition, there are IoT devices that can monitor containers being delivered including their location, temperature within the container, and other characteristics. In both these examples, the devices can send signals over long distances to systems that can monitor the information. Some stakeholders and FCC staff also agreed that managing interference caused by the increasing number of IoT devices will challenge the continued growth of IoT. As previously stated, interference occurs when signals in the same vicinity attempt to access the same spectrum bands or bands close to each other, causing the signals to degrade. This can lead to intermittent access, poor reception, or no reception. As the number of wireless IoT devices grows, the chances of harmful interference increases. The number of IoT devices is predicted to grow so fast the instances of harmful interference could be difficult to track. Furthermore, according to one stakeholder, with devices being made by more manufacturers, not all devices are created of equal quality, potentially further increasing the chance that such devices will cause interference. A recently issued GAO report found that according to FCC staff, the expansion in wireless services and devices, not just IoT, has contributed to interference becoming more of a challenge for FCC. FCC staff agreed that managing interference is becoming more challenging as the number of wireless IoT devices grows. However, according to FCC staff, relatively few complaints pertaining to licensed services involve devices that are compliant with FCC regulations and operating properly. Managing interference may be particularly difficult in homes where many devices rely on unlicensed spectrum. The FCC Technical Advisory Council’s (TAC) report from 2014, expressed concerns that the rapid growth of IoT could exacerbate interference issues in the home. Particularly, the growing reliance on unlicensed spectrum for many consumer IoT devices has contributed to this concern. For example, many IoT devices using unlicensed spectrum, such as digital assistants or wireless speaker systems, use Wi-Fi, Bluetooth or similar technology to transmit a short distance to a smart phone or Wi-Fi router. Not all agree however, that this use is an issue. One spectrum expert we interviewed for a recently-issued report said that interference among consumer devices is less likely to be an issue because they only transmit for short durations and over short distances. If the devices only transmit a short distance then many devices can transmit on the same spectrum. Similarly, if devices only transmit for short durations then they can take turns transmitting over the same spectrum. To plan for spectrum needs, FCC has repurposed spectrum by making additional spectrum available for commercial purposes and, according to FCC officials, the agency is continuing to look for additional opportunities to do so. For example, in 2016, FCC issued a final order that opened up high-band spectrum (above 24 GHz) for use with 5G networks and applications. This particular rulemaking from FCC opened up a total of 10.85 GHz of spectrum, 3.85 GHz for licensed mobile use and 7 GHz for unlicensed use. According to FCC, this order follows a technology neutral approach to planning by allowing spectrum users to develop technologies for the spectrum and not have FCC dictate its specific use. Advances in technology that now allow use of spectrum above 24 GHz for high-speed mobile services led the FCC to initiate the proceeding resulting in this order. Previously, this spectrum was best suited for various satellite or fixed microwave applications. As shown in table 1, in recent years FCC has freed up spectrum for licensed use, unlicensed use, and sharing between the two. In 2016, FCC issued a proposed rule to allow mobile uses in an additional 17.7 GHz of spectrum. In 2017, the FCC issued a Notice of Inquiry seeking input on potential opportunities for additional flexibility, particularly for wireless broadband services, in spectrum bands between 3.7 and 24 GHz. However, according to FCC staff, the process of identifying and freeing up new spectrum can take a significant amount of time as FCC must complete a rulemaking and either relocate existing users or define sharing arrangements between the existing users and new users. FCC has also proposed sharing mechanisms it hopes will allow some bands to be used by existing users as well as additional uses in the future. Other efforts to make additional spectrum commercially available have included examining the potential for sharing the 5.9 GHz band that FCC designated for transportation safety. This band was allocated over 15 years ago and designated exclusively for safety communication between vehicles and between vehicles and infrastructure. In recent years, FCC has worked with the automobile industry and Department of Transportation to assess whether all or a portion of that spectrum could be shared. FCC is also monitoring development of specifications to support 5G—the next generation of wireless networks. According to FCC, the 5G technologies that providers develop are projected to bring wireless networks lower latency, better coverage, faster Internet connections, and allow for more connections than the existing cellular network, all of which may enable more IoT devices to be connected. However, 5G technology is still being developed, and while specifications are not fully defined, according to the plans from the standards-making bodies there will be particular standards designed to support IoT communications. In 2016, NTIA issued a report on the potential roles of the federal government in support of the growth of IoT. It addressed specific questions regarding the spectrum needs and potential interference related to IoT devices and reaffirmed the government’s role in supporting technology growth. Furthermore, the report identified ongoing initiatives that support IoT as well as proposed future steps the Department of Commerce can take to further support IoT development. For example, NTIA’s report proposed that it continue to analyze the usage and growth of IoT devices through its survey used to collect its Digital Nation data. Recent Digital Nation surveys have asked about wearable devices, use of smart televisions, and use of Internet-enabled mobile phones, all uses that include IoT applications. The most recent survey, in 2015, also asked Internet users whether they interact with household equipment or appliances via the Internet. NTIA officials recently told us that they will continue to monitor these connected items to track trends in their use but do not intend to expand the survey to include questions about additional IoT devices. Specifically, in January 2017, NTIA sought out public comment on its November 2017 Digital Nation survey including comment on a proposed questionnaire. NTIA subsequently submitted its proposed questionnaire to Office of Management and Budget for final approval. NTIA also has ongoing spectrum studies through its Institute for Telecommunications Sciences and the findings may apply to IoT’s use of spectrum. As shown in table 2, these studies touch on a number of areas related to IoT including interference issues and spectrum use. NTIA also co-chairs the Wireless Spectrum Research and Development Interagency Working Group that coordinates spectrum-related research and development activities across the federal government, academia, and the private sector. Among other activities, this working group has developed the Wireless Spectrum Research and Development Inventory that, in its 2016 iteration, provides information on completed projects or those scheduled to be completed between January 1, 2015 and December 31, 2018. FCC has a strategic goal of promoting economic growth, and one way FCC pursues that goal is by ensuring that there is sufficient spectrum to support commercial demand. Most stakeholders agree that the growth in mobile IoT devices will eventually require additional spectrum to operate effectively. According to some stakeholders we interviewed and reports we reviewed, rapid, unexpected growth in two areas could lead to congestion and interference that could slow the growth of IoT in the United States: (1) high-bandwidth devices and (2) devices that operate in unlicensed bands. Federal standards for internal control instruct agencies to address risks such as these by estimating the significance of the risk, analyzing the likelihood of it occurring, and assessing its nature. Such assessments can be used to determine how to respond to the potential risks that could prevent agencies from meeting their goals. Rapid growth in high-bandwidth and unlicensed spectrum devices represent risks to FCC achieving its goal of promoting economic growth by ensuring that sufficient spectrum is available. FCC officials said that the agency tracks industry-produced trends and projections related to spectrum demand and use but does not focus on specific devices. Rather, it relies on network providers to manage and track the spectrum related to specific device types. When more spectrum is needed, FCC officials said that FCC identifies additional spectrum and makes it available to the commercial sector. However, this reactive approach may not adequately address the risks caused by high- bandwidth and unlicensed-spectrum devices. High-bandwidth devices: Some stakeholders we interviewed and FCC officials said that rapid increases in high-bandwidth IoT devices could overwhelm current wireless networks. Such IoT devices could include video-streaming devices or unmanned drones, which have much higher data needs and will require a lot of bandwidth. FCC officials said that the supply of spectrum has not always kept pace with demand caused by rapid increases in high-bandwidth devices. For example, the officials said that wireless networks were overwhelmed when providers introduced smart phones. Until then, ringtones represented the bulk of demand for wireless data, but mobile Internet browsing caused the demand for wireless data to increase several fold. In 2014, the FCC TAC warned that new IoT applications could overwhelm networks the same way smartphones and other new technologies have in the past. The TAC recommended that FCC monitor IoT wireless networks with a specific focus on high-bandwidth devices. Unlicensed spectrum use: Some stakeholders also said that unlicensed bands are particularly vulnerable to congestion and potential interference because of expected growth in IoT devices. For example, all the commercial, industrial, and personal devices that connect using WiFi and Bluetooth networks use unlicensed spectrum. In 2014, the TAC indicated that the majority of wireless IoT devices will rely on unlicensed spectrum and recommended FCC make sufficient unlicensed spectrum available for devices operating on local and personal area networks, like WiFi and Bluetooth. However, FCC may not have enough information to determine when the amount of unlicensed spectrum is sufficient. While network providers can manage the number of devices on their own licensed networks, this approach does not work for devices that use unlicensed spectrum, and FCC does not track unlicensed spectrum utilization. It does not track use of unlicensed spectrum because congestion of unlicensed spectrum is geographically and technically challenging to track. Specifically, it is geographically challenging because network congestion and demand can vary over very short distances and technically challenging because there are so many bands of spectrum that would have to be tracked at one time and unlicensed spectrum typically propagates over relatively short distances. However, there may be ways to track unlicensed use that does not require monitoring. For example, NTIA’s Digital Nation survey provides information on select IoT devices using unlicensed spectrum that could help track unlicensed spectrum use. While FCC makes additional spectrum available when needed, it lacks an early warning system for high-risk sectors, like high-bandwidth and unlicensed-spectrum devices. The process of identifying and reallocating spectrum is a lengthy process that can take years, including the need to identify new bands, address the needs of existing users on the bands, establish service rules, and license or assign the spectrum for commercial uses. Without tracking the high-bandwidth and unlicensed-spectrum devices, FCC is not assessing a key risk associated with its goal of promoting economic growth. Rapid, unexpected growth in these IoT sectors could lead to spectrum congestion and interference that could slow or halt the economic growth associated with IoT until FCC can make additional spectrum available. Like the United States, France, Germany, the Netherlands, and South Korea are among the world leaders in the development of IoT. We contacted public and private officials in these countries to identify their approaches to spectrum planning to address the growth of IoT. Those officials described approaches to planning for future spectrum needs that are similar to the United States in one area but different in others (see table 3). Specifically, we found that all four countries practice technology neutral spectrum planning, an approach that was broadly supported by the stakeholders we interviewed, including wireless carriers, a technology manufacturer, academics, and a nonprofit group. Some of these stakeholders indicated that this approach to spectrum planning encourages innovation as it allows developers to choose the most appropriate spectrum bands for new technology without having to take the extra step of getting regulators’ permission for each new device or application. Two of the selected leading countries, Germany and South Korea, have developed national IoT plans focused on developing IoT for industry; however, only South Korea has a plan that specifically addresses spectrum issues. South Korea’s national IoT plan seeks to increase collaboration among IoT stakeholders, promote innovation, and develop services for the global market in order to promote productivity and efficiency in Korean business. South Korea also developed a mid- to long-term spectrum plan to respond to the expected growth in demand for spectrum as IoT expands and 5G cellular networks are deployed. Released in 2016, the plan intends to makes more spectrum available to support new services such as smart homes, smart factories, smart cities, remote medical treatment, and unmanned vehicles. Specifically, the South Korean spectrum plan that includes IoT and establishes the following goals: almost doubling the amount of available spectrum available, expanding from 44 GHz of available spectrum to 84 GHz by 2026, and increasing the efficiency of spectrum use, promoting spectrum sharing, and advancing international coordination in spectrum planning. Officials from France and the Netherlands told us that making more unlicensed spectrum available is a high priority in their spectrum planning. These officials told us that unlicensed spectrum promotes greater innovation by lowering barriers to access, and many IoT devices are expected to be designed to operate on unlicensed bands. German and Dutch officials told us that numerous smart city IoT applications have been developed in their respective countries, most of which operate on unlicensed spectrum. For example, German and Dutch networks use unlicensed spectrum for purposes that include managing street lighting, preventing the theft of property such as bicycles, monitoring parking spaces, and managing agricultural resources. To provide service options for low power IoT devices, private companies in France, the Netherlands, and South Korea developed nationwide low- power wide-area networks (LPWAN) which use unlicensed spectrum to transmit data. These LPWANs use the 800 and 900 MHz bands to transmit data from wireless IoT devices such as sensors and location trackers. Signals in these bands can be transmitted over long distances and can penetrate obstacles. According to one LPWAN provider, the distance served by a LPWAN site is greater than a single cellular network site. However, according to the same LPWAN operator, the bands used for LPWAN networks have limited data capacity compared to those used by cellular networks. According to officials and telecommunications industry stakeholders in these countries, LPWANs offer several potential benefits including low barriers to entry, low costs, and broad coverage. According to a Dutch telecommunications industry stakeholder most devices that use LPWANs transmit only small amounts of data. A telecommunications industry stakeholder in France told us that the long range and strong propagation of these LPWANs make them useful for utility metering data and South Korean official told us that LPWANs are used to transmit location or temperature data. For example, in the Netherlands, LPWANs are used to monitor water depth and quality, manage street lighting, and to track the location of business inventory and personal property. In France, LPWANs are used for similar tracking as well as smoke detectors. Other uses for the LPWANs are currently in development. For example, a representative of a Dutch telecommunications company told us that in the Netherlands, IoT devices operating on the nationwide LPWAN are being tested at an airport for use in logistical processes such as baggage handling. Additionally, a Dutch railway station is experimenting with IoT technology that monitors rail switches using the LPWAN, and depth sounders at the port of Rotterdam have been fitted with devices to connect them to the network. South Korean officials said that the LPWAN in their country also provides specialized location-tracking services. Selected leading countries take many similar approaches to each other and the United States to managing spectrum in order to address related challenges (see table 4). Like the United States, spectrum-planning officials in France, Germany, and the Netherlands told us that it was necessary to coordinate spectrum planning with other countries on their borders. Officials in each of these countries told us that European spectrum planning is complicated by the number of countries that share borders. Germany, for example, borders nine other countries. As each country is responsible for its own spectrum planning, if their plans are not closely coordinated, there is a potential for cross-border interference. This coordination is complicated by the fact that European countries have legacy spectrum allocations, and these must be accommodated in spectrum planning. The United States, by contrast, shares its border with only Mexico and Canada. According to FCC officials, both of these countries generally align their spectrum plans to those of the United States, reducing interference issues. In order to facilitate international coordination of spectrum planning, each of the four selected leading countries, like the United States, belongs to a regional spectrum-planning association that works to harmonize spectrum planning among member states. Officials of regional groups we spoke with told us that harmonizing can reduce interference issues across borders and facilitate interoperability of devices across different countries. Officials from the manufacturing and telecommunications industries told us that this interoperability creates a larger potential market for IoT devices, thereby improving the economies of scale for the manufacture of IoT devices and reducing production costs. Regional planning associations are also taking steps to prepare their member countries for the spectrum needs of IoT. For example, an official of one association, the Inter-American Telecommunication Commission, told us that in 2016 it held a workshop on “machine-to-machine” technologies that brought together spectrum planners and stakeholders from IoT-related industries. Regional-planning associations also represent their member countries at World Radiocommunications Conferences (WRC). An official from one association told us that due to the diverse nature of IoT devices and applications it is unnecessary for IoT to be explicitly addressed as an agenda item at WRCs. However, the official further stated that the spectrum needs of specific IoT applications— including low power sensors, robotics, and connected vehicles—are included on the agenda. For example, the next WRC is scheduled for 2019 and includes an agenda item addressing connected vehicles, which are closely linked to IoT. Spectrum-planning officials in each of the selected leading countries told us they are concerned about the potential for spectrum congestion, due to growth in the number of IoT devices. However, like FCC in the United States, these officials do not currently believe such congestion presents an immediate problem. Representatives of the four countries we spoke with told us that one way that they address the potential challenge of spectrum congestion is through the use of spectrum-sharing arrangements. Representatives from Germany specifically stressed the importance of finding additional sharing arrangements in response to the expected spectrum needs for IoT. In 2016, both France and the Netherlands initiated pilot programs for spectrum sharing in which multiple users’ access the same bands while prioritizing use by the licensee. These pilot programs are similar to the dynamic-sharing model that FCC adopted in 2015, as described previously. However, whereas the model adopted by FCC has three tiers of users, the model used by France and the Netherlands has only two, and lacks the third tier of general access users. Unlike the United States, officials from Germany and France told us that they directly monitor spectrum congestion. For example, German officials told us that there are spectrum-monitoring services at six locations around the country, and that they perform mobile measurements of spectrum congestion. FCC officials told us that their primary means of tracking congestion is to communicate with spectrum licensees. According to officials from the Netherlands, the Dutch spectrum management agency takes a similar approach and has struck an agreement with a group of telecommunications companies to share information concerning IoT’s interference and congestion issues. Officials also told us that it is easier to monitor spectrum congestion in smaller countries, as there is simply less geographical space to monitor. Nevertheless, officials in France, Germany, and the Netherlands told us that monitoring spectrum is a challenging task, as it is difficult to determine how many wireless devices are active at any given time. FCC has a strategic goal to promote economic growth and effective spectrum management represents a key way that FCC can support meeting that goal. To that end, FCC officials said that the agency continuously seeks to make additional spectrum available and broadly tracks spectrum demand. However, stakeholders and FCC’s own technical advisors have identified rapid, unexpected growth in both high- bandwidth devices and unlicensed spectrum as risks to effective spectrum management. By overwhelming existing networks before FCC can make more spectrum available, rapid growth in spectrum demand could slow or halt IoT’s potential to facilitate economic growth. Absent additional efforts to assess the risks to effective spectrum management by focusing on high-bandwidth and unlicensed-spectrum devices, spectrum congestion and interference could slow IoT growth. We are making the following two recommendations to the Chairman of FCC. The Chairman of FCC should track the growth in high bandwidth IoT devices, such as video-streaming devices and optical sensors. (Recommendation 1) The Chairman of FCC should track the growth in IoT devices relying on unlicensed spectrum. (Recommendation 2) We provided a draft of this report to FCC and the Department of Commerce for their review and comment. FCC provided comments in a letter, which is reprinted in appendix IV. FCC and the Department of Commerce provided technical comments that we incorporated as appropriate. In its written comments, FCC did not concur with our recommendation that it track growth in high-bandwidth devices. FCC noted that it continues to believe that the best approach to track growth of devices is by monitoring overall traffic statistics and forecasts and how these devices affect aggregate spectrum requirements for all applications and services. However, FCC noted that it would task the Technological Advisory Council (TAC) to periodically review the state of the IoT ecosystem to ensure that the planned communications infrastructure is sufficient to support the needs of the growing sector and advise on any actions the FCC should take. We continue to believe that tracking the growth of high- bandwidth devices is necessary to avoid the potential spectrum shortage and that the TAC may be able to help FCC accomplish that. FCC did not concur with our recommendation to track IoT devices that rely on unlicensed spectrum. FCC noted that it may not be practical to determine which devices qualify as IoT or quantify their effect on spectrum utilization. As a result, FCC said that the best way to monitor growth in unlicensed IoT devices is to continue to monitor published papers and conferences and work with industry. However, since most of the projected IoT growth is expected to occur in unlicensed bands that are not protected from interference, we continue to believe that FCC should place a greater focus on tracking IoT devices in these bands. For example, the TAC may also be well positioned to help FCC track unlicensed IoT devices. As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to the Secretaries of Homeland Security and Commerce, the Chairman of FCC, and appropriate congressional committees. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov. If you or members of your staff have any questions about this report, please contact me at (202) 512-2834 or goldsteinm@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Major contributors to this report are listed in appendix IV. We were asked to examine the challenges facing federal spectrum managers and the steps they are taking to address those challenges. In this report we discuss: (1) the spectrum-related challenges stakeholders identified due to the anticipated growth of IoT, (2) steps FCC and NTIA are taking to plan for the anticipated growth in the demand for spectrum as a result of IoT, and (3) efforts that selected leading countries are undertaking to plan for IoT’s spectrum needs and ways that these efforts compare with those of the United States. To identify the spectrum-related challenges stemming from the expected growth of IoT, we reviewed documents from the Federal Communications Commission (FCC) and the National Telecommunications and Information Administration (NTIA), the two federal agencies that have direct authority over spectrum planning. Further, in order to identify relevant literature for review, we (1) conducted a key word search of data bases; (2) searched IoT and spectrum related websites, such as those of cellular carriers, telecommunications industry groups, and nonprofit organizations; (3) reviewed prior GAO reports on IoT and spectrum issues; and (4) asked FCC and NTIA officials, researchers, and non-profit organizations to identify relevant documents. Through our literature search, we identified a number of documents, including academic reports, government reports, congressional committee hearings, and trade journals addressing the projected growth of IoT to understand the number of devices that would be relying on the spectrum in the coming years. We also reviewed literature concerning the growth of other wireless devices, such as smart phones, and the burden they place on the spectrum, to assess if there are any lessons learned from the demand these devices placed on the spectrum that could be applied to the expected growth of IoT. In addition, we interviewed FCC and NTIA officials, and conducted 24 telephone and in-person interviews with officials from industry associations, industrial and commercial users of IoT, nonprofit groups, subject matter experts, manufacturers, and telecommunications companies to obtain their perspectives on the challenges presented by the expected growth of IoT. The experiences of the stakeholders are not generalizable to those of all IoT stakeholders in the United States; however, we believe that the information we gathered from selected stakeholders provides a balanced and informed perspective on the topics discussed. We identified relevant stakeholders by reviewing comments submitted to NTIA in response to its request for comment on the government’s role in planning for IoT growth, reviewing congressional hearings, and conducting a literature review encompassing academic articles, government reports, and trade journals. We interviewed officials from businesses that manufacture Internet-connected devices or equipment that would be considered part of IoT, including agriculture, telecommunications, and manufacturing. We spoke with these officials to gather information about the spectrum challenges they face as businesses working with and developing IoT devices. We then analyzed the results of these interviews and related documents to identify the main themes and develop summary findings. To characterize the views captured during the interviews, we defined the terms to quantify the views as follows: “most” users represents 18 to 24 users, “a majority of” users represents 11 to 17 users, “several” users represents 6 to 10 users, and “some” users represents 3 to 5 users.” To identify the steps FCC and NTIA are taking to plan for the anticipated growth in the demand for spectrum as a result of IoT, we interviewed FCC and NTIA officials and reviewed agency reports and documents. We interviewed officials to understand any agency plans to address spectrum needs for IoT devices and how these plans aligned with the spectrum planning for other wireless devices. We reviewed agency reports and documents on spectrum planning, IoT planning, and the role of the federal government in planning for IoT. Specifically, we reviewed comments submitted in response to NTIA’s request for comment and the final report developed in response to the comments received on the role of the federal government. To identify other relevant reports and literature from FCC and NTIA, we asked officials at the meetings and conducted a literature search. We also compared those planning efforts against FCC’s and NTIA’s strategic goals and the federal internal control standards related to risk management. Specifically, we compared FCC’s planning against its strategic goal to promote economic growth and national leadership in telecommunications, and NTIA’s efforts against its mission to expand the use of spectrum by all users and to ensure that the Internet remains an engine for continued innovation and economic growth. We also assessed the efforts of both agencies against leading practices that we previously developed for identifying, analyzing, and responding to risks related to achieving agency objectives. To identify the efforts that selected foreign governments are taking to plan for the expected spectrum needs of IoT and ways their efforts compare with those of the United States, we surveyed trade journals, industry publications, and foreign governments’ websites and publications. Through this survey, we identified seven countries of potential interest, all of which have conducted spectrum planning in support of IoT: China, France, Germany, Netherlands, Japan, Singapore, and South Korea. We selected four of these countries—France, Germany, the Netherlands, and South Korea—as being like the United States and leaders in IoT development based on additional criteria including the level of their economic development, the maturity of their telecommunications infrastructures, the comparability of their governments to the United States, and the accessibility of their spectrum-planning information. We categorized a country’s economy as fully developed if the United Nations Statistics Division categorized it in 2016 as existing in a developed economic region. When determining the maturity of a country’s telecommunications infrastructure, we followed the United Nation’s International Telecommunication Union (ITU) in categorizing a country’s telecom infrastructure as mature if it was included in the top quartile of the 175 countries ranked in ITU’s 2016 Information and Communications Technology Development Index. We considered a country to have a government structure comparable to that of the United States if Freedom House’s 2016 Freedom in the World report rated it as “free” and the Polity Project categorized it as a “democracy” in 2015. Finally, we considered the extent to which information could be efficiently procured from each country under consideration. We reviewed documents and conducted telephone and written interviews with officials from the spectrum management agencies in each of these four countries. We also conducted eight telephone and written interviews with officials from foreign telecommunications companies, IoT manufactures, and international spectrum-planning groups to gather information about IoT development, challenges, and responses to these challenges in the leading countries that we contacted. We conducted this performance audit from August 2016 to November 2017 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. Barcoding Case IH Deere & Co. O-I Consumer Technology Association CTIA National Association of Manufacturers Telecommunications Industry Association U.S. Chamber of Commerce Wi-Fi Alliance World Shipping Council New America Foundation Public Knowledge Technology and Innovation Foundation Jeffrey Reed, Ph.D. (Virginia Polytechnic Institute and State University) Douglas Sicker, Ph.D. (Carnegie Mellon University) AT&T Sigfox Verizon Agence Nationale des Fréquences (France) Agentschap Telecom (Netherlands) Bundesnetzagentur (Germany) Ministry of Science, ICT, and Future Planning (South Korea) In addition to the individual named above, Keith Cunningham (Assistant Director); Eric Hudson (Analyst-in-Charge); Camilo Flores; Adam Gomez; Josh Ormond; Andrew Stavisky; Hai Tran; and Michelle Weathers made key contributions to this report.

Summary: IoT generally refers to devices (or “things”), such as vehicles and appliances, that use a network to communicate and share data with each other. The increasing popularity of wireless IoT devices that use spectrum has created questions about spectrum needs. GAO was asked to examine issues related to spectrum and IoT. This report discusses, among other things, (1) spectrum challenges related to IoT, (2) how the federal government plans for IoT’s spectrum needs, and (3) how selected leading countries prepare for IoT’s spectrum needs. GAO reviewed documents and interviewed officials from FCC and the National Telecommunications and Information Administration as well as 24 officials from a variety of sectors, including government, commercial, and manufacturing. Stakeholders were selected based on a literature review, among other factors. GAO interviewed government and commercial representatives from four leading countries regarding IoT planning and development and reviewed associated documents. These countries were selected based on criteria that included level of economic development among other criteria. The stakeholders GAO spoke with identified two primary spectrum-related challenges for the internet of things (IoT)—the availability of spectrum and managing interference. Although not considered an immediate concern, Federal Communications Commission (FCC) staff and some stakeholders noted that rapid increases in IoT devices that use large amounts of spectrum—called high-bandwidth devices—could quickly overwhelm networks, as happened with smart phones. Stakeholders and FCC staff also indicated that managing interference is becoming more challenging as the number of IoT and other wireless devices grows, particularly in bands that do not require a spectrum license. The figure below illustrates the uses of radio frequency spectrum, including unlicensed use. FCC plans for IoT’s spectrum needs by broadly tracking spectrum demand and making additional spectrum available as needed. Ensuring sufficient spectrum to support commercial demand is one way FCC pursues its strategic goal of promoting economic growth. FCC has made additional spectrum publicly available at least four times since 2015 by repurposing over 11 gigahertz of spectrum. However, FCC does not track the growth of IoT devices in two areas that pose the greatest risk to IoT’s growth—high bandwidth and unlicensed-spectrum devices. In 2014, FCC’s Technical Advisory Council (TAC) recommended that FCC monitor high-bandwidth IoT devices and make sufficient unlicensed spectrum available. FCC officials said that FCC monitors spectrum use broadly and makes spectrum available as needed. However, since the process of reallocating spectrum is lengthy, FCC may not have adequate time to take actions to avoid a shortage, possibly hindering IoT’s growth and associated economic growth. Spectrum planners in four leading countries—France, Germany, the Netherlands, and South Korea—have taken steps similar to those taken by the United States in preparation for IoT’s expansion, including taking a technology-neutral approach that stakeholders believe encourages innovation. Unlike the United States, officials from two leading countries said they are concerned about spectrum congestion from the growth of IoT devices, but only one is actively monitoring congestion. In addition, three leading countries have developed nationwide low power wide-area networks that use unlicensed spectrum with potential benefits including low costs and low barriers to entry. FCC should track the growth in (1) high-bandwidth IoT devices and (2) IoT devices that rely on unlicensed spectrum. FCC did not believe these actions are necessary but noted that it would ask its TAC to periodically review and report on IoT’s growth. GAO continues to believe the recommendations are valid.