Disagreements Remain on Making Federal Users Account for Spectrum They Use

Spectrum fees would make government agencies use their spectrum more efficiently, said a report by the group’s Incentives Subcommittee. “One step towards greater efficiency of spectrum usage would be for the federal government to apply a simple fee on spectrum,” the report said. “The fee would have the effect of providing an incentive for those who value their assigned spectrum -- or portions of it -- little if at all to reduce or abandon their spectrum holdings or to use them more efficiently.” NTIA would charge a “below market” fee that would increase over time.

CSMAC previously agreed to look more closely at Administrative Incentive Pricing (AIP) as practiced in the U.K. Under the AIP model, government agencies pay for spectrum they use, to encourage efficient use of the airwaves. The fee proposal reflects “a narrow majority of the Subcommittee” but not a “consensus among all members,” the report notes.

Subcommittee Chairman Michael Calabrese of the New America Foundation said the subcommittee split 4-3 on fees. “We have to get the consensus right,” he said. “We had an alternative viewpoint that spectrum fees, particularly for federal users, were on a cost-benefit basis not worth doing.”

Jennifer Warren, representing Lockheed Martin, said it’s unclear whether fees will lead to more efficient use of spectrum. “What is for certain is that there will be an administrative cost, a bureaucracy overlay, to do the transfer of funds, to develop the prices … with absolutely nothing but speculation as to whether or not it will actually drive greater effect and/or efficient use of the spectrum that is being used,” she said.

Julie Zoller, representing ITT’s Advanced Engineering & Sciences Division, said the report must include language indicating sharp disagreements over fees. “From the time the subcommittee began meeting I think it was clear that there were legitimate differences between our various views on how we felt about fees,” she said

The report will have to do a better job of addressing the international impact of spectrum fees, former NTIA Administrator Janice Obuchowski warned. “The U.S. stands very much alone in how we use spectrum,” she said. “Anything we say about fees will be weaponized against us in the international environment and I don’t think that’s just a loose threat.”

Obuchowski also said any fee proposal must take into account the declining budgets faced by government agencies. “We're in an environment where we don’t even have a [FY2011] budget,” she said. “We're operating under a Continuing Resolution and the Pentagon and every other major agency is trying to figure what it’s going to do in that context.”

But Robert Pepper, with Cisco, said it has long been clear that fees and administrative pricing issues are controversial and the discussion will have to occur before the full CSMAC, not a subcommittee. Pepper said the U.S. must remain concerned about how to maintain its leadership in spectrum. “This is one way to do this,” he said.

The report finds that much spectrum remains underutilized. “The net result is that some spectrum is used intensively and efficiently, while other spectrum is used inefficiently or not all,” the report says. “While nearly all valuable spectrum frequency bands are assigned to users, the vast majority of spectrum is not used in most locations and at most times even in the so-called ‘beachfront’ bands below 3 GHz. Across the country, this underutilized spectrum represents an enormous untapped capacity for broadband; particularly in rural areas where average usage of ‘beachfront’ spectrum is in the low single digits.”

The report also recommends strengthening OMB Circular A-11, which directs agencies to consider the economic value of spectrum “when developing economic and budget justifications for procurement” of systems. The focus of the circular thus far has been on capital planning, the report said. “The Committee believes it would be more useful to focus on ensuring the agencies/departments give more consideration to trade-offs in spectrum use in their management processes. Doing so will likely yield more measurable and impactful elements for management processes to demonstrate and achieve greater improvements in overall spectrum management and use.” The report recommends revised language, including a requirement that agency heads must obtain NTIA certification “that the radio frequencies required can be made available” before submitting estimates “for the development or procurement of major radio spectrum-dependent communication-electronics systems.”

The changes to the OMB circular would be a “way of turning the screws a bit tighter, giving more transparency, more accountability,” Chairman Calabrese said.

The report also proposes a Spectrum Innovation Fund, similar to the Spectrum Relocation Fund, which paid the costs of reallocating federal users to other spectrum to clear the AWS-1 band. “Federal spectrum incumbents need the resources to take affirmative steps to enable more intensive access and band-sharing by other users -- federal or non-federal, as technically feasible,” the report said. The relocation fund could be broadened, “turning it into a revolving fund for modernizing federal systems not only to relocate when conditions permit, but to facilitate the shared or more efficient use of other bands,” the report said.

Bryan Tramont of Wilkinson Barker, CSMAC co-chairman, said the group should try to make at least some recommendation on fees and the other proposals in the report before the group’s charter expires in January. Otherwise work would have to start over again next year, he warned.

"I think there’s an awful lot of independent thinking that’s gone into this,” said Dale Hatfield, of the University of Colorado, the other co-chair. “I would hate to have the discussion here, the dispute over fees, somehow … diminish the other really great work that’s been done."

Also at Monday’s meeting, NTIA Administrator Larry Strickling polled CSMAC members asking them about changes they would like to see for the group. The future of the group, first launched under President George W. Bush was initially unclear during the early days of the Obama administration. “Let’s assume for purposes of discussion that the group is going to continue and we'll recharter next spring,” Strickling said. “But if anybody feels that this group really has outlived its usefulness, feel free to say that.” Strickling said members of the current group may have to reapply to serve another term, though no decisions have been made.