CSMAC Report Won’t Recommend Fees for Government Use of Spectrum
The Commerce Spectrum Management Advisory Committee is poised to approve a compromise on a report on incentives for getting more government spectrum into play for commercial use. It stops short of recommending charging government agencies fees for the spectrum they use. Members of the committee discussed the report Monday on a teleconference and put off a vote until Jan. 11, when the current CSMAC is expected to meet for the last time.
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Michael Calabrese of the New America Foundation, chairman of the Incentives Subcommittee, said the latest report is a compromise. The incentives body split 4-3 on an earlier version of the report that recommended fees (CD Nov 9 p1). “It’s not an absolute or strong recommendation to impose fees so much as it is a suggestion that fees would overall be beneficial, but that there are off-setting concerns that need to be taken into account so policymakers need to weigh these things,” Calabrese said.
"We tried to move toward a unified draft,” said Bryan Tramont of Wilkinson Barker, CSMAC co-chairman. “That was something that was very important to folks.”
Tramont said the most the committee can do is recommend further study of usage fees. “We're not well positioned from an information point of view or from a temporal point of view to devote the resources necessary to craft a fee regime that could be instantly applied throughout the federal government,” he said. “That’s not going to happen.”
Other committee members had different views on the report.
Former FCC Commissioner Harold Furchtgott-Roth cautioned against weakening the report by making further changes. “Quite candidly, I think the document is very watered-down at this point to the point where it really doesn’t say much of anything,” he said. “If we want to water it down some more … we'd have to water down the reservations as well.”
Gary Epstein of the Aspen Institute countered that the report does advance the debate over fees. “It does raise the next set of questions,” he said. “It digs down one layer below. Maybe they're obvious and maybe they're not, but at least it provides a construct.” Jennifer Warren of Lockheed-Martin said the report as a whole is valuable beyond just the section on fees.
The draft report, the third version by the Incentives Committee, was circulated to members of the CSMAC late last week. There are “limited options” for making government use of spectrum more efficient, the document says. “One step towards greater efficiency of spectrum usage would be for the federal government to apply a simple fee on spectrum,” says an important passage. “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.” This fee “could be a simple flat rate per megahertz pop (MHz-pop), quite likely starting at a rate considerably below the market-clearing price for flexible-use spectrum” but increasing gradually toward the actual market price, the draft says.
The draft report urges NTIA and the FCC to seek further guidance from the public and from government users on fees. It raises 13 questions that it says need further study. “The mechanics of both what rate to apply and how to apply the fee would take substantial care and detail in preparing,” the report says. “Such detail is beyond the scope of this report."
The report broaches extending to the U.S. use of administrative incentive pricing for valuing spectrum. Ofcom in the U.K. uses it. The method “provides some guidance for thinking about spectrum fees for government users,” the report says. Several lessons can be drawn from the U.K.’s experience, the report says. “First, the goal should remain efficient usage of spectrum, not to attempt to have users ‘give back’ spectrum or to generate new revenue,” the report says. “The UK’s experience to date is that while fees have resulted in the return of some spectrum from government agencies, the spectrum turned over was as yet essentially unused and had limited value for the commercial sector."
The committee briefly discussed provisions in the draft calling for strengthening OMB Circular A-11, which directs agencies to consider the economic value of spectrum “when developing economic and budget justifications for procurement” of new systems. The committee also discussed a third part of the report calling for the creation of a Spectrum Innovation Fund. Neither provision is as contentious as the one on spectrum fees.