By Roy Mark
December 28, 2005
Clearing federal agencies out of spectrum earmarked for advanced commercial wireless services will cost approximately $936 million, according to data released today by the U.S. Department of Commerce.
The costs and timelines transmitted to the Federal Communications Commission (FCC) pave the way for an FCC auction of some of the nation's most valuable airwaves as early as next summer. The cost of moving the federal agencies to new spectrum will be covered by the auction proceeds.
"With 90 megahertz of additional spectrum, today's cellular carriers will be tomorrow's next-generation broadband providers," Michael Gallagher, assistant secretary of Commerce for Communications and Information, said in a statement.
"We found a way to open up 'beachfront' spectrum for key economic activity without jeopardizing our national security."
The cleared spectrum is expected to provide 3G services, including mobile Internet access, for 195 million U.S. wireless subscribers.
A total of 2,240 frequency assignments will be relocated by 12 federal agencies. The most expensive transition at $288 million will be moving the Army, Navy and Air Force out of their current 482 frequencies.
Relocating the Department of Justice's 133 frequencies for agencies such as the FBI will cost approximately $263 million, followed by the Department of Energy ($173 million) and the Department of Homeland Defense ($91 million).
"President Bush's committed focus on wireless as a catalyst for technology growth is paying dividends," Gallagher said. "His leadership resulted in the historic agreement of the Department of Defense and other agencies to open up the frequencies, as well as the passage of key legislation a year ago that will make the 2006 auctions a reality."
In July 2002, the White House identified 90MHz of federally controlled spectrum that could be allocated for 3G services to meet the increasing demand for new commercial services without disrupting communications systems critical to national security.
Within a year, the FCC reallocated the 90MHz of spectrum to fixed and mobile services and adopted service rules, including provisions pertaining to application procedures, licensing, technical operations and competitive bidding.
Congress followed the FCC action with the Commercial Spectrum Enhancement Act (CSEA), creating a spectrum relocation fund for federal agencies.
Prior to the CSEA, a commercial telecom had to win a spectrum license at an FCC auction and then negotiate separately with the impacted federal agency regarding the price and timeline for the agency to move its spectrum operations to another band.
Under the CSEA, the FCC then will hold the spectrum auction, but cannot close it until the bidding equals at least 110 percent of the estimated relocation cost. Once the auction is closed, the winning bidder's money will be placed in the spectrum relocation trust fund.
The relocating agency will draw down directly from that trust fund until the relocation is complete and fully paid for.