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.
