Dear Chairman Walden and Ranking Member Eshoo,

On behalf of the more than one million members and supporters of the Council for Citizens Against Government Waste (CCAGW), I appreciate the work the Committee has undertaken on updating the Communications Act of 1934, and the open dialogue you have created in providing an opportunity for all to participate in the discussion of what a modern communications law would encompass.
I would like to submit the following responses to the questions posed by the Committee in its most recent white paper on “Modernizing U.S. Spectrum Policy.” Should you have any questions, please feel free to contact either myself, or Deborah Collier, CAGW’s director of technology and telecommunications policy at (202) 467-5300.

Sincerely,

Thomas Schatz

President, Council for Citizens Against Government Waste

Discussion and Questions:

1) As discussed in white paper #1 on Modernizing the Communications Act, the telecommunications industry has experienced a great deal of convergence in recent years. One result is that the current licensing structure at the FCC may no longer be the most efficient or appropriate method to maximize spectrum use. The FCC is responsible for licensing spectrum for a number of services, including public safety, fixed and mobile wireless, broadcast television and radio, and satellite. Although many of the processes are the same among these services, the licensing authority is housed in disparate bureaus. What structural changes, if any, should be made to the FCC to promote efficiency and predictability in spectrum licensing?

Response:

Under the current bureau structure, the Wireless Telecommunications bureau oversees the maintenance of the spectrum dashboard and spectrum map. However, the media bureau, international bureau, public safety and homeland security, wireline competition, and consumer and government affairs all have input and jurisdiction over the use of various spectrum licenses based on their overall responsibilities in coordinating between various agencies and entities that use spectrum. In addition, National Telecommunications and Information Administration (NTIA) of the U.S. Department of Commerce also has responsibility in managing the federal government’s use of spectrum to ensure that America’s domestic and international spectrum needs are met while making efficient use of this limited resource. The FCC and NTIA must coordinate and collaborate to ensure that the nation’s spectrum needs are met, while at the same time meeting their own individual mission goals.

Because of the scarcity of available spectrum for wireless use, including unlicensed spectrum, CCAGW believes that the committee needs to look beyond the FCC when reviewing spectrum responsibility and management. If it is economically and fiscally feasible, perhaps a consolidation of the roles and responsibilities of spectrum management could be merged into one federal agency in order to reduce overlapping missions and duplication. While NTIA plays an important role in managing government-held spectrum, as well as developing the FirstNet first responder network, these responsibilities, budget, and personnel could potentially be shifted to the FCC and managed under either one of its existing bureaus or in a newly restructured FCC by a bureau specifically charged with spectrum management, which would potentially reduce any duplication and waste in the programs. The FCC would be the responsible agency for oversight of federally held spectrum, coordinating future spectrum auctions and managing spectrum allocations, as well as maintaining the spectrum dashboard and spectrum map.

With such a consolidation of resources, the FCC would provide a more comprehensive approach to spectrum management and would be able to better understand the use or underuse of specific allocations, particularly within the federal government, in order to open up more spectrum for private sector use, while maintaining the public safety, defense, and homeland security missions of the federal government.

2) Spectrum users are allowed to operate without an FCC license—subject to certain technical rules—in spectrum that is designated as “unlicensed.” In 1985, the FCC opened up frequency bands, including the 2.4 GHz band, for unlicensed communications, and has since allocated other bands specifically for unlicensed operators. Users of unlicensed spectrum do not have exclusive use rights and are subject to interference by others. While operators do not need a license, they must abide by other regulatory safeguards, including authorization of equipment, accepting any interference and not causing harmful interference to others, and ceasing operations upon FCC notification.

There is vigorous debate over the appropriate role for unlicensed spectrum in the wireless ecosystem, particularly following the passage of the Spectrum Act. The Act requires the FCC to auction all spectrum made available by the incentive auction, but allows for unlicensed use in guard bands. Some contend that there is an ample amount of unlicensed spectrum available and that assigning spectrum via exclusive licensing is the most effective, efficient, and economically responsible way to allocate spectrum. Others argue that repurposed spectrum should be allocated for unlicensed use for similar reasons. What role should unlicensed spectrum play in the wireless ecosystem? How should unlicensed spectrum be allocated and managed for long-term sustainability and flexibility?

Response:

CCAGW believes that as Americans become increasingly dependent on the availability of unlicensed spectrum for various purposes including Internet research, watching videos over the Internet, and connecting to a blue-tooth enabled device, there is a heightened need for much of the spectrum currently found in the “white space” or unlicensed guard bands.
Wi-Fi devices work over one of two spectrum bands, either 2.4 GHz or 5GHz, both of which are unlicensed. The 2.4 GHz band is most frequently used for industrial, scientific, and medical purposes, and it only has three non-overlapping channels. The 5 GHz band has been allocated by the FCC for the automotive industry, and satellite phones, as well as some government use, and it has 23 non-overlapping channels. While the 2.4 GHz spectrum has a wider network range than the 5 GHz range, it also has a higher level of interference due to the increasing amount of uses for Wi-Fi and other unlicensed spectrum.
Council for Citizens Against Government Waste

The use of Wi-Fi and unlicensed spectrum has led to what is commonly called the Internet of Things (IoT), which was highlighted at the 2014 Consumer Electronics Show (CES). Among the newest gadgets on display at CES that are dependent on the availability of this spectrum are toothbrushes that provide information on how to clean teeth better, a tennis racket that records how many strokes a player takes, and a wireless dog collar that can help owners find their missing pets. These are just a few of the innovations being developed each day because of the availability of Wi-Fi and unlicensed spectrum. During his keynote speech at CES, Cisco CEO John Chambers predicted that IoT would become a $19 trillion market over the next several years.

On February 20, 2013, the FCC proposed making additional spectrum available in the 5 GHz range for unlicensed broadband.2 The automobile industry uses some of this spectrum, particularly in the 5850-5925 MHz range for its dedicated short range communications service systems, and the satellite phone industry uses the 5150-5250 MHz band. In comments submitted to the FCC on November 29, 2013, Globalstar, a provider of satellite phone services, indicated that opening up the 6 GHz bandwidth to unlicensed use outdoors would have a substantial, detrimental impact on their licensed two-way (duplex) mobile satellite service. However, it is important to note that at the end of 2012, the company provided duplex service to fewer than 85,000 customers worldwide.  In addition, a January 22, 2014 study by CableLabs and the University of Colorado found that satellite phone users could co-exist on this frequency without experiencing harmful interference from the expansion of Wi-Fi access to the 5 GHz band.

Opening up the 5 GHz spectrum bandwidth to Wi-Fi and unlicensed applications provides an opportunity for new technology development and improved use of existing devices. The CableLabs study completes the public record needed for the FCC to make a decision on the use of this bandwidth for expanding Wi-Fi and unlicensed applications. Newer technologies that utilize Wi-Fi and other unlicensed spectrum make it essential that the spectrum allocation be expanded for the IoT.


3) Spectrum sharing is one proposed technological solution that addresses the issue of spectrum scarcity and encourages efficiency. There are multiple ways to share spectrum, including geographic sharing, temporal sharing, and sharing through dynamic spectrum access. In July 2012, the President’s Council of Advisors on Science and Technology (PCAST) issued a report on ways to realize the full potential of government held spectrum. The report concluded that sharing is the most efficient way to utilize spectrum and directed the Secretary of Commerce to immediately identify 1,000 MHz of federal spectrum for shared use. However, others assert that spectrum sharing is only part of the solution to spectrum scarcity and that clearing unused or underused federal for exclusive commercial use is a vital part of any strategy for maximizing spectrum resources. In order to enable this sort of reallocation, bipartisan legislation has been introduced in the House that would allow government spectrum users an option to relinquish spectrum and receive a portion of net auction revenues instead of relocation costs, a structure similar to that of the broadcast television spectrum incentive auctions. What should be done to encourage efficient use of spectrum by government users?

Response:

According to the NTIA, the U.S. government currently has exclusive rights to more than 638 MHz of spectrum and shares another 1,030 MHz with commercial users.5 On January 3, 2013, FCC Commissioner Ajit Pai discussed the need for the federal government to relinquish some of its unused spectrum for mobile use.6 According to Commissioner Pai, almost 60 percent of the spectrum best used for mobile devices is currently held by the federal government and unavailable for private use.

The July 2012 PCAST report offering recommendations on government and private entities envisioned a “spectrum super-highway” shared by both government and commercial entities, with the government having the ability to pre-empt the private sector for public safety, emergency medical rescue, or national security purposes. On September 12, 2012, the FCC announced it would begin implementing one of the PCAST recommendations to free up 100 MHz of spectrum in the 3.5 GHz band currently used for radar and allocating it for shared small cell use.

However, not every agency may be willing to share spectrum with the private sector. On September 13, 2012, the House Energy and Commerce Subcommittee on Communications and Technology held a hearing on spectrum management. During this hearing, the Government Accountability Office (GAO) testified about existing barriers to sharing spectrum, including risk to an agency’s mission, cost to both federal and non-federal users, use of spectrum frequencies by more than one agency or program, limited federal budgets prohibiting investments in new technology that would allow spectrum sharing, and a lengthy approval and enforcement process.8 GAO also testified that, “While federal spectrum users often share spectrum among themselves, they may have little economic incentive to otherwise use spectrum efficiently, including sharing it with nonfederal users.”

Just as with the incentive auction process proposed to encourage broadcasters to relinquish their unused or underused spectrum to be repurposed for wireless use, Congress must encourage improved spectrum management within federal agencies and provide incentives for more efficient use. These incentives could include providing the agencies with a portion of any proceeds received through an auction of unused spectrum.
On June 26, 2013, the Mercatus Center at George Mason University released a study that examined various proposals for reclaiming federal bandwidth, which would expand the amount of underused mobile bandwidth for private sector use. According to the study, “reclaiming federal bandwidth has been painfully slow, and each year’s delay results in billions of dollars of social cost and forgone auction revenue.”

The study proposed creating an agency similar to the military Base Closure and Realignment Commission (BRAC) for spectrum reform, which would identify federal and state agencies using spectrum and compel them to vacate the bandwidth. The study also recommended that Congress create an agency similar to the General Services Administration to manage federal spectrum and lease or sell excess bandwidth, while liberalizing federal allocations and pricing the bandwidth to provide an incentive to economize.  Without additional spectrum for mobile communication and data, wireless networks will be unable to handle increased traffic. While the voluntary spectrum reverse auction is a first step toward providing more spectrum for mobile devices, unused spectrum currently allocated to federal agencies should be reviewed as a potential source for future auctions.

4) Given the enormous economic benefits of innovation spurred by commercial spectrum availability, both the government and the private sector are concerned with making more spectrum available to meet commercial demand. When discussing available resources, the FCC considers spectrum to be “currently available” if providers have the legal authority to build out and provide services using that band, or “in the pipeline” if it is not currently available for commercial services but there are government plans to make it available to commercial providers within the next three years. Congress and the FCC have worked to increase the amount of spectrum available to commercial providers, including through the provisions for auctions and relocation in the Middle Class Tax Relief and Job Creation Act. What other steps can be taken to increase the amount of commercially available spectrum?

Response:

As indicated in CCAGW’s response to question 3, the federal government currently has exclusive rights to more than 638 MHz of spectrum and shares another 1,030 MHz with commercial users. Spectrum usage in each agency is a critical inventory management issue that the federal government must address in order to make educated decisions on the availability of spectrum for auction.
CCAGW believes an annual or biannual review of government-held spectrum that is “in the pipeline” should be required of all federal agencies holding spectrum allocations, in order to determine whether this spectrum is viable for disbursement to the private sector in future spectrum auctions. In addition, a relaxation of the rules governing the secondary market for spectrum may be in order, so that companies with excess, unused spectrum would have the ability to trade out some of that spectrum in order to increase access to spectrum where it is needed most.

5) In order to issue spectrum licenses, the Communications Act requires the FCC to make an affirmative finding that granting the license serves the public interest, convenience, and necessity. Moreover, the Act prohibits the FCC from basing its finding on the expectation of auction revenues. Should the Act permit the FCC to use expected auction revenue as the basis for a public interest finding? What criteria should the FCC consider as part of its analysis?

Response:

As indicated by the Middle Class Tax Relief and Job Creation Act, one of the primary determinants for the upcoming spectrum auction is the attainment of revenue to provide for a national public safety network, also known as FirstNet. CCAGW is greatly concerned that FCC Chairman Tom Wheeler plans to inhibit bids from larger communications carriers, such as AT&T and Verizon, so that other carriers would have the opportunity to purchase more spectrum at lower prices.  We believe that this ill-conceived decision stems from recommendations by the Department of Justice (DOJ) in its Ex Parte submission to the FCC on April 11, 2013.

In its recommendations, DOJ proposed that the FCC adopt rules that prohibit or discourage larger mobile competitors from bidding on low-frequency spectrum in order to give small nationwide carriers the ability to purchase blocks of this spectrum. If, as Chairman Wheeler has announced the FCC will do, the agency uses the DOJ’s criteria for selecting participants in the auction, it will do little to spread the amount of available spectrum across all carriers, instead placing the FCC in the position of picking winners and losers in the spectrum auction.  Ultimately, this plan will limit the proceeds available both for use for the FirstNet public safety network and to reduce the deficit. CCAGW believes that this decision could have been avoided if the FCC was required to include expected auction revenues as part of its formula for a public interest finding when developing auction procedures.

9) As discussed above, interference can pose a major problem to efficient and full use of spectrum by providers. The FCC sets limits on transmissions, but doesn’t regulate the receivers used by wireless devices to receive wanted signals and eliminate the noise coming from the other surrounding spectrum bands. Underperforming receivers can prevent a device from operating properly. While the FCC has used tools like guard bands to mitigate the potential for interference, recent examples of receiver overload have shown that these efforts may not be enough as demand for spectrum increases but resources become more and more constrained. Some have proposed receiver standards as a solution, but others argue that such a step could result in over-engineering and higher consumer prices. What is the best balance between mitigating interference concerns and avoiding limiting flexibility in the future? Can engineering and forward-looking spectrum strategies account for the possibility of unanticipated technologies and uses in adjacent spectrum bands? How do we promote flexibility without unreasonably increasing the cost of services and devices? Does the Act provide the FCC tools to address this problem?

Response:

By dictating a set of standards into law, Congress would be addressing a problem that may not exist in the next several years. This is the same situation that the update to the Telecommunications Act of 1996, which in turn updated the Communications Act of 1934, seeks to address. A law can become obsolete because it is not technology or vendor neutral. Much like the regulations that impose restrictions on copper-wire and wireline communications which stymie innovation, standards to address specific interference issues will decrease innovation in the marketplace.  Barring a legislative or regulatory solution, interference issues will likely be addressed by the telecommunications industry based on consumer demand for interference avoidance measures. By allowing the free market to innovate to meet consumer demand, interference issues will be resolved more effectively. Should Congress set specific standards or require the FCC to set these standards, the decision to meet the standards will prevail, and the desire to innovate and improve beyond the standards will decline.

10) The other governing body of domestic spectrum use is the National Telecommunications and Information Administration (NTIA), which has the authority to assign spectrum frequencies to all federal government owned or operated radio stations under section 305 of the Communications Act. NTIA manages the federal government’s use of spectrum, in coordination with the FCC. Distinctions between “federal” or “non-federal” bands of spectrum are administrative creations made through agreements between the FCC and NTIA. The Spectrum Act required NTIA to work with the FCC to identify specific bands for release to commercial use and how to repurpose resources from federal to commercial use, with priority given to options that assign spectrum for exclusive, non-federal use through competitive bidding. In a report on reducing duplication in the federal government, GAO identified spectrum management as ‘fragmented’ between NTIA and the FCC and urged coordination. What role should NTIA play in the licensing and management of spectrum? Is their current role appropriate and necessary, given the potentially duplicative functions of the FCC and NTIA in spectrum allocation and assignment?

Response:

Duplicative and overlapping programs plague the federal government, including the NTIA and the FCC sharing jurisdiction over spectrum management. CCAGW believes that there should be only one agency overseeing the allocation of spectrum within the federal government.  The FCC has several bureaus that are involved in spectrum management. As noted in CCAGW’s response to Question 1, spectrum management should be consolidated within the FCC where possible, with the other bureaus reporting their spectrum needs. NTIA manages the federal government’s use of spectrum to ensure that America’s domestic and international spectrum needs are met while making efficient use of this limited resource. The FCC and NTIA must coordinate and collaborate to ensure that the nation’s spectrum needs are met, while at the same time meeting their own individual mission goals.

In addition to the FCC and NTIA, a number of other entities play a role in spectrum management. As noted by the GAO’s “2012 Annual Report: Opportunities to Reduce Duplications, Overlap and Fragmentation, Achieve Savings, and Enhance Revenue,” the Interdepartment Radio Advisory Committee (IRAC) and the Office of Management and Budget (OMB) are also involved in spectrum management. IRAC consists of 19 agencies that hold more than 90 percent of all federally assigned spectrum. This committee coordinates federal use of spectrum and provides NTIA policy advice on spectrum issues. OMB’s role in spectrum management is through the federal budget process, and the agency has issued guidance for the use of spectrum-dependent systems by federal agencies.  In its findings on spectrum management, the report notes that GAO had previously stated that “coordination challenges between NTIA and FCC have delayed efforts to repurpose spectrum for new commercial uses, and changes that affect existing users of spectrum can cause contentious stakeholder conflicts that cross the jurisdictions of both agencies, and can lead to protracted negotiations.”

By consolidating the roles and responsibilities of spectrum management into one federal agency, the federal government can avoid overlapping missions and duplication. While NTIA plays an important role in managing government held spectrum, as well as developing the FirstNet first responder network, these responsibilities, budget, and personnel could be shifted to the FCC under a new spectrum management bureau, thus reducing duplication and waste in the programs.