[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
U.S. DEPLOYMENT OF THIRD GENERATION WIRELESS SERVICES: WHEN WILL IT
HAPPEN AND WHERE WILL IT HAPPEN?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET
of the
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
JULY 24, 2001
__________
Serial No. 107-58
__________
Printed for the use of the Committee on Energy and Commerce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
__________
U.S. GOVERNMENT PRINTING OFFICE
74-845CC WASHINGTON : 2001
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001
------------------------------
COMMITTEE ON ENERGY AND COMMERCE
W.J. ``BILLY'' TAUZIN, Louisiana, Chairman
MICHAEL BILIRAKIS, Florida JOHN D. DINGELL, Michigan
JOE BARTON, Texas HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia SHERROD BROWN, Ohio
STEVE LARGENT, Oklahoma BART GORDON, Tennessee
RICHARD BURR, North Carolina PETER DEUTSCH, Florida
ED WHITFIELD, Kentucky BOBBY L. RUSH, Illinois
GREG GANSKE, Iowa ANNA G. ESHOO, California
CHARLIE NORWOOD, Georgia BART STUPAK, Michigan
BARBARA CUBIN, Wyoming ELIOT L. ENGEL, New York
JOHN SHIMKUS, Illinois TOM SAWYER, Ohio
HEATHER WILSON, New Mexico ALBERT R. WYNN, Maryland
JOHN B. SHADEGG, Arizona GENE GREEN, Texas
CHARLES ``CHIP'' PICKERING, KAREN McCARTHY, Missouri
Mississippi TED STRICKLAND, Ohio
VITO FOSSELLA, New York DIANA DeGETTE, Colorado
ROY BLUNT, Missouri THOMAS M. BARRETT, Wisconsin
TOM DAVIS, Virginia BILL LUTHER, Minnesota
ED BRYANT, Tennessee LOIS CAPPS, California
ROBERT L. EHRLICH, Jr., Maryland MICHAEL F. DOYLE, Pennsylvania
STEVE BUYER, Indiana CHRISTOPHER JOHN, Louisiana
GEORGE RADANOVICH, California JANE HARMAN, California
CHARLES F. BASS, New Hampshire
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska
David V. Marventano, Staff Director
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Telecommunications and the Internet
FRED UPTON, Michigan, Chairman
MICHAEL BILIRAKIS, Florida EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas BART GORDON, Tennessee
CLIFF STEARNS, Florida BOBBY L. RUSH, Illinois
Vice Chairman ANNA G. ESHOO, California
PAUL E. GILLMOR, Ohio ELIOT L. ENGEL, New York
CHRISTOPHER COX, California GENE GREEN, Texas
NATHAN DEAL, Georgia KAREN McCARTHY, Missouri
STEVE LARGENT, Oklahoma BILL LUTHER, Minnesota
BARBARA CUBIN, Wyoming BART STUPAK, Michigan
JOHN SHIMKUS, Illinois DIANA DeGETTE, Colorado
HEATHER WILSON, New Mexico JANE HARMAN, California
CHARLES ``CHIP'' PICKERING, RICK BOUCHER, Virginia
Mississippi SHERROD BROWN, Ohio
VITO FOSSELLA, New York TOM SAWYER, Ohio
TOM DAVIS, Virginia JOHN D. DINGELL, Michigan,
ROY BLUNT, Missouri (Ex Officio)
ROBERT L. EHRLICH, Jr., Maryland
LEE TERRY, Nebraska
W.J. ``BILLY'' TAUZIN, Louisiana
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Testimony of:
Dempsey, Michael J., President, The Catholic Television
Network.................................................... 41
Hatch, William T., Acting Assistant Secretary of Commerce,
Office of Communications and Information, Department of
Commerce................................................... 14
Knapp, Julius P., Deputy Chief, Office of Engineering and
Technology, Federal Communications Commission.............. 25
Strigl, Dennis F., Chief Executive Officer, Verizon Wireless. 36
Wells, Linton, Assistant Secretary of Defense for Command,
Department of Defense...................................... 18
Wheeler, Thomas E., President and CEO, Cellular
Telecommunications and Internet Association................ 31
Material submitted for the record:
Wells, Linton, Assistant Secretary of Defense for Command,
Department of Defense, responses for the record............ 67
(iii)
U.S. DEPLOYMENT OF THIRD GENERATION WIRELESS SERVICES: WHEN WILL IT
HAPPEN AND WHERE WILL IT HAPPEN?
----------
TUESDAY, JULY 24, 2001
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Telecommunications
and the Internet,
Washington, DC.
The subcommittee met, pursuant to notice, at 9:30 a.m., in
room 2123, Rayburn House Office Building, Hon. Fred Upton
(chairman) presiding.
Members present: Representatives Upton, Stearns, Cox, Deal,
Largent, Cubin, Shimkus, Wilson, Pickering, Davis, Terry,
Markey, Gordon, Rush, Eshoo, Engel, Green, McCarthy, Luther,
Harman, Sawyer, and Dingell (ex officio).
Staff present: Howard Waltzman, majority counsel; Yong
Choe, legislative clerk; Andy Levin, minority counsel; and
Brendan Kelsay, minority professional staff.
Mr. Upton. I've been told that my colleague, Mr. Markey, is
running a little bit late, but we're going to get started and I
would, I guess, before we start, I'm going to ask unanimous
consent that all members of the subcommittee be allowed to put
their opening statements into the record, so, without
objection, that is now done.
Good morning. Today's hearing is appropriately titled
``U.S. Deployment of Third Generation Wireless Services: When
Will It Happen and Where Will It Happen?''
It is important to note that the title of this hearing is
not whether this deployment will happen. There is much at stake
for the economy and competitiveness of our Nation and
particularly, the United States tech sector, not to mention our
Nation's consumers. In October 2000, the Council of Economic
Advisors found that the appropriate allocation of commercial
spectrum licenses that favor investment have the potential to
unleash a wave of innovation in 3G applications. The
President's Council of Economic Advisers concluded that an
additional 150 megahertz of spectrum could bring an additional
$35.7 billion of service revenues each year. In addition,
billions of dollars would be spent on 3G phones and networks.
The economic growth that would be prompted by an auction of
spectrum for 3G services is exactly the right medicine for our
slumping technology sector and the U.S. economy as a whole.
With so much at stake, to quote the great movie Apollo 13,
``failure is not an option.'' Does this mean that the
challenges to make 3G a reality are not daunting? No. Does this
mean that we do not need to carefully seek consensus among all
of the affected parties to make it a reality? No. But as
chairman of this subcommittee, I'm committed to trying to make
this work.
I also want to mention that with the concurrence of the
chairman of the full committee, Mr. Tauzin, I'm working with
our subcommittee colleague, Mr. Pickering and others, to craft
bipartisan legislation which will provide a win-win solution
for our country.
I am hopeful that we can unveil this legislation some time
early this fall and begin the legislative process in earnest in
this subcommittee. As we explore the how to relocated and
compensate incumbent government users of spectrum to make way
for 3G, we need to recognize that if this involves the
Department of Defense, there are critically important national
security considerations which demand our fullest attention and
respect.
Proudly, the U.S. is the world's sole superpower and we
cannot diminish our military's sophisticated battlefield
communications nor its training communication needs. Indeed, it
is our military's superior communications and intelligence
capabilities which makes its power so awesome and enables our
Nation to achieve military superiority with a minimum exposure
of our troops to harm's way.
However, I would note that under its current spectrum
allocation, the DOD encounters enormous interference issues in
parts of the world because our military communications
equipment is calibrated to frequencies which have crowded
commercial use. This is not ideal and presumably will only get
worse as the industrialized world moves toward even more
wireless use. In this regard, I am reminded of General John
Herr, Chief of the Calvary when he sat before a Congressional
Committee in 1941 on the dawn of our Nation's entry into World
War II and he said, with great confidence, that four mounted
Cavalrymen spaced 100 yards apart could charge half a mile
across an open field and destroy an enemy machine gun nest
without injury to themselves. If the Congress had chosen to not
even explore the replacement of horses with tanks, where would
we have been? I do not suggest that the answers in the case of
3G are simple, but I do believe that we need to continue
looking to the future and planning accordingly. I am optimistic
that we will find a win-win for all involved.
At the outset, I want to highlight my personal view that we
need to see a solution which ensures that our Nation's 3G
allocation is harmonized with that of the rest of our major
trading partners. If not, we will lose the competitive benefits
in the economy of scale which harmonization would provide.
So today, I look forward to the testimony our witnesses who
will help us answer the very difficult, yet hopefully, noble
questions of when and where we are to deploy 3G in our country
and I yield to my friend, the ranking member of the
subcommittee, Mr. Markey from Massachusetts.
[The prepared statement of Hon. Fred Upton follows:]
Prepared Statement of Hon. Fred Upton, Chairman, Subcommittee on
Telecommunications and the Internet
Good morning. Today's hearing is appropriately titled: U.S.
Deployment of Third Generation Wireless Services: When Will it Happen
and Where Will it Happen? It is important to note that title of this
hearing is not ``WHETHER'' this deployment will happen. There is much
at stake for the economy and competitiveness of our nation and
particularly the U.S. tech sector--not to mention our nation's
consumers.
In October 2000, the Council of Economic Advisers (CEA) found that
``[a]n appropriate allocation of commercial spectrum licenses that
favor investment have the potential to unleash a wave of innovation in
3G applications.'' CEA concluded that ``an additional 150 MHz of
spectrum could bring an additional $35.7 billion of service revenues
per year.'' In addition, billions of dollars would be spent on 3G
phones and networks. The economic growth that would be prompted by an
auction of spectrum for 3G services is exactly the right medicine for
our slumping technology sector and the U.S. economy as a whole. With so
much at stake, to quote the great movie, Apollo 13: ``Failure is not an
option''.
Does this mean that the challenges to make 3G a reality are not
daunting? No. Does this mean that we do not need to carefully seek
consensus amongst all of the affected parties to make it a reality? No.
But as Chairman of this Subcommittee, I am committed to rolling-up my
sleeves and figuring out a way to make this work. I also want to
mention that, with the concurrence of the Chairman of the full
Committee, Mr. Tauzin, I am working with our Subcommittee colleague,
Mr. Pickering, and others, to craft legislation which will provide a
``win-win'' for our nation. I am hopeful that we can unveil that
legislation early this Fall and begin the legislative process in
earnest in this Subcommittee.
As we explore the how to relocate and compensate incumbent
government users of spectrum to make way for 3G, we need to recognize
that, if this involves the Department of Defense, there are critically
important national security considerations which demand our fullest
attention and respect. Proudly, the United States is the world's sole
superpower, and we cannot diminish our military's sophisticated
battlefield communications, nor its training communications needs.
Indeed, it is our military's superior communications and intelligence
capabilities which makes its power so awesome and enables our nation to
achieve military superiority with a minimum exposure of our troops to
harm's way.
However, I would note that under its current spectrum allocation,
the DoD encounters enormous interference issues in parts of the world
where our military communications equipment is calibrated to
frequencies which have crowded commercial use. This is not ideal and
presumably will only get worse as the industrialized world moves toward
even more wireless use.
In this regard, I am reminded of General John Knowles Herr, chief
of the cavalry, when he sat before a congressional committee in 1941,
on the dawn of our nation's entry into World War Two, and said with
great confidence that four mounted cavalrymen, spaced one hundred yards
apart, could charge half a mile across an open field and destroy an
enemy machine gun nest without injury to themselves. If the Congress
had chosen to not even explore the replacement of horses with tanks,
where would we have been? I do not suggest that the answers in the case
of 3G are as simple, but I do believe that we need to continue looking
to the future and planning accordingly. I am optimistic that we can
find a ``win-win'' for all involved.
At the outset, I want to highlight my personal view that we need to
seek a solution which ensures that our nation's 3G allocation is
harmonized with the rest of our major trading partners--or we will lose
the competitive benefits and the economies of scale which harmonization
provides.
So today I look forward to the testimony of our witnesses who will
help us answer the very difficult, yet hopefully, knowable questions of
``when'' and ``where'' we are to deploy 3G in our nation.
Mr. Markey. I thank the chairman very much and I thank you
for having this very important hearing. There's no question
that your military analogy is appropriate because clearly we're
talking in many instances here about spectrum which is
controlled the Defense Department. I don't see them as
witnesses here today, oh, I see, Mr. Wells is here. Good. But
without question that's an integral part of this entire
discussion. I remember back now 10 years ago when the General
in charge of Command Control and Communication of Three Star
sat here and said that it was impossible to move over 200
megahertz of spectrum at two separate hearings and it would
cause serious defense problems for our country. But
nonetheless, we did it and it created the third, fourth, fifth,
sixth and seventh cellular phone license in every market in the
United States. Again, there are tradeoffs in everything that we
do here and at the end of the day we have to do it
synchronizing with the government, with the Defense Department
because clearly there are two very strong competing interests
at play.
Since this is the first foray, Mr. Chairman, this year into
this issue, and because the FCC and the Commerce Department are
still in the relatively early stages of identifying possible
frequencies for additional reallocation to the private sector,
the initial set of questions presented to policymakers is
fairly general. While it is axiomatic that almost everyone
wants more spectrum or wants to retain use of that which they
already utilize, the task before us to gauge how much spectrum
distinct services actually need in order to flourish. For
instance, how much spectrum is truly needed for 3G services? Do
carriers need 20 megahertz, 40 megahertz, 80 megahertz or some
other amount? We have to know that answer, Mr. Chairman.
In addition, we need to ascertain how much spectrum is
required at this time and then estimate or guess how much may
be needed at later dates to meet demand of ever higher rates.
There are other key questions that need to be addressed as
well. How should the government roll out that spectrum and make
it available? Should it all be reallocated immediately and sold
as it becomes available, or rather should we proceed under the
more cautious rollout so that we can assess both the demand
over time as well as anticipating the inevitable breakthroughs
in digital technology that may avail carriers of the
opportunity of doing more with less.
Will all incumbents be eligible to bid? Will we preserve
competition with retention of some type of spectrum cap which
limits total spectrum a carrier can accumulate in individual
markets? Or will we remove the cap completely and encourage
consolidation in the wireless marketplace? Indeed, if we are
able to reallocate more spectrum that the carriers each need
for 3G services, can the government license new competitors?
Now I appreciate that the incumbents will not like that
alternative, yet on the other hand we have seen in recent
months the contraction of competition in the local loop from
wireline competitors. Can we hope to license additional
wireless competitors to challenge wireline services?
In my view, if we are looking at the last major
reallocation of the public spectrum resources for a generation,
we owe it to the public to maximize service and to maximize
competition. The last thing we want to see in the wireless
marketplace is the consolidation and rising prices that we
witnessed in other areas of telecommunications.
Finally, I want to say a few words on what happens once all
this difficult work is completed and the auctions are over.
Many people in recent months have talked about a policy of win-
win in this area. Government can find additional airwaves and
license it to the wireless industry through auctions, and
second, the government can use the proceeds from that auction
to compensate incumbent users primarily the military perhaps
and assist those entities in obtaining and purchasing new
equipment to utilize at another frequency.
What I'd like to suggest is that we strive for a win-win-
win for our subcommittee and the country when we act in this
area. We can certainly reallocate additional spectrum to assist
in private sector deployment of 3G services and we can create a
fund for the military and other users to assist in their
reallocation and retooling. Yet, we can also achieve another
policy win by taking additional auction proceeds to foster use
of educational technology, the deployment of public
telecommunications infrastructure in needed areas and craft a
self-sustaining fund for grants to address the digital divide.
For example, we have a requirement that all television stations
must convert to digital broadcasting, yet Congress has not been
forthcoming with funding to assist public stations in that
conversion.
Moreover, we have a need in this country to assist in
teacher training and worker training for the digital economy.
Grants to support pilot projects could be a use of spectrum
proceeds as could be the deployment of broadband connections to
public housing facilities, Headstart facilities, community
centers and America's most rural areas.
Let's think creatively about how we can direct efficient
use of the auction proceeds and I hope that we can work in a
bipartisan manner to achieve our common high tech and
educational technology goals for this country.
Again, Mr. Chairman, I want to commend you for holding this
very important hearing and I'm looking forward to the process
as it unfolds.
Mr. Upton. Thank you. I recognize for an opening the vice
chairman of the subcommittee, Mr. Stearns from Florida.
Mr. Stearns. Good morning and thank you, Mr. Chairman, and
I also want to commend you for this hearing to examine third
generation wireless services. It's a very competitive market.
In less than 20 years, the United States wireless industry has
ballooned to more than 100 million subscribers and it continues
to grow at the rate of 25 to 30 percent annually. I believe one
of the more important roles of this committee is to ensure that
our Nation's spectrum is managed properly, wisely and
efficiently.
Unfortunately, for many years, spectrum policy has ridden
on the back of budgetary needs. As such, one of the top
priorities of Administrations and Congress needs to be a
comprehensive plan on spectrum management. For starts, spectrum
policy must be divorced from the needs of budgetary number
crunchers. For too long, government has viewed this precious
resource as nothing more than a means to fulfilling its
budgetary needs and wants.
Additionally, sound management of the spectrum is not
complete without ensuring this resource is available to those
who need it. As a result, I urge my colleagues to join me in
supporting legislation that I introduced to repeal the FCC's
antiquated and obsolete cap on spectrum. Current FCC
regulations prohibit a single entity's attributable interest in
the licenses of broadband PCS cellular and specialized mobile
radio services from cumulatively exceeding more than 45
megahertz of spectrum within the same geographic area.
Today, the cap limits competition by denying wireless
providers access to open markets, also thereby denying
consumers the benefits that arise from additional competition
such as lower prices and innovative services.
Furthermore, wireless providers have limited room for
advanced services such as data on their networks as they plan
for 3G services. The lack of spectrum threatens the ability to
expand current systems and entice new customers. Additionally,
continuation of the spectrum cap result in the continued lag of
the United States companies behind Europe, Japan and deployment
of wireless 3G technologies.
Legislation I introduced, H.R. 2535, the Spectrum Resource
Assurance Act, repeals the FCC's spectrum caps.
Mr. Chairman, the next generation of wireless technology
will bring broadband to hand held devices, allowing for new
audio, video and other applications. As such, 3G services
promises users the ability to use their wireless phones to work
anywhere in the world, therefore, the development of robust
third generation advanced mobile services is one of the most
critical communications and e-commerce issues facing us in this
country. Regrettably, the figurative spectrum train car
identified by the International Telecommunications Union for 3G
advanced mobile service may be derailed by U.S. incumbents
unwilling to relinquish their spectrum.
Of particular concern is the Defense Department. They're
unwilling to relinquish its spectrum by citing relocation as
extremely costly, technical infeasible and a threat to national
security. While the Defense Department use of the spectrum of
such things as combat training, tactical weapons systems and
tactical radio relay serve in the national interest, I am wary
of sacrificing American technology and competitive might in the
telecommunications area to European and Asian competitors
simply because the Department of Defense is unwilling to even
give up a part or to work out an arrangement that would occur
in the near future. I have not given up hope. I commend FCC
Chairman Powell and Commerce Secretary Evans for seeking relief
from the deadlines requiring the government to identify
spectrum by the end of this month and auction licenses by
September 30, 2002. A time out will allow all the government
entities responsible for U.S. spectrum management to have
adequate time to develop a plan to make spectrum available for
advanced wireless services in the future.
Quite simply, Mr. Chairman, 3G services like many of the
issues this committee examines, will not become a reality
unless all the players are involved, both government and
private, cooperate and work together toward a common goal.
After all, at the end of the day we need a rational policy on
spectrum in order to balance the interests between government
and industry. Thank you, Mr. Chairman.
Mr. Upton. Mr. Sawyer from Ohio.
Mr. Sawyer. Thank you very much, Mr. Chairman. I was
pleased to hear the way you opened the hearing today, drawing a
contrast between what the title is and what it might have been
in terms of when and where rather than whether. I was stunned
when my staff told me that there are actually pessimists out
there who believe that third generation is not desired, wanted,
marketable in the United States. I was flabbergasted at that,
but I gather that must be true, that there are people who are
saying such things. I, like you, am an optimist. I don't think
it's a matter of whether, but when we get there. I think that
3G will lead the way for wireless Internet to provide the
competition we've been seeking among the big telecom players,
wireless guys have generally been pretty good guys, good self-
regulators. They've dealt well with issues of privacy and
beyond that, it may well be that 3G provides at least a partial
answer to the digital divide.
One of the things that I hope we can talk about today a
little bit is what comes after third generation, what might a
fourth generation consist of, are we missing an opportunity if
we don't make space for that now? It's clear that spectrum
shortage won't go away simply because DOD's decision to make
more space and it may well be that we're missing an opportunity
to fix our spectrum problems by looking for a short term
instead of a longer term solution.
The current spectrum map makes it very difficult to do any
future planning in the present dysfunctional allotment system.
We've outgrown the 1934 scheme. It seems to me, perhaps that
it's a good time right now to slow down and take a look at the
range of options, perhaps creating a single organization to
manage industry and government spectrum and leading to, as
previous speakers have said, a more coherent policy regarding
spectrum, one that's more flexible.
Finally, let me just touch on something we don't talk about
a great deal and that's the issue of spectrum efficiency. As it
becomes more of a scarce resource we should find ways to reward
those who use it more efficiently. We're learning hard lessons
in that every week in the energy crunch and that is that when
there's a shortage of resources we must use that resource more
carefully and more efficiently. I think the same principle
probably applies to spectrum today.
I look forward to our witnesses' remarks and thank you, Mr.
Chairman, for calling the hearing.
Mr. Upton. Thank you. Mr. Shimkus.
Mr. Shimkus. Thank you, Mr. Chairman. I appreciate this
hearing today. I see not in the front panel, but in the back
room, a couple of white suiters and a couple of blue suiters
and I'd like to welcome my military colleagues here to the
Commerce Committee and I want to go on the record, Mr.
Chairman, I'm not a cavalryman, I'm an infantryman so hopefully
those comments about the cavalrymen will not be held against
me. In military parlance, especially in the infantry, to move,
to shoot and to communicate is basic military doctrine and this
spectrum debate is really about the ability to communicate with
our military forces around the world. And we have to be very,
very careful as we do diligence in this debate and ensure that
if we were to eventually move defense issues to different
levels that there is quick, rapid deployment in other areas so
that the national defense, which is the preeminent
responsibility of Federal Government is defending its citizens,
make no mistake about it. We can do a lot of things and we
provide greater services, but if we're not willing to protect
our citizens, then I really question why we serve in this
office. But there is also a dilemma in my own congressional
district being a very large, rural district, 3G services offers
the ability to connect my rural citizens with increased
technology that is badly needed, especially when we want to
keep rural America alive and vibrant. It offers great hope to
keep people at home and living in the communities they really
want to live while providing really some high tech work in the
high tech sector through 3G.
So we are in for a good hearing. We've got a great panel
ahead of us. I look forward to hearing their opening statements
and then responding to questions with them, Mr. Chairman. I
yield back my time.
Mr. Upton. Ms. Eshoo.
Ms. Eshoo. Thank you, Mr. Chairman, for convening this
hearing and welcome to our guests here this morning that are
going to testify.
Third generation wireless services' promise of a wealth of
new and improved performance capabilities that can have, I
believe, a really significant effect, not only on our economy,
but the global economy, but what I think we're going to learn
today from this hearing is how best to assure that there's a
successful transition to 3G services and that we have to have a
comprehensive and efficient spectrum assignment plan for the
technologies.
The plan, obviously, has to be developed with a great deal
of care and input from all the parties that are involved. And I
think I can't help but think that we can learn something from
what's transpired overseas. Maybe some of the witnesses can
speak to that this morning.
As we've learned from the past years' dot com implosion
unreasonable expectations, I think, can lead to tremendous
losses of capital, so what we do we have to do well. We have to
do carefully. We have to plan it well. There's some indication
that the winners in the auctions held overseas are longing for
a return of some of the enormous sums that they invested. Some
of the companies took on enormous debt in order to purchase the
spectrum, only to find that they may not have sufficient
capital to build the networks required for the employment of
the technology.
Other headlines, I think, at least give me some pause.
Singapore has canceled its 3G auction because it's only had
three bidders for four licenses. Carriers have announced delays
in their service plans in Europe and Japan and Australia has
raised just over $1 billion in its 3G auction. Is there
anything for us to learn from this? Does this have anything to
say about where we're headed? I'd like the people that are at
the witness table this morning to spend a moment talking about
that.
There's another point that I'd like to make and that is
while 3G brings with it many promises, there are many
intricacies that may delay its deployment. I'm concerned that
its future promise may be diverting the attention of the
industry from an issue that I've been plugging away at for a
long, long time and that's from the implementation of life
saving technologies such as enhanced 911. The resources devoted
to 911, to E-911 pale in comparison to those invested in what's
arguably a less precise technology in 3G. Now it may be
somewhat unfair, I think, for the industry to hear of me
comparing one to the other, but I still fail to understand why
we can't get the one done as we move to the other. So I'm
puzzled as to why the industry fails to move forward with E-911
deployment with the same vigor as 3G. We know that lives can be
saved and that we have an excellent panel here today and I hope
that you will address the point that, the last point that I
just made as well as the others and if not, fear not, I'll
question you on it.
Thank you, Mr. Chairman.
Mr. Upton. Mr. Terry.
Mr. Terry. Waive.
Mr. Upton. Mr. Pickering.
Mr. Pickering. Mr. Chairman, I want to thank you for
holding this hearing today and your leadership on this issue.
This is an extremely important issue, both to our economy and
to our security and we want to find that balanced path that
provides the win-win as Mr. Markey was talking about. As Mr.
Shimkus mentioned, the need to communicate on the battlefield
or in training is critically important to our national
security. We want to make sure that we can continue to have
that capability and that it is compatibility with our
commercial interest.
So I want to talk about the three Ps of this effort: the
process, the proceeds and the goal of prosperity. Process, we
need to find a way that the current decisionmaking process of
how we allocate and manage our spectrum is reformed, it is done
in a way that gives us a more efficient use of our spectrum. It
is more inclusive for the decisionmakers to reflect the
realities of the 21st century and the technological needs both
of our commercial interests, our economic interests and our
security interests. So the change is necessary of how we make
our decision, who makes these decisions and then it gets to the
second point, proceeds. As we make these decisions of
allocations, as we go forward in a spectrum auction, the
proceeds to those that are reallocated are possibly moved as a
result of these decisions, the proceeds to them must be
guaranteed. In 1993, the last time DOD sacrificed some of their
spectrum they received no proceeds. It is critically important
if we are going to displace and disrupt then we must guarantee
with a mechanism, whether it is a trust fund or whatever the
mechanism should be, to have the proceeds go to DOD or
commercial interest or anyone involved that it is assured, it
is guaranteed that those proceeds will provide for the
relocation, for the transition and importantly, the
compensation of the value they have given up.
And this gets to our third point, prosperity. Estimates
show about $35 billion if the spectrum could be made available
to our commercial sector, could be given back into economic
growth and a prosperity back to those in our government which
controls spectrum today, if those proceeds go back anywhere
from $10 to $100 billion, I think are reasonable. A fair
estimate is in the $35 to $40 billion estimate, could be
guaranteed back to DOD or others for their modernization or for
their other objectives that they face today in providing either
security or services.
The planets and stars are aligning. The need is great for
international competitiveness, to harmonize, for security. It
is critically and vitally important that we as decisionmakers
step up to the challenge, to the plate, and reform the process,
guarantee the proceeds and then create a framework where this
can be used to bring prosperity to our economy and security to
our people. And with that, I yield back.
Mr. Upton. Thank you. Ms. Harman.
Ms. Harman. Thank you, Mr. Chairman, I want to commend your
choice of hearing topics one more time and to say what a
pleasure it is to work with you on this subcommittee. I heard
you say earlier that you may be offering legislation on this
issue and I would like to offer my support for that and would
love to work with you on that when you get to that.
I believe that we have before us a legislator's dream, a
rare opportunity to benefit several good purposes and to
generate revenue at the same time. Can that possibly be true?
Will we take advantage of it? Or will we squander it? I think
that is the most important question. I want to associate myself
with many of the questions raised by earlier speakers,
particularly Mr. Markey. I love listening to him because he is
the institutional history of this committee. He seems to have
been here since before the dinosaurs and to remember everything
that ever happened and it seems time and again that we return
to the same subjects, hopefully with better answers, but not
necessarily.
I think his questions are valid and so are others. I would
just add a few others to the long list. First, what will new
technologies do to our decisions about how to allocate this
spectrum, new compression technologies, for example?
What about flexibility? It seems to me even if we make
decisions today that are better than the decisions of
yesterday, those decisions may have to change in the near term.
How do we really give value to current funding priorities?
We've heard numbers of them, rural areas, the digital divide,
military technologies. I'm a big proponent of investment in
military technologies and I suggest that the Defense Department
has priorities in addition to the communication function that
need urgent funding, but how do we give priority to these
current and competing funding needs? Those are some of the
questions.
Let me also suggest several axioms. First, change will come
whether we welcome it or not. Second, Congress can easily get
it wrong or at a minimum make change harder to accept. An
example is perhaps our rules on digital television which may
still work out but which in a variety of ways have caused
consternation out and about and haven't yielded the results we
anticipated. Third, as you said, I think, Mr. Chairman, and
several others have said, it's better to be an optimist because
otherwise this just becomes totally gloomy. Again, I offer my
services. I hope we get this right. At least I hope we get it
better.
Thank you very much.
Mr. Upton. Thank you. Mr. Davis.
Mr. Davis. Thank you, Mr. Chairman. We have before us today
an issue that's as complex as it is controversial. Although the
spectrum debate has identified the 698 to 960 megahertz and the
2500 to 2690 megahertz bands as potential locations for 3G
services, the battle lines appear to center most intensely on
the 1710 to 1850 megahertz band. A major question that I have
is are we essentially pitting the continued strength of our
intelligence and war-fighting capabilities against the future
prosperity and health of our national economy. Is this really a
choice between incapacitating our military's ability to defend
our national interest on a domestic or an international scale
or weakening our ability to globally compete in the next
generation of high speed wireless communications?
At the outset, I'm not convinced that we have a true
dilemma before us. There is merit to each of the many concerns
raised by players on all sides of the 3G debate. Our defense
community needs to be able to maintain the same level of
operations, security and training throughout any spectrum
transition. At the same time, we have a bustling global economy
that has soared as a result of the Internet and the next step
in this communications evolution is dependent upon the
availability of spectrum for use by 3G technologies. This is a
problem in search of a workable solution and I hope that our
discussion today will focus as equally on that solution as it
may on the problem. There are funding concerns, timing
concerns, utilization concerns. Some may be legitimate, others
may not be as troublesome. I do think that Congress can play a
constructive role in this debate and I commend you, Mr.
Chairman, for taking the lead, along with our committee
chairman in focusing our energies on this subject matter this
morning. I look forward to hearing from each of our witnesses,
and thank you all for being here.
Mr. Upton. Thank you. Mr. Luther.
Mr. Luther. Thank you, Mr. Chairman, and thank you for
holding this hearing. I understand the many arguments for
allocating spectrum, but I do agree with those who have already
stated that I believe that we should proceed cautiously. I
believe that giving up too much spectrum now could reduce our
flexibility for the future and for unanticipated needs. And so
I think it is important that we look at all the alternatives. I
believe that's what this hearing is about, that we consider
them carefully and I look forward to reviewing the record.
Thank you, Mr. Chairman.
Mr. Upton. Mr. Largent?
Mr. Largent. Mr. Chairman, in the interest of time, I'd
like to submit my entire opening statement for the record and
just say that I look forward to hearing from our witnesses.
Mr. Upton. Thank you. So ordered. Mr. Green?
Mr. Green. Thank you, Mr. Chairman, and I'm sorry Eddie
Markey left because I've never heard that Eddie was here before
the dinosaurs, because sometimes in Congress those of us who
serve a long time are called dinosaurs, but never pre-dinosaur.
I'm going to put my full statement in the record, Mr. Chairman,
but listening to my colleagues in their opening statement, I
think that's what oftentimes I get frustrated when we have our
witness panel sitting there and they're listening to us instead
of us listening to you. But on something that's as important as
3G for the future, I think what's happened this morning is that
I have listened to my colleagues on where we all come from and
that helps us build the legislation so oftentimes we don't
focus on these issues until we're at this hearing and so our
opening statements actually I feel like are much more
beneficial than I've had for many years before. But it is
important what we're doing and I'd like to hear today, like my
colleagues on how can we work with DOD to make sure that's
available, how we do not recreate or the problems we've had
like with high definition television that we do something
different so we don't have that problem, but also that we make
sure we are competitive in the world, that we also can
compensate or work with DOD to make sure that our defense of
our country is protected.
Mr. Chairman, I'll submit my total opening statement and
appreciate the time.
[Additional statements submitted for the record follow:]
Prepared Statement of Hon. Steve Largent, a Representative in Congress
from the State of Oklahoma
Mr. Chairman, in the interest of time I'll make my opening
statement brief. As evidenced by the number of cellular phones, palm
pilots, pagers, blackberrries, and other miscellaneous wireless devices
in this hearing room, the use of wireless telecommunications services
has grown dramatically over the past decade.
Wireless communication has evolved from analog to digital to the
next iteration which we know as third generation or 3G.
It is expected that the development of third generation wireless
will have a significant impact on the creation of new technologies as
well as economic development. Last October, the Council of Economic
Advisors projected that ``an additional 150 megahurtz of spectrum could
bring an additional $35.7 billion of service revenues per year.''
However, before industry can move forward with its plans to move
from second generation wireless technology to the much anticipated 3G,
we need to examine our current spectrum policy to determine how to
harmonize the private sector's desire for this valuable resource
without compromising our national security.
Mr. Chairman, I suspect this issue will require more than one
hearing, but I thank you for getting the ball rolling on this very
important topic. I look forward to hearing from our distinguished panel
of witnesses.
______
Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee
on Energy and Commerce
Mr. Chairman, thank you for holding this hearing today, in which we
will examine what promises to be one of the next big steps in the
digital revolution we've experienced in recent years.
We have all witnessed the explosive growth of both the Internet and
mobile communications. The deployment of third-generation mobile
wireless services promises to bring the two together--so that consumers
can have, in the palms of their hands, an exciting new array of digital
products, including high-speed Internet access, video and other
informational services, all broadcast over the airwaves.
Equally important, third-generation wirless promises to provide
many high-tech and information-service companies with a new avenue for
innovation and growth.
But the deployment of third-generation wireless services will not
happen in the united states until we get our act together.
It's not that the technology does not exist for 3G services.
(Although in its infancy, it is developing rapidly.) The problem is the
federal government lacks a comprehensive, coherent spectrum policy that
will bring about the swift deployment of 3G services.
At present, all of the spectrum bands identified by the world radio
conference last year for global 3G deployment are heavily encumbered in
the United States. Some segments of these bands are slated to be
auctioned by the FCC, but such an action would be extremely premature.
For example, we could auction off part of the 700 mhz band right
now for 3G services. But this band will not be available until at least
2006. And, currently, no other country has allocated this for 3G
services. It makes no sense to commit resources this way at this time.
We could auction off part of the 1710-1755 mhz segment and couple
it with the 2210-2150 mhz segment. But doing so could foreclose use of
the potentially valuable 1755-1850 mhz band for 3G services.
Simply put: We should not auction some portions of these bands
until we have a comprehensive policy concerning what we are going to do
with all of the bands.
I hope that our administration witnesses today can shed some light
on when we can expect to have a comprehensive strategy for 3G.
I was pleased that FCC Chairman Powell delayed the 700 mhz auction.
And I was also pleased with correspondence between Chairman Powell and
Commerce Secretary Evans concerning their efforts to work together and
to avoid a policy of auctioning spectrum in a piecemeal fashion.
But that leaves us with the question of the Pentagon's role in this
matter. To date, the Pentagon has not been very cooperative. Instead of
helping us figure out whether there are viable options for moving its
operations from the 1755-1850 mhz band, the Pentagon has essentially
just told us ``no.''
I hope that changes today. I hope that Dr. Wells will help us
determine whether there are spectrum bands to which the Pentagon's
operations can be reallocated. We certainly want the pentagon to have
comparable spectrum. And we want it to be fully reimbursed for the cost
of moving to other bands and to be able to purchase state-of-the-art
communications gear.
It may even make sense to enable the Pentagon to use the funds
produced by an auction of its spectrum licenses for other modernization
purposes as well. (Based on our current budget situation, I am not sure
where else comparable funds will be found.)
The bottom line is that we need a new spectrum policy. And we need
one that reflects how we are going to prepare American consumers for
the benefits of 21st century advanced wireless technology. We need a
thorough review of all of our options and honest dialogue with
incumbent licensees to determine where we should deploy 3G services and
when we can do so.
Mr. Chairman, I applaud you for holding this hearing and for your
leadership on this issue. And I look forward to our witnesses
testimony.
______
Prepared Statement of Hon. Eliot Engel, a Representative in Congress
from the State of new York
Mr. Chairman: Thank you for putting this hearing together. I also
want to thank and commend your staff for the briefings they put
together for the committee staff. This is a difficult issue in many
ways to get your arms around. There are numerous competing interests
for a very valuable and scarce resource--spectrum.
Essentially, the Defense Department is now occupying prime spectrum
real estate that has been identified by international agreements for
development of third generation wireless services. This presents great
potential for commercial development but also enormous challenges.
To the Defense Department, I will simply say, that in my mind
because the rest of the world seems to be moving to using this portion
of the spectrum and thus in the future it could and most likely
interfere with DOD activities around the world, it just makes sense to
find appropriate alternative spectrum for DOD to move to.
To the wireless industry, I will simply say--and think I speak for
every Member of Congress--we will do nothing that endangers the
national security of the United States. We take very seriously the
concerns and problems presented by the Department of Defense. Just the
logistics of migrating all these systems to new frequencies is a
daunting challenge that must be VERY carefully managed.
That being said, I believe working together we will find a
solution--a transitional phase-out that is acceptable to all parties.
We will need to identify specific parts of the spectrum and specific
DOD systems operating at those spectrums to see if we can move this
system or that equipment in 3 years, 5 years, or longer.
I think it is obvious if we all work together--are honest and open
up front about the challenges we face in this process we will be better
off. I think it telling that DOD reports that all the Delta rockets
used to launch satellites are booked through 2004. This isn't just
small problem, it is a big one. On the other hand, I think US
leadership on 3G service is key to continuing the United States'
technological dominance and economic strength.
We have a lot of smart people working on this issue. I think from
the outset, we all have to come to the table with a set of reasonable
expectations and reasonable compromises. We won't succeed tomorrow, but
I am confident that success is in the near future.
Mr. Upton. Thank you. With that, we're ready to hear from
our panel and we are joined today by Mr. William Hatch, Acting
Assistant Secretary of Commerce, Office of Communications and
Information at the Department of Commerce; Dr. Linton Wells,
Assistant Secretary of Defense for Command, Department of
Defense; Mr. Julius Knapp, Deputy Chief of the Office of
Engineering and Technology of the FCC; Mr. Thomas Wheeler,
President and CEO of the Cellular Telecommunications and
Internet Association; Mr. Denny Strigl, Chief Executive Officer
of Verizon Wireless; Monsignor Michael Dempsey, President of
the Catholic Television Network.
Gentlemen, thank you first of all for submitting your
testimony in advance. Your statements are made as part of the
record in their entirety and if you could limit your opening
statements to about 5 minutes that would be terrific.
Mr. Hatch, we'll start with you. Thank you.
STATEMENTS OF WILLIAM T. HATCH, ACTING ASSISTANT SECRETARY OF
COMMERCE, OFFICE OF COMMUNICATIONS AND INFORMATION, DEPARTMENT
OF COMMERCE; LINTON WELLS, ASSISTANT SECRETARY OF DEFENSE FOR
COMMAND, DEPARTMENT OF DEFENSE; JULIUS P. KNAPP, DEPUTY CHIEF,
OFFICE OF ENGINEERING AND TECHNOLOGY, FEDERAL COMMUNICATIONS
COMMISSION; THOMAS E. WHEELER, PRESIDENT AND CEO, CELLULAR
TELECOMMUNICATIONS AND INTERNET ASSOCIATION; DENNIS F. STRIGL,
CHIEF EXECUTIVE OFFICER, VERIZON WIRELESS; AND MICHAEL J.
DEMPSEY, PRESIDENT, THE CATHOLIC TELEVISION NETWORK
Mr. Hatch. Thank you, Mr. Chairman.
Mr. Upton. If you could just pull the mike a little bit
closer, that would be great. Thank you.
Mr. Hatch. Mr. Chairman and ranking members and other
members of this subcommittee, I want to thank you for inviting
me to testify today on spectrum matters relating to what we
call accommodation of third generation wireless systems in the
United States. As you stated, I am Bill Hatch, Acting Assistant
Secretary for Communications and Information and Acting
Administrator of the National Telecommunications and
Information Administration within the Department of Commerce. I
am also the Associate Administrator in NTIA's Office of
Spectrum Management.
If I may, for the record, Mr. Chairman, I found that there
are two typos in my testimony. One in the Executive Summary and
one in the body of my testimony where I refer to the frequency
band 1710 to 1855 megahertz. It should actually be 1710 to 1850
megahertz, so if you could make that correction I would
appreciate it.
As members of the committee know, NTIA serves as the
spectrum manager for the Federal agencies and as the principal
advisor to the President on communications and information
policy. Because of NTIA's unique role, the Agency must balance
the spectrum interests of the government agencies while also
advancing policies that promote the benefits of technological
developments in the United States for all users of the
telecommunications services.
Over the past decade there has been tremendous growth,
worldwide in the use of cellular-based wireless
telecommunications systems. The Department of Commerce and NTIA
believes that this global growth will continue. The third
generation wireless (3G) systems under discussion will provide
mobile and satellite based broadband capabilities. While
current cellular and PCS wireless systems are expected to
evolve to 3G technology over time, there is a strong desire
from the wireless industry for additional spectrum to establish
these 3G networks.
The International Telecommunication Union has been
fostering the development of the advanced wireless system or
what's commonly referred to as the international mobile
telecommunications-2000 or IMT2000, or also referred to here
today as 3G for a number of years. The ITU World Radio
Conference (WRC) in 2000 held in Istanbul, Turkey adopted a
resolution which states that approximately 160 megahertz of
spectrum will be needed for the projected requirements for 3G
in high density areas and this would be needed by the year
2010. At the World Radio Conference there were a number of
frequency bands that were identified for possible use by IMT200
or 3G and it was provided that each country may determine which
of the bands to implement domestically after taking into
account the impact on incumbent services.
The WRC decision also provided that 3G services may be
introduced through evolution of technology and frequency bands
that are presently used by the mobile services.
As you know, in the United States we are now in the process
of deciding which of the various frequency bands is most
appropriate for the implementation of 3G services and noting
that our particular domestic requirements may be different from
other country's national requirements.
As a result of the cooperation between the Department of
Commerce, the Department of Defense, the Federal Communications
Commission and other Federal agencies, the Department of
Commerce, under guidelines set forth last year, developed an
ambitious action plan to identify spectrum for 3G services. To
date, both NTIA and the FCC have completed interim and final
reports examining the respective bands of 1710 to 1850 and 2500
to 2690 megahertz. We've conducted industry outreach meetings
and we've participated in discussions with foreign bodies and
international bodies. In addition, the FCC has issued a notice
of proposed rulemaking addressing 3G allocation issues and has
received comments from the public on the issues raised in that
NPRM.
Because of the complex issues surrounding the allocation of
spectrum for 3G, there's a general agreement among the
Department of Commerce, the FCC, and the affected Federal
agencies to continue the efforts that we have been doing, so
that we may carefully study the various options that have been
put forward in all of the comments and in the various reports
that have been done to arrive at the best possible solution.
In recognition of the work that remains to be done,
Chairman Powell recently sent a letter to Secretary Evans
suggesting that additional time to study the auction would be
desirable, and requesting that the Department work with the FCC
to come up with a revised allocation plan and auction time
table. Secretary Evans responded last week by agreeing with the
Chairman, that continuing these efforts would ensure that the
final 3G allocation would be the best possible one that we
could make. He has directed me to work with the FCC and the
Federal agencies to develop a new plan for the selection of 3G
spectrum and to consider ways to achieve flexibility on the
statutory auction date, if such flexibility is needed to
implement the plan.
I'm happy to report, Mr. Chairman, that in accordance with
Secretary Evans' memo, preliminary discussions have been held
with Federal agencies, including the FCC to discuss the
establishment of a new plan and timetable for the selection of
spectrum to accommodate 3G.
I want to thank you for this opportunity to share these
views with you and would be pleased to answer any questions
that you may have.
[The prepared statement of William T. Hatch follows:]
Prepared Statement of William T. Hatch, Acting Assistant Secretary for
Communications and Information, U.S. Department of Commerce
Mr. Chairman, Ranking Member and other members of this
subcommittee, I want to thank you for inviting me to testify today on
spectrum matters relating to the accommodation of third generation (3G)
wireless systems in the United States. I am William T. Hatch, Acting
Assistant Secretary for Communications and Information, and Acting
Administrator of the National Telecommunications and Information
Administration (NTIA) within the Department of Commerce. I am also the
Associate Administrator in NTIA's Office of Spectrum Management.
NTIA serves as the spectrum manager for the Federal agencies and is
the principal adviser to the President on communications and
information policy. Because of NTIA's unique role, the agency must
balance the spectrum interests of the Federal agencies while also
advancing policies that promote the benefits of technological
developments in the United States for all users of telecommunications
services.
I am pleased that the Subcommittee is looking into the matter of 3G
wireless services, and would like to begin my remarks today by giving a
brief background on the efforts to assure adequate and timely
deployment of 3G services in the United States, our accomplishments to
date, and our plans for the future.
background
Although in the United States our wireless services are not
generally distinguished by a ``generation'' label, we might classify
the early cellular telephones as the ``first generation'' of wireless
services that brought nationwide mobile telephone services to hundreds
of thousands of Americans. Building on the success of cellular service,
the current personal communications services (``PCS'') could constitute
the ``second generation'' of wireless services. These services bring
digital voice and messaging services to the nation. In recent years,
there has been robust competition in the field of wireless services.
This competition has promoted lower rates, greater customer choice, and
higher quality of service.
Over the past decade there has been a tremendous growth worldwide
in the use of cellular-based wireless telecommunications systems. The
Department of Commerce and NTIA believe that this global growth will
continue. The ``third generation'' (or ``3G'') systems advanced by
industry propose to provide mobile and satellite-based broadband
capabilities. While current cellular and PCS wireless systems are
expected to evolve to 3G technology over time, there is a strong desire
from the wireless industry for additional spectrum now to establish 3G
networks.
In recognition of this growth and the trend toward global markets
for wireless services, the International Telecommunication Union (ITU)
has considered the spectrum requirements for evolving 3G systems, which
is internationally termed International Mobile Telecommunications-2000,
or IMT-2000. At the May 2000 World Radiocommunication Conference (WRC-
2000) in Istanbul, Turkey, an ITU-established agenda item called for
the review of spectrum and regulatory issues for advanced mobile
applications in the context of IMT-2000. The ITU acknowledged the
urgent need to provide additional spectrum, particularly for the
terrestrial component of IMT-2000 applications. The ITU forecast that
160 MHz of additional spectrum would be required for 3G systems. This
amount is over and above that spectrum already allocated
internationally for 1- and 2G systems. The ITU identified several
frequency bands that could be used for IMT-2000 systems. However,
member administrations of the ITU retained the right to implement any
of the bands in any time frame, for any service or technology, and
could use any portion of the identified bands that they deemed
appropriate to satisfy national requirements.
current status
In October 2000, then President Clinton signed an Executive
Memorandum which stated the need and urgency for the United States to
select radio frequency spectrum for 3G. The Memorandum articulated
principles to serve as guideposts for future actions that would be
taken related to the development of 3G, and directed Federal agencies
to undertake certain activities. President Clinton directed the
Secretary of Commerce to work cooperatively with the FCC to take
certain actions that would enable the FCC to identify, in coordination
with NTIA, 3G spectrum and to auction licenses to competing applicants
by September 30, 2002. In addition, the Secretary of Commerce was
directed to work with government and industry representatives through a
series of public meetings to develop recommendations and plans for
identifying spectrum for 3G wireless systems. The Secretaries of
Defense, Treasury, Transportation, State and other agency heads were
directed to participate and cooperate with this government-industry
group. The Secretary of State was directed to coordinate and present
the views of the United States to foreign governments and international
bodies. The FCC was encouraged to participate in this government-
industry outreach program and to initiate a rulemaking to identify
spectrum for 3G, in coordination with NTIA, with the goal of allocating
3G spectrum so that licenses could be made available via auction by
September 30, 2002.
As a result of cooperation between the Department of Commerce, the
Department of Defense, the Federal Communications Commission (FCC), and
other Federal agencies, the Department of Commerce, under guidelines
set forth by the Executive Memorandum, developed an ambitious action
plan to identify spectrum for 3G services. To date, NTIA and the FCC
have released interim and final reports on the 1710-1855 MHz band and
2500-2690 MHz band, respectively; conducted a government-industry
outreach program; and participated in the State Department's outreach
program to foreign governments and international bodies. In addition,
the FCC issued a notice of proposed rulemaking.
We are now in the process of deciding which of the various
frequency bands is most appropriate for the implementation of 3G
services in the United States. The possible bands for allocation for
the terrestrial component of IMT-2000 in the United States include the
698-960 MHz, 1710-2025 MHz, 2110-2200 MHz, and 2500-2690 MHz bands. All
of these bands are being considered in the FCC's rulemaking process.
Two bands, however, the 1755-1850 MHz band (exclusive government
spectrum) and the 2500-2690 MHz band (exclusive non-government
spectrum) require a more extensive analysis to determine their
potential to accommodate 3G services. NTIA has studied the 1755-1850
MHz band and the FCC has studied the 2500-2690 MHz band and the study
reports have been entered in the record of the FCC's 3G rulemaking for
public comment.
ntia spectrum report
The NTIA report noted that the 1755-1850 MHz band supports various
Federal functions: space telemetry, tracking and control (TT&C);
medium-capacity fixed microwave; precision guided munitions; tactical
radio relay training; and aeronautical mobile applications such as
telemetry, video and target scoring systems. This band is currently
allocated on an exclusive basis to the Federal Government for fixed and
mobile; and in the 1761-1842 MHz portion, space operation (Earth-to-
space) and space research (Earth-to-space) services. This allocation
supports Federal space tracking, telemetry and command. Fixed links are
operated by Federal agencies for voice, data, and/or video
communications where commercial service is unavailable, excessively
expensive, or unable to meet required reliability. Applications include
law enforcement, emergency preparedness, support for the national air
space system, military command and control networks, and control links
for various power, land, water, and electric-power management systems.
Other fixed links include video relay, data relay, and timing
distribution signals. Probably the most critical system in the band is
the USAF Space Ground Link Subsystem (SGLS). This system, via Earth-to-
space uplinks in the 1761-1842 MHz band, controls the U.S. military
satellites, including telecommunications satellites, intelligence
gathering satellites, the Global Positioning System (GPS) satellite
constellation and U.S. allies.
The NTIA report studied three options for sharing or segmenting the
1710-1850 MHz band and provided estimated cost information for
relocating Government systems to other bands based on the agencies'
analyses of their respective systems. In its report, NTIA concluded
that without some form of real-time coordination among IMT-2000
operators and the Federal users, sharing between the IMT-2000 systems
and Federal ground and airborne systems would be problematic. For
example, a Department of Defense analysis (contained as an appendix to
the NTIA report) indicated that IMT-2000 base stations would interfere
with the control of Federal Government satellites. The Defense
Department asserted that it would cost $3.9 billion to relocate its
systems from the 1755-1850 MHz band assuming no relocation of satellite
systems until the end of their projected useful life and that such
relocation could not be completed before the year 2017. The relocation
scenarios were contingent on whether spectrum could be identified to
which the agencies' operations could be moved.
In its report, NTIA discussed the possible ways in which the 1710-
1755 MHz band could be used for 3G services. NTIA previously identified
the 1710-1755 MHz band for reallocation to the private sector on a
mixed-use basis under the requirements of the Omnibus Reconciliation
Act of 1993 (OBRA-93). However, under OBRA 93 the Federal Power
Administration and fixed links supporting safety-of-life services were
exempted from the requirement. In addition, NTIA protected operations
within 16 military areas used for large-scale training exercises. In
its final report, NTIA noted that one possible option to accommodate 3G
services within the band would be to relocate Federal systems from this
band completely if comparable spectrum for these military operations
could be found and the Federal Power Administration services were
willing to relocate on a voluntary basis. Identifying comparable
spectrum is important to the 3G spectrum allocation process because the
provisions of the National Defense Authorization Act for Fiscal Year
2000 protect Department of Defense uses of the spectrum unless
alternative spectrum can be identified that preserves essential
military capability.
outreach programs
To obtain much-needed technical information and to develop a better
understanding of industry's needs, NTIA held a number of industry
outreach sessions in which Federal agencies and industry exchanged
information on various 3G issues. In addition, the wireless industry
hosted several smaller, more focused working group meetings that
addressed the operational and sharing possibilities of Federal systems
in the 1755-1850 MHz band, and sharing possibilities in the 2500-2690
MHz band. These outreach meetings included NTIA and Department of
Defense staff as well as numerous industry stakeholders, including
radio manufacturers and wireless service providers. These meetings were
invaluable information exchanges--the Federal Government could provide
information on radio systems used in the band, and industry could
provide their views on the feasibility of IMT-2000 systems sharing with
existing Federal systems.
going forward
Because of the complex issues surrounding the allocation of
spectrum for 3G services, there is a general agreement among Department
of Commerce, the FCC and the affected Federal agencies to continue
these efforts beyond the original July 2001 target date so that we may
study carefully the various spectrum options available to arrive at the
best possible decision. In recognition of the work that remains to be
done, Chairman Powell recently sent Secretary Evans a letter suggesting
that additional time to study options would be desirable and requesting
that the Department work with the FCC to come up with a revised
allocation plan and auction timetable. Secretary Evans responded last
week by agreeing with the Chairman that continuing these efforts would
ensure that the final 3G allocation decision would be the best possible
one. He directed me to work with the FCC and other Federal agencies to
develop a new plan for the selection of 3G spectrum and to consider
ways to achieve flexibility on the statutory auction date if such
flexibility is needed to implement the new plan.
I thank you for this opportunity to share with you the views of the
NTIA on this critical issue, and I would be pleased to answer any
questions you may have.
Mr. Upton. Thank you.
Dr. Wells.
STATEMENT OF LINTON WELLS
Mr. Wells. Mr. Chairman, thank you very much.
Mr. Upton. Just move that microphone over as well, thanks.
Mr. Wells. Mr. Chairman, thank you very much. DOD is eager
to participate with our executive branch colleagues, the FCC,
the Congress and the private sector in the process that will
determine the best allocation of third generation spectrum for
the Nation. The band that is of most interest to us, as I'm
sure you know, is 1755 to 1850 megahertz. To explain why this
is important imagine that you're the pilot in a cockpit of an
airplane. The communications support, the intelligence support,
most of the navigation and the weather that you receive in your
cockpit comes from the 120 plus military and civilian
intelligence satellites that are controlled within this band.
In addition, the training you have received on air tactical
maneuvering ranges is based largely on this band as one of the
reasons why our pilots are the best trained in the world. Under
your wing may well be a precision guided munition, the kind of
weapon whose accuracy allows not only increased military
capability, but also dramatically reduced civilian casualties.
That weapon depends on control band frequencies and this band.
Beneath your wing are Army and Marine Corps troops. Their
tactical Internet, the battlefield radio relay is, in fact,
controlled in this band and links them not only for the
situational awareness, but also to ships that may be offshore.
So intensely as we are using this band today, it's even going
to grow. In the case of Kosovo, we had one tenth of the number
of troops deployed that we did in Desert Storm and yet we used
250 percent of the bandwidth in that small scale contingency.
Equally dramatic in Kosovo, once the fighting started, the
amount of bandwidth we needed increased 21 times over what it
had been before the fighting started and we project a 500
percent increase in our use of military satellite
communications in the years ahead.
Moreover, this sort of transformation that the Department
is going through that Secretary Rumsfeld is encouraging is
moving us toward network centric operations which use even
more--rely even more on spectrum and bandwidth.
Thus, these are functions that have to be performed. If
they are not performed for whatever reason, there will be a
severe and immediate impact on the national security of this
country. The result will be increased casualties, mission
failures, reduced intelligence to the President and senior
leadership, not to mention interruptive navigation services to
the private sector. So if relocation of DOD out of the Federal
band is necessary, we will need to have comparable spectrum to
move into. There will need to be some sort of time line to
allow the adjustment to take place and compensation will need
to be provided.
One of the things that interests me is why this band is so
attractive. It is, after all, only 95 megahertz out of the
2,000 megahertz that are already available between 700 and 2700
megahertz in the United States. Various arguments have been put
forward. Harmonization, for example, including the goal of
having a single band that you could operate on worldwide is
very attractive. My concern is that we're not going to get
there. China recently has announced they're going to operate in
2.3 to 2.4 gigahertz. That's not even a band that's under
serious consideration in the United States.
The question about whether we will encounter increased
interference overseas certainly is a matter of concern. Thus
far we have dealt with this with a series of international
agreements with almost all of our operating partners that have
allowed us to work through these problems. If we change the
frequencies, we're going to have to go through and renegotiate
and entirely new set of agreements.
Finally, some have said that the U.S. should match the
amount of spectrum provided to that available in other
countries. There is, in fact, a lot of spectrum available today
in the United States. I have included Table 3 in our written
presentation 130 megahertz that might be made available today,
rising to perhaps 210 megahertz, 240 megahertz by 2010.
Obviously, there are considerations, but there is spectrum that
is available without ever touching the 1755 to 1850 megahertz.
Mr. Sawyer raised the issue of being a good steward of the
spectrum. DOD, in fact, has to revalidate periodically the
continued use of the spectrum we have and if we don't have it,
we have to give it back up. In addition, we are aggressively
pursuing new technologies such as demand access which has
increased by four times the number of satellite circuits we can
get in a single channel and we are spending tens of millions of
dollars on advanced technologies such as software programmable
radios that should allow more efficient use of the spectrum in
the future. We are good stewards of the spectrum we have.
Together with NTIA we have analyzed the spectrum and the
implications of either sharing or vacating the 1755 to 1850
megahertz band. What we found was that because of mutual
interference, full sharing of the band would not be feasible.
We looking at moving and there are several issues. One again is
comparable spectrum. One of the problems of comparable spectrum
is that almost all of the attractive spectrum is occupied by
someone today. We could say 2500 would be a great band to move
into, but I think Monsignor Dempsey would have a concern with
us on that point. The same is true of many other attractive
spectrum, possibly attractive spectrum.
With regard to timelines, the satellite control I mentioned
earlier, the satellites on orbit today, we can't just send a
space shuttle up to fix them and return the receivers like it
was done with the Hubble Telescope. It may be as long as 2017
before the satellites that use this band fly themselves out.
Similarly, by the time we budget for research and development,
build and deploy the terrestrial systems, that could be as long
as 2010 even before the terrestrial systems can be fully
vacated from the band. So there are solutions. There is a time
line associated with them. There is some near term spectrum
outside of the DOD band that might be suitable and we look for
an integrated solution, going forward.
The other point I would make in moving spectrum is that
there's an integrated operational fabric that has been put
together and balanced over many decades. On the AWACS, the
airborne warning and control system aircraft alone there are 80
different antennas. If you were to retune one of those antennas
you have to make adjustments on many of the others on the
airplane. To return to the pilot in the cockpit, if you were to
move his precision-guided munition datalink to a higher
frequency, that would mean he would have to come closer to the
target in order to control the weapon which, in turn, could put
his aircraft at risk. Similarly, it increased the power on the
datalink. That might make his aircraft more detectable. There
are other tactical sort of situations that one could mention.
To close then, DOD does look forward actively participating
with the other members in this debate. We have benefited
enormously from the private sector's genius and we expect to do
so again. However, I ask that we not act precipitously.
Reasonable people can differ over the urgency of transferring
the spectrum and if a decision is made to move DOD, I ask that
the risk to national security be balanced against the need for
a thorough debate over choosing the right option and also the
enormous benefits that this country, the world and indeed the
world economy in which this technology so benefits have gained
from the international peacekeeping, national security efforts
that our people are conducting, efforts that increasingly
depend on having adequate spectrum. Thank you very much, Mr.
Chairman.
[The prepared statement of Linton Wells follows:]
Prepared Statement of Linton Wells, Acting Assistant Secretary of
Defense for Command, Control, Communications and Intelligence,
Department of Defense
1. introduction
Thank you, Mr. Chairman, and members of the subcommittee, for
inviting me to speak on this issue of the utmost importance to our
military forces, allocating radio frequency (RF) spectrum. As the
Acting Assistant Secretary of Defense for Command, Control,
Communications and Intelligence, I am responsible for spectrum policy
and management within DoD.
The issue of finding spectrum in the United States for Third
Generation Wireless (``3G'') services illustrates the growing demand
for spectrum in both the commercial and government sectors. The
Department of Defense's needs for spectrum are growing along with those
of other organizations. For example, the satellite bandwidth used in
Operation Allied Force in Kosovo was two and one half times the
bandwidth used in Desert Storm nine years earlier, while the Kosovo
force was one tenth the size. Work done at the Department of Defense
has projected significant growth in military spectrum requirements in
all functional areas over the next few years (see Figure 1).
Access to adequate RF spectrum was critical to US Forces' success
in Desert Storm and Kosovo and will continue to be crucial to the
Department's ability to transform itself into a leaner, more agile, and
more effective force that can meet the security challenges of the
future at reasonable cost to the taxpayers. Fundamental to this
transformation is the network-centric concept of operations which is
already being implemented. RF spectrum is virtually the only way to
connect mobile ground forces, ships, aircraft, and satellites.
2. dod use of the federal government 1755-1850 mhz band
As you know, the Federal government band from 1755-1850 MHz is one
of the bands under consideration for 3G. DoD uses this band for
satellite control, battlefield radio relay, aircrew combat training,
precision weapons guidance, and many other important functions. The
band was picked for these functions because the signals at these
frequencies propagate in ways that make the spectrum ideal for mobile
communications. Altogether more than 100 DoD systems, and a more than
equal number of systems from other Federal agencies, utilize this band.
Figure 2 depicts many of the uses. I will briefly describe each of the
major functions resident in the 1755 MHz band.
The control uplinks for all DoD and Intelligence Community
satellites (more than 120 satellites representing a cumulative
investment of about $100B) use the 1755 MHz band. These satellites
perform communications, positioning and timing, surveillance and
reconnaissance, weather observation, and other functions crucial to
war-fighting and to decision-making by National Command authorities,
including the President, the Secretary of Defense, and the Chairman of
the Joint Chiefs of Staff, as well as other senior military
decisionmakers.
DoD's Global Positioning System satellites have become crucial
parts of the national civilian/military infrastructure supporting
global navigation and positioning requirements for air, land and sea
vessels. GPS serves functions that are as important as the functions
provided by railroads and telecommunications systems.
The battlefield radio relay systems in this band form the long-haul
backbone of the Army and Marine tactical internets. They let our ground
forces to share situational awareness and coordinate their operations
in real time across the extended battlefield, as well as to ships off-
shore.
The Air Force and Navy aircrew combat training system, which
provides realistic training with engagement assessment and feedback, is
one of the main reasons American pilots are the best-trained combat
pilots in the world.
The most accurate air-launched precision weapons in the Services'
inventories are guided by data links using the Federal band. These
weapons are often used by commanders to ensure the highest probability
of mission accomplishment with the fewest possible civilian casualties.
Virtually all of the these systems played a key role in the Allied
victory in Kosovo. The success of this operation would have been
unlikely without satellite-based communications, navigation, and
reconnaissance, without well-trained combat aircrews, without
precision-guided weapons, and without tactical radio relay systems.
Other important DoD systems that use the Federal band, include
Combat Identification, soldier radios, and weapon scoring.
In an era of reduced force structure, increased mission
responsibilities and fewer soldiers, sailors and airmen, these systems
serve to enhance significantly our operational capabilities. Enhanced
knowledge of the battlefield, coupled with precise engagement
capabilities obtained from these spectrum dependent, force multipler
systems, protect our forces, throughout the full range of U.S.
involvement from combat to peacekeeping and humanitarian operations.I
want to say in the most unequivocal way possible that the loss or
degradation of our ability to perform these crucial functions would
have very severe consequences for National Security. It would result in
mission failures and increased casualties in future operations, and
loss of vital intelligence information to the President and senior
leaders. If the Federal band is to be reallocated, then other suitable
spectrum must be found to enable the displaced functions to be
performed without degradation, and we need enough time to relocate to
the new spectrum.
3. dod study findings
The White House-directed study conducted by DoD on accommodating 3G
services in the Federal band examined the options of sharing the band,
vacating all of the band, or vacating part of it. The study found that
sharing the band between 3G services and incumbent DoD systems would
not be feasible because there would be too much mutual interference.
Vacating or segmenting the band is feasible in theory, provided that
comparable spectrum could be allocated to DoD and adequate, timely
financial compensation provided, but DoD satellite control systems
could not vacate the band before 2017 and non-space systems before
2010. These timelines are driven by fact-of-life considerations
including the expected satellite lifetimes, the inability to change the
frequencies of on-orbit satellites and time required to design and
field new systems in a different frequency band. NTIA's report
incorporates the DoD findings.
4. comparable spectrum.
Let me emphasize again, as a matter of national defense and
security, DoD's ability to carry out its operational mission will be
jeopardized if the Department is not provided with access to spectrum
with appropriate technical characteristics and regulatory protections.
The National Defense Authorization Act of 2000 requires that DoD be
provided ``comparable spectrum'' for functions displaced by
reallocation of Federal spectrum to meet commercial needs. The
Secretary of Defense, the Chairman of the Joint Chiefs of Staff, and
the Secretary of Commerce must jointly certify that any replacement
spectrum is comparable. We consider this to mean that the replacement
spectrum for different DoD systems has suitable technical
characteristics and similar regulatory status so that the displaced
function can be performed with no degradation in capability. At this
point, DoD believes that it is unlikely that comparable government
spectrum can be found for most of the functions presently residing in
the 1755 MHz band and, to date, the NTIA and the FCC have not
identified such spectrum. Forced relocation of DoD without provision of
comparable spectrum will result in the very servere consequences to
National Security that I addressed earlier.
We are willing to engage with all parties to find a way ahead on
spectrum. Nonetheless, we believe that the issue of equivalent spectrum
must be resolved before any decisions are made on spectrum for 3G,
including any ``decision in principle'' or ``policy decision'' on band
reallocation.
5. ctia proposals
In their 3G ``briefing book,'' CTIA has proposed work-arounds for
satellite control, tactical radio relay, and air combat training
systems to enable accommodation of 3G services in the Federal band
earlier than the DoD timelines Our initial assessment is that none of
these proposals could be implemented without serious degradation to DoD
capabilities. CTIA has not proposed work-arounds for precision guided
weapons or many other important DoD systems.
CTIA has proposed a ``win-win'' solution in which DoD would be
provided modernization funds, beyond the marginal cost to relocate, as
an inducement to accept relocation. We would be interested in seeing
what could be included in such a package but have not yet seen such a
proposal. Moreover, we emphasize that any such solution could only be
viable if DoD is provided access to spectrum with equivalent technical
characteristics and regulatory status. While the offer is no doubt made
in good faith, a mechanism has not been presented by which it could be
implemented in such a way as to produce a genuine win-win situation.
6. need for additional spectrum for 3g in the united states
We were asked in Chairman Upton's letter of invitation to comment
on this issue. In our view, the case must be updated, refined and
timelines for such spectrum spelled out. The U.S. has a much lower
population density than Europe or Asia, so that requirements for 3G
personal communications devices may be smaller than either of these
regions. Further, we can expect that technological advances will enable
the wireless industry to wring more use out of their spectrum (just as
the DoD is counting on spectrum-efficient technologies to enable us to
meet our growing needs without demanding more spectrum from the
regulators). Finally, the amount of spectrum needed for 3G is
undetermined because the demand for 3G services is unknown at this
point. Many industry observers believe that second generation wireless
services (personal communications services'' or PCS in the United
States), with enhancements (high speed voice and data connection, but
not streaming video) will be sufficient for most truly mobile users.
7. candidate bands for 3g
The Federal 1755 MHz band is heavily encumbered and would require
nearly two decades to become available, there are other bands readily
available to FCC for meeting the needs of the 3G vendors. Figure 3
lists some of the other bands available. Much of this spectrum was
reallocated from DoD/Federal use to commercial use by earlier
legislation and NTIA action but it has not yet been made available
through auction by the FCC. Altogether there is at least 130 MHz of
suitable commercial spectrum that FCC could make available this year
with limited displacement to established users, and more than 240 MHz
could be available within ten years.
Another means of meeting the 3G spectrum requirement in full or in
part is to provide 3G services on spectrum currently used for PCS or
other wireless services, as FCC regulatory flexibility allows and as
some 3G vendors are planning.
8. harmonization
CTIA argues that the Federal band is desired for 3G because it
would harmonize U.S. spectrum allocation with 3G allocations around the
world. This is not the complete picture. There are at least six bands
that WRC-92 and WRC-00 suggested nations consider for 3G. Worldwide
harmonization of 3G bands is not happening. Most nations have not yet
decided on which band will be used for 3G, and I am not aware of any
nation that has auctioned the 1755 MHz band for 3G. In fact, Europe
uses the 1755-1850 MHz band for 2G. Europe would need to make
regulatory changes before using this spectrum for 3G and probably will
not migrate it to 3G for more than a decade. Many nations are waiting
to see which band the U.S. picks.
CTIA is now modifying its position to state that the 1755 MHz band
is needed to enable harmonization of advanced commercial wireless
services ``in general.'' Harmonization is primarily helpful when it can
be achieved with respect to a particular band (such as 2G or 3G) or
waveform (such as CDMA, one of the current U.S. standards for first
generation phones, or GSM, the current first generation standard in
Europe and most of Asia). We have no national commitment to
harmonization with respect to 3G implementation. Finally, multi-mode
and multi-band phones are available today and appear to be economically
viable.
9. the federal government, including dod, is managing spectrum
judiciously.
DoD is not ``hoarding'' spectrum and using it inefficiently. DoD is
granted access to spectrum by NTIA and, in a few cases, by FCC for
specific purposes. The need for government spectrum for particular user
and uses is reevaluated on an ongoing basis. DoD systems must be
designed to a very high level of spectrum efficiency since the lives of
servicemen and women are at risk and many military systems must operate
in close proximity at the same time, during military operations. We are
constantly pursuing new spectrum-efficient technologies. For example,
we are fielding multiplexers for our UHF satellite receivers that
multiply the number of channels per satellite by a factor of four.
I would like to put the relative allocation of bandwidth between
industry and the Federal government in proper context. Out of the total
amount of spectrum that is appropriate for 3G deployment, generally
700MHz-2700MHz, the Federal government is the exclusive occupant of
about 15%. Three times that amount is reserved exclusively for
commercial use, and the rest is shared.
10. conclusion
This issue requires a balancing of economic and national security
needs. We should remember that there can be no economic prosperity
without national security. Furthermore, the value of national security
cannot be measured in dollars. The benefits the nation derives from
making spectrum available for Defense are expressed in terms of wars
that we won't have to fight, and victories achieved and casualties
avoided in the wars we do fight.
To summarize the DoD position on this issue, we must have
comparable spectrum if we are to relocate, and this must be identified
and certified prior to any decision to reallocate the Federal band. If
comparable spectrum cannot be identified within the next few months,
then the Federal band should be taken ``off the table.''
Forced relocation of DoD without comparable spectrum, or without
respect for the transition timelines, as proposed in legislation
drafted by CTIA, would cause grave damage to National Security. In
effect, without comparable spectrum, we would be risking the lives of
our Soldiers, Sailors, Airmen and Marines.
Furthermore, even given comparable spectrum, timely and adequate
financial reimbursement, and respect for our transition timelines, it
is still not clear that the Federal band should be reallocated. As I
have explained, industry's case for needing the Federal band is very
weak, there are commercial bands that appear to be more readily
available, and a Federal band should be the last resort, not the first
resort, for a new commercial need such as 3G. Given that there are
risks for DoD in moving to other bands, we would like to see compelling
evidence that this is truly in the national interest before agreeing to
relocate.
The way ahead is for all of us to work together to further assess
what band options are feasible and, of the feasible set, which is the
best choice for 3G based on mutually-agreed criteria. I believe this
process should include an attempt to identify and certify comparable
spectrum for DoD if FCC still wishes to consider the Federal band.
The United States has global security responsibilities and thus has
needs for spectrum for military systems that are far greater than any
other nation's requirements. This is part of the benefits and burdens
that accrue to our Nation, given our worldwide leadership role in the
21st Century. We will continue to work in a spirit of cooperation and
openness with the Congress, other Executive Branch agencies, the FCC
and other interested parties to reach the best decision for the nation
on this important question.
[GRAPHIC] [TIFF OMITTED] T4845.001
[GRAPHIC] [TIFF OMITTED] T4845.002
Mr. Upton. Thank you.
Mr. Knapp.
STATEMENT OF JULIUS P. KNAPP
Mr. Knapp. Mr. Chairman, ranking member and members of the
subcommittee, good morning. I am Julius Knapp, the Deputy Chief
of the Office of Engineering and Technology at the FCC and I
welcome this opportunity to discuss the spectrum allocations
for advanced wireless services or the so-called third
generation or 3G mobile radio services. Unfortunately, Chairman
Michael Powell could not be here today, but he shares your
interest in the future of 3G. The Commission is committed to
facilitating the rapid deployment of new and innovative
technologies as well as promoting spectrum efficiency.
It's crucial that we provide the essential ingredients for
success in the marketplace for advanced wireless services. And
those are adequate spectrum and an open, competitive,
deregulatory market. In order to accomplish these goals we must
work together as a Nation to ensure a cooperative atmosphere
and a unified voice.
The Commission is dedicated to working with industry, other
agencies and Congress to find and deploy the most suitable
spectrum. Today's hearing is an important step toward
encouraging the development of shared goals and perspectives
and we welcome the opportunity to testify here today.
Let me briefly outline the past and current situation. As
Mr. Hatch mentioned, the International Telecommunications Union
has been fostering the development of advanced wireless systems
for about 10 years. The 2000 World Radio Conference adopted
Resolution 223 which states that approximately 160 megahertz of
additional spectrum will be needed to meet the projected
requirements of IMT-2000 or 3G in those areas where the traffic
densities are highest by the year 2010.
WRC-2000 identified a number of frequency bands for
possible IMT-2000 use and provided that each country may
determine which of the bands to implement domestically after
taking into account the impact on their incumbent services.
WRC-2000 decisions also provided that 3G services may be
introduced through evolution of technology and frequency bands
that are used by existing mobile services. The 3G frequency
bands that were identified internationally are allocated in the
United States for both Federal Government and nonfederal
government use and therefore the executive branch and the FCC
each have jurisdiction for parts of the spectrum that were
identified internationally.
A Presidential Memo was issued in October of 2000
instructing the Secretary of Commerce to work cooperatively
with the FCC to develop a study plan to select spectrum for 3G
systems. The Department of Commerce released a plan on October
20, 2000 to identify spectrum for 3G and the plan established
target dates for completion of spectrum studies by NTIA and the
FCC. The plan also called for the FCC to allocate spectrum by
July 2001 and to establish rules so that spectrum could be
assigned by competitive bidding by September 2002.
Late last year, the FCC initiated a rulemaking to consider
spectrum allocations to facilitate the introduction of advanced
wireless services. The Commissions Notice of Proposed
Rulemaking invited comments on the types of advanced wireless
services that will be provided and their technical
characteristics, the amount of spectrum that may be required,
spectrum pairing options and a number of other issues.
I'd like to take a moment just to focus on the frequency
bands. The Commission invited comment first of all on the
extent to which the currently allocated spectrum might be used
for advanced wireless services including the bands used by
cellular, PCS, specialized mobile radio services and the
spectrum that was recently reallocated for commercial use from
TV channel 60 to 69 as a result of the transition to digital
television.
The Commission also invited comment on five new frequency
bands that are shown on the chart we've placed on the easel. We
propose to allocate for mobile and fixed services the 1710 to
1755 megahertz band that was designated for reallocation from
Federal Government to nonfederal government use under two
statutory budget directives. And that's shown in yellow on the
chart.
We sought comment on providing mobile and fixed service
allocations for the 1755 to 1850 megahertz band if that
spectrum is made available for nonfederal government use. We
also proposed to designated for advanced mobile and fixed
services parts of the 2110 to 2150 megahertz and 2160 to 2165
megahertz bands that are currently used for a variety of fixed
and mobile services and were identified in the Commission's
emerging technologies proceeding in 1992.
We also asked for comment on various approaches for the
2500 to the 2690 megahertz band which is currently used for the
multi-channel, multi-point distribution and instructional
television fix services that we refer to in shorthand as MDS
and ITFS.
So what's next? The Commission staff is evaluating the
record in its rulemaking to determine how to proceed. Comments
filed by the wireless industry suggest that the 1710 to 1850
megahertz band would be the preferred choice for 3G spectrum.
This spectrum would harmonize U.S. spectrum allocations with
those in use or planned internationally, permit economies of
scale and reduce costs in manufacturing equipment as well as
facilitating international roaming.
We've been working in close consultation with the
Department of Commerce and the Department of Defense and they
are continuing to evaluate whether in addition to the 1710 to
1755 megahertz band that has already been identified for
transfer, spectrum can be made available in the 1755 to 1850
megahertz band.
In addition, the Commission staff is working to identify
other possible nongovernment spectrum bands that might be
reallocated for 3G or serve as relocation spectrum. Industry is
also looking at additional spectrum options. CTIA recently
filed a petition with the FCC seeking to reallocate spectrum
that was allocated to the mobile satellite service.
As Mr. Hatch mentioned, the Chairman sent a letter to the
Secretary of Commerce Donald Evans noting that the entire
Federal Government faces a challenge in addressing the issues
for 3G and making sufficient spectrum available.
Secretary Evans recently responded to Chairman Powell's
letter and directed the Acting Administrator of the NTIA to
work with the FCC to develop a new plan for the selection of 3G
spectrum as quickly as possible.
In conclusion, the Commission is committed to making
spectrum available for new advanced wireless services. We will
continue to work closely with the Congress, the Federal
Government, the Department of Defense, the wireless industry
and other spectrum users toward that end. We must approach
these issues by balancing the needs of all users through a
well-managed national plan.
I'd like to thank you, Mr. Chairman, for the opportunity to
appear before you today and this concludes my testimony and I'd
be happy to answer questions afterwards.
[The prepared statement of Julius P. Knapp follows:]
Prepared Statement of Julius P. Knapp, Deputy Chief, Office of
Engineering and Technology, Federal Communications Commission
Mr. Chairman, Ranking Member, and Members of the Subcommittee: Good
morning. I am Julius Knapp, Deputy Chief of the Office of Engineering
and Technology at the Federal Communications Commission (FCC). I
welcome this opportunity to discuss spectrum allocations for advanced
wireless service, or so-called third generation (3G) mobile radio
services.
Unfortunately, Chairman Michael Powell could not be here today, but
he shares your interest in the future of advanced wireless
communications services, including 3G. The Commission, in general, is
committed to facilitating the rapid deployment of new and innovative
technologies as well as promoting spectrum efficiency.
More specifically, it is crucial that we provide the essential
ingredients for success in the marketplace for advanced wireless
services - adequate spectrum capacity, and an open, competitive de-
regulatory environment. In order to accomplish these goals, we must
work together as a nation to ensure a cooperative atmosphere and
unified voice. The Commission is dedicated to working with the
industry, other agencies, as well as Congress to find and deploy the
most suitable spectrum. Today's hearing is an important step toward
encouraging the development of shared goals and perspectives, and we
welcome the opportunity to testify here today.
introduction
Commercial mobile radio services have experienced unprecedented
strong growth, particularly in the past several years. In the twelve
months ending December 2000, the mobile telephony sector generated over
$52.5 billion in revenues and subscribership increased from
approximately 86 million to 110 million users.
The first wireless phones, introduced in the 1980s, used analog
technology and offered only voice service. The second generation of
wireless phones, introduced in the mid-1990s, use digital transmission
technology but still primarily offer voice services. Data services are
being introduced that allow consumers to use wireless phones and other
devices to provide access to the Internet, but transmission speeds are
relatively slow by today's standards.
Industry has developed technology for advanced wireless services,
referred to as third generation or 3G wireless, that will offer high-
speed data rates that make it possible to offer a variety of new voice
and advanced services. The United States has been very involved
internationally in developing technical standards and identifying
spectrum for 3G services.
Late last year, the FCC initiated a rulemaking to consider spectrum
allocations to facilitate the introduction of advanced wireless
services, such as 3G. Some of the spectrum identified internationally
for 3G currently is used in the United States for Federal government
communications systems. The Commission's staff has worked closely with
the Department of Commerce in addressing possible spectrum allocations
for 3G.
The FCC is continuing its efforts to address the spectrum
requirements for 3G systems. I am pleased to report on our progress
thus far.
international spectrum allocations for 3g
The International Telecommunications Union (ITU) has been fostering
the development of advanced wireless systems, commonly referred to as
International Mobile Telecommunications-2000 (IMT-2000) or 3G systems,
for a number of years. The 2000 World Radio Conference (WRC-2000)
adopted Resolution 223, which states that approximately 160 MHz of
additional spectrum will be needed to meet the projected requirements
of IMT-2000 in those areas where traffic is highest by 2010. WRC-2000
identified a number of frequency bands for possible IMT-2000 use and
provided that each country may determine which of the bands to
implement domestically after taking into account the impact on
incumbent services. The WRC-2000 decisions also provided that 3G
services may be introduced through evolution of technology in frequency
bands used by existing mobile services.
coordination with department of commerce
The frequency bands identified internationally for possible use for
advanced wireless services are allocated in the United States for both
Federal Government and Non-Government use and therefore fall under the
spectrum management responsibilities of both the Executive Branch and
the Commission. Setting the direction for the Executive Branch, a
Presidential Memorandum was issued in October 2000 instructing the
Secretary of Commerce to work cooperatively with the Federal
Communications Commission to develop a Study Plan to select spectrum
for 3G systems.
The Department of Commerce released a ``Plan to Select Spectrum for
Third Generation (3G) Wireless Systems in the United States'' on
October 20, 2000. The plan established target dates for completion of
spectrum studies by the National Telecommunications and Information
Administration (NTIA) and the Federal Communications Commission. The
plan also called for the FCC to allocate spectrum by July 2001 and to
subsequently establish rules so that spectrum can be assigned by
competitive bidding by September 2002.
fcc rulemaking
The Commission issued a Notice of Proposed Rule Making (``Notice'')
in ET Docket No. 00-258 in December 2000 to identify spectrum for
advanced wireless services, including third generation and future
generations of wireless systems.
Service Requirements
In the Notice, the Commission sought comment on the types of
advanced wireless services that will likely be provided and the
technical characteristics of such systems. The Commission noted that
wireless carriers in the United States employ a variety of technical
standards and sought comment on how networks will migrate to new
technologies and whether networks have the capacity now to provide data
services. We also requested information on the projected demand and
growth rates for mobile data services, the number of licensees needed
to meet this demand, how to accommodate global roaming, and other
issues.
Amount of Spectrum Needed
The Commission's rulemaking invited comment on the amount of
spectrum required for advanced wireless services, for example, whether
the 160 MHz of spectrum recommended by WRC-2000 Resolution 223 is
required or whether some alternative amount is needed. The Notice
states that the Commission intends to identify a flexible allocation
for advanced wireless services, noting that it is not Commission policy
to set aside spectrum restricted to a given technology.
Frequency Bands
The Commission asked for comment on the extent to which currently
allocated spectrum might be used for advanced wireless services. This
spectrum includes the frequency bands used by cellular, PCS, and
specialized mobile radio services, as well as spectrum recently
reallocated for commercial use from TV channels 60-69 as a result of
the transition to digital television.
The Notice also invited comments on using additional candidate
bands for advanced wireless systems. Three of these bands are ones that
the Commission previously identified for reallocation and that the ITU
identified for possible 3G use: 1710-1755 MHz, 2110-2150 MHz, and 2160-
2165 MHz.
The 1710-1755 MHz band is now used by Federal Government operations
and is scheduled for transfer to the private sector on a mixed-use
basis by 2004.
The 2110-2150 MHz and 2160-2165 MHz bands are currently used by the
private sector for fixed microwave services. The Commission identified
these bands several years ago for reallocation to emerging
technologies.
The Notice sought comment on whether portions of the 1755-1850 MHz
band, which is now used by Federal Government operations, can be made
available for advanced wireless services. Recent legislation sets
certain conditions before the Department of Defense (DOD) surrenders
use of a band, such as this one, in which it is a primary user.
Further, Federal Government users in this spectrum would be entitled to
compensation for relocation to other bands.
The Commission's rule making asked for comment on whether the 2500-
2690 MHz band, which is now used for Instructional Television Fixed
Service (ITFS) and Multipoint Distribution Service (MDS), can be used
for advanced mobile, as well as fixed services. The proposal also asked
whether we should simply add a mobile service allocation to this band
or if ITFS/MDS incumbents should be relocated.
Finally, the Notice requested comment on how newly available
spectrum for advanced wireless services might be paired and the
importance of global harmonization.
The Commission's staff currently is reviewing the comments received
in response to this Notice as we evaluate next steps, which I will
discuss in a moment.
fcc technical report
The staffs of NTIA and the FCC issued Final Reports in March
reporting the results of studies for two of the frequency bands under
consideration for advanced wireless systems.
The FCC staff report examines the 2500-2690 MHz band. The report
explains that this spectrum is heavily occupied by existing ITFS and
MDS systems. These services are experiencing and are expected to see
significant future growth, particularly in the provision of new
broadband fixed access to the Internet. Given the ubiquitous nature of
ITFS/MDS, the report found sharing of this spectrum for 3G does not
appear feasible. Further, the report found that reallocating a portion
of the 2500-2690 MHz band from incumbent services for new third
generation mobile wireless services would raise significant technical
and economic difficulties.
reimbursement for federal relocation
The Strom Thurmond National Defense Authorization Act of 1999 (NDAA
99) mandates that new commercial licensees (assigned via competitive
bidding) reimburse Federal government incumbents forced to relocate
spectrum. The reimbursement requirement applies to the 1710-1755 MHz
band that has already been identified for transfer from Federal to non-
government use. It would similarly apply to the 1755-1850 MHz band if
the Federal government were to make this spectrum available for use by
the private sector.
The first application of the mandatory reimbursement provisions is
under consideration in a separate Commission (ET Docket 00-221) and
NTIA rulemaking proceedings. The Commission's Advanced Services Notice
invited comment on relocation rules and reimbursement procedures. The
Commission and NTIA invited comment as to how these reimbursement rules
and procedures would affect the commercial viability of Federal
reallocated spectrum that may be made available for 3G. Concerns raised
in the comments focused primarily on the availability of adequate
information and reduced uncertainty in the process for potential
licensees to develop viable bidding strategies. We are continuing to
work closely with NTIA to develop reimbursement policies and procedures
that are viable for Federal incumbents as well as prospective new
users.
next steps
As I mentioned, the Commission is evaluating the record in the
Advanced Services Rule making to determine how to proceed. The comments
filed by the wireless industry suggest that the 1710-1850 MHz band
would be the preferred choice for 3G spectrum. This would partially
harmonize U.S. spectrum allocations with those in use or planned
internationally. Harmonization would permit economies of scale and
reduce costs in manufacturing equipment, as well as facilitate
international roaming.
Parts of the 1710-1850 MHz band could be used to harmonize with 2G
GSM systems, which are currently used extensively throughout the world
and are expected to transition eventually to 3G systems. Other parts of
the 1710-1850 MHz band could be paired with the 2110-2150 MHz band to
achieve partial harmonization with spectrum recently auctioned in
Europe and elsewhere for 3G systems.
The Department of Commerce and the Department of Defense are
continuing to evaluate whether, in addition to the 1710-1755 MHz band
that has already been identified for transfer, spectrum can be made
available in the 1755-1850 MHz band. They have been working closely
with industry in consultation with the Commission.
The Commission staff has also been working to identify other
possible non-government spectrum bands that might be reallocated for 3G
or serve as relocation spectrum. These additional bands could be
identified in a Further Notice of Proposed Rulemaking in the near
future.
Industry, as well, has been looking at additional spectrum options.
For example, the Cellular Telecommunications and Internet Association
recently filed a petition with the FCC seeking to reallocate spectrum
currently allocated to the mobile satellite service.
Given these developments, on June 26, 2001, FCC Chairman Powell
sent a letter to Secretary of Commerce Donald Evans noting that the
entire federal government faces a challenging set of issues in
addressing how best to make available sufficient spectrum for advanced
wireless services. Chairman Powell stated that the public interest
would be best served by additional time for informed consideration,
even if this results in some delay in reaching a decision. The Chairman
also acknowledged that some of the bands identified for 3G are subject
to September 30, 2002 statutory auction deadlines. The Chairman offered
that, together with the Executive Branch and the Congress, we can come
up with a revised allocation plan and auction timetable that would
enable the important work in this area to be finalized in the most
effective manner.
Secretary Evans recently responded to Chairman Powell's letter and
directed the Acting Administrator of the NTIA to work with the FCC to
develop a new plan for the selection of 3G spectrum as quickly as
possible. This effort will be carried out in close coordination with
the appropriate Executive Branch entities, including the National
Security Council, the National Economic Council, the Office of
Management and Budget, and the Department of Defense. Secretary Evans
encouraged the participants to consider ways to achieve flexibility
with respect to the statutory auction dates if flexibility is needed to
implement the new plan.
conclusion
The Commission is committed to making spectrum available for new
advanced wireless services. We will continue to work closely with the
Congress, the Federal Government, the Department of Defense, the
wireless industry, and other spectrum users towards that end. We must
approach these issues by balancing the needs of all users through a
well-managed national plan.
I would like to thank you, Mr. Chairman, for the opportunity to
appear before you today. This concludes my testimony and I would be
pleased to answer any questions you or the other members may have.
Mr. Upton. Thank you.
Mr. Wheeler.
STATEMENT OF THOMAS E. WHEELER
Mr. Wheeler. Thank you, Mr. Chairman, and members of the
committee. I want to begin by associating myself with many of
the remarks that Dr. Wells made. Particularly, there was a
great word that you had there, eager, and we particularly want
to work with you in your eagerness to address this issue
because I think we can really stipulate three things here. One
is that today we have the best military in the world and we
want to keep it that way for those men and women who are called
into harm's way. The second is that the 21st century military
is going to be an information battlefield as you have often
pointed out. And wireless is going to be a key component on
that battlefield. And the third is that there is another
component of our national security in the 21st century and
that's our economic security. We are the world leaders in
information technology today because we had the home field
advantage. The reason that Yahoo started here and not in France
is because they had a backbone network they could go to scale
quickly. There are other countries in the world now who are
trying to jump and use that home field advantage with spectrum
to give them the leg up in the next generation.
The challenge is how do we have both a military win and an
economic win and there's been a lot of talk in the statements
earlier about win-win situations, but I truly think that that
is possible and I think that this Administration, the work
that's being done at the National Economic Council, the
National Security Council, along with the efforts of the
preceding witnesses clearly are moving toward that kind of a
situation.
What I hope to do today is to illustrate the potential for
that win-win by using the information the Defense Department
has prepared to help guide us toward that win-win. What you see
up here on the chart right now is page C-6 from the Defense
Department spectrum report in which they talk about tactical
radio problems that occur when the military deploys in Europe
because of the fact that those frequencies are being used by
Europeans for wireless phones. We had an experience in Asia in
the Team Spirit exercise in Korea where in order to use our
radios we had to shut down part of the Korean cellular network.
And this situation can only get worse and the number of
wireless subscribers grow. Here's the projection in terms of
what that growth is going to look like and what that means is
that the spectrum that we are presently using domestically
becomes unusable or encumbered when we deploy for either action
or training abroad. Our international effectiveness starts with
spectrum policy at home as a result. Now let's look for that
win-win situation. Let's take a look at the Defense
Department's report on the findings in their study and this is,
as you might recognize, with your copyright permission, sir,
we've reprinted your charts.
And go immediately to the second bullet there about
vacating the spectrum and let's just kind of tick through
those. First of all, the Defense Department says they must have
comparable spectrum. We agree. The DOD report laid out a
migration plan from the present spectrum to new spectrum, but
they're going to need help from the Congress and the
Administration and the FCC to get there and they should get
that help.
The second bullet says that they need timely cost
reimbursement. We agree. The estimate in the DOD report is $4.3
billion. We're talking about roughly 95 megahertz of spectrum
here, covering all the U.S. We recently had an auction, the FCC
had an auction in which they auctioned off 30, sometimes
slightly less megahertz covering about 60 percent of the U.S.
and generated $17 billion. There is availability of funds for
covering the cost reimbursement.
And last, the scheduled time to vacate bullet. We agree.
There needs to be a plan. We're not talking about tomorrow, all
this gets done in one clean cut. But there needs to be a
scheduled roll out of spectrum that recognizes the needs of the
Defense Department as well as the economic needs. Now we do
disagree with one thing on this chart and that's that line
right there that says that it is not until 2010 that the non-
space system's spectrum can move. Let me show you another DOD
chart and suggest that perhaps this might be a way of helping
to address that problem and priming the pump over all. This has
to do with fixed systems, microwave networks. And I call your
attention to the bottom bullet down there that says that half
of the DOD's fixed spectrum is used by the Corps of Engineers
for monitoring purposes, to monitor waterflows, dams and things
like this. That's burst-y kinds of intermittent information.
Page 9 of the Defense Department report says that there already
exists a migration path for that that spectrum has already set
aside if they were to migrate. I might also indicate that those
are the kind of services that wireless carriers are providing
daily. Albertson's grocery store in California, for instance,
is using wireless to monitor their energy consumption during
the California energy crisis and to control what they do in
their stores. The same kind of thing can be done with dams and
other things.
But why don't we take this spectrum, which the Defense
Department says is half of all of their fixed spectrum that is
not a national security issue and why don't we use it to prime
the pump?
Ms. Wilson. Mr. Chairman, point of information.
Mr. Upton. Ms. Wilson?
Ms. Wilson. Mr. Chairman, we're seeing some excerpts from a
study here and I wonder if that entire study is available to
the committee?
Mr. Wheeler. I'd be happy to submit it for the record, Ms.
Wilson.
Ms. Wilson. Do we have a copy here?
Mr. Wheeler. It's a DOD study.
Ms. Wilson. I'm concerned I'm seeing excerpts from a study
that you're presenting me and I just wondered if you have a
full copy of the report that I could have.
Mr. Upton. Mr. Hatch?
Mr. Hatch. Thank you, Mr. Chairman. We have provided copies
to Members of Congress. If there are members of your committee
that do not have copies----
Mr. Upton. We'll make sure we get one.
Mr. Hatch. We'll be happy to provide copies of both NTIA
and the DOD report.
Mr. Upton. Thank you.
Ms. Wilson. Does anybody have a copy?
Mr. Wheeler. We'll get you a copy right away.
Ms. Wilson. Thank you.
Mr. Wheeler. Thank you, Mr. Chairman. What I'm trying to
say here is that I think there is a way to prime the pump using
this spectrum that is for fixed services and that that can
create, that can go into a trust fund that can then pay for
additional upgrades, pay for clearing of spectrum and start a
process, so there is a win-win in this whole situation for
America. We can build a strong military, paid for with nontax
dollars and then we can build an internationally competitive
economy that generates that kind of non-tax opportunity and
that the good work of the Defense Department has shown the way
and we look forward to working with Dr. Wells and his eagerness
to together find that kind of a win-win solution.
[The prepared statement of Thomas E. Wheeler follows:]
Prepared Statement of Thomas E. Wheeler, President and CEO, Cellular
Telecommunications & Internet Association
Mr. Chairman and Members of the Subcommittee: Thank you for the
opportunity to appear before you today. I am Thomas E. Wheeler,
President and CEO of the Cellular Telecommunications & Internet
Association (CTIA) representing all categories of commercial wireless
telecommunications carriers, including cellular and personal
communications services (PCS).1
---------------------------------------------------------------------------
\1\ CTIA is the international organization which represents all
elements of the Commercial Mobile Radio Service (CMRS) industry,
including cellular, personal communications services, wireless data.
CTIA has over 750 total members including domestic and international
carriers, resellers, and manufacturers of wireless telecommunications
equipment. CTIA's members provide services in all 734 cellular markets
in the United States and personal communications services in all 50
major trading areas, which together cover 95% of the U.S. population.
---------------------------------------------------------------------------
As we look to the challenges of American national security at the
dawn of the 21st Century it is increasingly apparent that our security
is dependent upon not only traditional military capabilities, but also
the strength of our economic competitiveness at home and abroad. We
presently find ourselves challenged to upgrade military systems and to
supply each and every one of our fighting men and women every
technological advantage possible. We also find ourselves challenged to
maintain our position as world leaders in technology, especially as the
world prepares to debut the next generation of the wireless Internet.
At few times in this nation's history have the solutions to both these
challenges been more closely intertwined.
Economically, the reason the United States leads the world in
Internet technology and services is because we had a ``home-field
advantage'' at the Net's inception. A well-developed Internet backbone
enabled companies like Yahoo to test an idea and then go quickly to
scale. Our international economic competitors, however, have learned
from that experience and are seeking to build their own ``home field
advantage'' for the next generation of the Internet--the wireless
Internet. In countries like Japan, Germany, Great Britain and France
the governments have made available blocks of spectrum for next
generation wireless services that approximately double the amount of
spectrum the U.S. government has made available to its wireless
industry. Our competitors' plan is transparent: control the next
generation of Internet products and services by giving non-U.S.
companies access to the pathway necessary to deliver those products and
services.
Militarily, there is almost uniform agreement that the new
battlefield will increasingly be an information battlefield. Satellite
infrared imaging, for instance, will enable soldiers to see behind the
next hill. Real time intelligence updates and maps will show the
enemy's latest positions. Leaders on the ground will have voice and
data communications with superiors as well as with their own troops.
Information superiority becomes a force multiplier for whoever is able
to communicate best. Unless our soldiers are going to be dragging wires
behind them as they deploy, these capabilities are all going to require
the airwaves for their delivery.
The problem is that the airwaves that the rest of the world is
allocating or otherwise plans to use for expanded wireless services are
the very same spectrum that the American military utilizes for its
communications. In the next five years the ability of the American
military to deploy or train abroad will be compromised by hundreds of
millions of consumers using wireless devices in the spectrum to which
U.S. military radios are tuned. Already the growth of wireless
technology abroad has begun to impact U.S. military capabilities. A
recent Department of Defense analysis reported on the ``nonavailability
of alternate [spectrum] bands to provide the high-end frequency
component'' of command and control systems. The reason these airwaves
were not available, according to the report, was the growth of mobile
phones. Decisions already made by other countries have, are, and will
affect our national security capabilities for years to come.
The seriousness of this situation was exemplified in the joint
U.S.-Korean training exercise ``Team Spirit'' held in late 1999. In
order for the U.S. radios to work, several channels of the Korean
cellular network had to be shut down. According to a May 22, 2000
article in Aviation Week & Space Technology, ``There are some U.S.
weapons that currently aren't allowed to operate in South Korea out of
fear they would interfere with civilian systems.'' No wonder Major
General J. D. Bryan, Vice Director of the Defense Information Systems
Agency, recently warned, ``If we're not real careful, we face chaos in
the wireless environment.''
The U.S. military is a forward-deployed force whose international
assignments will increasingly be hindered by the conflict between
airwave assignments made at home and those made abroad. In a ``double
whammy'' affecting both U.S. military and economic security, the
governments of the world simply changed the rules. For the purpose of
spurring Internet-related growth, they reallocated to wireless phone
use vast amounts of the very same piece of the airwaves the U.S.
military relies upon for its communications because that is what has
been assigned to it here at home.
Fortunately, there appear to be solutions. Some solutions may be
more costly than others--but not as costly to our national defense as
losing the opportunity to modernize and upgrade older military
equipment. Deploying new spectrum-hopping, frequency agile radios for
both ground and air tactical communications could help solve some
problems. By tuning across a wider band and then having the flexibility
to jump from one frequency to another as conditions warrant, these new
radios may solve the problem for our tactical ground troops and
aircraft. An area requiring more patience is in satellite
communications. With a fifteen-year average life, the lead-time for
frequency changes in satellites is longer, but no less manageable.
At a time of concern over budget-busting defense spending, the
world's reallocation into domestic U.S. military frequencies
paradoxically provides a solution. Because the rest of the world is
rapidly increasing the number of wireless users in these same
frequencies, the U.S. wireless industry would like to use them as well.
Should the Federal government decide to reassign the military to other
spectrum and auction these airwaves, the resulting billions of dollars
could pay for both the move to new frequency and the necessary upgrades
to strategic and tactical equipment. There are 95 megahertz (MHz) of
DoD spectrum in the 1755-1850 MHz band allocated to mobile use by the
rest of the world. A recent U.S. auction of spectrum blocks ranging
from 25 to 30 MHz and covering only about 60% of the population,
generated over $17 billion from wireless carriers. The Department of
Defense is sitting on a valuable domestic asset whose value can be
utilized to help solve the military's international spectrum problem.
This debate over spectrum for advanced mobile services puts a
spotlight on the urgent need for some fundamental rethinking of our
nation's spectrum management process. We need to create more positive,
market-oriented incentives for incumbent users to free up spectrum. And
we need to create a more efficient spectrum management process that
focuses more on policy goals than on constituent interests. That does
not mean that we should ignore the important interests of incumbents,
especially when they involve crucial national security requirements. It
means we need to find creative, effective and timely ways of making
tough spectrum management decisions that leave all affected parties
leaving the table satisfied that their interests have been addressed.
One immediate step Congress could take to advance these goals would
be to pass legislation to ensure that the proceeds of an auction could
be used by the incumbent to move sooner allowing the auction winner to
immediately utilize the spectrum acquired. Normally this would entail
using those proceeds to pay the relocation expenses of the incumbent,
but in some circumstances the funds could be used to enable the
incumbent to modify its equipment to share with the new licensed uses.
Congress might also consider earmarking an additional percentage of the
auctions' proceeds for the incumbent user, to help give incumbents a
positive incentive to turn in spectrum for auction. If incumbents were
guaranteed that their needs would be accommodated and paid for, and
that they could obtain some additional revenue as well, they would have
a greatly increased incentive to turn back spectrum that could be
auctioned. The result in the long run could be not only more efficient
spectrum management, but higher revenues for the U.S. Treasury. In this
particular instance, I believe it absolutely imperative the Congress
guarantee DoD reimbursement funding and additional monetary incentives
to move, with funds, to modernize and upgrade DoD capabilities. The
test should be to maintain and enhance capabilities--not fall on your
sword for a piece of spectrum that will be compromised by the decisions
of other nations.
This kind of ``win-win'' requires the implementation of a rational
spectrum policy. Unfortunately, the United States does not have the
kind of spectrum policy that would facilitate either this evolution, or
taking advantage of the potential funding mechanism. In fact, the U.S.
has no spectrum policy that can effectively deal with such a muliti-
faceted problem. What has passed for spectrum policy has been budget
policy decisions about when to sell pieces of the airwaves in order to
generate finds for the Treasury. As the Defense Department's Defense
Science Board has observed, the system is broken. That unfortunate
situation hurts both military capability and economic competition.
The seriousness of the spectrum issue to American combativeness and
competitiveness calls for dedicated solution-oriented efforts by both
the defense community and the wireless industry. Denying the economic
viability of next generation wireless services in hopes of forestalling
the inevitable need to deal with the spectrum crisis is not a solution.
New technologies never come forth without hiccups. The military saw
this with the Patriot Missile, Tomahawk Cruise Missile, Abrams Tank and
Osprey aircraft, and the same will be true of the new technology of the
wireless Internet. History's message is clear: those who place their
bets against technological advancement are ``betting on a nag.''
The wireless industry is most fortunate that this Administration
has taken several bold steps to correct a decade-long refusal to make
tough decisions. Secretary Evans just last week directed the National
Telecommunications and Information Administration to work with the FCC
to develop a new plan for (3-G) advanced mobile services. Secretary
Evans even suggested flexibility in the statutory auction dates for
1710 to 1755 MHz and 2110 to 2150 MHz may be necessary to implement the
new spectrum plan. Additionally, over the past 3 months, various
Executive Branch agencies have been brought together under the able
direction of the White House NEC and NSC to address the spectrum
problem. The White House attention to finding a solution to this
decade-old problem has been most helpful. The industry is encouraged
that some of the best and brightest minds in the Administration are
committed to finding a solution that is good for the economy and our
national security.
An opportunity appears to exist to demonstrate the good faith
possibilities of cooperation in the evolution to new military
technology and continued wireless competitiveness. In recent Capitol
Hill briefings the Defense Department indicated that approximately half
of all the Department's spectrum usage for fixed wireless applications
is by the Army Corps of Engineers to do remote monitoring of water
levels, alarms and dams. Tying up that spectrum for intermittent
services that take a quick reading and then report a data burst is not
only spectrally inefficient; it is probably also overly expensive.
Throughout America, the wireless industry is providing the exact same
services on a commercial basis. If the grocery chain Albertson's can
use commercial wireless networks to monitor and control electricity in
their stores during the California power emergency, the same should be
true for the Corps of Engineers to monitor water levels. What's more,
buying a shared service will no doubt be much lower cost than building
a stand-alone system with its own allocated airwaves. That spectrum
then can be sold and the proceeds put into a Defense Department-only
trust fund for the purpose of paying for the next spectrum move (which,
in turn, will generate more auction revenue), and for the new
technology to assure information dominance on the ground, in the air
and at sea.
Right now we are at a unique point in time. Most countries are
reducing their monetary commitments to their military. No other country
in the world has the available resources, technological know-how and
the opportunity to up-grade military communications capabilities to
21st century systems. The U.S military has it within its grasp and
ability to do what no other country in the world can do in the current
environment--deploy digital end-to-end encrypted state-of -the art
communications capabilities. Now is the time to seek a better defense--
and a better economy . Unless we act now things will only become more
confusing and more intractable. We must not fail to seize upon the win-
win opportunity before us--a second rate communication system is no
real option for a world leader.
Mr. Upton. Thank you.
Mr. Strigl.
STATEMENT OF DENNIS F. STRIGL
Mr. Strigl. Mr. Chairman and members of the committee,
thank you very much for inviting me to appear before you today.
The allocation of adequate spectrum to support the development
of 3G services is the most important and timely issue facing my
company and the wireless industry. We're grateful for this
committee for its interest and support, but time is running
out.
While we have made some progress since I appeared before
you last year, no new spectrum has been allocated and no such
action appears imminent. Consequently, I come before you today
to deliver the same message that I had a year ago and that is
that the wireless communications industry must have additional
radio spectrum in order to provide innovative services which
will meet the needs of our customers while bringing critical
benefits to the American economy.
The following actions are urgently needed for 3G services
to reach their potential. First, the Commerce Department and
the FCC need to identify 200 megahertz of globally harmonized
spectrum for reallocation to commercial mobile services, the
1710 to 1850 megahertz band provides a good start. The band was
identified by WRC-2000 as a primary candidate band for 3G
services and in fact, is globally harmonized.
Second, the government and private industry need to develop
an implementation plan for how this spectrum will be cleared
and auctioned and the process must be established for
reimbursing Federal Government users for relocation. In this
regard, I applaud the efforts of Congressman Pickering, of
Chairman Tauzin, of Congressman Wynn and of you, Mr. Chairman,
for your leadership in exploring legislative solutions which
balance the needs of DOD with the spectrum requirements of the
wireless industry. And I do believe that this is a win-win
approach. It's an important step forward in the process of
making 3G spectrum available.
Third, Congress should pass Congressman Stearns' bill to
repeal the spectrum cap. The rule was adopted when there were
just two carriers in wireless market. The FCC's own studies
show that the wireless market is robustly competitive. The
Commission's 2001 Competition Report finds that 91 percent of
the population has access to three or more competitors, while
75 percent of the population lives in areas with five or more
mobile telephone providers.
The report also finds that wireless prices continue to fall
substantially, including 12 percent drop in the year 2000, but
with the explosion of demand in wireless services, the primary
challenge for continued competitiveness is obtaining additional
spectrum resources. The spectrum cap impairs the very
competition that we intend to promote and in part by capping a
carrier's potential for success at the amount of demand
supportable by 45 megahertz.
In conclusion, Mr. Chairman, I cannot overstate the
importance to the wireless industry of the spectrum need for
third generation services. My company bid nearly $9 billion
this year for spectrum in an auction that raised $17 billion
for the U.S. Treasury and I know that this hearing is focused
on 3G, but how could I come to Washington without at least
mentioning my $9 billion problem. Congress should do all it can
to encourage all the parties to settle. This is the best way to
ensure that valuable mobile licenses purchased at auction are
put into the hands of carriers to deploy immediately to serve
our customers.
Additionally, Verizon Wireless has also announced our
intention to purchase $5 billion of third generation network
equipment and I can think of no greater examples to demonstrate
the need that we have for spectrum than this commitment that
Verizon Wireless has made and the industry is making to provide
third generation services to our customers.
In conclusion, I urge the committee to take every action
you can to make spectrum available to the wireless industry so
that carriers can move on and deploy third generation services.
Thank you again for your continued interest and leadership on
wireless policy issues.
[The prepared statement of Dennis F. Strigl follows:]
Prepared Statement of Dennis F. Strigl, President and CEO, Verizon
Wireless
summary
Mr. Chairman and Members of the Committee, thank you for inviting
me to appear before you today. The allocation of adequate and
appropriate spectrum is one of the most important and timely issues
facing my company and my industry. We are grateful to this committee
for its interest and support, and together we must find a way to
quickly address the critical spectrum needs of this industry. Foremost
among these needs is adequate spectrum to provide Third Generation
(``3G'') wireless services. These services and the technologies that
support them will enable U.S. industry to maintain its global
competitive and technological leadership in both wireless and Internet
markets. If spectrum is not available on a timely basis, we risk
squandering our global position and with it a panoply of associated
economic and societal benefits.
Efforts by many government and private sector interests have led to
some progress in achieving the necessary spectrum reallocation, but
today, just as was the case last July when I last appeared before this
committee to discuss spectrum needs, new spectrum has not been
reallocated to meet our needs nor is such action imminent. For that
reason, I come before you today with the same basic message as I had a
year ago: the wireless communications industry must have additional
radio spectrum to provide innovative new services and other critical
benefits to the American public and to foster continued economic
growth. In addition, this year I must add that: Time is running out. We
are facing the prospect of our industry's equivalent of a ``fuel
crisis''--with access to the spectrum ``fuel'' restricted by government
policy.
The following actions are urgently needed:
1. Reallocation of adequate globally harmonized spectrum for mobile
services. As reflected in decisions made at the 2000 World
Radiocommunication Conference (``WRC-2000''), with U.S.
Government support, the U.S. wireless industry needs at least
200 MHz of additional spectrum, aligned with spectrum to be
used in other regions of the world, to meet its long-term
growth requirements.
2. Implementation plan for how this spectrum will be auctioned and
cleared. Equally important to the actual reallocation of needed
spectrum is the implementation plan setting out the timeframes
when that spectrum will be auctioned and when it will be
available for use by the industry. The entire band will not be
able to be auctioned at once, nor will it all be available at
the same time given the variety of incumbent uses. Operators
need some certainty and predictability about what spectrum will
be available and when. Moreover, Congress must establish a
workable process for enforcing the clearing of the spectrum and
for reimbursing relocated Federal Government users.
3. Repeal of the ``spectrum cap''. This outdated rule limits the amount
of spectrum a single company can own. In the intensely
competitive wireless industry, this rule only impedes companies
from competing for the spectrum needed to meet the future
demand for wireless voice, data and other new services.
The continued growth of the wireless industry will provide critical
benefits to the American public and the U.S. economy.
3G services will be the next important chapter in a compelling
success story as wireless industry growth continues unabated. Today,
more than 110 million people in the United States subscribe to mobile
services and that number continues to grow at an annual rate of more
than 20 percent. Two years ago, analysts predicted a healthy 60 percent
of the public would subscribe to mobile services by 2008. But having
reached 40 percent penetration this year, the analysts now expect a
higher 70 percent penetration level to be reached 4 years sooner, that
is by 2004.
As impressive as our subscriber growth is, it tells only part of
the story. In addition, we have seen a tremendous surge in individual
subscriber usage, including a 20-fold increase in total wireless
minutes of use between 1992 and 2000. The 2000 total of 280 billion
minutes reflects a compound annual growth rate of 50 percent. In the
three years between 1997 and 2000 alone monthly usage per subscriber
doubled, and it is projected to double again between 2000 and 2004.
Digital technology has been a primary driver of this amazing
growth. Since introducing the digital technologies into our network in
1997, we have substantially increased the capacity and efficiency of
our network and provided consumers with enhanced services and choices,
including many new pricing plans. Digital handsets feature longer
battery time and reduced equipment size and cost. Wireless services are
more accessible and affordable, they have become a part of many
customers' daily routine, and increasingly they are an alternative to
using a wireline telephone.
Despite the efficiency gains of digital technologies, the overall
growth in customers and usage is placing increasing strain on network
capacity. The next phase of technology deployment will relieve some of
these capacity constraints, but technology alone cannot meet our
capacity and new service needs. The industry's urgent need for new
spectrum to meet growing demand for existing voice services, for
example, is evidenced in the $17 billion bid for C and F block licenses
when they were reauctioned. As we proceed to offer customers new,
higher-speed mobile services, a continued lack of access to additional
spectrum will only exacerbate capacity constraints.
In developing 3G and other innovative wireless technologies, the
industry is addressing customers' desire for a wide range of high-speed
data and multimedia applications, including wireless Internet access.
Verizon Wireless will begin this year to address demand for these high-
speed, high-bandwidth data services by deploying 3G technology in our
existing licensed spectrum. This technology--cdma2000 1XRTT--will not
only increase the efficiency of our existing network, but it will allow
us to provide customers with mobile data services at rates up to 144
kilobits per second--ten times what is currently available.
Mobile data services currently represent less than two percent of
total network usage. However, analysts predict that data applications
will account for more than 50 percent of network usage by 2004 and
ultimately those applications will dominate the use of the network. As
I just indicated, we can initiate some new, high bandwidth services,
and Verizon Wireless will be among the first companies to do so, but we
will be bandwidth limited in the nature and scope of these services.
The industry needs additional spectrum before the services can reach
their potential anticipated by analysts.
The importance of these advanced wireless data technologies cannot
be overstated. As I stated earlier, these technologies converge two
powerful, largely U.S.-led, innovations--wireless communications and
the Internet--and in so doing, they will deliver significant benefits
to consumers and complementary benefits to the U.S. economy. To this
point, the President's Council of Economic Advisers (``CEA'')
documented the likely benefits of 3G services in a report it released
last year. The report estimated that the likely consumer benefits from
3G services would approach $100 billion annually. That report also
determined that an adequate supply of additional commercial spectrum
was needed for these services and urged government action making
adequate spectrum available for 3G applications.
This Committee is in a key position to ensure that the needed spectrum
is made available.
Congress has an important role in ensuring that the spectrum
resources is managed for the benefit of the American public--it is the
public, after all, not carriers, that uses this scarce resource to meet
its communications needs. Given the significant benefits that 3G and
other advanced wireless services will provide to American consumers,
businesses, and the economy, Congress has every reason to ensure that
adequate spectrum is available to support the full potential of such
services. Other nations have already allocated and licensed sufficient
amounts of spectrum to meet the needs of their wireless industries. The
United States must do the same.
There are three concrete steps that Congress should take now:
1. Allocate the additional spectrum needed for mobile services.
WRC-2000 identified two spectrum bands to accommodate 3G
development around the world. This action to identify spectrum on a
global basis will provide the global ``harmonization'' that is so
important to future services. By implementing the WRC-2000 actions and
allocating harmonized spectrum, U.S. carriers will be able to compete
globally in offering international roaming while achieving the
economies of scale that reduce network and customer equipment and
service costs.
The 1710-1850 MHz band, as identified at WRC-2000, provides the
best, initial opportunity to harmonize U.S. spectrum allocations with
those being made around the world and thereby to meet the 3G growth
needs of the industry. The band is already used for second generation
mobile services in Europe and parts of Asia, where it is expected to
evolve to 3G. In Canada, Mexico, Brazil, and other parts of North and
South America, this band is the first choice for initial 3G deployment.
Even though the United States, at WRC-2000, supported the use of this
band for global 3G services, most of the band is currently occupied by
the U.S. Department of Defense (``DOD'') and other Federal agencies.
In cooperation with the wireless industry, the U.S. Government has
worked diligently to assess the potential for making this band
available for commercial use. My company and others from the wireless
industry have been working closely with the FCC, the Department of
Commerce, DOD, and various other Federal agencies to develop a workable
reallocation plan. We have made progress, as I stated earlier, but a
final decision on this band has not been made; nor is one imminent.
Beginning with this hearing, this Committee can provide the impetus for
the quick allocation action we need.
Obviously since reallocating the 1755-1850 MHz band will not
satisfy the 200 MHz requirement, additional spectrum must be
identified. To that end, the 2110-2165 MHz band, for example, is an
appropriate and workable supplement. This band, most of which has
already been proposed for reallocation, is encumbered with commercial
fixed operators, and we are working with the FCC on relocation options.
Recent events suggest that the 1990-2025 MHz and 2165-2200 MHz
bands, currently allocated as additional spectrum for Mobile Satellite
Service (``MSS''), may better serve the public interest by being
reallocated at least in part to more viable purposes. Reported business
difficulties among the applicants for MSS licenses raise questions as
to the viability of MSS. For these reasons, we and other carriers
requested the Commission to evaluate how this band could be used to
facilitate the development of advanced mobile services, e.g., by
accommodating the relocation of commercial and/or government systems
from bands used for 3G.
2. Establish an implementation plan for auctioning and clearing
spectrum.
Equally important to the reallocation of needed spectrum is the
implementation plan setting out the timeframes when portions of that
spectrum will be auctioned and when it will be available for use by the
industry. The entire band will not be able to be auctioned at once, nor
will it all be available at the same time, given the variety of
incumbent uses. The industry can and will work with these logistical
realities, but operators need certainty and predictability about what
spectrum will be available and when so that we can develop our plans.
Moreover, a workable process must be established to enforce the timing
of spectrum clearing as set out in the implementation plan. Last but no
less important, a process must be adopted which identifies the
relocation costs of government users in advance of a reallocation
auction, provides for recovery of these costs through the auction
process and reassures government users that these relocation costs will
be reimbursed.
This implementation plan must reflect the need for allocation
decisions that promote harmonization. For example, the Commission is
considering whether to pair the 1710-1755 MHz band (for mobile
transmit) with the 2110-2150 MHz band (for base transmit). This pairing
would be inconsistent with existing and anticipated future uses of this
spectrum around the world. As a result, mobile base stations and
portable devices developed for U.S. markets would be incompatible with
and more expensive than equipment developed for markets where spectrum
is harmonized. The availability of additional spectrum in the 1755-1850
MHz band would permit the Commission to establish pairing arrangements
that are harmonized worldwide. I urge you to quickly resolve the
broader 3G spectrum allocation decisions so that the Commission can
consider all viable candidate bands before taking action on a few. In
doing so, the Commission can establish a spectrum allocation and
auction plan that promotes harmonized use of spectrum, reduces the
costs of 3G equipment and services, and increases the overall value of
spectrum.
In establishing a workable process for clearing the 1710-1850 MHz
Federal Government band, the method for reimbursing displaced Federal
users can be improved and in so doing it may actually facilitate the
clearing process. Current law requires that wireless operators
negotiate with Federal agencies to relocate after they have acquired
their licenses at auction. Based on past experience, this ``after-the-
auction'' approach means that operators have considerable uncertainty
regarding the costs of relocation and the availability of spectrum,
affecting their bidding strategy and the value they attribute to the
license. It also imposes unnecessary transaction costs on operators
when they proceed to the negotiation, and it may result in DOD and
other Federal agencies being expected to disclose information about
their systems that they contend is classified or proprietary.
The law can be improved by providing for the identification of
relocation costs and timing in advance of the auctions and collection
of relocation costs directly from the auction proceeds. In this way,
operators would know the timeframe for spectrum clearing and the costs
attributable to that clearing. For its part, the government users would
know that their relocation costs would be fully compensated without the
need for any negotiations with industry. Legislation should be adopted
that would make these changes to the relocation and reimbursement
process.
Concerning these proposed action steps, I want to thank Rep.
Pickering, Chairman of the Wireless Caucus for his leadership, and
similarly I want to thank Chairman Upton and Chairman Tauzin, and Rep.
Wynn for their commitment to this critical matter.
3. Repeal the ``spectrum cap''.
As this committee well knows, the spectrum aggregation limit or
``spectrum cap'' rule has outlived the FCC's purpose and now is working
to the detriment of maintaining the very competitive and robust market
it sought to foster. The rule was adopted when there were two carriers
in the wireless market to encourage new entrants in that market. Today,
the Commission's own studies show that 75 percent of the population
lives in areas with five or more mobile telephone providers. Nearly 50
percent of the population has at least six carriers from which to
choose. In Washington, D.C., for example, Verizon Wireless competes
against Cingular, AT&T, Sprint, VoiceStream and Nextel. New entrants
continue to gain considerable ground. Price competition is steep, but
perhaps even more important, carriers are competing on the basis of new
and enhanced product features. The consumer is winning.
Now, the primary challenge to continued competitiveness in domestic
markets is access to additional spectrum to meet demand, and the
spectrum cap is impeding that access.
The spectrum cap rule prohibits any company from holding more than
45 MHz of cellular, PCS and specialized mobile radio (``SMR'') spectrum
in the same geographic area, with a higher limit of 55 MHz in rural
areas. The adverse impact of these arbitrary limits is exacerbated by
the non-uniform nature of the size of license areas and licensed bands,
and this lack of uniformity prevents carriers from approaching even
these caps in their full footprint.
Congress did not impose this economic regulation. To the contrary,
the 1993 Omnibus Budget Reconciliation Act replaced traditional
wireless regulation, such as entry and price controls, with a
competitive, market-driven model--a deregulatory change that has
contributed to the growth of our business.
The cap is an artificial and uneconomic constraint on our ability
to determine how best to meet demand and offer new services. It
threatens to impair the very competition that it was intended to
promote, in part by capping a carrier's potential for success at the
amount of demand supportable by 45 MHz. My company and many others are
restricted from acquiring new spectrum even though we are facing strong
competition and will use the additional spectrum productively to serve
the public.
I want to thank Congressman Stearns for introducing legislation to
remove the cap, and I urge the Committee to proceed with this important
legislation. Lifting the cap will allow an open and fair market for
available spectrum, and it will favor innovation and competition in the
wireless industry. It will facilitate the deployment of advanced mobile
services and promote the global competitiveness of US industry. Today,
U.S. competitors are at a significant disadvantage relative to our non-
U.S. counterparts, as other governments either do not have caps or have
much higher limits on existing spectrum, while they are working
aggressively to provide 3G spectrum to their wireless operators.
In short, the spectrum cap rule is unnecessary and
counterproductive. Competitive industries require market-driven
policies, not outmoded regulation that picks winners and losers,
penalize success and denying access to critical resources.
conclusion
Congress must act now to ensure the timely allocation of necessary
additional spectrum, the creation of a mechanism for reimbursement and
relocation of incumbents and the adoption of market-driven spectrum
policies that promote the development of advanced wireless technologies
and services. The steps include: (1) allocating a minimum of 200 MHz of
additional, harmonized spectrum for mobile services, (2) establishing a
plan for the timing of license auctions and spectrum clearing, (3)
ensuring that all candidate spectrum bands are dealt with as part of a
comprehensive allocation plan that is harmonized with worldwide
allocations, (4) revising the reimbursement process so costs are
identified in advance of auctions and displaced Federal users are
reimbursed from auction proceeds, and (5) repealing of the spectrum
cap.
Mr. Upton. Thank you.
Monsignor Dempsey, welcome.
STATEMENT OF MICHAEL J. DEMPSEY
Mr. Dempsey. Good morning, Mr. Chairman and members of the
subcommittee. I am Monsignor Michael J. Dempsey, the Director
of Patrick Communications for the Diocese of Brooklyn, New York
and I've been doing this work for 35 years. I also serve as
President of the Catholic Television Network. That's an
association of Roman Catholic Diocese that operate many of the
largest school systems in the United States. We also operate
large ITFS systems that serve more than 600,000 students. These
systems transmit a broad range of onsite and distance learning
programs, teacher and medical training courses, inspirational
programs and live interactive services to schools, community
centers and hospitals.
I'm here today to urge Congress to assure that the
broadband networks being deployed on our ITFS channels not be
held hostage to the efforts, legitimate efforts defined
spectrum for 3G. We have traveled to Washington many times to
make our peace and after extensive study, the FCC staff has
found that our spectrum is serving a valuable educational
purpose and is not a viable choice for 3G, so I ask you today,
please urge the FCC to take our spectrum off the table and let
us go back to serving our students and communities before the
start of another school year.
There are three reasons why the FCC should act now. The
first is the extensive record developed by the FCC staff fully
supports this action. The second is removing the cloud of
uncertainty will enable us and our commercial partners to build
out our new broadcast systems, broadband systems and allow
educators to focus on educating students. And third, the 3G
community itself has expressed an overwhelming preference for
bands other than ours. So I'm asking for your support to end
this uncertainty.
I make this request not only in behalf of CTN, but on
behalf of an unprecedented number of public and private
elementary, secondary and higher educational institutions in
all 50 States. There are far too many of them to name them all,
but they include groups like the American Association of School
Administrators, the Association of American Universities, the
National Educational Association and thousands of individual
institutions.
Let me give you an example of why this spectrum is so
important to education. The per pupil cost of education is
increasing faster than the income needed to support it, either
from tuition in our case or taxes in the case of the public
schools. And as a result in my diocese alone, we have closed 75
schools in 25 years. In the case of the public schools, when
you can't close schools, the entire system declines. In New
York City, 45 percent of the youngsters who enter first year
public high school do not even get to senior year of high
school. The only way to change this situation is to redesign
our schools and the only way we can do that is with this
technology. We need this technology to do that.
Now ITFS is the only spectrum set aside for education. ITFS
systems that are licensed to and controlled by schools empower
us to use technologies in ways we need to help students. We now
stand at the threshold of a new digital broadband era for our
schools that will make available high speed Internet access,
video on demand, wider area networking and other similar
services. But the 3G proceeding has caused significant
regulatory delay and uncertainty that has hurt our students and
the educational community. Nothing in the FCC record credibly
supports delaying action to remove the ITFS and the MDS bands
from further consideration.
The final FCC staff report regarding our band demonstrates
that no portion of it should be reallocated.
Mr. Chairman, ITFS is the most valuable technology tools
available to education. So please support our request that the
FCC act now to remove our band from further consideration. If
this vital resource is taken away or is compromised by
prolonged uncertainty, the real losers will be our Nation's
children. A single school year is a very long time in the life
of a student. Thank you again for the honor of appearing before
the subcommittee.
[The prepared statement of Michael J. Dempsey follows:]
Prepared Statement of Monsignor Michael J. Dempsey on Behalf of The
Catholic Television Network
Mr. Chairman and members of the Subcommittee, my name is Monsignor
Michael J. Dempsey. I am the Director of Pastoral Communications for
the Diocese of Brooklyn, and I have the responsibility of supporting,
through television and information technology, the educational,
medical, and religious needs of approximately four million people in
Brooklyn and Queens, New York. I have been doing this for the past 35
years.
I also serve as the President of the Catholic Television Network
(``CTN''). CTN is an association of Roman Catholic archdioceses and
dioceses that operate many of the largest parochial school systems in
the United States including those located in New York, Detroit, Los
Angeles, Dallas, and the San Francisco Bay area. CTN's members use
frequencies in the 2500-2690 MHz band to distribute educational,
instructional, inspirational, and other services to schools, colleges,
parishes, community centers, hospitals, nursing homes, residences, and
other locations. Collectively, CTN's members serve over 600,000
students and millions of households throughout America.
I am here today to urge Congress to assure that the broadband
networks being deployed across the country in the 2500-2690 MHz band
not be held hostage to efforts to find spectrum for commercial 3G
services. While I understand the need to review all possible spectrum
options, the review must have a reasonable end. The time has come to
remove our band from further consideration as a possible home for 3G
services.
I am speaking not only on behalf of the Diocese of Brooklyn and
CTN, but on behalf of an unprecedented number of public and private
elementary, secondary, and higher educational institutions and
commercial entities from all 50 states that have joined forces to
protect this valuable spectrum resource. In over 40 years as an
educator, I have never seen an issue generate such a high level of
concern from so many sectors of the educational and business
communities.
the history of itfs
The Instructional Television Fixed Service (``ITFS'') was
established in 1963 when the Federal Communications Commission
(``FCC'') allocated spectrum in the 2500-2690 MHz band for use by
accredited educational institutions and other non-profit entities to
further their educational missions. This is the only spectrum
specifically set-aside for formal educational instruction.
Historically, the band was used for one-way video program delivery.
However, as a result of new regulatory and technological developments,
the band is evolving rapidly into high-speed, two-way interactive
services. As a result, the band is becoming an even more valuable tool
for teachers and students in our nation's schools and communities.
There are four key points with respect to this evolution that I would
like to emphasize this morning.
Educational/Commercial Partnerships. First, one of the most
important things to understand about ITFS is that the effective use of
this spectrum by educators is highly dependent on partnerships we have
forged with commercial operators who hold Multipoint Distribution
Service (``MDS'') licenses at 2150-2162 MHz and on certain channels
within the 2500-2690 MHz band. In 1983, the FCC adopted a regulatory
paradigm that encouraged educators to lease part of their spectrum to
commercial operators. The FCC's goal was to stimulate the creation of
shared networks that would not only promote efficient spectrum use, but
also advance the interests of both education and commerce. This is
exactly what happened.
Shortly after the 1983 rules were implemented, ITFS licensees began
leasing some of their transmission capacity to commercial partners in
return for equipment, services, and funding that has been used to
further their educational mission. These partnerships are absolutely
essential to the success of ITFS/MDS licensees. They have enabled CTN
and hundreds of other educators to deliver high-quality educational
services at a reasonable cost. At the same time, they have enabled our
commercial partners to amass enough spectrum to deploy commercially
viable broadband networks that they share with educators.
New Two-Way Rules. Second, it is important to understand that we
are at the threshold of a new and exciting digital, two-way broadband
era that will revolutionize education in America. In 1998, after a
lengthy and complex rulemaking proceeding, the FCC issued new rules
that permit ITFS/MDS licensees to use their channels for a whole new
array of two-way video, voice, and data services. These new rules were
intended to spur competition in the market for high-speed, two-way data
communications and Internet access services. They were also intended to
help ITFS licensees whose needs have changed dramatically since the
1960's. To effectively improve education, students today require more
than one-way video programming. They need interactive two-way video;
document and data exchanges; high-speed Internet access in the
classroom, home and workplace; videoconferencing; wide area networking;
and a host of other technology tools. The FCC's new rules are the
stimulus to provide these services.
Significant Investments. Third, the FCC's 1998 decision is
important because it encouraged the entry of major new players into the
ITFS/MDS arena. In 1999, shortly after adoption of the FCC's rules,
Sprint and WorldCom alone spent more than $2.0 billion acquiring rights
to ITFS/MDS spectrum in an effort to get a foothold in the wireless
broadband field. Since then, both MDS and ITFS licensees have made
substantial additional investments in the form of renegotiating
existing lease agreements, preparing and filing complex two-way
applications with the FCC, developing new equipment, and planning and
building the infrastructure needed to offer high-speed broadband
service to the public.
Educators now have the right partners to deploy the technology and
services that students need in the 21st century. Sprint has spectrum in
90 markets encompassing 30% of the nation's homes, and is operating
first generation broadband systems in 14 markets. WorldCom has spectrum
in over 100 markets encompassing another 30% of the nation's homes, and
is offering wireless broadband service in five markets with plans to
serve up to eight additional markets by the end of this year. Nucentrix
Broadband Networks has spectrum in over 90 mostly rural markets
covering 9 million households across Texas, Oklahoma, and the Midwest.
Nucentrix is currently providing broadband wireless Internet access in
two Texas markets (Austin and Sherman-Denison), and is testing second-
generation technology in Amarillo, Texas.
Heavily Encumbered Spectrum. The final historical point I want to
make is that the 2500-2690 MHz band is one of the most heavily
encumbered bands in the United States, and the licensing regime is
extremely complicated. There are over 2,000 existing ITFS stations held
by over 1,200 licensees serving millions of public and private school
students throughout the United States. The National ITFS Association
estimates that there are more than 70,000 sites (schools, libraries,
hospitals, government centers, etc.) in the United States currently
receiving educational programming over ITFS channels. This explains why
virtually every national educational association in the country has
joined forces, with each other and with commercial service providers,
to protect the ITFS/MDS bands.
the record at the fcc
Because the ITFS/MDS bands have been identified as possible
candidates for 3G mobile services, our spectrum has been under a
microscope for nearly a year. The FCC issued an Interim Report
regarding our spectrum in November 2000, a Notice of Proposed
Rulemaking in January 2001, and a Final Report on March 31, 2001. The
FCC requested public comment on each of these items, and voluminous
comments, reply comments, and ex parte submissions were put into the
FCC record.
The Final Report released by the FCC staff on March 31, 2001
demonstrates conclusively that no portion of the ITFS/MDS spectrum
should be reallocated for 3G. Let me be clear: There is nothing in the
FCC record that supports reallocating our spectrum. Here are a few of
the key findings made by the FCC staff, which support the conclusion
that our spectrum should be removed from further consideration:
``ITFS licensees make extensive use of their spectrum to
provide formal classroom instruction, distance learning, and
video conference capability to a wide variety of educational
users throughout the nation.'' Final Report at 13.
``ITFS has approximately 1,275 entities holding over 2,175
licenses in urban and rural locations throughout the United
States. Over 70,000 locations serve as registered ITFS receive
sites, although the number of actual locations at which ITFS
programming is viewed is likely much higher since receive sites
are typically located within a 56.3-kilometer (35-mile)
protected service area around an ITFS base station.'' Final
Report at 14.
``The MDS industry has invested several billion dollars to
develop the band for fixed wireless data systems. Final Report
at 13.
These systems will provide a significant opportunity for
further competition with cable and digital subscriber line
(DSL) services and deliver broadband services to rural
America.'' Final Report at 13.
``Sharing between 3G systems and ITFS/MDS operations is
extremely problematic.'' Final Report at 36.
``Segmentation would require considerable time and costs on
both private entities and the public . . . Furthermore,
delivery of fixed broadband wireless services to the public and
educational users would be delayed, and in rural areas or
smaller markets, may never be realized. Relocation would also
require considerable time and costs to re-engineer and deploy
systems in alternate frequency bands. Again, delivery of
service would be delayed or never realized. The relocation
option also would require other services to be relocated, and
the time and costs to move those additional services would be
significant.'' Final Report at 92-93.
The relocation costs for traditional ITFS facilities would be
approximately $19 billion; and secondary relocation costs would
fall between $10.6 and $30.4 billion. Final Report at 90-92.
``There is no readily identifiable alternative frequency band
that could accommodate a substantial relocation of the
incumbent operations in the 2500-2690 band . . . Relocation to
higher bands could affect significantly the economics of
current and planned ITFS and MDS systems and lessen their
ability to provide service in rural areas or smaller markets.''
Final Report at iii.
In addition to these very compelling findings, the record
established at the FCC shows that the ITFS/MDS bands are not the
preferred bands for 3G services. The 3G community has expressed an
overwhelming preference for reallocation of the 1.7 GHz band used by
the government; and there is ample spectrum in a variety of other bands
that can be used to provide 3G services including the 700 MHz, 2110-
2150 MHz, and 1990-2025/2165-2200 MHz bands.
the need for immediate action
I respectfully submit that the time has come to remove our spectrum
as a possible candidate for 3G services. The FCC's 3G proceeding
already has caused significant regulatory delay and uncertainty that
has hurt both the business and educational communities. For new
businesses, especially those focusing on rural markets, this
uncertainty has prevented access to the capital necessary to complete
their network build-outs. In addition, some vendors are finding it
difficult to get new funding for ITFS/MDS projects, and are diverting
their research and development efforts to other areas.
And, while businesses have been struggling to survive, America's
children have been denied access to new technologies and broadband
networks as envisioned by the FCC's ITFS/MDS policies. Equally
disturbing, the educational community has been forced to divert scarce
financial resources to fight a regulatory battle in Washington to save
spectrum that is not a viable choice for 3G services.
Given that nothing in the FCC record credibly supports reallocation
of our bands, and given that 3G proponents prefer other spectrum
options, it is fundamentally unfair to hold our spectrum hostage and
further delay a decision while the FCC explores other more desirable
options. I would like to articulate the many compelling public policy
reasons to eliminate the uncertainty and let us get on with our
business.
Improved Educational Opportunities. First, rapid deployment of
broadband services in the ITFS/MDS bands will help ensure the success
of the important educational initiatives that are currently underway to
create classrooms for the 21st century. Mr. Chairman, in a recent
letter to President Bush you emphasized that deployment of broadband
services into our homes and schools can ``vastly improve educational
opportunities'' for our children. Under the current regime for ITFS/
MDS, educators have the necessary technical capability and spectrum to
make your vision a reality. But, we cannot proceed until our spectrum
is taken ``off the table'' as a possible candidate band for 3G.
Renewed Certainty in the Marketplace. Second, removing our spectrum
from further consideration will bring credibility to the FCC's spectrum
management policies in the capital markets. The FCC has gone to great
lengths to encourage ITFS licensees to lease spectrum and deploy fixed
broadband services. In reliance on these FCC's policies, commercial
service providers have invested billions of dollars in this spectrum,
and educators have devoted significant resources to ensure that the
spectrum will serve the needs of their students. It would be a travesty
for the FCC to change course now. Certainty and stability must be
maintained in formulating and implementing spectrum management
policies.
New Options for Consumers. Third, rapid deployment of broadband
services in the ITFS/MDS bands will result in immediate and concrete
benefits to the American public. There is a huge demand for fixed
broadband access. The MDS/ITFS spectrum is uniquely suited to serve the
residential market and broad geographic areas. It reaches places that
local telephone companies and cable companies cannot or will not serve.
High-speed service has already been deployed in some markets, and many
more will follow. As the roll out continues, homes, businesses, and
educational institutions will benefit from the availability of these
new broadband service options.
New Competitive Alternatives and Rural Deployment. Fourth, rapid
deployment in the ITFS/MDS bands will provide a meaningful competitive
alternative to incumbent local exchange carrier offerings consistent
with the goals of the Telecommunications Act of 1996. Currently,
broadband competition is limited primarily to DSL, cable modem, and
satellite service, each of which suffers from limitations which
restrict their ability to provide full broadband competition.
Nationwide deployment of fixed wireless broadband systems in the ITFS/
MDS bands will provide Americans with another competitive alternative.
Indeed, in rural areas, the ITFS/MDS bands may provide the only option
for broadband access.
Increased Educational Opportunities. Fifth, rapid deployment in
these bands will help close the information technology gap. Through the
continued deployment of fixed broadband wireless services, students and
adult learners in rural and traditionally underserved areas will have
access to the same educational opportunities as those in better served
metropolitan areas. In urban areas, the continued roll out of fixed
broadband wireless services will provide students in all school
districts with access to the latest instructional materials at all
levels, helping to even the playing field and promote learning
opportunities.
Managing Educational Costs. Finally, rapid deployment in our bands
will help reduce the spiraling cost of education. The United States
must find better ways to manage the cost of education. When the cost of
operating a Catholic school exceeds the income needed to operate that
school, it is closed. In the last 25 years, we have closed nearly 75
Catholic schools in my Diocese alone and thousands more across the
country. Our tuition income was simply insufficient to support these
schools. Public schools, however, cannot be closed just because tax
revenues are insufficient. Instead, the quality of education for the
entire system is reduced. As a result, today in New York City, nearly
45% of those entering the first year of public high school drop-out
before reaching the fourth year. Educators need ITFS/MDS frequencies to
help them rethink the way schools are designed and to reduce the cost
of education. Without these frequencies, the challenge of reducing
educational costs is much greater and perhaps insurmountable.
the need for your support
President Bush has made education one of his top national
priorities. Shortly after taking office, the President said that if
``our country fails in its responsibility to educate every child, we're
likely to fail in many other areas. But, if we succeed in educating our
youth, many other successes will follow throughout our country and in
the lives of our citizens.'' The President also has encouraged schools
to ``use technology as a tool to improve academic achievement.''
The ITFS/MDS bands are one of the most valuable technology tools
available to education. We have been using this educational tool for 35
years to improve academic achievement. We don't want to lose it now. If
this vital resource is taken away or compromised, the real losers will
be the millions of students, teachers, and schools that rely on
services provided by ITFS/MDS licensees.
Mr. Chairman and members of the Subcommittee, there is wide
bipartisan support for improvement of education and for the effective
use of technology toward that end. Please seize this opportunity and
support our efforts to have the FCC remove the ITFS/MDS bands from
further consideration as a possible candidate for 3G services now.
Thank you. I am honored to have had the opportunity to appear
before you today.
Mr. Upton. Thank you all for your testimony, again, thank
you for getting it in so we could take it home last night as
well to review. At this point we'll begin with members'
questions, alternating between sides for 5 minutes and I
suspect that we'll go to a second round when this is done.
Dr. Wells, I too, appreciated your comment and your
eagerness and wrote that in my notes as well and I have to tell
you from the very outset that as we begin to look at this
situation and try to build bipartisan solution to what is
clearly a problem out there that we're looking at two main
items that have to be included in that legislation which has
yet to be unveiled. One is that we do need comparable spectrum
for the Defense Department. That's absolutely essential. And
second, yes, we do need to compensate DOD if, in fact, spectrum
is taken away and as I understand it and I know my pre-dinosaur
age colleague, Mr. Markey has stepped away for a moment, but as
I understand it that did not happen in the pre-dinosaur age and
we've got to make sure that things turn around as we begin to
look at bipartisan legislation.
I have a number of questions for you. First of all, Dr.
Wells, how much spectrum is the Pentagon's fixed point to point
wireless operations actually occupy?
Mr. Wells. Let me take that, for the record, Mr. Chairman.
I do not believe it's fully half the band, but I'll take that
to the record.
Mr. Upton. Okay, if you provide that to us, that would be
appreciated.
Do you know how many channels within the 1755 to 1850
megahertz band these operations actually use and do they share
channels with any other Pentagon operations? Related to that, I
think, is the comment that Mr. Wheeler made in his testimony
with regard to the Army Corps of Engineers, water level
monitoring activities.
Mr. Wells. The channels of this fixed system, how many
channels the fixed system uses, I'll take that for the record
also.
Mr. Upton. Okay, is the Pentagon aware of any other bands
other than the 1755 megahertz band and we can get these back to
you in writing, 1755 to 1850 megahertz, that provide the
propagation characteristics necessary to the Pentagon satellite
uplink operations that provide enough spectrum to accommodate
those operations?
Mr. Wells. One of the problems is the devil in the details.
For example, people have talked about a band called unified S-
band that other satellites use. That's becoming a crowded band
and so for us to move our applications in there, again, there's
a time line consideration. It's going to have to deal with the
usage of other people and the band. This has been the case with
a number of alternatives that have been suggested for
comparable spectrum. It looks great when you first take a look
at it, then the more you get into it, you find that there are
complications.
So the best band that we've seen for the satellite has been
this unified S-band. There's clearly a timing issue involved
and we look forward to working through that question.
Mr. Upton. In your testimony as you refer to S-band, I know
on page 2 of your testimony you indicated you thought that the
costs of 120 satellites was $100 billion.
Mr. Wells. The investment costs of the constellation.
Mr. Upton. Right. How many of those 120 satellites actually
use S-band because I mean that is the best, right?
Mr. Wells. The satellites we're talking about here use for
their uplinks today the 1755 to 1850 so those are satellites
that are controlled now within the military band, so they would
have to--of those 120 we're talking about are all within the
1755 to 1850 band.
Mr. Upton. And they all use the S-band then?
Mr. Wells. Those are some frequencies that could possibly
move to 2100 megahertz for uplink, but again, other satellites
use that today and for us to move in there could well cause
crowding and interference with the existing systems. This would
have to be worked out.
Mr. Upton. As I understand the report, the DOD report that
says that the S-band offers physical advantages for tracking
telemetry and control operations, particularly in areas of
launch, early orbit and anomaly resolution. It went on to say
that S-band is uniquely suited for conducting critical and
nonroutine satellite operations functions. So I guess the
question is, is the Pentagon doing everything that it can to
ensure that as many satellite operations are moved to the S-
band as quickly as possible.
Mr. Wells. We are actively looking at it. Let me see if
saying ``as quickly as possible'' but there is the problem we
have these satellites on orbit now, Mr. Chairman, some of which
will not fly out to 2017. It will not complete their orbits and
so we will have to continue controlling those and the existing
bands until that constellation dies or if someone wanted to put
lots of money in to accelerate replacement of the
constellation, that might be an option.
Mr. Upton. Lots of money is how much?
Mr. Wells. I would think in the multiple tens, billions of
dollars.
Mr. Upton. I suspected that that was the answer.
Mr. Wells. And frankly, sir, I would not suggest that would
be a useful use of taxpayers' dollars.
Mr. Upton. Okay. Ms. Eshoo.
Ms. Eshoo. We don't want to knock over coffee and water
here.
Let me start with Mr. Knapp from the FCC. In your
testimony, you state that the FCC's report concluded that the
sharing of the spectrum in the 2500 to 2690 megahertz band
doesn't appear feasible because it would raise significant
technical and economic difficulties.
What are the next steps that the FCC is going to take with
regard to that spectrum and will it formally be removed from
consideration so that regulatory uncertainty is eliminated?
It's an important area. I've written to the FCC about this.
It has an impact on education, the schools. Monsignor, I think,
has given excellent testimony in that and the uncertainty that
exists is yet another overlay in this. So it is having an
effect. It may not be the biggest issue that's at the table
today because the struggle is what we're going to do with
defense, how that opens up parts of the spectrum for 3G, but
this is, I think, on the front lines in terms of education. So
can you comment on that?
Mr. Knapp. Yes, thank you. That's an excellent question.
Ms. Eshoo. Thank you.
Mr. Knapp. This band, of course, was examined because it
was one of the bands that was identified internationally and
that's why we took it up and conducted the study and so forth.
In our report, we looked at sharing and basically because
these systems are distributed throughout the country, you have
a problem of spacing any new systems in. They couldn't share
the same channels. Relocation because of----
Ms. Eshoo. I think I know what the problem is, but I'm
asking you what you're prepared to do. How is this going to be
resolved?
Mr. Knapp. We have the request in front of us for taking
that off the table. I think that's going to be looked at very
shortly. We also have a pleading that was filed by one of the
carriers asking us to continue to look at that until we resolve
the ultimate selection of the spectrum.
I expect we're going to take the issue up very soon.
Ms. Eshoo. Well, I think the sooner, the better, because
the longer the uncertainty exists, the tougher it makes the
situation and there are an awful lot of schools that are really
looking for an answer on this. So it's not small potatoes. It
just isn't. So I'm encouraged when you say that the FCC is
going to take action soon on this. When you say ``soon'' is
that within the next 3 months, 30 days, 60 days, 90 days? Can
you give us just a little----
Mr. Knapp. I would hope months. I would hope it would be
within a matter of months.
Ms. Eshoo. Matter of months. Before the end of the year?
Mr. Knapp. Certainly.
Ms. Eshoo. Great. All right. We don't come to these answers
easily, do we?
Now, to one of my favorite subjects, E-911. I want to go to
Mr. Wheeler. As I said in my statement, I'm concerned that the
wireless industry is focusing on--well, I shouldn't say that
I'm concerned. I think that it's important to focus on the
benefits of 3G. I don't want to cloud that issue by saying that
somehow it isn't important and that we should hesitate and that
we shouldn't, as a Nation, really be prepared to embrace not
only the technology, but how to make it work so that it can be
in--that the American people would be able to benefit fully
from it.
What I'd like to ask you is how many tests and pilots has
the industry conducted on 3G technologies this year?
And by contrast, how many tests and pilots have been
conducted on Phase II for E-911?
Mr. Wheeler. I'd like to also observe that's a good
question and I don't have the answer to it, either part.
Let me see if I can pick up on one thing though insofar as
the question you asked Mr. Knapp earlier, because I think what
you did was you focused right in on what one of the key issues
insofar as spectrum planning is concerned and that is that
heretofore, we have always gone at it piecemeal. We look at
this piece and we look at it separate from this piece and what
we need to have is an overall plan that says here's where we
want to be in 10 years. Here's where we want to be in 5 years.
Here's where we want to be in 2 years. And that would make the
kind of things you were talking about moot because everybody
would know where things are going. And so when and if there is
a legislative vehicle, we would hope that the committee will
have a vehicle that comes up for the first time with a spectrum
plan to address those kinds of issues, to address Monsignor
Dempsey's kinds of issues, to address the Defense Department's
issues, because that's really what's at the crux of this whole
thing.
Ms. Eshoo. I appreciate your lengthy comment on that
without addressing E-911.
Mr. Wheeler. I will get the answer for you for the record.
I'm sorry I don't know what--may I say one thing?
Ms. Eshoo. I wanted just to--the red light is on. I think
that if the industry would spend less time and energy in
formulating the request for waivers in just getting this done,
that we would really be far better off in our country. There
are far too many people today that buy into wireless, believing
that they're covered so I still remain concerned that there's a
stalling. I think the more the players put in for their waivers
that others say well, if they are, then we're going to as well.
Let's get this done. I will find you far more believable
players if you get this behind us and get this implemented,
rather than spending time on waivers.
So I want to work with you on 3G. I think it's an important
technology. We should be the leaders in the world. We should be
able to blend all of this, but what kind of a country are we
when people believe that they're going to be able to dial into
this and they're not. It's a lifesaving issue and I think you
should be able to advertise and say come with us because we
indeed cover this.
So thank you, Mr. Chairman, and I look forward to your
answer.
Mr. Wheeler. I just want to say I personally, in our
organization, am very proud about the fact that the rulemaking
at the FCC for this requirement is one that we initiated. We
asked the FCC to come up with location based rules. We worked
out with the public service community exactly how to make that
work and together we went in and said will you please enact
these because we both agreed this is the way to do it. The
problem is in the intervening 4 years that has been nipped away
at and new technological issues have been introduced which has
slowed the whole process down. But I want to say to you without
doubt that yes, the wireless phone is the greatest safety tool
since the development of 911 and we are the ones that
petitioned the FCC to have location capability as a part of
caller 911.
Ms. Eshoo. Can I have 30 more seconds, Mr. Chairman,
unanimous consent for 30 seconds?
Mr. Upton. Without objection, 30.
Ms. Eshoo. Thank you, Mr. Chairman. I would only respond, I
appreciate what you've just said in terms of the history and I
think that it's important, but how are we to have confidence
that you're going to work out what you're here for today on 3G
if, in fact, in the last chapter of 911 it seems to be falling
apart in my view by these requests for waivers? Let's get this
thing done. Let's get it done. It's a great technology, but
it's not going to touch people if, in fact, it can't be
implemented. Thank you.
Mr. Wheeler. There's a desire to get it done. You're right.
There's a desire to get it done.
Ms. Eshoo. Thank you, Mr. Chairman.
Mr. Upton. Mr. Stearns.
Mr. Stearns. Thank you, Mr. Chairman. Mr. Knapp, what
consideration has the FCC given to repealing the current 45
megahertz spectrum cap?
Mr. Knapp. We have an outstanding notice of proposed
rulemaking that we conducted under a biennial review. The
comments have been filed and we expect to address that before
the end of the year.
Mr. Stearns. So by the end of the year we'll have an answer
definitized?
Mr. Knapp. Yes, I believe so.
Mr. Stearns. Anything more in terms of--it will be sort of
a yes or no? I mean it will be a full dimension answer that
these companies will be able to move on it?
Mr. Knapp. At this point, the Commission staff is still
evaluating the record and trying to determine what action to
take on it.
Mr. Stearns. And it's your intention that with this
decision American companies will realize that 3G advanced
mobile services with the current spectrum cap in place or not?
Mr. Knapp. No, I think, of course, as you know the spectrum
cap only applies to the cellular PCS and specialized mobilized
radio services bands. It would--it would not necessarily apply
to any additional spectrum allocations. That would be reviewed
separately.
Mr. Stearns. Mr. Strigl, this is sort of an easy question
which you covered in your opening statement, but I thought I'd
give you another chance on this. You mentioned my bill.
How does the current 45 megahertz cap affect your company's
business decisions to expand and offer additional services,
particularly 3G services and then Mr. Wheeler, if you'd just
comment how it affects your member companies? I'd appreciate
it.
Mr. Strigl. Thank you, Congressman. It affects us in one
simple way. Today, we operate in most of our properties with 25
megahertz to 30 megahertz of spectrum. Some places we have gone
up to 40. With our commitment in auction 35 in New York, we
operate on 25 megahertz. We have committed for 20 additional
megahertz. Takes us to the 45 megahertz cap. We don't have that
spectrum. We can't look for additional spectrum in the interim
until this current auction 35 issue is resolved.
Furthermore, we need a minimum of 65 megahertz of spectrum
in our major cities. That requirement will exist within the
next 5 to 6 years.
Mr. Stearns. Mr. Wheeler?
Mr. Wheeler. Mr. Strigl just did a great job of explaining
the impact on companies. Let me just see if I can relate it to
the rest of the world. We're the only country, major country
that has this kind of an artificial cap. In the rest of the
world, spectrum finds its own level, if you will, in terms of
how much spectrum a carrier needs to be efficient and be
competitive.
Mr. Stearns. He or she--he could go out and buy it if he
wanted it?
Mr. Wheeler. Correct. For instance, in the UK, four of the
five carriers in the UK have more than 77 megahertz. We're
capped at 45. In Germany, 4 of the 6 have more than 60
megahertz. We're capped at 45. In Japan, 2 out of the 3 have
more than 92 megahertz. We're capped at 45. And so the rest of
the world is saying okay, what are the levels that water will
seek of its own accord.
The other thing that's really interesting is that this has
an impact on Monsignor Dempsey and this has an impact on Dr.
Wells. Let's just do the math here for a second. Let's say take
Mr. Strigl's 65 megahertz is the minimum that he needs. Eight
licensees which is not an untypical situation, that's 520
megahertz. Where are we going to find that? That puts pressure
on Dr. Wells. That puts pressure on Mr. Dempsey and why are we
having to put that pressure on? We're putting the pressure on
because of the fact that the spectrum that has already been
allocated is not out there and necessarily being fully
utilized. It could be if it could be transferred and get above
that spectrum cap.
Mr. Stearns. Mr. Strigl, how--I'm talking about timeframe,
how soon should additional spectrum be made available, do you
think? I mean what is the drop dead, is it another year, 2
years or you're at an instant you need it right away?
Mr. Strigl. Congressman Stearns, in places like Los
Angeles, New York, Washington, DC, Chicago, the need is within
1 year to 18 months. The issue is that unless we are provided
with additional spectrum, in order to--this will work precisely
against what we have worked so hard to create which is a
competitive industry, low prices, high bundles of minutes, lots
of usage. We find ourselves constrained. The supply is limited
at this point. There will become a point in time when I fear
that this commodity will carry with it higher prices in order
to guarantee a high quality of service for those customers who
will remain on the service.
I don't want to sound like an alarmist. I don't mean that
at all, but there comes a point in time when you've used
everything you can use and to continue with a high quality of
service, something has to give.
Mr. Stearns. Thank you, Mr. Chairman, my time has expired.
Mr. Upton. Ms. Harman.
Ms. Harman. Thank you, Mr. Chairman. I have a few questions
for Mr. Wells.
Mr. Wells, I describe myself as a pro-defense, pro-
business, pro-choice Democrat, so I make apologies to no one
about my advocacy for a strong defense. And even if I might
forget, my constituents wouldn't let me forget, since most of
the major defense firms are located in my District. That by way
of prologue.
I am very well aware, as you are, of many priorities that
the Pentagon has in this year's budget and next year's that we
may not be able to fund. Just to start off the list, more C-17
airlift, more B-2s. Missile defense, just to name several. And
I'm sympathetic to those priorities. My question to you is if
you have the opportunity to consider some changes in your use
of spectrum that would generate revenue that could potentially
fund some DOD priorities, if you have that opportunity or let
me put it another way, do you have the opportunity to consider
changes that could generate funds that could help other DOD
priorities?
Mr. Wells. I believe that a wide range of options is on the
table. I have some concerns. What is often teed-up as a win-win
as I mentioned to the Chairman earlier, runs into devil in the
details. For example, the comparable spectrum needs to be made
available clearly and in enough time, with enough compensation
early enough to make the change.
Second, when people talk about trust funds and funding
mechanisms for DOD, one of the reasons it becomes complicated
in law of how those monies migrate from the general revenues to
a particular department and I honestly have not seen an air
tight, if you will, mechanism to ensure that promises made in
discussions actually get translated into the transfer of funds.
So in theory, it sounds excellent. I remain skeptical that
it will work.
Ms. Harman. Well, I certainly would agree that the devil is
in the details, but I would not agree that because it is the
right answer is to resist change. I think that your
communications needs are a very high priority. I support your
communications needs, but I also suggest that resources are not
infinite and the Defense Department budget is large and money
is going to have to be freed up to fund other programs and so
with all the talent you have down there, I would suggest that
more focus be given to how to make that transition effective so
that we have not just Jane Harman or not just this committee,
but the country has the benefit of funds for other defense
priorities. I just listened to your testimony very carefully
and didn't hear anything said about that. So as one voice up
here, I would like to suggest that it's not just the slogan
win-win, it is two other words called national security that
will be short changed if we don't have a more creative view of
the opportunities here for spending on additional defense
priorities.
Mr. Wells. The Secretary has spoken in terms of
transforming the Department. We fully subscribe to that and I
seek as many innovative solutions as possibly can. The flip
side is I do have a responsibility to make sure that we wind up
actually getting the benefits that are offered and we will
aggressively, eagerly seek an opportunity to engage on this
issue.
Ms. Harman. I like those words, aggressive and eager. It
takes that to overcome the inertia, not just in your building,
but in this building to change. And so I would urge Mr.
Chairman, that we be aggressive and eager in considering these
issues and that we certainly view national security as a high
priority when we're allocating and reallocating the spectrum,
but we define it to include more than just the communications
function. We define it to include a lot of priority programs
that we may not be able to fund if we don't free up some money.
Thank you, Mr. Chairman.
Mr. Upton. Thank you. Mr. Shimkus.
Mr. Shimkus. Thank you, Mr. Chairman. Kind of following up
on some of my comments of my colleague. I think the military
and national security concern is that the transition in that
there's no gap. It would have to be a seamless transition which
means capital would have to be upfront, satellites would have
to be in place, and so that when the handover of the current
spectrum was given that it would initially transfer over.
The risk of someone deployed anywhere in this world and the
ability not to communicate is life or death. It is market share
and capital for folks in the industry and in a competitive
world time is money, but in the military environment it's life
or death and meeting national security goals, and Mr. Wells,
you mentioned the timeframe. We're talking years out and then--
so that's the challenge and that's why we're hear.
I want to ask Mr. Hatch first, were you the representative
at the World Radio Conference? Who represented our government
at the World Radio Conference in 2000?
Mr. Hatch. The delegation was headed by Ambassador
Schoettler and there were representatives from the government
agencies. Both NTIA and the FCC were vice chairmen of the
delegation, and we had four representations from those two
agencies, as well as from other government agencies and the
private sector.
I was only there for the last 2 weeks of this particular
conference, but have been to many of the previous conferences
and our delegation, I believe, was well over 100 delegates. So
we had full representation.
Mr. Shimkus. Did we have anyone from the Department of
Defense there?
Mr. Hatch. Yes sir, we did.
Mr. Shimkus. It was construed as a success by our
government in identifying the three different bands instead of
one large band. Can you explain why that's a success?
Mr. Hatch. Various foreign governments wanted to identify
just a single frequency band. The Europeans wanted to identify
just the 2500 to 2690 MHz band. There were other
administrations including some in Region 2 that wanted to
identify just the 1710 to 1850 MHz band--I think those were the
two principal bands that were trying to be identified. We knew
that we had some difficulties with these frequency bands and
that we would need maximum flexibility in order to try to come
back and then determine how much spectrum would be available
and where we could find that spectrum.
So the U.S. made a proposal to not only identify those two
bands as potential for use by 3G, but also the 806 to 960
megahertz band that would give us three potential options for
identifying additional spectrum for 3G.
We made the commitment prior to going to the conference
that if our proposal is accepted, we would then come back and
do the detailed studies, especially on the two frequency bands,
1710 MHz and 2500 MHz. This is what we have, in fact,
accomplished to make that information available to guide us in
making a decision on spectrum for 3G.
Mr. Shimkus. Has it been successful in speeding up the
process? I mean I think that's what it was construed to do if
we had a victory over at the World Radio Conference and then
split it up into three bands that that would help us more
rapidly change.
Mr. Hatch. Well, it would give us the opportunity,
Congressman, to look at the various options and the various
frequency bands to see if any of the frequency bands, either
all of them or in part could be made available and what the
conditions are that they would be made available for 3G. So I
think it did help in providing us with options and as I said
right now we're in the process of evaluating those options and
determining what spectrum can be made available for 3G. I do
believe that having the option of looking at three different
frequency bands would be better than having a single frequency
band and if that frequency band turned out to be one that we
couldn't support, then we would not have the flexibility.
Mr. Shimkus. Thank you. Mr. Wheeler, I appreciate you being
here and we've had a good relationship and I appreciate the
industry and the 911 efforts that have been made so far and
look forward to the next generation.
This is being pitted industry versus the DOD spectrum. I
guess a question would be why should an industry be challenged
to consider other bands?
Mr. Wheeler. Industry has been, Congressman. There is--I'm
sure that you are as tired as I am of the stories in Time
Magazine and the newspaper headlining why the United States is
in second place in the world in wireless. The difficulty that
we have had heretofore has been that there hasn't been a
unified piece of spectrum, therefore requiring different radios
if you're to have one device and eliminating economies of
scale. What has happened in the rest of the world is that--can
we put that world chart up, pleas, Craig? What has happened in
the rest of the world is that they have made decisions and
those decisions have consequences for us in terms of scope and
scale economies. This chart right here, the green areas are the
countries of the world who have either currently allocated,
plan to or have indicated a preference toward using this
particular spectrum. The yellow countries are those who haven't
yet and the red is us who have yet to make that--we're sticking
out there like a sore thumb.
And the problem is when our troops deploy into those green
areas, they're going to be impacted. When our consumers buy
products, they're going to be impacted. Both of those impacts
can be resolved if we have a harmonized set of spectrum.
Mr. Upton. Dr. Wells?
Mr. Wells. Mr. Chairman, thank you. The concern I have with
this slide is that it suggests that the only thing standing
between global harmonization and future peace and prosperity is
the United States because of the 1755 to 1850 megahertz band.
Harmonization, as I believe is indicated by the fact that
Europe was looking to use 2500, 2690; China has picked 2300 to
2400 megahertz for their bands; others are looking at other
things, is not going to happen around a single band.
In addition, it's not even necessary for effective global
roaming. I'm pleased to have a world phone here that already
operates on multiple frequency bands and multiple different
modulation schemes that is effective today at reasonable prices
for the consumer.
So while it would certainly be desirable, if you could get
a single band, I don't believe you're ever going to harmonize
around a single band and to hold DOD up as the sole set of
obstacle to achieving global harmonization, I'm sorry, I have
to disagree.
Mr. Shimkus. Mr. Chairman, if I could just follow up
because and I ought to ask the question is then why, Dr. Wells,
why isn't industry considering using other bands and that's a
question I asked of Mr. Wheeler.
Mr. Wells. I will have to defer to industry, sir, but I
would just point----
Mr. Shimkus. I mean easy pickings or I mean is that
spectrum easy pickings versus competitive alternative of moving
other corporate entities off their bands?
Mr. Wells. Well, certainly it is a government band. It is
not now allocated for commercial and if it were reallocated it
would increase the total amount of commercial spectrum.
My only point is that in Figure 3 in our, in my written
statement, addresses 130 megahertz of commercial spectrum
that's available today without touching either the 2600, 2500
band or the 1755 band that could be made available now and
there are difficult choices. These are not easy allocations.
Mr. Wheeler. But Dr. Wells, you will agree, I trust, that
that spectrum which you have identified as not in your area, is
also not in anybody else's area and that what it creates is a
continuation of what has burdened this economy in terms of the
ability to compete.
The phone that you pulled out, for a second, a couple of
things that are necessary that the committee understands about
that. No. 1, that phone was probably about 4 years, maybe 5,
late getting to this country. The people in the rest of the
world were able to do that before American consumers were able
to do that because, precisely because of the problem of
incompatibility.
Second, let me just tell you a story. It happened last
weekend, I was in Finland. My wife became infatuated with a
phone that is available in the rest of the world that opens up
and is kind of a combination computer, palm pilot, everything
all at once. She asks the question when can I get that? Why
can't I get this in the United States? And the answer is they
only make it for the rest of the world because of the fact that
only the rest of the world can provide the scale economies for
the radio, that to do it so that it works in the United States
market drives the scale economies into the ground, drives them
this way, and drive the price like this.
So there are consequences. This chart that you have here
really doesn't answer the question because it's not a question
of just more spectrum. It's a question of spectrum that is
going to work with our neighbors in the rest of the world and
is going to work for you as well as for us and that's why we
need to be eager to get at the issue.
Mr. Wells. Mr. Chairman, may I? I would love to have a
global harmonized band in which the military could go and
operate and not have interference from other users. I just fear
the reality is that we're always going to have to negotiate
agreements. The demand for spectrum everywhere is going to be
increasing and that just to say that if DOD would only move out
of this we'd be able to gain global harmonization is an
oversimplification of an argument that's still going to be a
very difficult problem to come to closure on.
But just what concerns me, this is a hard problem. I'm not
saying that these bands are easy. If they were easy somebody
would have taken them. Just like if our band were easy, someone
would have taken it. This is a decision that has to be reached
deliberately from a national approach and not just have a fiat
that says ah, we solved the problem by striking away the DOD
access.
Mr. Wheeler. But if we go to your conclusions that says
let's have someplace to move, yes, let's do that together.
Let's work on that and let's get these people involved on it.
Let's have compensation and let's get even more beyond that for
that and let's have a timeframe. We can do it.
Mr. Wells. But let's find comparable spectrum into which we
can move. That is the key that we have not----
Mr. Upton. The gentleman's time has expired.
Mr. Shimkus. I yield back the balance of my time, Mr.
Chairman.
Mr. Upton. It doesn't work. Mr. Green.
Mr. Green. Thank you, Mr. Chairman, and frankly, I enjoyed
that interchange and in reading the testimony, particularly
from Dr. Wells, on page 6 where you say that CTI has proposed a
win-win solution to DOD, you'd be interested in seeing such a
package, but you haven't seen the proposal. It sounds like
other than having us as witnesses, you all may want to leave
this hearing and sit down and see if you all can trade those
proposals because nobody on this committee, I know myself,
doesn't want any degradation of our ability for our service
personnel. And one of the questions, Dr. Wells, in looking at
that chart over there where it looks like most of Europe,
except that one yellow part and even with my trifocals I can't
see if that's Bosnia or Kosovo there that it's there just to
the east of Italy, there's some questions that the Department
of Defense is already facing serious degradation around the
world and increased use of wireless devices in the 1755 to 1850
megahertz. Did DOD see that during Bosnia and Kosovo and again,
without binoculars I don't know if I can tell but was there any
degradation in Bosnia and Kosovo by using those megahertz
because of the overflow or what's happening in Europe?
Mr. Wells. There were a variety of degradations and a
variety of bands. It was not just in this band and it just
indicates that almost everywhere the band is crowded and we
have been able to solve some of this by negotiating host nation
agreements wherein we get some priorities and in other cases we
have to adjust our operations to the realities of the
situation. So we don't want to complicate, as I say, we've been
able to negotiate agreements in many of these cases to allow us
to operate satisfactorily. We are concerned that since there
will not be a single harmonized military band that any
movements we do now are just going to generate the need for
additional negotiations and it's a cause for concern. As I've
tried to maintain all along. If there was an easy answer, if,
in fact, there was a hard answer that would let us get global
harmonization, that would let us get money for the Defense
Department, that would let us get comparable spectrum and
continue our operations without risk to the lives of our
servicemen and women, we ought to leap at that chance. The
problem is reality is more complicated and to take a quote from
President Reagan, ``trust, but verify.'' We would love to have
these solutions. We need to make sure that the i's are dotted
and the t's crossed.
Mr. Green. Well, the concern I have again, even though this
is Energy and Commerce Committee is that in the parts of the
world that we may need that, you may have to spend time
negotiating with those host countries and not with ourselves in
the United States, but again, I would suggest maybe CTIA and
Department of Defense sit down and share that proposal because
otherwise it's much better if you all work it out than if
Congress gets involved and even though I'm a student of
government and have been involved in it for 30 years, it's much
better with the folks involved instead of us having to do it.
Mr. Strigl, let me talk a little about in your testimony or
in your answers to questions, you said in certain areas in our
country you're going to see the need for increased spectrum in
18 months?
Mr. Strigl. Yes sir. We have begun to see that in places
like New York and Los Angeles today, the need for spectrum is
here.
Mr. Green. And again, in Dr. Wells' testimony, I mean
there's obviously a great many years between 18 months and 10,
15, 20 years. What can we expect? Is it the increase in the
need for that spectrum? Is it typically in cell phones or is
there some other killer application that we know we may use and
need that spectrum for other than just cell phones?
Mr. Strigl. The immediate need is one driven by low prices
and high packages of minutes that our customers buy. The main
need in places like New York City and Los Angeles today is
driven by voice applications. As we begin to unfold our data
and Internet access applications on top of that, it is just one
further need for the spectrum.
Mr. Green. Okay, so it's mostly in voice right now?
Mr. Strigl. Yes sir. Today it is mostly voice application,
correct.
Mr. Green. Thank you, Mr. Chairman.
Mr. Upton. Mr. Pickering.
Mr. Pickering. Thank you, Mr. Chairman. Let me quickly just
say I represent a district that is the home of Sonny
Montgomery, Mr. Veteran, Mr. National Guard, Mr. Defense and
John Stennis, father of the modern Navy. I have two military
bases. I have multiple defense contractors. The story I would
like to be able to tell if we could successfully work out--the
devil's in the detail--is to say that through these policy
decisions that we're making in this effort, we are able to buy
the planes, the carriers, the destroyers, the transports. We
have made our military modern, agile, mobile, quicker, faster,
more ready, effective in fighting the threats that we face in
the 21st century.
As I understand it, the modernization needs of the military
over the next 10 years are approximately $100 billion. With
budget realities of today I don't know where that money is
going to come from to achieve your modernization objectives
which I would desperately want to see achieved, representing
the district that I do and the examples and the legacies of the
men who have gone before me. That this offers a possible
solution that if we could work out as what you call an airtight
mechanism that would guarantee you the proceeds of such an
auction, estimates, conservative estimates, $40 billion, almost
halfway there as to what you need for your modernization
objectives over the next 10 years. And so if we can work it
out, I do think it would be a great story to tell not only in
the military side as far as what we can do for our men and
women in the military, but then in a rural district like mine,
the 3G applications and the wireless potential to bring to our
hospitals, our schools, our businesses and those areas, the
applications of 3G, I think it would be a tremendous story that
we would be able to tell and a good result.
And so this is my question, Dr. Wells, could we, working
with your attorneys and the FCC and this committee, work out a
mechanism, an air tight mechanism that would guarantee you that
if we went down this path, if we did try to take the 1755 to
1850 or the 1710 to 1855 and we worked out a migration plan,
would you be willing to sit down with us, with your attorneys
and to try to develop that trust fund or airtight mechanism
concept so that we could answer the devil's in the detail
legislatively and from a budgetary point? Is that something
that the Department of Defense would be willing to do and ready
to do?
Mr. Wells. We met yesterday with the FCC and the NTIA to
look at a way ahead on a national approach toward choosing the
best set of options for way ahead on allegation of third
generation and certainly these sorts of things are on the
table.
My caution, Mr. Pickering, is a couple-fold. First of all,
these numbers are so large as to be very seductive. If only you
could get this, then you would get half of the modernization
requirements you would need and yet this is not strictly just a
regulatory or even a commercial issue. If a few calls are
dropped on the battlefield is not a question of redialing. It's
a question of people's lives. So we really do have to make sure
that this is done. If that could be done, absolutely. I would
love to be able to see that happen, but the other consideration
is the United States as the sole superpower with its global
responsibilities does have somewhat different sort of criteria,
perhaps, for judging the allocation of spectrum than most other
nations in the world and we have to take into account the fact
that we do have these global security responsibilities as well.
I am more than willing to engage in a process to find this
answer. I would love to be able to solve the Department's
problems this way. I just need to make sure that we're not
putting our people or the security of the country at risk in
the process.
Mr. Pickering. Dr. Wells, to follow up to my question,
would you be willing to sit down with this committee and with
the other Federal agencies' counsels and then--there are two
questions, the proceeds, if we can have a mechanism to
guarantee the proceeds back to DOD, then the second and more
fundamental question which you talk about, can you maintain
secure, strategic communication capability and that is the
process, the migration, the relocation, those issues? I think
that if we can answer the first one and set up a process that
doesn't prejudge, but set in motion the decisions that have to
be made to allocate the spectrum, to relocate the spectrum, to
maintain your capability, I think they both fit and work
together. Would you be willing to work on a mechanism with us
to guarantee the proceeds and then to work with us on a
process?
Mr. Wells. I'm certainly willing to work. I think we need
to work together.
Mr. Pickering. That's what I'm suggesting.
Mr. Wells. The Department of Defense deals unilaterally
with the Commission, committee. We need to work together. But I
think there's also another question that needs to be answered
and that has to do with fully justifying the business case that
additional spectrum is needed at this time. There have been
statements that additional spectrum is needed. There are other
members of the cellular community who have said right now we
don't need additional spectrum. We can deploy 3G services
within additional spectrum. I was in Europe a few weeks ago and
the headline of the international Newsweek talked about other
tech meltdown, $300 billion folly, the race for third
generation phones. We're willing to do this. I just want to
make sure the business case has looked at other spectrum before
someone just defaults the fact that it's going to be 1755 to
1850.
Mr. Pickering. Dr. Wells, I would agree that we need to put
everything on the table. We need to have a fair process, but
going back to my original question, would you be willing to
work with us on a mechanism to guarantee the proceeds so then
you could have the confidence that the second and the third
questions that you're raising would be beneficial to DOD.
Mr. Wells. Absolutely, we're willing to work on the
process. We're willing to work on the process. We're willing to
work toward a solution and you understand what I need to see to
get that process culminated.
Mr. Pickering. Yes. Thank you, Mr. Chairman.
Mr. Strigl. Mr. Chairman, may I just respond to one point,
please?
Mr. Upton. Go ahead.
Mr. Strigl. Dr. Wells has stated that business case needs
to be done. I can only say that we did a business case and it
justified us spending $9 billion in the last auction. I think
that demonstrates the value of the spectrum and how much money
can be raised.
Mr. Upton. Thank you. Mr. Rush.
Mr. Rush. Thank you very much, Mr. Chairman. I want to ask
Mr. Knapp, first of all I want to make a statement. I want to
emphasize and re-emphasize, underline and in the most strongest
words that I could possibly express, my association with the
comments of my colleague from California, Ms. Eshoo, regarding
E-911 and the absolute necessity that it's present for the
rapid deployment, I mean 911.
I want to also say that I would ask that the FCC be very,
very mindful that any delay through the waiver process be
discouraged. This is very, very important. Last winter, a
public school teacher in my District, one of my constituents,
was kidnapped as she returned home with groceries in her car.
They kidnapped her and kept her for almost 2 days. They locked
her up in the trunk of her car. She had a cell phone. She made
two phone calls to try to get help, but nobody could help her
because they could not identify and she could not describe and
give them the location where she was at. When they found her,
she was dead. And it just further illustrated to me how
important it is to make sure that we have these location
devices so that we will be able to locate people who utilize
their cell phones for emergency calls. So I wanted you to know
that I am absolutely convinced that we need to have the rapid
deployment of E-911 available to all of our consumers and I
again want to associate myself in a most emphatic way with the
comments of my colleague from California.
I want to ask Dr. Wells, has the degradation in the 1710 to
1850 band ever reached a level where national security was
somewhat compromised? And if so, to what extent? It seems to me
like if there's millions of consumers worldwide using 1710 to
1855, it's hard to imagine that DOD has experienced only slight
degradation in this band and I would also like you to comment
on whether or not you find the statement in Mr. Wheeler's
testimony on page 3 regarding the situation in South Korea.
Would you consider that slight degradation or was that a major
incident, major occurrence there?
Mr. Wells. Let me take, for the record, the
characterization of the Korean incident, slight or major, I'll
put that in context. But we in the service have lived ever
since I was a junior officer in the Navy with spectrum
interference. It used to be in the Mediterranean that you would
always listen to the Italian taxicabs on your ship to ship
radio frequencies because they just shared frequencies. We have
been able through the years to work through this, either
through operational procedures or through host nation
agreements or in some cases changing our procedures. So again,
I will get you a characterization of this incident. I have
not--and obviously Kosovo is the recent example. We have not
seen interference at the level that it caused the military
operations to fail.
On the other hand, we have suffered fairly serious losses
in the aeronautical telemetry area by virtue of the 1710 to--by
virtue of the spectrum we've had to give up in the past when it
was redirected away from DOD. So one of the reasons why I'm
cautious in signing up the idea of international harmonization,
even though I recognize that the number of users of these cell
phones is going to grow is that up to now we have been able to
work through it. Second, there is no panacea that a single band
is going to solve all these problems, and third, that there are
other ways to address the problem, if, in fact, the
interference becomes too severe. So let me take the question on
Korea for the record and that's how I answer the other
question.
Mr. Upton. Ms. Wilson.
Ms. Wilson. Thank you, Mr. Chairman. I think and I'll have
to go back and look at the list, but I think I am the only
member of the Commerce Committee who is also a member of the
House Armed Services Committee and so I see this from both
sides and what concerns me about the interchange we saw here at
the table and some of the other pieces of testimony is that I
think we've seen evidence here and I've seen it in my one on
one briefings with members of industry and with the military, a
deep distrust of each other because your different objectives,
in some ways those objectives being directly contrary to one
another.
I don't know if it's possible to resolve this issue, but
like Mr. Pickering, I would like to see it resolved. And I'd
like to see a solution that works for everyone. But having read
a fair amount about this and then briefed on it by multiple
parties, I do see that there is a real issue and that the
migration for spectrum is not as easy as some in industry would
like it to be. It would be wonderful if with the help of
industry we could modernize and bring next generation
communications technology to our military systems and do that
on a time line that works for industry. That would be great.
Reality is, we're not going to replace those satellites that
are working in this band and we can't go up there and just
unplug the transponders and put in something new. This is more
difficult than some of the rhetoric that I've seen, not
necessarily here today, but some that I've heard in some of the
briefings and at the same time I think the military is probably
justifiably distrustful that they would ever see any of the
money that came from the spectrum auction because let's face
it, they've been messed over before. And they have reason to
distrust.
I hear a factor of 10 difference in how much money the
spectrum auction would really bring to the military, everything
from $4 billion to $40 billion just here this morning. It's a
big difference and the $4 billion end is 1 percent of 1 year of
the Defense budget. Let's not kid ourselves about this funding,
the transformation of the military. It may help in mitigating
and allowing the military to migrate to a next generation
technology. This isn't going to stop the shortage of ships.
It's not going to provide us the training that we need over the
next 10 years. It's a drop in the bucket of what the military
needs to do its job.
I don't have specific questions for you all this morning
because I've asked them mostly privately on my own. But I do
wish that we'd see a change in approach by both Defense
Department and those involved in industry. I know you want to
succeed in the market place and that you believe that what
you're doing is to the benefit of the American consumer and the
American economy, but there's another side of this too. And
likewise, if I can be of assistance to the military in easing
some of that sense of distrust and making sure that this
migration doesn't hamper our ability to protect this country, I
would be more than willing to work with Mr. Pickering and the
Chairman and others to find out what that solution is. I yield
the balance of my time.
Mr. Upton. Thank you. Ms. McCarthy.
Ms. McCarthy. Thank you, Mr. Chairman. I have three
questions for Mr. Wheeler. One is on the June 4th hearing on
911 and at that hearing I raised the question of Mr. Sugru of
the Agency. What keeps the industry from cooperating on the
technology since France has indicated it will be ready on time
and everybody else is looking at waivers, because in the end,
no matter where I am and whose systems I'm on, whether it's
Sprint or whatever, it's all got to work together. And so in
the end everybody is going to know about everybody else's
technologies because it all has to go into that main system and
come out and locate the person. So I was a little miffed today
when you talked about you wanted a dedicated solution oriented
efforts by both the Defense community and the wireless industry
on this next generation 3G, but then when Ms. Eshoo asked you
about E-911 you talked about well, we're nipping away at those
problems. I'd like you to revisit that issue with me and I
think the same dedicated effort ought to be on E-911 as I think
most everyone in the room would agree.
The other concern I have is with regard to rural America
and providing them with affordable broadband. Spring and
WorldCom have developed some MMDS technology, are working on it
and have invested $2 million for spectrum to get that
technology out to rural America as an alternative to the
wireless we now use and to try to help those people. But if the
government takes that part of the band for 3G as you advocate,
what would be the impact on rural deployment by MMDS providers
and how would you and your industry compensate companies like
Spring and WorldCom for their investment loss? And third, in
light of the FCC's decision to move forward with the auction of
C block spectrum owned by NextWave what impact will the recent
Federal court decision have on your member companies?
Mr. Wheeler. Those are three excellent questions. Let me
see if I can go through them. First of all, with regard to E-
911, I don't think I was saying that we're chipping away at the
problem. I was saying that the changing of the rules chipped
away at the solution that was already worked out. We're now in
a situation where there is a handset based solution which is
what you referenced with Sprint and there is a network based
solution and those are for units that are mobile, so I'm going
to--I may have service here in Washington, DC, roam up to your
District, expect the service and expect it from not only the
wireless carrier, but also from the 911 service provider.
Unfortunately, what we're finding is the technical issues on
the carrier side and also technical issues on the 911 provider
side so that even if the signal was provided, it is not
necessarily capable of being decoded, if you will, to determine
exactly what the address is for dispatch.
I think what we're looking at here, perhaps we're playing
with--there's a word that's getting in the way here. We've used
the word ``waiver'' a lot. There's not going to be a lifting of
the rule and again I go back and say we asked for the rule.
There's not going to be a lifting of the rule. What is being
worked out between carriers and the FCC however is a schedule
for how they will implement it, based upon their own unique
technologies and the realities that exist, so this is not it's
going to go away. This is here's the plan to deliver it and
what I hope we can also get to and the FCC has no jurisdiction
over this latter issue, but what I hope we can also get to is
the similar kind of an implementation plan on the side of the
E-911 so that when Mr. Strigl or anybody else's company goes
forward with the implementation of their plan, that their
signal won't be a tree falling in the forest and it is those
kinds of things that we have to move through. But I go back to
the point that we asked for this rule. We started. We proposed
a solution. Unfortunately, it's been changed over time. That
has inhibited the ability to deliver on it. But there is going
to be location capability tied to 911. Nobody's letting anybody
off the hook.
Insofar as your rural question----
Ms. McCarthy. My point was is that a company has figured
that already out and why can't everybody else do it?
Mr. Wheeler. Because they use one particular technology
that is tied to GPS signals and not all other carriers do. And
so there are both handset services, handset-based solutions and
network based solutions and there's actually going to have to
be a hybrid. What happens when you take that phone into an area
that doesn't have that particular technology, so there's going
to have to be a hybrid. See, the difficulty is that when the
initial rule was proposed by us and the public safety community
together, we had that worked out. Then it got changed over time
and the complexity of meeting it increased. We're working our
way through that. It's not that we're not going to, but we are
working our way through that.
Ms. McCarthy. We'd like you to work your way through on the
time table set so we can save lives. I think that was the point
of several of us this morning.
Mr. Wheeler. And I hope, Ms. McCarthy, that there is no
doubt that the wireless industry is committed to saving lives,
140,000 times a day and we are proud of that and yes, we want
to do that also.
Ms. McCarthy. I don't doubt that. I just think you have
priorities in your industry and you know, bottom line and how
the stock is doing and all of those things. Sometimes they are
a higher priority than sitting down in a room and not leaving
until you get the solution, but please answer my other two
questions.
Mr. Wheeler. You raise a really good point that we need to
address. There are strong economic incentives for location
technology. If you read any of the Wall Street analysts'
reports and they talk about the future of M-commerce, mobile
commerce, the kind of things we're talking about here, the
Internet on your handset, a large component of that is going to
be knowing where you are. You look at the Wall Street analysts
and what they say is that here's the revenue that location
information used for commercial purposes can mean to a wireless
carrier.
Believe me, they want that revenue. And there is an
economic incentive to get to your solution as great as this
public safety incentive to get to that solution and so these
are working in tandem. We wouldn't be walking away from dollars
coming in the door in this situation if there really weren't a
serious challenge technically.
Quickly on rural and MMDS, one of the things that has
always fascinated me is that wireless has been used around the
world to deliver telecommunications services to areas that have
never been able to afford them before, yet in this country we
retard them. Wireless carriers, as a result of government
policy, for the most part have a very difficult time going into
rural areas and providing the kind of high speed service that
have got to compete against companies that are subsidized,
etcetera.
There is great opportunity for wireless carriers to do in
the United States what they've done in South Africa and other
countries around the world, if we can be allowed to get there.
Now insofar as your specific question about Sprint's MMDS
spectrum, I would submit to you that if we can, eagerly, work
out with Dr. Wells, the kinds of things we've been talking
about today, then there is much less pressure on either
Sprint's MMDS spectrum or Monsignor Dempsey's MMDS spectrum and
that's what we're trying to work our way through.
Your third question insofar as Nextwave, I can only echo
what Mr. Strigl said and there is a--this spectrum--the fact
that this spectrum is off the table, if you will, is only
compounding the very problem that we're here talking about and
anything that this committee or any of you could do to urge the
parties to come to the table and settle this issue so that
spectrum is out there and being used, it will then take the
pressure off of all of us to some extent because there's 30
megahertz of spectrum that's sitting there fallow right now and
only the lawyers are using it.
Ms. McCarthy. Mr. Chairman, thank you for indulging me in
those lengthy answers and my questions. I appreciate it. I
yield back.
Mr. Upton. You are very welcome. I would note that we have
had 21 members here during all or part of the hearing this
morning. I know there are a couple of members, I know Mr.
Pickering has got a couple of questions. I would just like to
note for the record that we'll leave the record open for all
members, some of which I know said they were not able to ask
questions due to other commitments.
But let me say just Dr. Wells, it is my understanding that
a new generation of radios is being developed called the high
capacity line of sight. It's also my understanding that these
new radios will operate between 1350 and 2690 megahertz. Are
there other spectrum bands within the range other than the 1710
to 1855 megahertz to which the Pentagon's tactical radio relay
operations could be moved?
Mr. Wells. A number of the radios today can tune over a
wide range of frequencies. Some of those are denied to us for
training in the United States because those bands are not
available. So as I mentioned earlier, there are tradeoffs in
all of these between, if you increase the frequency then you're
now in line of sight, you can't get longer ranges, you get
higher data rate, you need more power. If you decrease the
frequency you can get longer ranges with lower power, but you
may not have the same kind of data rates. So there are those
kind of tradeoffs. We're developing a number of different radio
approaches and those will operate over wide bands.
Mr. Upton. How quickly are you planning to have this
installed, the line of sight system, completely operating?
Mr. Wells. Let me take that for the record, Mr. Chairman.
Mr. Upton. Do you have any cost estimates of expediting the
change over?
Mr. Wells. Expediting the change over to this new radio--
let me take that also. I do have an answer, by the way, for
your earlier question about fixed sites. DOD uses 1855 fixed
sites in the 1755 to 1850 megahertz band and that's 49 percent
of the total fixed sites in that band.
Mr. Upton. Okay. Mr. Pickering?
Mr. Wells. You asked me one thing. You asked me earlier
about the unified S-band, moving the satellites. One of the
concerns we have in that band is that we would need better
regulatory status in the band than some of the other users.
NASA, for example, is accorded priority right now after
broadcast auxiliary services. If we're going to move military
and intelligence satellites into that band, clearly they would
need adequate regulatory protection.
Mr. Wheeler. Could I just ask a clarification? 1855, how
much spectrum are we talking about? You said 1855 fixed sites,
was that the number that you used?
Mr. Wells. In various places within the 1755, I'll get
that----
Mr. Wheeler. I'm just curious. Good.
Mr. Upton. Mr. Pickering.
Mr. Pickering. Mr. Chairman, my understanding is as we
start the legislative process with this hearing today that it
is with the intent and objective of soon introducing
legislation. I would like to introduce legislation as soon as
possible, but I would like to have as broad a consensus as
possible and as broad of an input and buy in. We hope, I
believe, this fall to try to move legislation through this
committee and to a mark up and so my first question would be to
the panelists from both industry and from the agencies and DOD,
would you all be willing to work with the committee as we draft
legislation over the next month? Would everybody be willing to
come to the table in this process and let me start with Mr.
Hatch?
Mr. Hatch. Thank you and----
Mr. Pickering. You can be very brief, with just a yes or a
no.
Mr. Hatch. The answer would be yes. Obviously, we'd be glad
to work with industry, the FCC, government agencies, and the
Congress to try to help resolve how to accommodate third
generation and at the same time protect the interests of the
incumbent users. Thank you.
Mr. Pickering. Dr. Wells?
Mr. Wells. Of course, Judy will work with the committee and
we'll use--the only thing that I would ask is that there not be
a precipitous decision to sort of treat 1755 to 1850 as being
the solution and that everybody sort of march down the path.
Mr. Pickering. And Dr. Wells, let me assure you that I do
want to end this process, put everything on the table except
maybe Monsignor Dempsey's spectrum.
Mr. Knapp?
Mr. Knapp. Yes, thank you. Of course, we'd be pleased to
provide whatever help we can and we'd be more than happy to
work with you.
Mr. Pickering. I think I know your answer, Mr. Wheeler.
Mr. Wheeler. In a heartbeat.
Mr. Pickering. Dr. Wells, if you could, I believe Mr.
Wheeler has outlined some possible migration plans. Is there a
way in looking at and again, not prejudging the 1710 to 1855,
but I believe that you've identified I believe in your
testimony 130 megahertz. Is there a portion of that, is there
half of that, is there a quarter of that that we make--be able
to identify in the near term, looking at the long term issues
and what we have to do in the long term, but in the short term,
by 2004, is there some spectrum that you believe DOD could make
available? Again, with all the caveats of compatibility and
security, do you think that there's a way that we can find a
way to do so?
Mr. Wells. The 130 megahertz I mentioned was outside both
the DOD and the 2500 band, so that's commercially available
spectrum today that again, tough decisions will have to be
made. I think the FCC and NTIA have laid out the beginnings of
a thorough systematic deliberate process that will, in fact,
allow all the options to be put on the table. And if some of
those include genuine win-win options for DOD, I'm certainly
willing to consider those. So the answer is there may, in fact,
be a path. What I need to make sure of is that as part of this
integrated operational framework we don't break one thing while
we fix another. The fixed radio relays that were talked about,
perhaps that will be an option. We are certainly willing to
consider them. I only ask it be done deliberately and
considering all factors.
Mr. Pickering. Mr. Wheeler, would you like to comment on a
path or just again summarize what you think is doable from a
migration plan, finding the comparable spectrum that DOD would
need?
Mr. Wheeler. I want to also, this looks like the closing of
things, close it with the same point I made at the outset and
that is make no mistake about it. We want a strong defense. We
don't want to threaten one life of one individual in uniform.
It does appear very plain, however, that in the Department of
Defense's report, suggestions were made as to migratory paths
that were available. There are challenges in many of those, but
this committee, this Congress, the Administration, the
leadership that has already been shown by your Department and
the White House and the willingness of the industry, I think
can address those issues. We are not looking for a solution
that is a couple hundred megahertz falling from the sky
tomorrow. There needs to be a plan, a step-wise logical
progression. I think that you have outlined those in your
report and that we have, we're sitting in front of the people
who can actually make things happen in regard to some of the
solutions that you need along the way to make that transition
work.
Mr. Pickering. Mr. Chairman, thank you for your patience.
Panelists, I thank you for your participation and look
forward to working with you as we try to find a legislative
solutions to these very important objectives. Thank you.
Mr. Upton. Thank you, Mr. Pickering.
Mr. Hatch, I have just one quick other question. Are there
other sharing or segmenting options that were not studied for
the 1710 to 1850 megahertz band?
Mr. Hatch. Thank you, Mr. Chairman. There were proposed
segmenting options provided in the FCC NPRM. We considered
three options in our report. Industry has also put forward some
options, so it's all of these options and the information that
has been submitted for the record in the FCC's proceeding that
we need to now take into consideration, do a very detailed and
careful study and analysis to see what are the best options,
what are the time lines associated with those options and try
to prioritize those options as to which ones to consider and
which ones to look at in detail. I need to keep stressing that
this comparable spectrum issue is one that is going to be very
difficult for us to address and will take some cooperation and
time by all parties to look at this migration and try to find
comparable spectrum. It is not an easy task.
Thank you, Mr. Chairman.
Mr. Upton. Thank you. Again, I just want to say that other
members may have some questions for the record that we may ask
you to respond to. I want to thank all members and their staffs
for participating today and last couple of weeks as we've
prepared for this hearing and I would also say that as we look
toward the next step, we look to continued bipartisan
cooperation, working with the Administration. I'd like to think
and I've talked to Mr. Markey and had some discussions with the
Chairman Tauzin. I'd like to think that the next step will be
the introduction of some legislation, probably led by Mr.
Pickering and others, again on a bipartisan basis, particularly
as we deal with other committees that may have jurisdiction as
well, the Armed Services Committee, I don't know if they have
direct--they probably would have some referral, but my goal
would be to try to see legislation introduced some time after
we return from the Labor Day break at which point we will
schedule a legislative hearing later on, on that legislation
with the idea that we would move forward beyond that, probably
in October.
So with that again, we welcome your participation in this
very important issue, Monsignor Dempsey, particularly your role
here as well and I adjourn the hearing.
[Whereupon, at 12:15 p.m., the subcommittee was adjourned.]
[Additional material submitted for the record follows:]
Department of Defense
September 2001
Honorable Fred Upton
Chairman, Subcommittee on Telecommunications and the Internet
Committee on Energy and Commerce
U.S. House of Representatives
Washington, D.C. 20515-6115
Dear Mr. Chairman: I want to thank you for the recent invitation to
speak before your subcommittee regarding the ``U.S Deployment of Third
Generation Wireless Services: When Will It Happen and Where Will It
Happen?''. I also welcome this opportunity to provide additional
information concerning Department issues related to the potential loss
to the 1755-1850 MHz band. Enclosed are the Department's answers to the
questions you sent me on August 2, 2001.
Finding suitable spectrum for Third Generation (``3G'') Wireless
services is a challenging telecommunications issue. Industry proposes a
win-win solution--a goal that we endorse, provided it is truly a win
for our National Security as well as for Industry. However, we must be
cautious about proposals that promise uncertain future benefits to the
Department of Defense, in exchange for a firm commitment to relinquish
the Federal spectrum now. We shall continue to work with the Executive
Office of the President, Commerce Secretary Evans, Federal
Communications Commission Chairman Powell, the Congress, and other
concerned parties to help us reach the best decision for the nation and
the Defense Department.
If either my staff or I may be of further assistance to you or your
subcommittee, we would be most pleased to do so.
Sincerely,
Linton Wells
Enclosure: As stated
cc: Honorable W.J. ``Billy'' Tauzin
Honorable John D. Dingell
Honorable Edward J. Markey
QUESTIONS FOR THE RECORD
Question 1a. How much spectrum does the Pentagon's fixed point-to-
point wireless operations occupy? How many channels in the 1755-1850
MHz band do these operations use and do they share channels with any
other Pentagon operations?
Response: There are fully 595 frequency assignments (e.g.,
channels) recorded for DoD fixed point-to-point wireless operations in
the U.S. between 1755 and 1850 MHz. These point-to-point systems use
``channels'' throughout this band and use bandwidths ranging from about
1 MHz up to 40 MHz, with the vast majority using less than 4 MHz. The
fixed nature of their use, frequency engineering, and geographic
separation allow the same frequencies (channels) to be re-used for
assignments elsewhere in CONUS. Full cognizance of fixed point-to-point
receiver and transmitter equipment parameters ensures DoD frequency
management personnel are able to develop compatible frequency plans for
simultaneous operations of other systems with these fixed equipment
systems.
It should be noted that these numbers address only those DoD
systems that are physically fixed in place, as opposed to those systems
that operate in the ``Fixed Service'' but are actually transportable,
such as Tactical Radio Relay (TRR) systems.
Question 1b. What percentage of these fixed wireless operations are
non-combat or battle-related such as the Army Corps of Engineers' water
level monitoring activities?
Response: Of the assignments identified in the answer to question
1a, approximately 60% support non-combat related efforts, such as Army
Corps of Engineer (ACE) backbone communications and base administration
functions. The balance of assignments support DoD test and training
efforts whose functions have a direct bearing on combat readiness.
Question 2. Your written testimony states that the 1755-1850 MHz
band was chosen for the Pentagon's crucial operations ``because the
signals at these frequencies propagate in ways that make the spectrum
ideal for mobile communications.'' What Pentagon and other agencies'
fixed wireless operations have to be performed in this band? Why do the
fixed wireless operations have to be performed below 3 GHz?
Response: As stated in the DoD report, most, if not all, DoD non-
tactical fixed point-to-point systems could be accommodated in other
frequency bands above 3 GHz that are already allocated for this
particular type of service. Tactical radio-relay systems however, are
transportable by design, have time-to-deploy requirements, and link
establishment requirements that are best fulfilled in frequency
spectrum below 3 GHz. Mobile aircrew training and precision guided
munitions systems would face extreme technical hurdles if forced above
3 GHz because of aircraft dictated size and weight limitations that
would constrain power availability and would result in reduced
effective ranges for these systems. Antenna factors and mobility and
increased power requirements would make it very difficult to
successfully meet the performance requirements of our tactical and
training systems.
Question 3a. Is the Pentagon aware of any other bands, other than
1755-1850 MHz, that provide the propagation characteristics necessary
to the Pentagon's satellite uplink operations that either already have
enough spectrum to accommodate those operations or could have enough
spectrum if incumbent users were relocated?
Response: Yes, DoD is investigating the potential for moving these
satellite control operations (SATOPS) to what is generally referred to
as Unified S-Band (USB) at 2025-2110 MHz. There are, however,
regulatory considerations regarding priorities to be accorded the
Pentagon's satellite functions in the USB, compared to priorities of
incumbent commercial and Federal government users that must be
satisfactorily addressed in order for USB to be comparable. The risk
associated with international coordination of satellites (in terms of
priorities in the international coordination process through the
International Telecommunication Union) for use in USB is also of
concern. Furthermore, as explained in the DoD report on IMT2000,
satellite control could not be moved out of the band until
approximately 2017 or later.
Question 3b. Please provide the answer to that question for the
Pentagon's tactical radio relay operations.
Response: Tactical Radio Relay (TRR) systems have operational
requirements, including transportability, propagation range, and
foliage/building wall penetration, that are best accommodated at
frequencies below 3GHz. Three potential alternate bands (2200-2290 MHz,
4400-4490 MHz, and 7/8 GHz) were assessed and found to be unsuitable.
NTIA has stated that there are no government bands below 3 GHz to which
TRR could migrate without displacing incumbent users or creating a
crowding problem.
Question 3c. Please provide the answer to that question for the
Pentagon's air combat training operations.
Response: Three potential alternate bands (2200-2290 MHz, 4400-4490
MHz, and 7/8 GHz) were assessed and found to be unsuitable. We are not
aware of a government band that could accommodate air combat training
operations.
Question 3d. Please provide the answer to that question for the
Pentagon's precision guided missile operations.
Response: Three potential alternate bands (2200-2290 MHz, 4400-4490
MHz, and 7/8 GHz) were assessed and found to be unsuitable. We are not
aware of any other available bands that provide the same very effective
propagation characteristics to support the unique mission requirements
of our precision guided munitions (PGM) systems.
Question 4a. Your written testimony indicates that ``[v]acating or
segmenting the band is feasible, provided that comparable spectrum
could be allocated to DoD and adequate, timely, financial compensation
provided, but DoD satellite control systems could not vacate the band
before 2017 and non-space systems before 2010.'' What is the Pentagon's
definition of ``timely, financial compensation'' that support the 2017
and 2010 time-lines?
Response: To meet these timelines, funding sufficient to begin
development of the new systems would have to be provided in FY2002.
Remaining funding would be needed within the next two to three years to
enable efficient production and timely fielding of all units.
Question 4b. What if more money was provided for compensation than
the Pentagon has envisioned? Could these operations be moved more
quickly if more money was made available?
Response: No, more money would not enable significant acceleration
of the transition timelines because they are based on constraints other
than cost. In the case of satellites, the transition timeline is based
on a ``flyout strategy'': existing satellites will be replaced when
they reach end of life. It is doubtful that there is sufficient
satellite manufacturing capacity and launch capability to allow the
timeline for satellite control operations to be shortened significantly
regardless of the availability of enhanced funding. Furthermore, it
would waste billions of taxpayer dollars to prematurely retire
functioning satellites.
With regard to other systems that would require redesign, the 2010
transition timeline is based on the time needed to complete the
processes of developing and fully deploying a new system. For most
systems, this timeline could not be accelerated without adding
substantial risk to the program.
Question 5. In your written testimony, you indicate that ``DoD
believes that it is unlikely that comparable government spectrum can be
found for most of the functions presently residing in the 1755-1850 MHz
band.'' What functions are not in that ``most'' category? For what
functions can comparable spectrum be found?
Response: Recalling that, at a minimum, ``comparable spectrum''
makes reference to equivalent technical characteristics, equivalent
regulatory status, and sufficient spectrum to avoid degradation due to
interference with incumbents, it is believed that the DoD fixed point-
to-point systems could be relocated to alternate spectrum. Also, we are
investigating the feasibility of migrating the satellite control to
Unified S-Band (see the answers to Questions 3a and 9). However,
questions remain regarding the regulatory status of DoD operations
should they move to this band, compatibility with incumbent uses, and
international coordination. The FCC has not yet proposed commercial or
shared spectrum into which the DoD functions presently in the 1755-1850
MHz band could move.
Question 6. The Pentagon's report that serves as an annex to the
NTIA 3G Report on the 1755-1850 MHz band states that ``[m]ost
installations of microwave systems that employ spectrum in this band
are legacy in nature.'' What exactly does this mean? Do these systems
not use spectrum as efficiently as they could?
Response: The term legacy means that the systems have already been
fielded. It is possible that a redesign of some systems could enable
more efficient use of spectrum, but we must also consider that the
spectrum needs for some functions, such as battlefield communications,
are growing. DoD's overall spectrum requirements for mobile
communications are expected to grow by ninety percent by 2005.
Question 7. The Pentagon's report also states that ``[a]
significant amount of frequency spectrum is already allocated to the
Government on an exclusive basis for Fixed Service operations in higher
frequency ranges. The 4400 to 4990 MHz and 7125 to 7185 MHz bands are
already employed by the DoD for fixed point-to-point microwave
communications in CONUS.'' Why is it that the fixed wireless operations
currently in the 1755-1850 MHz band cannot be relocated to these bands?
Response: The fixed wireless operations in the 1755-1850 MHz
probably could be relocated to other government bands. It is also
possible that some of these operations could be outsourced, thus
enabling the use of commercial bands.
Question 8. Please explain the geographic sharing that may be
possible for fixed microwave links? The DoD Report states that
``[s]ince the microwave links tend to be in remote area, sharing does
not present a problem. For those links near population centers or IMT-
2000 systems, frequency sharing could be coordinated.'' What does this
mean?
Response: Since signal strength fades with distance, two systems
can use the same or adjacent frequencies provided they are far enough
apart. The acceptable geographic separation is related to the closeness
of the operating frequencies. In population centers where geographic
separation is impractical, 3G and fixed microwave systems might still
be able to share through coordinating time of use, as well as through
coordinating frequency assignments.
Question 9. The DoD Report states that the ``S-band offers physical
advantages for TT&C [tracking, telemetry, and control] operations,
particularly in the areas of launch, early orbit, and anomaly
resolution.'' The report also states that ``[g]iven the current
implementation, S-band is uniquely suited for conducting critical, non-
routine SATOPS functions.'' Given these conclusions, is the Pentagon
doing everything it can to ensure that as many satellite operations are
moved to the S-band as quickly as possible? What impediments stand in
the way of moving all of these operations to the S-band?
Response: The area of the spectrum commonly referred to as ``S-
band'' extends from 1550 to 3900 MHz. It encompasses both the current
satellite control band of 1755-1850 MHz and the ``Unified S-band'' from
2025-2110 MHz. The unique and desirable performance features of ``S-
Band'' described in the DoD Report apply to both of these bands.
Question 10a. DOD engineers argue that emissions from commercial
use would extend so high in the sky over a city or area where its
commercial use is deployed that [any] satellite uplink would have to be
at least 250 kilometers away, or risk interference. Industry engineers
argue that commercial wireless antennas direct their emissions towards
the ground (where customers use the service) so, the interference would
not extend so high into the sky. Please explain the reason for the
disparity in the conclusions of the engineers?
Response: This question addresses two interference issues. The
first is interference from DoD satellite ground terminals to 3G phones.
DoD studies predicted that SATOPS emissions could cause interference to
ground based 3G receivers up to 350 km away. Industry does not dispute
this analysis. The other issue refers to the potential for interference
from 3G base station emissions to the DoD SATOPS receivers on orbiting
satellites. The differing conclusions regarding the interference to
satellite receivers are based on differing assumptions about the
antenna pattern.
Question 10b. What process will you follow to determine which set
of engineers is right?
Response: DoD and industry engineers are in discussion to resolve
the difference if possible. DoD analyses must be based on appropriately
conservative assumptions to ensure adequate control is maintained of
priceless space assets.
Question 10c. What is the time-frame for resolving this dispute?
When will we have a definitive answer to technical question surrounding
this issue?
Response: We look forward to expeditiously closing this point of
misunderstanding of the risks to our SATOPS capabilities.
Question 11. It is my understanding that the Army has already begun
to experience problems in Europe with the Army Mobile Subscriber
Equipment (MSE) and the Tri-Services Tactical Communications (TRI-TAC).
Can you please explain the nature of this problem and what is being
done to overcome it?
Response: The problem experienced in Europe relates to the need for
tuning flexibility to achieve both radio transmit/receive frequency
separation and collocated system frequency separation. The Army employs
the Mobile Subscriber Equipment (MSE) system regularly in Europe and is
able to support both operations and training missions through proper
frequency assignment coordination procedures, though large networks of
multiple systems are challenging to support with available frequency
assignments. The Army is acquiring the High Capacity Line of Sight
(HCLOS) radio system that has significantly increased tuning
flexibility to address the increased complexity of frequency
separation.
Question 12. It is my understanding that a new generation of radios
is being developed called High Capacity Line of Sight (HCLOS). It is
also my understanding that these new radios will operate between 1350-
2690 MHz. Are there other spectrum bands within this range other than
1710-1850 MHz to which the Pentagon's tactical radio relay operations
could be moved? In your answer, what assumptions are you making about
the spectrum capacity needs of these operations?
Response: NTIA has stated that there are no other government bands
to which TRR could be moved, regardless of tuning capability. Like MSE,
HCLOS requires a separation of at least 60-70 MHz between transmit and
receive frequencies with sufficient total capacity (at least current
allocation) to meet rapidly growing information transfer requirements.
The 1710-1850 MHz band provides the single largest block of contiguous
spectrum available to the DoD for support of tactical radio operations.
This large spectrum block is critical to being able to employ system
tuning flexibility for required frequency separation of transmit/
receive links and collocated system operations. It should be noted that
one of the main reasons for acquiring the High Capacity Line of Sight
(HCLOS) radio system is to significantly expand tactical network
capacity. This will be accomplished by the HCLOS radio being able to
support much higher data rates than the current MSE systems. We firmly
believe that spectrum requirements to support the Army battlefield
networks in the future will be significantly greater than the needs of
today.
Question 13a. When is the HCLOS system slated to be installed and
fully operating?
Response: About five percent of the systems have been fielded to
date. Fielding will continue beyond FY 2009. The Navy and Marine Corps
have not programmed for HCLOS or another system to meet their TRR
requirements if access to the 1755-1850 MHz band is lost.
Question 13b. Is there any way to expedite the full installation
and operation of the HCLOS system?
Response: For Army requirements, yes. The current contract for the
HCLOS system has options and range quantities that would permit the
accelerated procurement and fielding of radio systems. This would not
address Navy and Marine Corps requirements, however.
Question 13c. Do you have any cost estimates of expediting the
change over?
Response: For the Army, yes. Fielding could be accelerated by two
years at a cost of an additional $243M over funding currently budgeted
between FY 02 and FY 06.
Question 13d. What can be done in the interim? Is there a mutually
agreeable temporary solution?
Response: There is no mutually agreed temporary solution to
accommodating 3G in the 1755-1850 MHz band prior to relocation of TRR
and other DoD systems. The DoD report found that sharing of the band
would not be feasible.
Question 14. It is my understanding that Secretary's Rumsfeld
``bottom-up review'' will recommend that significant changes be made in
DoD's spectrum management responsibilities. I understand that these
changes will be radical in some respects. What are the recommended
changes and when will they take effect?
Response: We are strengthening spectrum management at the OSD level
and within the Defense Information Systems Agency. The Joint Staff is
leading a study to address other changes to spectrum management
responsibilities.
Question 15. How much spectrum (in megahertz) would be required for
a new Joint Tactical Combat Telemetry [sic] System (JTCTS)? Are the
spectrum requirements over land different from requirements over water?
Response: The JTCTS program is being restructured. However, based
on the most recent design and assuming 20 MHz guard bands, land-locked
sites would require about 60 MHz and littoral sites about 95 MHz.
Question 16. When will JTCTS be operational?
Response: Full operational capability of JTCTS and replacement of
existing training systems that use the 1755-1850 MHz band is not
envisioned until well after the 2010 timeframe. Acceleration to earlier
than 2010 would be problematic.
Question 17. What reason(s) would the Department of Defense have
for not migrating to the JTCTS?
Response: The DoD intends to migrate to JTCTS.
Question 18. What bands, other than the 1755-1850 MHz band, could
the JTCTS operate in?
Response: The JTCTS could be designed to operate in any band from
138-2400 MHz predicated on allocation of sufficient bandwidth,
regulatory action to give Government airborne mobile service
appropriate regulatory status, and incumbent user relocation.
Question 19. Could the JTCTS operate in a guardband in the 1755-
1850 MHz band if advanced commercial mobile radio services operated in
the 1755-1850 MHz band?
Response: Not without providing unacceptable limitations on
littoral range operations.
Question 20. Has the equipment for JTCTS already been designed
specifically and exclusively for the 1755-1850 MHz band?
Response: The datalink developed under the E&MD effort was
specifically designed for the 1755-1850 MHz band but this effort was
halted.
Question 21. Are there other sharing or segmenting options for the
1710-1850 MHz band that were not studied by the Department of Commerce
and the Department of Defense that would protect current Department of
Defense operations in that band against interference while permitting
3G services to operate in that band as well?
Response: The DoD report examined the feasibility of full band
sharing and partial band sharing or segmentation. It was determined
full band sharing was not possible from a DoD standpoint or an industry
standpoint, that interference to either DoD or IMT-2000 systems in the
band would be unacceptable. Two partial sharing/segmentation options
were also examined and determined to be not feasible. Our study shows
any sharing option is not feasible. Alternate segmentation options may
vary in terms of which and how many systems may be impacted. However,
all options likely will require comparable spectrum as well as cost
reimbursement and the adherence to timelines similar to those for full
vacation of the band.
The NTIA report found that FCC's, `Out-of-Band Pairing & Band
Unrestricted Operation', proposal in the 3G NPRM, which pairs the 2110-
2150 MHz and 2160-2165 MHz bands with spectrum in the 2500-2690 MHz
band, would result in no impact to Federal users. NTIA also believes
that the Commission's proposal to pair the 1710-1755 MHz with the 2110-
2150 MHz and 2160-2165 MHz bands could be a viable option.