[Congressional Record Volume 142, Number 34 (Wednesday, March 13, 1996)]
[Senate]
[Pages S2000-S2003]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TELECOMMUNICATIONS

  Mr. PRESSLER. Mr. President, the Telecommunications Act of 1996, 
which passed on February 1 and was signed into law February 8, is only 
the first step in my reform agenda for national telecommunications 
policy. As comprehensive as the new Telecommunications Act is, there 
are a number of profile and policy issues we were not able to 
adequately address, which need our attention.
  Over the coming months, the Commerce Committee will be examining the 
Federal Communication Commission's regulatory structure. The key issue 
is whether the FCC, a regulatory agency devised in the 1930's, based on 
the ICC model from the turn of the last century, makes sense today as 
we prepare for the 21st century. We also need to ensure that 
Federal regulation does not become a roadblock to the deregulatory 
policy changes engineered by the Congress with enactment of the 
Telecommunications Act of 1996.

  We also will move forward with national spectrum policy reform. I 
plan to chair four Commerce Committee hearings on spectrum policy 
reform, covering a broad range of issues concerning the management of 
the electromagnetic radio frequency spectrum. Although the issue of the 
broadcast advanced television spectrum captured headlines, there are a 
number of spectrum policy reform issues we need to address that are far 
more important. I intend to move the spectrum policy debate firmly back 
on the ground to the communications policy rather than the budgetary 
process which, to date, unfortunately, has dictated the terms of the 
spectrum reform debate.
  Mr. President, the electromagnetic radio frequency spectrum is an 
important physical phenomenon--a natural, national resource. An 
increasing number of telecommunications enterprises depend on access to 
this resource. These enterprises include radio and television 
broadcasting, communications satellites, the complex air-to-ground 
systems needed to manage aviation, the wireless systems upon which law 
enforcement and public safety depend, and the burgeoning mobile radio 
telephone business--cellular phones and personal communications 
services [PCS].

  Simply put, the spectrum is to the information age what oil and steel 
were to the industrial age.
  Today, there is a limited supply of available spectrum and an almost 
limitless demand for its use. In other words, the spectrum is an 
enormously valuable yet finite natural resource. This is the crux of 
the problem with our current spectrum policy structure. Unless a 
reformation plan is developed that will create a more effective and 
efficient use of the spectrum, as well as a more stable supply of 
spectrum for private sector use, a vast array of new spectrum-based 
products, services, and technologies will go unrealized for the 
American people.
  This is particularly disheartening when one considers the benefits 
that are derived from current spectrum-based technology. For example, 
direct broadcast satellite [DBS] has become a viable competitor to 
cable. High powered DBS satellites have the ability to process and 
transmit as many as 216 video and audio channels simultaneously.
  Cellular is another spectrum-based technology that is worth 
mentioning. In 1962, AT&T was operating its first experimental cellular 
telephone system. It was not until 20 years later that the first 
cellular licenses were handed out. Today, the cellular industry 
generates about $14.2 billion in revenues a year and provides service 
to nearly 35 million customers.
  From its very beginning, wireless communication has played a vital 
role in protecting lives and property and, subsequently, through the 
development of radio and television broadcasting, in delivering 
information and entertainment programming to the public at large. More 
recently, wireless, spectrum-based telecommunications services, 
products and technologies have proven to be indispensable enablers and 
drivers of productivity and economic growth, as well as international 
competitiveness.
  Wireless technology can deliver telecommunications and information 
services directly: First, to individuals on the move, away from the 
office desk or factory floor, thereby increasing their personal 
productivity; and second, to fixed locations that cannot be served 
economically by wireless facilities because of physical infeasibility 
or prohibitively high costs. Wireless services are also critically 
important in bringing competition to the wireline telephone network, 
one of the key goals of the Telecommunications Act.
  The use of this economic resource is largely determined through 
administrative licensing procedures first developed in the 1920's. 
Compared to that of most other countries, the U.S. spectrum management 
system allows for a broad degree of private sector involvement in 
spectrum. Yet, the system still involves a large degree of central 
government planning by federal regulators.
  To a large extent, it is electromagnetic industrial policy.
  The FCC must determine which services should be provided, the 
frequencies on which they will be provided, the conditions under which 
they will be provided, and often the specific technology to be used.
  As with other systems of central planning, the spectrum management 
system currently utilized in the U.S. tends to result in inefficient 
use of the spectrum resource. Federal regulators--rather than 
consumers--decide whether taxis, telephone service, broadcasters, or 
foresters are in greatest need of spectrum. It is a highly politicized 
process. Most importantly, new services, products and technologies are 
delayed or, worse yet, denied. This obviously harms consumers.
  It typically takes years to get a new service approved by the FCC. 
The lengthy delay in making cellular telephone service available, noted 
earlier, imposed tremendous cost on the economy. One study estimated 
that the delay cost the economy $86 billion. As important, American 
consumers were denied a new productivity and security tool for many 
years.
  Equally troubling, the system constrains competition. One of the most

[[Page S2001]]

important determinants of a competitive industry is the ability of new 
firms to enter the business. The bureaucratic allocation process 
typically provides for a set number of licenses for each service, 
precluding additional competitors. Only two cellular franchises, for 
instance, are allowed in each market.
  These problems have long been the focus of criticisms by economists 
and other expert analysts. Changes in new communications technologies, 
especially the digitization phenomenon, are making the system even more 
unworkable. New wireless communications technologies, services and 
products are being developed at an accelerated rate. Even if the FCC 
were able to weigh accurately the needs and merits of the relatively 
few spectrum-based services that existed in the 1930's, it is simply 
not able to do so today. Even if it could, the lengthy delays 
associated with the allocation and assignment processes, while perhaps 
acceptable in a slow changing world, are seriously out of step with the 
fast-changing world of today.
  Pressures on the traditional radio frequency management structure are 
increasing. This is because demand for channels is outstripping supply. 
Some of the major issues which have arisen in recent years include:


                             government use

  Many believe the Federal Government occupies too much of the radio 
spectrum resource today. They argue for reducing the government 
spectrum inventory in order to get this resource into the hands of the 
private sector where they believe it will be used more effectively and 
efficiently. Some also contend the traditional division of 
responsibilities between the FCC and NTIA is obsolete. Establishing a 
single radio spectrum manager for the United States, they argue, would 
be a significant improvement. Still others see the Government spectrum 
inventory as a potential source of revenues. They argue that the 
Government should be required to relinquish frequencies which could 
then be auctioned. They believe spectrum auctions would return billions 
of dollars to the Treasury.


                          spectrum flexibility

  Many contend the Government should liberalize rules governing use of 
the spectrum. The prevailing radio frequency management system limits 
the uses that can be made of particular bands and channels. The 
channels allocated to broadcasting and assigned to broadcast stations 
thus cannot legally be used for cellular phone service today. Many of 
these frequency use limitations are grounded on traditional analog 
radio transmission technology. Many engineers and technical experts 
contend that the trend toward digital transmission renders these 
traditional limitations on channel use obsolete. Organizations 
including the Progress & Freedom Foundation have argued in favor of 
according frequency users broad flexibility to use their channels as 
they choose, subject to a no-interference requirement. Such a change 
would greatly empower individual licensees. It would also eliminate the 
scarcity of radio channels upon which much government regulation is now 
based.


                        self-managed regulation

  At present, the FCC controls which entities receive licenses and what 
they can do with them. Much of the radio frequency engineering 
associated with this regulatory system is conducted by the FCC in-
house.
  In some instances, the FCC has delegated some of its engineering and 
routine licensing functions to user cooperatives called frequency 
coordinator groups. Legislation passed by Congress in 1981 authorized 
this approach. Some believe the FCC should expand this approach to 
encompass virtually all radio-based communications. This would reduce 
the administrative burden on the agency, they maintain, while speeding 
up the overall process. Some have suggested that the FCC should make 
block grants of the spectrum to the States. Governors could then 
apportion channels among various State law enforcement, public service, 
and other users. This also would significantly reduce FCC costs, they 
argue, and could ensure more responsive frequency management.
  The radio frequency management and use reforms outlined above hold 
significant promise. None represent a truly fundamental change in 
Federal policy. All would reduce regulatory burdens while fostering 
important public policies including advances in technology and 
innovation, greater choice and more customer options, and more 
effective, efficient, and responsive use of this resource.


           a spectrum policy reform proposal--government use

  Several approaches have been advanced which, if adopted, would 
significantly improve the effectiveness and efficiency of Federal use 
of the radio frequency spectrum, and with no discernible adverse impact 
on the performance of the many Federal programs that now rely heavily 
on radiocommunications.
  First, legislation should build on the 1993 Omnibus Budget 
Reconciliation law, which directed the Government within a specified 
period of time to relinquish control over a predetermined amount of 
radio frequency spectrum. This spectrum has been retroceded, in part, 
and should prove the basis for a variety of new private sector 
communications offerings.
  Now, legislation requiring the Government to privatize a set 
percentage of its spectrum--20 to 25 percent--makes sense. A special 
temporary congressional commission could be established to carry out 
this task much like the Base Realignment and Closures Commission 
[BRAC]. Congress also has created special or temporary commissions in 
the past to examine problems like the 1981 temporary Commission on 
Alternative Financing for Public Telecommunications.
  Mr. President, the proposal here is that there would be either the 
Base Closure Commission or something like it to look at the spectrum 
that the Defense Department and the CIA has to see if that could not be 
released in part or shared in part as new technology develops. Indeed, 
one of our hearings that we are going to hold in the Commerce Committee 
will be an off-the-record hearing on that subject. We certainly want 
our national defense to meet its requirements with spectrum, but we 
need to take a look at it. It may well take an extension of the Base 
Realignment and Closure Commission to look at the spectrum that the 
military has.
  If enacted, this initiative would have several positive consequences. 
To begin with, it would give Federal agencies a powerful incentive to 
modernize their communications facilities--to derive more 
communications capacity from the same or less channel bandwidth. 
Reducing the amount of spectrum used by Government would also create a 
powerful economic engine that could help drive the deployment of common 
user wireless communications systems generally.
  At present, there are a number of private sector alternatives to the 
Government providing its own radio communications. These include 
cellular radiotelephones as well as the new PCS services which are 
developing nationwide. As cellular radio moves from the conventional 
analog to more advanced digital transmission techniques, the number of 
cellular channels--system capacity--may increase by five- or six-fold.
  That is important to repeat. As cellular radio moves from the 
conventional analog to more advanced digital transmission techniques, 
the number of cellular channels--system capacity--may increase by five- 
or six-fold. In other words, we may have five or six times as much 
capacity on some of the same spectrum. Do not let me overstate this 
matter because that is only true of certain types of spectrum. But we 
may have five or six times as much use of that same band of beachfront 
spectrum in some instances.
  That large-capacity increase, plus the proliferation of additional 
wireless systems, hold the promise of significantly lower customer 
costs. Such costs could be even lower, if the volume of communications 
handled by these wireless systems grows. Here, as in other cases, cost 
per message, and thus price to users, is highly dependent upon volume.
  Not all Government radio communications requirements can necessarily 
be fully satisfied by private-sector commercial mobile service [CMS] 
providers. Through the standard Government procurement process, 
however, agencies could negotiate with CMS providers for special 
services and capabilities. There is little reason to assume, at this 
time, that an effectively competitive wireless communications business 
could not adequately meet

[[Page S2002]]

many Government radio communications requirements. In the final 
analysis, the cost to the Government of relying on private sector 
supplies would be lower than the posted price because of the private 
sector's tax liabilities.
  Second, legislation should be passed to consolidate U.S. frequency 
management responsibilities under the FCC. The current practice of 
splitting functions between the FCC and NTIA is a historical 
anachronism. The frequency management functions of NTIA, together with 
the IRAC Secretariat and associated support activities--including 
NTIA's electromagnetic compatibility analysis operations--should be 
transferred to the FCC. In order to take into account critical national 
defense, law enforcement, and security concerns, the law should provide 
for limited review of FCC decisions on Federal frequency management by 
the President or his designee. At present, NTIA frequency allocation 
decisions are reviewable by the Director of the Office of Management 
and Budget, acting pursuant to delegation from the President. No appeal 
from an NTIA frequency decision apparently has ever been taken.
  Such a consolidation makes sense. The FCC's engineering and routine 
radio frequency management chores can, for the most part, be assumed by 
private sector frequency coordinator groups. As Government users 
increasingly rely on the private sector to meet communications needs, 
and the dimensions of the Government change as well, the NTIA workload 
is likely to shrink as well. It makes little sense for taxpayers to 
fund two separate, Federal agencies both responsible for the effective 
and efficient use of the same resource.


                          Spectrum Flexibility

  Radio frequency management traditionally has limited the permissible 
uses of allocated bands and assigned channels. This, in part, has been 
a function of technology, as well as the technical characteristics 
associated with particular frequencies.
  For example, channels allocated to the Forest Products Service have 
traditionally been quite low frequencies, because those frequencies 
have been shown to have the greatest ability to penetrate underbrush, 
leaves, etc. In general, the higher the frequency range, the more the 
transmission resembles visible light in terms of the phenomena that 
cause interference. Hence, at very high frequency ranges, fog, air 
pollution, and rain cause interference which would not arise if lower 
frequencies were used. New digital communications technologies, 
however, lessen this challenge. This is because digital technology 
includes error correction and other features which lessen interference.
  ``Spread spectrum'' and ``digital overlay'' techniques make it 
possible for multiple communications pathways to be established within 
the same radio frequency channel. Using this technology, broadcasters 
could transmit other communications in addition to video and sound 
signals. Radio broadcast channels today already are providing local 
links for paging operations.
  Government policy should encourage multiple, more intensive use of 
radio frequency resources where there is no perceptible adverse 
technical impact. Among other things, allowing radio frequency 
licensees greater flexibility could facilitate equipment and systems 
modernization and upgrading. For example, many public safety 
communications systems today are in need of modernization, to meet the 
demand for more cost-effective and responsive law enforcement, fire 
safety, and emergency medical services. The financial resources 
available to many public safety communications organizations are 
limited today, however, as a consequence of the fiscal austerity 
imperatives arising at virtually all levels of government.
  If local police forces were permitted greater flexibility in use of 
their channels, however, this challenge would be less severe. Switching 
to new digital communications techniques typically achieves a 
significant increase in the total number of channels available--in some 
cases, by a factor of four or more. A local police department, 
therefore, could increase the number of channels available to support 
its operations and, at the same time, have capacity available which it 
could lease or barter with private communications organizations. Such 
arrangements could generate the funds needed to finance modernization. 
Greater flexibility is a public interest win-win situation--an option 
that benefits all involved and affords the general public both better 
service and more communications options.
  The FCC and NTIA have already taken steps to allow some radio 
licensees more flexible use. The FCC's cellular radiotelephone rules, 
for example, place few constraints on permissible communications. The 
same is true in the case of the new PCS services. What is needed, 
however, is far greater application of this fundamental principle of 
flexible spectrum use.


                        self-managed regulation

  One of the more promising options for radio frequency management 
reform is expanded use of self-managed regulation--the use of private 
sector radio frequency coordinator groups to handle routine 
engineering, frequency coordination, and other functions which, in the 
past, had typically been undertaken by FCC staff.
  At present, the FCC relies on frequency coordinators to handle many 
of the routine chores associated with private mobile radio systems. 
Organizations such as the National Association of Business & 
Educational Radio [NABER], the Associated Public-Safety Communications 
Officers [APCO], and the Special Industrial Radio Service Association 
[SIRSA] process applications, conduct engineering surveys, and 
otherwise facilitate licensing and channel usage in these specific 
private radio services. The FCC does not generally rely on frequency 
coordinators, however, with regard to broadcast services, satellite 
communications, and other large frequency-using services.
  The task of being a frequency coordinator depends, in large part, 
upon access to computerized data bases, and having some radio frequency 
engineering expertise. Access to data bases today, of course, is 
routine. The number of individuals with substantial radio frequency 
management expertise is growing, moreover, in part because of Federal 
Government, and Defense Agency, downsizing. There is, in short, no good 
reason to assume that multiple frequency coordinators could not be 
sanctioned by the FCC. This would have the effect of broadening user's 
options. Competition among and between frequency coordinator groups, 
moreover, should have the effect of ensuring efficient charges and 
effective, responsive operations. That has been true in virtually every 
market where competition has been introduced, and should prove true in 
this case as well. The FCC should be directed to expand substantially 
the Agency's use of private sector frequency coordinator groups.
  Let me say something about the public safety spectrum and begin to 
conclude by saying, at this time, the FCC should be directed to assess 
the feasibility and desirability of making some spectrum block grants 
to States. In lieu of processing, issuing, and renewing tens of 
thousands of public safety communications licenses--at significant cost 
to licensees, as well as the FCC--the agency would issue 55 block 
grants to the chief executive officer of each State, including Guam, 
Puerto Rico, the U.S. Virgin Islands, and the District of Columbia. It 
would then be the responsibility of State Governors to determine 
eligibility, to ensure compliance with standard FCC--and other--
operating rules, and to resolve disputes among public safety licensees 
within the jurisdiction.
  This would reduce delays and heighten responsiveness to actual user 
requirements, while also lessening substantially the burdens of 
traditional regulation now borne by the FCC. Most importantly, it would 
tend to ensure more and better public safety communications for State 
residents. Again, while States today have substantial radio frequency 
engineering expertise, such expertise is readily available in the 
competitive marketplace.
  In conclusion, the radio frequency management and use reforms 
outlined above hold significant promise. All would reduce regulatory 
burdens while fostering important public policies including advances in 
technology and innovation, greater choice and more customer options, 
and more effective, efficient, and responsive use of this valuable 
national resource. I look forward to receiving comment on these and 
other spectrum reform proposals as part of our comprehensive hearing 
process in the Commerce Committee.

[[Page S2003]]

  Mr. President, as I look about the Chamber and in the galleries, I 
feel as I did some months ago. I addressed our State Chamber of 
Commerce. I was our last speaker after a whole series of speakers. 
Toward the end of my speech I noticed everyone was nodding their heads. 
Either they agreed with me or they were falling asleep.
  I thank my colleagues for letting me make this speech on spectrum 
management policy. Some of my basic thinking is we need to take a new 
look at this spectrum. It is a national natural resource. We need to 
look at what the Government has and what private areas have. We need to 
look at what the broadcasters have; if they are going to migrate, if we 
are sure we are going to auction what they migrate from.
  We have to look at giving authority to the States. If we find that 
there is more spectrum to use, we need to consider the possibility of 
auctioning it or, if it is used for public use, letting some of the 
State Governors decide how to allocate it rather than have it be 
allocated here within the beltway.
  Those are some things we need to think about.

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