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Remarks of Assistant Secretary Rohde at Department of Commerce Industry Outreach Meeting on Advanced Wireless Communications Systems

Proposed Rules on Mandatory Reimbursement
January 17, 2001

Remarks of Assistant Secretary Gregory L. Rohde
Department of Commerce Industry Outreach Meeting
Advanced Wireless Communications Systems
January 17, 2001

Announcement of Proposed Rules on Mandatory Reimbursement

Since President Clinton signed the historic Executive Memorandum in October 2000 directing the Commerce Department to lead an inter-agency coordination process and industry outreach effort, the Secretary has issued a Third Generation (3G) spectrum development plan that charts out an aggressive schedule to promote the development of broadband wireless communications systems. In accordance with that plan, NTIA and the Federal Communications Commission (FCC) have issued interim reports on two candidate spectrum bands which are subject to potential reallocation for 3G services.

Also, the FCC, after coordination with NTIA, issued an NPRM on 3G wireless services earlier this month. In addition, NTIA has held several public meetings which have provided beneficial input to each of the government agencies involved in the Administration's initiative to develop advanced wireless services. This gathering is the latest in that series.

Before we get started with today's agenda, I want to announce a Notice of Proposed Rulemaking (NPRM) which suggests procedures under which Federal agencies will be reimbursed for the costs of moving out of spectrum reallocated for private sector use. NTIA will soon publish the notice in the Federal Register, possibly as early as tomorrow (Thursday).

The rules are obviously important in the 3G context because one of the spectrum bands designated for study is occupied by Federal users. The reimbursement rules will come into play if that band, 1755-1850 MHz is reallocated for 3G and if Federal users are required to modify their systems as a result. The rules are not limited to 3G. They will apply whenever Federal users must leave or modify their systems as a result of having their spectrum assigned to the private sector.

These proposed rules touch on a number of important subjects. They propose definitions for which costs are eligible for reimbursement, and suggest a dispute resolution system that includes negotiation, mediation and arbitration. They propose a means for determining how to define a facility that will be comparable to what Federal users would have to give up. The text of the proposed rule will be posted at later today. The NPRM is modeled after the FCC's reimbursement procedures, so many of the procedures will resemble the procedures used in the PCS auctions.

Although this rule making was required under legislation enacted in 1999, these procedures will play a role in the 3G initiative should this process result in any reallocation of Federal spectrum. Congress wrote into the Defense Department authorization law of 1999 the requirement that the government must be compensated fro the cost of relocating as a result of reallocation. These rules implement that requirement.

Frequencies reallocated under the budget bills of 1993 and 1997, when Congress required spectrum to be transferred from Federal users to the FCC for auction to the private sector will also be subject to the reimbursement rules. Some of that spectrum has not yet been auctioned.

The bands designed in this proposed rule for reimbursement are: the1710-1755 MHz band from the1993 law, and the 216-220, 1432-1435 and 2395-2390 bands from the 1997 law. On November 20, 2000, the FCC released a Notice of Proposed Rule making for the 27 MHz in those bands.

The NPRM establishes a 60-day comment period, and a 30-day reply-comment period. NTIA will issue a final rule later this year. Although the spectrum plan published pursuant to the Executive Memorandum did not include discussion of this mandatory reimbursement rule making, it is important that industry work with NTIA and provide comments on the reimbursement procedures outlined in this NPRM, since these rules may play a major role in the fruition of the process.

The development of 3rd Generation Wireless is one of the most critical communications and e-commerce issues facing the United States the next couple of decades. At stake are our international competitiveness and our ability to lead the world in the communications systems of the future. The only way that we will continue to make progress in achieving our goals to develop 3G and to meet the deadlines specified in the spectrum plan is for the private sector to work closely with NTIA and other Federal agencies.

I am very grateful for your dedication and participation in this process to date and I hope that we can continue moving ahead.

Thank you.