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Remarks of Deputy Assistant Secretary Gallagher at the Center for Strategic and International Studies Second Meeting of the Commission on Spectrum Management

Keynote Luncheon Address by
Deputy Assistant Secretary Michael D. Gallagher
National Telecommunications
and Information Administration
United States Department of Commerce

As prepared for delivery to the

Center for Strategic and International Studies
Second Meeting of the Commission on Spectrum Management
Washington, D.C.
July 8, 2002

I. Introduction

Thank you for inviting me to talk today on the very important and timely work of improving spectrum management. This second meeting of the CSIS commission is addressing the need for meaningful change in approaches to spectrum management. It is not, of course, a simple task. For one thing, spectrum management is an inherently technical and complex undertaking. For the uninitiated, it may be difficult to distinguish a megahertz from a mid-size Hertz rental car, a Blue Tooth from a Sabre Tooth or Ultrawideband from a jazz band. Technology improves so fast and so often that meaningful advances can be overlooked. Last month, for example, I saw something that could have been confused for a component in the most basic of all telecommunications technology, two tin cans connected by a string. It is a website that instructs you on how to create a Wi-Fi antenna that projects nearly 11 miles out of a Pringles can and $6 worth of common materials.

That said, technology advancements do not equal regulatory advancements. Today there are urgent issues facing government decisionmakers, which were summed up by a presidential policy board examining spectrum management as:


The development of so valuable a resource as the radio spectrum is a matter of paramount importance. Despite technical and operational improvements the demand for frequencies has steadily crowded the supply within the usable spectrum. The use of this resource should have the most careful planning and administration within the United States and in cooperation with other countries. Unfortunately, guidance and administration have often been inadequate.

You say you didn't know that the President had a communications policy board or that it issued its report? It was 51 years ago, and the President was Harry Truman. Seventeen years later, another presidential task force also addressed spectrum management issues. The "Rostow Report" of late 1968 observed the "remarkable" growth in spectrum use and resulting problems, including congestion in public safety bands. It noted inefficiencies caused by an inflexible block allocation system and the government/non-government split of authority. The report called for greater use of economic factors, and, echoing a Commerce Department advisory board report on "The Silent Crisis" of spectrum management, cautiously raised the idea of a market system and possible license fees bearing a reasonable relationship to the amount of spectrum used. The General Accounting Office offered its own report in the 70s, which also covered very familiar ground. Another seventeen years later, NTIA's own comprehensive review of spectrum management explored options for reforming spectrum management.

These and many other reports have been invaluable in identifying the problems in spectrum management. We have seen many improvements in both the technology and regulation of spectrum over time, but some of the same questions are still with us generations later. This NTIA will not be adding to the country's collection of coffee table books. It's time to act.

The changes we're talking about today are the legal, institutional and procedural changes that we all expect will lead to a dramatic improvement in spectrum management and in the efficiency of spectrum use. We approach this challenge primed with hope. All of us in the government and in the spectrum user community need to work hard, try new things, innovate, and work cooperatively. Importantly, solutions will require vision and leadership. At times there will be tradeoffs that come of competing yet valid needs and goals. The challenge of leadership and management is not to choose between two competing goals--rather, it is to drive to accomplish both. Getting it right on many goals is hard. That is our challenge.

NTIA is up to the task. As many of you know, NTIA rides two spectrum horses. It is responsible for management of the Federal Government's own spectrum use. More broadly, however, it serves within the Department of Commerce as the President's principal advisor on telecommunications. In those capacities we have worked with the Federal Communications Commission and the State Department on many challenging issues, including Third Generation wireless, Ultrawideband, and preparation for next year's WRC. Moreover, within NTIA, we have one of the world's leading telecommunications research laboratories located in Boulder, Colorado -- the Institute for Telecommunication Sciences (or ITS). ITS is NTIA's chief research and engineering arm, but it also serves as a principal federal resource for resolving the telecommunications concerns of other federal agencies, state and local governments, and private associations and organizations.

For the next few minutes, I'd like to talk some about some of the ideas that have been presented for spectrum management improvement, about some of the things NTIA has done so far to make improvements and to advance the debate on spectrum management, and some of the things we're looking into right now.

II. The Academics' Proposals For Major Change

Spectrum management is all about efficiency. In order for radiocommunications to best serve all of us, there must be enough available to those services, public and private, that we value and need. Given that most of the spectrum is occupied already, albeit more heavily in some geographical areas than others, a large part of the problem is figuring out how to make spectrum use more efficient and whether and how to make encumbered spectrum available new uses.

The traditional way to address these issues, as the Truman-era report seems to assume, is through government planning and oversight -- the "command and control" approach. Surely, there is a continued need for planning and government involvement. At the same time, there has been a movement, nurtured by academic theorists, to move towards the market-based system that the Rostow report so gingerly raised. A few years ago a free-market oriented organization proposed that the FCC auction off all of the spectrum and call it a day. (For the record, I'm not proposing that today.) That report shows the other end of the scale of how to address issues using these theories. In between have been proposals great and small. Some have been adopted with success by the FCC: competitive bidding (or auctions) adopted and used by the FCC for assigning licenses, and flexibility for many commercial licenses, including PCS services. Today, many call for us to grant greater rights to users, such as to lease or trade all or part of the assigned rights, or would like to see fees on commercial, even government users, based on the amount of spectrum used as is being done or proposed in other countries. What these proposals have in common is the notion that there is a quantifiable value in spectrum rights that can be measured and used to provide incentives for greater efficiency.

Coinciding challenges have put visible stress and strain on spectrum management. One challenge is the ever evolving technology advances that offer great new services, but need more spectrum. Threats to security and safety pose another challenge. We live in a time when we need to devote more resources to protecting America, and that includes the limited spectrum resource. The Department of Defense, for example has predicted that its spectrum usage will grow by more than 90 percent by 2005. The armed forces have used spectrum extensively in the war on terror, to the point of even using real time video links to command centers in the United States straight from drone aircraft in Afghanistan. At the same time, commercial services are becoming more important to everyday life, and industry is working to make wireless a broadband competitor. The commercial sector also plays a key role in helping the DOD accomplish its mission, such as by providing remote controlled Predator drones and supporting jet fighters. In April, the Wall Street Journal detailed the lack of satellites available to DOD because only about two-fifths of the satellites in launches expected between 1998 and 2002 reached space.

Here's a summary of the key activities and concepts we're pursuing on spectrum management at NTIA:

III. Meeting Current Spectrum Management Challenges

The Spectrum Summit

Last April, NTIA and the DOC held a high-level two-day Spectrum Management and Policy Summit to sound out the larger issues of spectrum management. Its purpose was to explore new and innovative ideas to develop and implement spectrum policy and management approaches. The focus was upon ways to encourage spectrum efficiency; provide spectrum for new technologies; and improve the effectiveness of the domestic and international spectrum management processes. Importantly, the Secretary kicked off the Summit, and the Chairman of the FCC, two other Commissioners, and a number of FCC senior staff co-moderated every panel.

Recently, we have articulated the several themes that emerged as follows: First, the U.S. Government agencies mainly responsible for spectrum management -- NTIA, the FCC, and the State Department -- must work together as "One Spectrum Team" to serve our Nation's collective interest. Second, we need to craft policies that encourage spectrum efficiency. Third, we need to create forward-looking policies that enable technological advances and remove outdated regulations that stifle innovation. And fourth, we need to establish policies that ensure the deployment of robust wireless networks that are prepared for the worst crises and are able to deliver the very best of services to the American people. That Summit, as well the FCC's Spectrum Policy Task Force and initiatives like this one at CSIS, have all brought out ideas for improvement. The following are NTIA's tasks and goals springing from those ideas and our efforts to meet them, in terms of actions underway and planned.

"One Spectrum Team"

To improve spectrum management process, which is divided among several agencies, Chairman Powell, Deputy Assistant Secretary Gross of the State Department, and we at NTIA have established a "One Spectrum Team" management approach in order to improve our interagency communications and to take a more forward-looking approach to management. As part of that effort, we have been discussing how we can better coordinate to improve our international outreach as we prepare for international forums and have tackled a number of challenging and thorny spectrum management issues, including Third Generation mobile spectrum and Ultrawideband.

Third Generation Wireless

NTIA found itself on the fulcrum - - that's the pointy part - - of the government's efforts to identify spectrum for 3G services. After extensive public outreach and work with industry and the affected agencies, NTIA and the Federal agencies focused on the 1.7 GHz band while the FCC has focused on the 2110-2170 MHz band. As we all know, the Federal government has many systems in the 1.7 GHz band that are critical to your and my security. Moreover, there is a broad consensus that these government systems cannot be compromised. Yet NTIA's goal was not simply to protect Government users, but to find a solution that would help industry provide advanced services as well.


In May of 2000, the Federal Communications Commission issued a notice of proposed rulemaking to amend its rules to accommodate UWB devices in the radio spectrum without causing harmful interference to governmental operations (including critical air traffic control, weather warning systems, and national defense systems) or commercial communications systems (including TV and radio broadcasting, domestic and international commercial satellites, cellular telephones). NTIA conducted extensive measurements and analysis, including tests and analysis of UWB effects on a number of governmental systems and the satellite-based global positioning system (GPS). NTIA worked closely with the affected Federal agencies, including DOD, and the FCC to ensure that the FCC's rules will protect critical Government uses of the spectrum. The rulemaking process was long, the arguments were highly technical, and the record was voluminous. But, together, the FCC and NTIA were able to meet the challenge and develop a technically sound set of regulations for the safe and effective authorization of UWB technology while preserving public safety and national security. I am hearing that UWB devices will soon be available in the marketplace. I think it is one of the most promising technologies I've been exposed to. NTIA and the FCC have committed themselves to a "truth in testing" approach to modify the first report & order as necessary.

Public Safety

In the area of public safety, NTIA has had a long and active role in providing spectrum support for our nation's law enforcement and emergency response activities. In 1996, NTIA and the FCC co-sponsored the Public Safety Wireless Advisory Committee report which provided recommendations on public safety issues through the year 2010. The NTIA Public safety Program was born from this report to address the long-range spectrum requirements of federal public safety agencies, develop a strategy to provide sufficient spectrum for growth of the current services, and to provide for advanced technology and interoperability. Just this past June, NTIA and the Public Safety Wireless Network Program, jointly managed by the Departments of Justice and Treasury, co-hosted a two-day Public Safety Interoperability Technology Summit here in Washington. The Summit focused on current and emerging solutions for achieving interoperability to better inform public safety officials on the technology choices. NTIA will also be looking for additional ways to assist the public safety community to reach a fully interoperable future.


Finally, NTIA has helped with the process of relocating Federal spectrum users by developing the rules for reimbursement of displaced users, as required by the Balanced Budget Act of 1997. That is just part of the story. We are working on proposed legislation today to further refine the process by creating a "trust fund" to reimburse federal users from the proceeds of auctions conducted for that spectrum. A trust fund process should lead to more information to bidders and less friction in the reimbursement and relocation process.

IV. Moving Forward to Improve Spectrum Management Efficiency and Innovation

What we have done so far will seem simple compared to the challenges that face us next. Aside from addressing immediate demands for spectrum, we need to consider larger changes to the way we do the business of spectrum management. The need for spectrum will come from many quarters. Commercial mobile services are already talking about Fourth Generation advanced mobile systems. At the same time, defense, homeland security, and public safety have never been so important. These requirements need to be recognized and addressed as we move forward in encouraging innovation and efficiencies in the public and private sectors.

Reform can come in many shapes and sizes, but I will focus here on two of them that have received considerable attention recently, regulation of receivers, and management reforms to create an environment and incentives for spectrum efficiency.

Receiver Standards

At NTIA's Spectrum Summit and elsewhere, commenters have pointed to greater use of receiver standards as a way to increase efficiency. Generally speaking, spectrum efficiency is determined by both technical transmitter standards and receiver standards. When receivers are more selective, transmitters and receivers can operate more closely to each other. Traditionally, however, spectrum management governs radio transmitters, not receivers. Although NTIA mandates transmitter and receiver standards for almost all Federal radiocommunications systems the FCC currently has only limited authority over consumer home electronic receivers. It's been pointed out repeatedly that one of the most ubiquitous electronic devices in the United States is also one of the weakest receivers--the television. The potential for efficiency is such that as the spectrum gets more crowded in the most desirable portions of the radio spectrum, we should consider greater use of receiver standards.

Greater Introduction of Market Principles

As we evaluate national spectrum policy, one of the most promising areas of reform takes its cue from the economic ideas I mentioned earlier. The FCC has adopted various reforms over the years to allow markets to more directly affect efficiency. Chairman Powell has signaled support for further developments based on this approach.

One such promising spectrum management reform is contained the FCC's proceeding on creating secondary markets for spectrum use. The proposed secondary markets rules would permit parties to "lease" their spectrum to others -- encouraging the development of secondary markets in order to put spectrum to its most efficient use. This concept is not entirely new. As the FCC's rulemaking notes, de facto leasing already takes place in some circumstances, such as for Instructional Television Fixed Services, where parties are allowed to sell excess capacity. Leasing is also permitted with satellite time and through the relatively new band manager licensing regime. The secondary markets concept would broaden these limited leasing venues and extend the benefits of leasing arrangements across more of the spectrum. If fully developed, it could even lead to dynamic trading of spectrum rights among parties in real time, on an "as needed" basis. I expect that the FCC's Spectrum Management Task Force will consider such proposals as part of its larger review of spectrum management.

I might also note that NTIA supported the FCC's repeal of the spectrum cap on commercial mobile radio services. The FCC adopted an order last December to repeal the cap as of January 1, 2003 and to raise the cap to 55 MHz in all markets in the interim. This will permit carriers to assemble spectrum where appropriate to meet capacity needs and to deploy broader bandwidth services. The spectrum limits were simply too rigid to allow for changing needs and capabilities.

Flexibility can also provide incentives in an unlicensed, low power environment for innovative, new services. We are seeing today the results of such an approach in the development of Wi-Fi high speed Internet access, using the 802.11(b) standard in unlicensed spectrum, everywhere from college campuses to coffee bars. Over 1.5 million units of Wi-Fi gear are being sold every month. This shows that such wireless systems, while not necessarily a replacement for licensed services, can flourish on an unlicensed basis.

Positioning the United States Internationally

Finally, I'd like to say a few words on the United States' participation in the international spectrum management process and our goal of improving our effectiveness at international conferences. The name of the game is advantage. Our goals at the World Radiocommunication Conferences are not only to reach agreement on spectrum use that benefits U.S. consumers, but also to protect U.S. commercial and national defense interests. The United States is fortunate to have the world's number one economy. I can assure you that our respected colleagues from various nations, including our allies, are doing what they can do to displace us from that position. We are even more fortunate to have the world's top military protecting us. I can assure you our allies want to continue to benefit from our potent military forces -- but don't really want to be troubled by its spectrum needs.

As some of you know, the next World Radiocommunication Conference, WRC-03, is scheduled for June and July of 2003 in Geneva, Switzerland. Over 40 issues will be on the conference agenda. Preparations for WRC-03 are now beyond the half-way point of completion. In an attempt to continue to improve on our past performance, the FCC and NTIA are striving to finish all proposals by July-August of this year and many of the more difficult proposals are being discussed and completed now. Issues that could become conflicts between the federal agencies and the private sector are becoming clear and both NTIA and the FCC work together and, if necessary, compromise to come to agreement on final U.S. proposal and views. Approximately six months prior to the start of the conference, the United States will form its delegation to the conference, led by a U.S. Ambassador.

Our "Team Spectrum" has been working to coordinate our international outreach as we prepare for WRC-03 and other international meetings. For one thing, our ability to reach a consensus with other countries in the Americas prior to such meetings helps ensure that U.S. policy views have a greater likelihood of success, given the "one country, one vote" process and the often unified positions of the European or Asian-Pacific nations. We are also discussing ways in which we can begin the development of U.S. positions earlier in the process, including whether the appointment of the U.S. head of delegation for each WRC should be made sooner in the process to allow for the most effective representation of U.S. interests at these meetings.

V. Conclusion

NTIA and other agencies have a lot to do in the area of spectrum management. We have made progress and produced results in crucial areas, but there are many difficult tasks ahead. There is a lot to do in many areas, both substantive and procedural. The common denominator for success in all of these areas is leadership. Today our agencies need to get things done, and done right. We can't afford to be wrong. We look forward to working with you and CSIS to achieving world-leading results.