Freeing up more spectrum for consumer and business use is one of the best levers to spur additional wireless innovation, and one of the largest opportunities in the quest to maximize the efficient use of spectrum is in upgrading legacy federal radio systems. Various federal agencies hold vast swaths of spectrum that could be used more efficiently or put to more valuable use, but agencies have little incentive to give up control. Mechanisms to fund and hasten federal users’ upgrade of legacy radio systems could potentially be a key tool to help free up spectrum. But to gain buy-in and cooperation, transition mechanisms must preserve the flexibility for government radio users to achieve their mission as their spectrum needs evolve.
ITIF hosted a conversation discussing spectrum policy and the opportunities and next steps in efforts to unlock federal airwaves for innovative new uses.
Thomas Hazlett, Hugh H. Macaulay Endowed Professor of Economics, and director of the Information Economy Project, at Clemson University and author of The Political Spectrum: The Tumultuous Liberation of Wireless Technology, from Herbert Hoover to the Smartphone (Yale University Press, 2017), began the event by discussing some of the history of radio regulation. He singled out the “standard story” of the early wireless regulation—whereby the 1927 Radio Act was necessary to fix a tragedy of the commons in radio broadcast—as simply untrue. Rather, the 1927 Radio Act displaced a largely successful system of enforceable first-come, first-serve rights to broadcast frequencies, and ultimately locked in a limited number of incumbent commercial radio broadcasters through a straightforward rent creation and distribution scheme.
Hazlett highlighted four challenges in improving federal spectrum allocations today. First, interagency conflict and fragmented distribution of licenses in a band can bedevil efforts to improve distribution of rights. Second, the “gains [of redistribution] is external to the agency…. They’re distributed widely to society. That’s an externalities problem.” Third, even if agencies could benefit from redistribution through something like an incentive auction, “the decision-makers … fail to capture some, or certainly most, of those gains,” as they may flow to other parts of the agency or be netted out in the budgetary process. Fourth, those initiating a reconfiguration of federal spectrum are often another government agency, with the same externality problems.
Hazlett advocated for an overlay licensed approach, which would allow private actors to negotiate with incumbent users for access to spectrum. The hunting license approach that Hazlett advocated for would create an incentive for the incumbent owner to reconfigure spectrum usage by providing a “beneficial rent-seeking” opportunity for commercial users, whereby the federal user could capture some of the gains of a more efficient distribution.
Hazlett was followed by Mary Brown, senior director of government affairs at Cisco. First, she discussed the effort to open up broad spectrum blocks in the 5 GHz band that unlicensed users would share with U.S. radar interests. After the National Telecommunications and Information Administration (NTIA) and agencies signed off, the Federal Communications Commission (FCC) agreed to allow the use of the 5 GHz spectrum using a Dynamic Frequency Selection (DFS) interference mitigation technique where if unlicensed devices “hear a pattern that sounds to them like a radar pattern … they have to change channels.” While there has been ups and downs with DFS, it has largely worked well. She noted that as a baseline, technological solutions to mitigate interference like DFS must satisfy both government incumbents and commercial interests as a technological matter, but they must also work as a commercial matter. She argued, “the simpler the mitigation, the more likely you are to get to yes.”
But those wider channels enabled by loosened restrictions in the 5 GHz band led to advancements in the Wi-Fi standard that ultimately saw “Wi-Fi take off like gangbusters.” In contrast to that success story, Brown also discussed the travails in attempts to free up other sections of 5 GHz spectrum for unlicensed use. In one portion of the band for example, the Department of Defense (DoD) concluded such sharing would be impossible only after years of review. She also noted the discussions regarding sharing the upper portion of the 5 GHz band with Intelligent Transportation Services are still ongoing. Brown noted that “all of this took place without any kind of Spectrum Relocation Fund (SRF) help, because unlicensed is not subject to” the SRF. “So all of this work,” she continued, “was not reimbursed by anybody.” She noted that SRF mechanisms might well have helped, if not to actually clear the band, at least to get an answer sooner.
Giulia McHenry, chief economist for NTIA, followed Brown to discuss how her agency is thinking theoretically about spectrum allocation. NTIA has been examining federal spectrum incentives, in the early stages of an effort “to both help address the increasing federal demands on spectrum, as well as potentially free up … more spectrum for non-federal use in the process.” This push, McHenry explained, has three parts. First, NTIA is examining existing incentive proposals that have been made. Second, NTIA is working with the Institute for Telecommunications Sciences to research “how to define efficiency in the federal agency context,” looking to assist in evaluating spectrum efficiency of federal systems in the economic sense. Third, recalling a point made by Hazlett, McHenry said NTIA is trying to get a “handle on who is making spectrum-dependent decisions” within specific agencies.
Again echoing Hazlett, McHenry noted there is a two-fold problem in spectrum allocation: First, “the budget process generally precludes agencies from being the beneficiaries” of gains in efficiency, and second, “even if the agency can be the beneficiary the individuals within the agencies are not likely to be the beneficiaries of any progress.” McHenry argued the budget process also poses another constraint, because it “has to account for the full value of capital investment in one year,” which makes long-term investments much more difficult.
Steve Sharkey, vice president of government affairs, technology, and engineering policy at T-Mobile, asserted that “we’ve made a lot of progress in working through a reallocation process, in making it more cooperative.” Regarding DoD in particular, he stated, “we’ve seen a mind shift in their willingness to be more cooperative.” However, there are still areas in which progress could be made, including the SRF. Sharkey argued the fund needs to be “more responsive to the agencies and their needs.” For example, he recalled, when agencies wanted to replace their analog radio systems with digital radios, a lack of flexibility in the Office of Management and Budget’s interpretation of regulations prevented them from doing so, even though analog radios were off the market and therefore much more expensive to procure. Although he noted there have been “changes to the SRF structure since then,” he continued, “we need to make it a more fluid process for agencies.” A good opportunity to examine, Sharkey suggested, would be in air combat training systems (ACS), which preclude the use of certain bands over very large areas because the systems are airborne. “[The] people who ran that system … said it’s an old system…. They’d love to have it replaced.”
John Leibovitz, a former deputy chief at the FCC, said there is now “a toolbox of tools to help us solve some of these problems.” Many of these involve expanding the scope of SRF projects. Brown’s idea for an SRF involving unlicensed spectrum, for example, “would be controversial” but worth considering. Leibovitz pointed to recent amendments that allow SRF money to be utilized for more forward-looking research and development in evaluating the possibility to free up new bands. He cited as the “poster-child” of this type of investment a Federal Aviation Administration proposal, known as the Spectrum Efficient National Surveillance Radar (SENSR) Program to consolidate multiple missions from multiple agencies into a different band, which used SRF money to help fund a proof-of-concept study. Focusing on spectrum used by federal airborne systems, which “intrinsically ... have a bigger [spectrum] footprint,” would have a “triple bottom line”: freeing up spectrum for commercial use, funneling money to the Treasury, and using the proceeds from selling the available spectrum to fund a new system that would benefit the agencies.
Spectrum scarcity is one of the biggest challenges the public and private sectors face in an increasingly wireless world. The federal government, as the single most important regulator and user of wireless spectrum, has an indispensable role to play in improving the efficiency of spectrum usage and radio systems for everyone. Technological solutions, as the panel recognized, are not enough. Innovative approaches to wireless governance will be necessary for what Hazlett’s book appropriately calls the “political spectrum.”