GAO-12-342SP: General government: 13. Spectrum Management

General government > 13. Spectrum Management

Enhanced coordination of federal agencies' efforts to manage radio frequency spectrum and an examination of incentive mechanisms to foster more efficient spectrum use may aid regulators' attempts to jointly respond to competing demands for spectrum while identifying valuable spectrum that could be auctioned for commercial use, thereby generating revenues for the U.S. Treasury.

Why This Area Is Important

 

The radio frequency spectrum is a natural resource that is used to provide wireless communications services critical to the U.S. economy and a variety of government functions, such as national defense, homeland security, and other vital public safety activities. The federal government controls the use of spectrum by authorizing federal agencies’ requests for spectrum and issuing licenses to nonfederal users. As the nation continues to experience significant growth in commercial wireless broadband services, the demand for spectrum has increased and additional capacity will be needed to accommodate future growth.

Since most spectrum has already been allocated for federal, nonfederal, or shared uses, a number of initiatives are under way to identify previously assigned spectrum that can be repurposed for commercial wireless broadband. When spectrum is repurposed for commercial use, an auction may be held to distribute licenses through a bidding process. Since the first auction in 1994, auctions have generated nearly $52 billion for the U.S. Treasury and have provided additional spectrum for new commercial applications. In addition, some spectrum is available for unlicensed use, meaning an unlimited number of users can share the spectrum on a non-interference basis. Unlicensed spectrum supports a variety of technologies, including wireless fidelity (Wi-Fi) networks, and regulators are attempting to make more unlicensed spectrum available in the hopes of fueling innovation and economic growth. Spectrum management decisions require that regulators weigh the potential economic and technological benefits of increased spectrum availability against the need for federal agencies to use spectrum to achieve their missions.

Over the past 10 years, GAO has identified weaknesses in spectrum management—which is fragmented between the Department of Commerce’s National Telecommunications and Information Administration (NTIA) and the Federal Communications Commission (FCC)—that could impact the nation’s ability to meet the growing demand for spectrum. In addition, GAO identified FCC’s spectrum management as a major governmental challenge, specifically citing the need to balance competing demands for limited spectrum.

What GAO Found

 

Spectrum management in the United States is fragmented between NTIA and FCC.[1] NTIA is responsible for managing the federal government’s use of spectrum, and FCC regulates spectrum use by nonfederal entities, such as television broadcasters, wireless service providers, and state and local public safety officials. A number of other entities also play a role in spectrum management. For example, the Interdepartment Radio Advisory Committee (IRAC), which consists of 19 agencies that hold over 90 percent of all federally assigned spectrum, coordinates federal use of spectrum and provides NTIA policy advice on spectrum issues. In addition, the Office of Management and Budget (OMB) is involved in spectrum management through the federal budget process and has issued a circular (OMB Circular A-11) that provides guidance for the use of spectrum-dependent systems by federal agencies.

Given the fragmented federal approach, coordination is essential to ensure that NTIA and FCC take a holistic approach to efficiently and effectively manage spectrum use. As GAO reported in March 2006, changes that affect existing users of spectrum can cause contentious stakeholder conflicts that cross the jurisdictions of both agencies and can lead to protracted negotiations.

As GAO reported in November 2011, coordination challenges between NTIA and FCC were one of four factors contributing to delays in efforts to repurpose spectrum for new commercial uses. Efforts to repurpose spectrum require that NTIA and FCC coordinate to determine what spectrum is suitable for new commercial uses, and the extent to which federal agencies will be affected by efforts to relocate or modify their current spectrum assignments. Repurposed spectrum that can be auctioned for new commercial uses can generate significant revenues for the U.S. Treasury, and GAO and the National Commission on Fiscal Responsibility and Reform have supported the continued use of auctions to assign spectrum licenses.

While NTIA and FCC have taken steps to improve coordination and are collaborating on efforts to make spectrum available for wireless broadband, the extent to which they are effectively coordinating and will be able to quickly meet growing demands for spectrum is unclear due, in part, to a lack of transparency in their joint planning efforts. In 2003, NTIA and FCC signed a Memorandum of Understanding (MOU) that stated the Assistant Secretary for Communications and Information at NTIA and the Chairman of FCC would meet twice a year to conduct joint spectrum planning activities, as required by the NTIA Act, to ensure spectrum is used for its “highest and best purpose.”[2] According to the MOU, the joint spectrum planning is to include considerations of the future spectrum requirements of public and private users, with the goal of promoting efficient use of spectrum that reflects the economic and national security interests of the nation.

However, according to NTIA and FCC officials, these meetings did not occur regularly during one prior FCC Chairman’s term. FCC officials also told us that the results of the meetings are not publicly available because they contain pre-decisional information. In addition, NTIA and FCC have not jointly developed a strategic spectrum plan encompassing federal and nonfederal spectrum use, despite statutory requirements and a 2004 Presidential Memorandum to do so. In fact, when GAO asked which documents comprise the national spectrum strategy, NTIA and FCC officials identified different documents.

As GAO reported in November 2011, 62 of 71 experts and stakeholders we surveyed strongly or somewhat agreed that there is a need to maintain an ongoing strategic spectrum plan. GAO has also reported on the importance of transparency and oversight in spectrum management decisions. Lacking information on the extent to which NTIA and FCC are coordinating to strategically manage spectrum, Congress and stakeholders have no assurance that spectrum is being used for its highest and best purpose, and it is difficult to assess whether NTIA and FCC are fulfilling the intent of the NTIA Act and the MOU.

Furthermore, as GAO reported in April 2011, NTIA relies heavily on federal agencies to self-evaluate and determine their current and future spectrum needs, with limited oversight or emphasis on holistic spectrum management to ensure that spectrum is being used efficiently across the federal government. NTIA has explained that because federal agencies use spectrum for a variety of applications and missions, it must rely on the agencies’ expertise when reviewing spectrum assignments. However, prior GAO reports found that such a fragmented, decentralized approach proves problematic, since agency use of spectrum may not reflect the economic value of spectrum for the following reasons:

  • Agencies focus on mission requirements—not an underlying, systematic consideration of spectrum efficiency—when making investments in spectrum technologies.
  • Agencies do not pay for the spectrum they receive (outside of an administrative fee to NTIA). While OMB’s Circular A-11 requires that agencies consider the economic value of spectrum when purchasing spectrum-dependent systems, the requirements only apply to new procurements.
  • Agencies receive no economic benefit from freeing up spectrum that can be auctioned for other uses and potentially generate revenue for the U.S. Treasury. In May 2004, GAO recommended that NTIA develop a pilot to implement incentives for agencies to use spectrum more efficiently, and NTIA undertook a review to identify potential incentives. However, according to NTIA, it did not carry out the studies recommended by the review due to limited resources and other strategic priorities.Some experts GAO spoke with noted the need to better incent agencies to use spectrum more efficiently, and a subcommittee of the Department of Commerce’s Spectrum Management Advisory Committee made recommendations on this issue in a January 2011 report. NTIA officials told us that NTIA has also highlighted the need to amend the Commercial Spectrum Enhancement Act[3]to provide agencies with up-front funding to cover their planning costs associated with future spectrum reallocations, as well as covering the costs of sharing spectrum and enabling agencies to upgrade their technology.
  • Agencies might not have the up-front resources needed to invest in new technologies, which could result in the agencies using outdated, inefficient equipment. GAO has noted that OMB has experience managing a dedicated governmentwide fund that supports the up-front costs of improving efficiency in certain programs, such as improving the administrative efficiency of federal assistance programs. Although this fund is not spectrum-related, OMB officials noted that one of the benefits of having a centralized multiyear source of dedicated funding for efficiency projects is the ability to enhance agencies’ abilities to undertake efficiency issues that need to be reviewed over time or that are affected by multiple federal agencies.[4]

With respect to using incentives to encourage more efficient spectrum use among non-federal users, GAO found that FCC has taken steps to rely more heavily on market mechanisms, such as auctions, to dictate the allocation of spectrum, and recommended Congress consider extending FCC’s auction authority.[5] FCC is also pursuing additional approaches to expand economic incentives, such as incentive auctions—in which an existing user could receive a portion of the proceeds from the auction—however, some of these approaches require congressional approval and face mixed support among stakeholders.



[1]The responsibility for managing spectrum was divided between NTIA (an executive agency) and FCC (a federal independent regulatory commission) to avoid concentrating licensing power into one executive agency, while at the same time taking into account the President’s responsibility for both national defense and fulfilling agency missions.

[2]See National Telecommunications and Information Administration Act, title I, § § 103, 112 (1992) codified as amended at 47 U.S.C. §§ 902 (b)(2)(L)(i), 922, and Memorandum of Understanding Between the Federal Communications Commission and the National Telecommunications and Information Administration, signed January 31, 2003.

[3]Pub. L. No. 108-494, title II, 118 Stat. 3991 (2004).

[4]GAO-11-908 provides more information about OMB’s Partnership Fund for Program Integrity Innovation, which funds efforts to improve the efficiency of federal assistance programs.

[5]GAO-12-118.

Actions Needed

 

In its previously issued reports, GAO has consistently noted that spectrum management is not guided by a long-range holistic vision encompassing federal and nonfederal users. A Presidential Memorandum required NTIA and FCC to collaborate to make more spectrum available for wireless broadband. NTIA and FCC are also working together to accommodate more flexible and efficient models of spectrum use. These efforts could lead to additional spectrum auctions, which could generate increased revenues for the U.S. Treasury and provide spectrum for new commercial applications. Enhanced transparency in NTIA and FCC’s joint spectrum management efforts could aid Congress’ oversight and ensure that the agencies are on the path to efficient and effective spectrum management. In addition, GAO, the Department of Commerce, and an FCC task force have noted the need to develop incentives that encourage agencies to use spectrum more efficiently.

To improve transparency in national spectrum policy decisions, assure coordination between managers of government and privately-owned spectrum, and help ensure that spectrum is used for its highest and best purpose, the Assistant Secretary for Communications and Information at NTIA and the Chairman of the FCC should

  • report periodically to Congress on their joint spectrum planning activities and their consultation with other relevant government agencies. The report should include information on estimated future spectrum requirements for public and private uses, the spectrum allocation actions necessary to accommodate those uses, and any actions taken to promote the efficient use of spectrum.

To improve spectrum efficiency among federal agencies, Congress may wish to consider

  • evaluating what incentive mechanisms could be used to move agencies toward more efficient use of spectrum, which could free up some spectrum allocated for federal use to be made available for other purposes. OMB’s experience managing governmentwide efficiency programs could prove helpful in this evaluation.

How GAO Conducted Its Work

 

 

The information contained in this analysis is based on findings from the products listed in the related GAO reports section as well as additional work GAO conducted. GAO interviewed NTIA and FCC officials, as well as academic experts and think tank representatives.

Agency Comments & GAO Contact

 

GAO provided a draft of this report section to the Department of Commerce, FCC, and OMB for review and comment. The Department of Commerce, FCC, and OMB provided technical comments, which were incorporated as appropriate. The Department of Commerce stressed that spectrum management is a difficult, complex undertaking with multiple growing demands from commercial and governmental users, requiring that regulators balance regulatory certainty for existing users against flexibility to accommodate new users. The Department of Commerce added that NTIA and FCC will need to continue to improve their processes to meet competing demands for spectrum, specifically noting the need to develop a regulatory basis for spectrum sharing. The Department of Commerce stated that if so directed by Congress, NTIA would work with FCC to report on planning activities, but cautioned against over-simplifying the complexity of spectrum management, noting that it is impossible to simply calculate a number that represents how much spectrum each user requires. GAO acknowledges the complexity of such decisions, but believes that increased transparency in NTIA and FCC’s statutorily-required joint planning efforts would prove useful for Congress and stakeholders. With respect to applying market incentives to encourage more efficient federal spectrum use, the Department of Commerce noted potential difficulties with applying such incentives. For example, the Department of Commerce stated that federal agencies seldom have exclusive spectrum access and a band of spectrum may be used to support a variety of technologies and operations. Thus, providing incentives to one federal user to use less spectrum may not mean that other federal users in the same spectrum will do the same. However, the Department of Commerce stated that NTIA would do its best to ensure the implementation of any efficiency requirements ultimately specified by Congress, and would fully consider any proposals to fund efficiency gains such as those carried out by OMB in other fields.

 

FCC noted that it has increased strategic planning for spectrum designated for commercial use, and has worked to ensure greater transparency in FCC’s planning efforts. FCC also provided some information on its efforts to expand the use of market incentives to encourage efficient spectrum use among commercial users, which were incorporated as appropriate.

OMB disagreed with GAO’s recommendation that NTIA and FCC report periodically to Congress on their joint spectrum planning activities and their consultation with other relevant government agencies. OMB stated that since NTIA and FCC have distinct missions and serve discrete populations of spectrum users, additional public reporting would not likely appreciably enhance spectrum management efforts. OMB also noted that NTIA and FCC are collaborating with one another and with other federal agencies to identify spectrum that can be made available for wireless broadband, and that NTIA periodically reports on the progress of these efforts. GAO recognizes that NTIA and FCC are collaborating to make additional spectrum available for broadband. However, GAO has previously noted that coordination challenges between NTIA and FCC have delayed efforts to repurpose spectrum for new commercial uses, and changes that affect existing users of spectrum can cause contentious stakeholder conflicts that cross the jurisdictions of both agencies and can lead to protracted negotiations. Given that NTIA and FCC have not jointly developed a national strategic spectrum plan, despite being statutorily required to do so, and did not, during one prior Chairman’s term, hold statutorily-required spectrum-planning meetings, GAO believes that increased transparency in NTIA and FCC’s coordination efforts would prove useful in maintaining coordination between the agencies. In its comments, OMB also stated that the Administration has put forth proposals to encourage more efficient use of spectrum, such as providing FCC with new authority to conduct incentive auctions, and modifying existing law to provide federal agencies with up-front funding to plan for spectrum reallocations and allowing support for upgrading agency communication capabilities.

For additional information about this area, contact Mark Goldstein at (202) 512-2834 or goldsteinm@gao.gov.

 

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