oversight

Spectrum Management: Federal Government's Use of Spectrum and Preliminary Information on Spectrum Sharing

Published by the Government Accountability Office on 2012-09-13.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                               United States Government Accountability Office

GAO                            Testimony
                               Before the Subcommittee on
                               Communications and Technology,
                               Committee on Energy and Commerce,
                               House of Representatives
                               SPECTRUM
For Release on Delivery
Expected at 10:15 a.m. EDT
Thursday, September 13, 2012

                               MANAGEMENT
                               Federal Government’s Use
                               of Spectrum and
                               Preliminary Information on
                               Spectrum Sharing
                               Statement of Mark L. Goldstein, Director
                               Physical Infrastructure Issues




GAO-12-1018T
                                              September 13, 2012

                                              SPECTRUM MANAGEMENT
                                              Federal Government’s Use of Spectrum and
                                              Preliminary Information on Spectrum Sharing
Highlights of GAO-12-1018T, a testimony
before the Subcommittee on Communications
and Technology, Committee on Energy and
Commerce, House of Representatives



Why GAO Did This Study                        What GAO Found
Demand for spectrum is increasing             The National Telecommunications and Information Administration (NTIA) is
rapidly with the widespread use of            responsible for governmentwide federal spectrum management, but GAO
wireless broadband devices and                reported in 2011 that NTIA’s efforts in this area had been limited. In 2003, the
services. However, nearly all usable          President directed NTIA to develop plans identifying federal and nonfederal
spectrum has been allocated either by         spectrum needs, and in 2008, NTIA issued the federal plan. GAO found it did not
NTIA for federal use or by the Federal        identify governmentwide spectrum needs and did not contain key elements and
Communications Commission (FCC)               conform to best practices for strategic planning. Furthermore, NTIA’s primary
for commercial and nonfederal use.            spectrum management operations do not focus on governmentwide needs.
Federal initiatives are under way to          Instead, NTIA depends on agency self-evaluation of spectrum needs and
identify federal spectrum that could be       focuses on mitigating interference among spectrum users, with limited emphasis
repurposed or possibly shared by              on overall spectrum management. Additionally, NTIA’s data management system
federal users or wireless broadband           is antiquated and lacks internal controls to ensure the accuracy of agency-
providers and other nonfederal users.         reported data, making it unclear if reliable data inform decisions about federal
This statement discusses how NTIA
                                              spectrum use. NTIA is developing a new data management system, but
manages spectrum to address
                                              implementation is years away.
governmentwide spectrum needs and
the steps NTIA has taken to repurpose         Despite these limitations, NTIA has taken steps to identify spectrum that could
spectrum for broadband. As part of an         potentially be made available for broadband use. For example, in 2010 NTIA
ongoing review, the statement also            evaluated various spectrum bands and identified 115 megahertz of spectrum that
discusses preliminary information on          could be repurposed within the next 5 years. In doing so, NTIA worked with a
the factors that prevent spectrum             special steering group consisting of the Assistant Secretaries with spectrum
sharing and actions that can                  management oversight in agencies that were the major stakeholders in the
encourage sharing and efficient               spectrum bands under consideration. For each of the identified bands, NTIA
spectrum use. This testimony is based
                                              reviewed the number of federal frequency assignments within the band, the types
on GAO’s prior work on federal
                                              of federal operations and functions that the assignments support, and the
spectrum management and ongoing
work on spectrum sharing. GAO                 geographic location of federal use.
analyzed NTIA processes, policies and         In addition to efforts to repurpose spectrum, industry stakeholders have also
procedures, and interviewed relevant          suggested that sharing spectrum between federal and nonfederal users be
government officials, experts, and            considered to help make spectrum available for broadband. Our ongoing work
industry stakeholders.                        has identified several barriers that limit sharing. Primarily, many users may lack
What GAO Recommends                           incentives to share assigned spectrum. Typically, paying the market price for a
                                              good or service helps to inform users of the value of the good and provides an
In April 2011, GAO recommended that           incentive for efficient use. But federal agencies pay only a small fee to NTIA for
NTIA (1) evaluate its current approach        spectrum assignments, and may, in some contexts, have little incentive to
for validating agency-reported data and       conserve or share it. Federal agencies may also have limited budgets to upgrade
(2) establish internal controls for its       to more spectrally-efficient equipment that would better enable sharing.
data management systems. NTIA                 Nonfederal users are also reluctant to share spectrum. For instance, license
concurred with the recommendations            holders may be reluctant because of concerns that spectrum sharing could
and has proposed approaches to
                                              encourage competition. A lack of information on federal spectrum use may limit
implement new measures to better
                                              users’ ability to easily identify spectrum suitable for sharing.
ensure the accuracy of agency-
reported data, and is taking steps to         GAO’s ongoing work suggests that some actions might provide greater
implement internal controls in a cost-        incentives and opportunities for more efficient spectrum use and sharing. These
efficient manner. GAO provided a draft        actions could include assessing spectrum usage fees to provide economic
of this statement to FCC and NTIA.            incentive for more efficient use and sharing, expanding the availability of
View GAO-12-1018T. For more information,      unlicensed spectrum, and increasing the federal focus on research and
contact Mark L. Goldstein at (202) 512-2834   development of technologies that can enable spectrum sharing and improve
or goldsteinm@gao.gov.                        spectral efficiency. However, all of these actions also involve challenges and may
                                              require further study.
                                                                                      United States Government Accountability Office
Chairman Walden, Ranking Member Eshoo, and Members of the
Subcommittee:

Thank you for the opportunity to testify today on issues related to
spectrum management and spectrum sharing practices in the United
States. Radio frequency spectrum enables wireless communications
services critical to the U.S. economy and a variety of government
functions, such as scientific research and national defense. Spectrum
capacity is necessary to deliver wireless broadband to consumers and
businesses and broadband deployment stimulates economic growth and
boosts the nation’s capabilities in areas such as education and health
care. As the U.S. experiences significant growth in commercial wireless
broadband services, the demand for spectrum has increased and
additional capacity will be needed. However, nearly all usable spectrum
has been allocated either by the National Telecommunications and
Information Administration (NTIA) for federal government use or by the
Federal Communications Commission (FCC) for commercial and other
nonfederal use. Virtually no “green fields” of spectrum are currently
available to allocate to new uses or technologies.

Currently, federal government initiatives are under way to identify
spectrum that can be made available to meet the nation’s increased
demand for commercial wireless broadband services. In particular, the
National Broadband Plan recommended that 500 megahertz (MHz) of
spectrum be made newly available for broadband use within the next 10
years, 1 and in June 2010, the President issued a memorandum directing
NTIA to begin identifying federal spectrum that can be made available for
wireless broadband. 2 Solutions geared toward greater sharing of
spectrum among users—federal and nonfederal—have become attractive
because of the potential access to more spectrum and opportunities to
use spectrum more efficiently that sharing presents. The President’s
Council of Advisors on Science and Technology (PCAST) recommended




1
 In 2010, an FCC task force issued the National Broadband Plan. Federal
Communications Commission, Connecting America: The National Broadband Plan, p. 84,
Recommendation 5.8, (Mar. 16, 2010)
2
See, Unleashing the Wireless Broadband Revolution, 75 Fed. Reg. 38387 (2010).




Page 1                                                                 GAO-12-1018T
that 1,000 MHz of spectrum previously occupied only by federal users be
shared with nonfederal users. 3

Based on our April 2011 report, my testimony today discusses NTIA’s
spectrum management to address governmentwide spectrum needs and
the steps NTIA has taken to repurpose spectrum for broadband. 4 Based
on an ongoing review, I will also discuss our preliminary information on
the factors that prevent spectrum sharing and actions that might be taken
to encourage sharing and efficient spectrum use. We plan to issue a
report on these issues in fall 2012. In conducting our work, we reviewed
NTIA documents, including its Manual of Regulations and Procedures for
the Federal Radio Frequency Management (commonly referred to as the
Redbook); an assessment of spectrum bands that could possibly be
repurposed for wireless broadband (referred to as the Fast Track
Evaluation); and other documentation of NTIA’s current processes,
policies, and procedures. We interviewed officials from NTIA’s Office of
Spectrum Management about their spectrum management policies and
procedures and interviewed stakeholders with knowledge of spectrum
issues including industry and academic experts, and representatives of
an industry association and telecommunications companies. We selected
the experts and industry stakeholders based on prior published literature,
stakeholders’ recognition and affiliation with the spectrum management
industry, and NTIA and other stakeholders’ recommendations. We also
reviewed federal legislation, regulations, and processes regarding
spectrum sharing, including various FCC plans, notices, orders and other
publications. We conducted interviews with officials from FCC, NTIA, and
various advisory committees, including the Commerce Spectrum
Management Advisory Committee (CSMAC). 5 We also interviewed
several agencies on the Interdepartment Radio Advisory Committee




3
 President’s Council of Advisors on Science and Technology, Report to the President;
Realizing the Full Potential of Government-held Spectrum to Spur Economic Growth
(Washington, D.C.: July 2012).
4
 GAO, Spectrum Management: NTIA Planning and Processes Need Strengthening to
Promote the Efficient Use of Spectrum by Federal Agencies, GAO-11-352 (Washington,
D.C.: April 12, 2011).
5
 CSMAC is a federal advisory committee that provides advice and recommendations to
NTIA. It is organized through NTIA’s Office of Policy Analysis and Development and
consists of approximately 25 spectrum policy experts from the private sector.




Page 2                                                                    GAO-12-1018T
             (IRAC). 6 Additional information on our scope and methodology is
             provided in our 2011 report. We conducted our work related to federal
             management and use of spectrum from May 2010 to April 2011 and our
             work related to spectrum sharing from September 2011 to September
             2012. All of our work was conducted in accordance with generally
             accepted government auditing standards. We provided a draft of this
             statement related to spectrum sharing to FCC and NTIA officials to obtain
             their comments. FCC and NTIA provided technical corrections, which we
             incorporated where appropriate.


             The radio frequency spectrum is the part of the natural spectrum of
Background   electromagnetic radiation lying between the frequency limits of 3 kilohertz
             (kHz) and 300 gigahertz (GHz). Not all spectrum has equal value. The
             spectrum most highly valued generally consists of frequencies between
             225 MHz and 3700 MHz, as these frequencies have properties well suited
             to many important wireless technologies, such as mobile phones, radio,
             and television broadcasting. According to NTIA, as of September 2012,
             federal agencies had exclusive access to about 18 percent of these high-
             value frequencies, and nonfederal users had exclusive licenses to about
             33 percent. The remainder of this spectrum is allocated to shared use.
             However, in many cases in these shared bands, federal or nonfederal
             uses may dominate and actual sharing is nominal. NTIA has concluded
             that overall, approximately 43 percent of these high-value frequencies are
             predominantly used by federal operations.

             Federal agencies use spectrum to help meet a variety of missions,
             including emergency communications, national defense, land
             management, and law enforcement. Over 60 federal agencies and
             departments combined have over 240,000 frequency assignments.
             Agencies and departments within the Department of Defense have the
             most assignments, followed by the Federal Aviation Administration, the
             Department of Justice, the Department of Homeland Security, the
             Department of the Interior, the Department of Agriculture, U.S. Coast
             Guard, the Department of Energy, and the Department of Commerce,
             respectively. These federal agencies and departments hold 94 percent of


             6
              IRAC is an interagency advisory committee that was established in 1922 to coordinate
             federal use of spectrum and provide policy advice on spectrum issues. It is comprised of
             representatives from 19 federal agencies that use spectrum. Those agencies hold over 90
             percent of federally assigned spectrum.




             Page 3                                                                     GAO-12-1018T
                                       all federally assigned spectrum. Nonfederal entities (which include
                                       commercial companies and state and local governments) also use
                                       spectrum to provide a variety of services. For example, state and local
                                       police departments, fire departments, and other emergency services
                                       agencies use spectrum to transmit and receive critical voice and data
                                       communications, while commercial entities use spectrum to provide
                                       wireless services, including mobile voice and data, paging, broadcast
                                       radio and television, and satellite services (see fig. 1).

Figure 1: Examples of Allocated Spectrum Uses, and Federal Spectrum Use in the High-Value Range




                                       In the United States, responsibility for spectrum management is divided
                                       between NTIA and FCC. NTIA and FCC jointly determine the amount of
                                       spectrum allocated for federal, nonfederal, and shared use. After this
                                       allocation occurs, in order to use spectrum, nonfederal users must follow


                                       Page 4                                                         GAO-12-1018T
rules and obtain authorizations from FCC to use specific spectrum
frequencies, and federal users must follow rules and obtain frequency
assignments from NTIA. In order for nonfederal users to share federal
spectrum, NTIA and FCC are jointly involved in the process. The
nonfederal party petitions FCC, and FCC in turn coordinates rulemakings
and licenses with NTIA through IRAC. NTIA manages sharing between
federal users on a day-to-day basis. If federal users are requesting
frequency assignments in exclusive nonfederal or shared bands, that
request is coordinated through IRAC with FCC. If sharing is solely
between nonfederal users in exclusive nonfederal bands, sharing is
generally governed by FCC rules and does not go through NTIA, unless
there could be out-of-band interference. In addition to its spectrum
allocation and authorization duties, NTIA serves as the President’s
principal advisor on telecommunications and information policy and
manages federally assigned spectrum, including preparing for,
participating in, and implementing the results of international radio
conferences, as well as conducting extensive research and technical
studies through its research and engineering laboratory, the Institute for
Telecommunication Sciences. NTIA has authority to issue rules and
regulations as may be necessary to ensure the effective, efficient, and
equitable use of spectrum both nationally and internationally. It also has
authority to develop long-range spectrum plans to meet future spectrum
requirements for the federal government.

Spectrum sharing can be defined as the cooperative use of common
spectrum. In this way, multiple users agree to access the same spectrum
at different times or locations, as well as negotiate other technical
parameters, to avoid adversely interfering with one another. For sharing
to occur, users and regulators must negotiate and resolve where
(geographic sharing), when (sharing in time), and how (technical
parameters) spectrum will be used (see fig. 2).




Page 5                                                         GAO-12-1018T
Figure 2: Illustration and Examples of Spectrum Sharing




                                        Spectrum sharing also occurs with unlicensed use of spectrum, since it is
                                        accessible to anyone using wireless equipment certified by FCC for those
                                        frequencies. Equipment such as wireless microphones, baby monitors,
                                        and garage door openers typically share spectrum with other services on
                                        a non-interference basis using low power levels to avoid interference with
                                        higher priority uses. In contrast with most licensed spectrum use,
                                        unlicensed spectrum users have no regulatory protection against
                                        interference from other licensed or unlicensed users in the band.
                                        However, unlicensed use is regulated to ensure that unlicensed devices
                                        do not cause undue interference to operations with a higher priority. For
                                        example, in the 5 GHz band, wireless fidelity (Wi-Fi) devices share a
                                        band with military radar subject to the condition that the Wi-Fi devices are
                                        capable of spectrum sensing and dynamic frequency selection; if radar is
                                        detected, the unlicensed user must immediately vacate the channel.




                                        Page 6                                                          GAO-12-1018T
NTIA’s Processes for
Managing Federal
Spectrum Lack
Governmentwide
Focus and
Accountability
NTIA’s Spectrum        As the federal agency authorized to develop national spectrum policy,
Management Efforts     NTIA has been directed to conduct several projects focused on reforming
                       governmentwide federal spectrum management and promoting efficiency
                       among federal users of spectrum; however, we reported in 2011 that its
                       efforts in this area had resulted in limited progress toward improved
                       spectrum management. NTIA has authority to, among other things,
                       establish policies concerning assigning spectrum to federal agencies,
                       coordinate spectrum use across federal agencies, and promote efficient
                       use of spectrum by federal agencies in a manner which encourages the
                       most beneficial public use. As such, NTIA has a role in ensuring that
                       federally allocated spectrum is used efficiently. According to NTIA’s
                       Redbook and agency officials, efficient use includes ensuring that federal
                       agencies’ decisions to use spectrum to support government missions
                       have been adequately justified and that all viable tradeoffs and options
                       have been explored before making the decision to use spectrum-
                       dependent technology, and ensuring that these tradeoffs are continuously
                       reviewed to determine if the need for spectrum has changed over time.
                       NTIA’s primary guidance to federal agencies is technical guidance
                       provided through NTIA’s Redbook concerning how to manage assigned
                       spectrum.

                       In 2003, the Bush Administration directed NTIA to develop strategic
                       plans, and in March 2008, NTIA issued its report on federal spectrum use
                       entitled the Federal Strategic Spectrum Plan. 7 While the intent of the
                       Federal Strategic Spectrum Plan was to identify the current and projected
                       spectrum requirements and long-range planning processes for the federal
                       government, we reported in 2011 that the final plan is limited in these


                       7
                        Department of Commerce, National Telecommunications and Information Administration,
                       Spectrum Policy for the 21st Century – The President’s Spectrum Policy Initiative: The
                       Federal Strategic Spectrum Plan (March 2008).




                       Page 7                                                                   GAO-12-1018T
                             areas. For example, the plan does not identify or include quantitative
                             governmentwide data on federal spectrum needs. Instead, NTIA’s plan
                             primarily consists of a compilation of the plans submitted by 15 of the
                             more than 60 agencies that use federal spectrum. Additionally, due to the
                             fact that they contained limited information regarding future requirements
                             and technology needs, NTIA concluded that its “long-range assumptions
                             are necessarily also limited.” Furthermore, NTIA’s plan did not contain
                             key elements and best practices of strategic planning.


NTIA Focuses on              NTIA’s primary spectrum management operations include authorizing
Interference Mitigation      federal frequency assignments and certifying spectrum-dependent
Rather than on Best Use of   equipment for federal users; however, these processes are primarily
                             focused on interference mitigation as determined by IRAC and do not
Spectrum across              focus on ensuring the best use of spectrum across the federal
Government                   government. In 2011, we found that the process as established by federal
                             regulations for review and approval of frequency assignment and system
                             certification was technical in nature, focusing on ensuring that the new
                             frequency or system that an agency wants to use would not interfere with
                             another agency’s operations. According to NTIA officials, this focus on
                             day-to-day spectrum activities, such as interference mitigation, is due to
                             the agency’s limited resources. This focus, while important, makes limited
                             consideration about the overall best use of federally allocated spectrum.
                             Therefore, NTIA’s current processes provide limited assurance that
                             federal spectrum use is evaluated from a governmentwide perspective to
                             ensure that decisions will meet the current and future needs of the
                             agencies, as well as the federal government as a whole.


NTIA’s Current Data          NTIA’s data management system is antiquated and lacks transparency
Management System Is of      and internal controls. In 2011, we reported that NTIA collects all federal
Limited Usefulness           spectrum data in the Government Master File (GMF), which according to
                             NTIA officials is an outdated legacy system that was developed primarily
                             to store descriptive data. These data are not detailed enough to support
                             the current analytical needs of NTIA or other federal users, as the system
                             was not designed to conduct such analyses. NTIA does not generate any
                             data, but maintains agency-reported spectrum data in the GMF, which are
                             collected during the frequency assignment and review processes.

                             NTIA’s processes for collecting and verifying GMF data lack key internal
                             controls, including those focused on data accuracy, integrity, and
                             completeness. Control activities such as data verification and
                             reconciliation are essential for ensuring accountability for government


                             Page 8                                                         GAO-12-1018T
                           resources and achieving effective and efficient program results. In 2011,
                           we reported that NTIA’s data collection processes lack accuracy controls
                           and do not provide assurance that data are being accurately reported by
                           agencies. Rather, NTIA expects federal agencies to supply accurate and
                           up-to-date data submissions, but it does not provide agencies with
                           specific requirements on how to justify that the agencies’ spectrum
                           assignments will fulfill their mission needs.

                           NTIA is developing a new data management system—the Federal
                           Spectrum Management System (FSMS)—to replace the GMF. According
                           to NTIA officials, the new system will modernize and improve spectrum
                           management processes by applying modern information technology to
                           provide more rapid access to spectrum and make the spectrum
                           management process more effective and efficient. NTIA projects that
                           FSMS will improve existing GMF data quality, but not until 2018.
                           According to NTIA’s FSMS transition plan, at that time data accuracy will
                           improve by over 50 percent. However, in the meantime it is unclear
                           whether important decisions regarding current and future spectrum needs
                           are based on reliable data.



NTIA Has Taken Steps
to Identify Spectrum
for Future Wireless
Broadband Use
NTIA Efforts to Identify   In response to the government initiatives to make a total of 500 MHz of
Spectrum for Broadband     spectrum available for wireless broadband, in 2010 NTIA (1) identified
                           115 MHz of federally allocated spectrum to be made available for wireless
                           broadband use within the next 5 years, referred to as the Fast Track
                           Evaluation, and (2) developed an initial plan and timetable for repurposing
                           additional spectrum for broadband, referred to as the 10-Year Plan.

                           Fast Track Evaluation. NTIA and the Policy and Plans Steering Group
                           (PPSG) 8 identified and recommended portions of two frequency bands,


                           8
                            The PPSG consists of the Assistant Secretaries, or equivalent, with spectrum
                           management oversight in agencies that are major stakeholders in the spectrum issues
                           under consideration.




                           Page 9                                                                   GAO-12-1018T
totaling 115 MHz of spectrum within the ranges of 1695–1710 MHz and
3550–3650 MHz to be made available for wireless broadband use. 9 For
each of these bands, NTIA reviewed the number of federal frequency
assignments within the band, the types of federal operations and
functions that the assignments support, and the geographic location of
federal use. Since clearing these bands of federal users and relocating
incumbent federal users to new bands was not an option in the given time
frame, the bands that NTIA recommended be made available will be
opened to geographic sharing by incumbent federal users and
commercial broadband.

10-Year Plan. By a presidential memorandum, NTIA was directed to
collaborate with FCC to make available 500 MHz of spectrum over the
next 10 years, suitable for both mobile and fixed wireless broadband use,
and complete by October 1, 2010, a specific plan and timetable for
identifying and making available the 500 MHz for broadband use. 10 NTIA
publicly released this report in November 2010. 11 In total, NTIA and the
National Broadband Plan identified 2,264 MHz of spectrum to analyze for
possible repurposing, of which 639 MHz is exclusively used by the federal
government and will be analyzed by NTIA. Additionally, NTIA will
collaborate with FCC to analyze 835 MHz of spectrum that is currently
located in bands that are shared by federal and nonfederal users.
Furthermore, NTIA has stated that it plans to seek advice and assistance
from CSMAC, its federal advisory committee comprised of industry
representatives and experts, as it conducts analyses under the 10-Year
Plan.

In January 2011, NTIA announced that it had selected the 1755–1850
MHz band as the first priority for detailed evaluation under the 10-Year
Plan. According to NTIA, this band was given top priority for evaluation by
NTIA and the federal agencies, based on a variety of factors, including
industry interest and the band’s potential for commercial use within 10
years. This is not the first time NTIA has studied this band. This band was


9
  In November 2010, NTIA publicly released its results. In its final report, NTIA summarized
its analysis of four frequency bands: 1675–1710 MHz, 1755–1780 MHz, 3500–3650 MHz,
and 4200–4400 MHz.
10
     Unleashing the Wireless Broadband Revolution, 75 Fed. Reg. 38387.
11
  NTIA, 10 Year Plan and Timetable to Make Available 500 MHz of Spectrum for Wireless
Broadband (2010).




Page 10                                                                       GAO-12-1018T
                             previously evaluated for reallocation, and in 2001, we reported that at the
                             time adequate information was not currently available to fully identify and
                             address the uncertainties and risks of reallocation. 12


Industry Concerns with the   Industry stakeholders, including wireless service providers,
Usefulness of the            representatives of an industry association, and a think tank representative
Identified Spectrum          we contacted in 2011 expressed concerns over the usefulness of the
                             spectrum identified by NTIA in the Fast Track Evaluation, since most of
                             the spectrum identified (100 of the 115 MHz) is outside the range
                             considered to have the best propagation characteristics for mobile
                             broadband. Overall, there has been limited interest in the bands above 3
                             GHz for mobile broadband use because, according to industry
                             stakeholders, there has been minimal development of mobile broadband
                             in bands above 3 GHz and no foreseeable advances in this area at this
                             time.

                             According to industry representatives, the 1755–1780 MHz band that
                             NTIA considered as part of the Fast Track Evaluation has the best
                             characteristics for mobile broadband use, and it is internationally
                             harmonized for this use. NTIA did not select this band to be made
                             available in the 5-year time frame due to the large number of federal
                             users currently operating there. However, NTIA identified it as the first
                             band to be analyzed under the 10-Year Plan to determine if it can be
                             made available for commercial broadband use. An industry stakeholder
                             has stated that the 1695–1710 MHz band identified by NTIA in the Fast
                             Track Evaluation is the second-best alternative for wireless broadband if
                             the 1755–1780 MHz band were not made available; however, the 1695–
                             1710 MHz band is not currently used internationally for wireless
                             broadband, which may reduce device manufacturers’ incentive for
                             developing technology that can be used in these frequencies.




                             12
                               GAO, Defense Spectrum Management: More Analysis Needed to Support Spectrum
                             Use Decisions for the 1755-1850 MHz Band, GAO-01-795 (Washington, D.C.: Aug. 21,
                             2001).




                             Page 11                                                               GAO-12-1018T
Some Users Lack
Incentives and Face
Several Barriers to
Sharing Spectrum,
and Cannot Easily
Identify Available
Spectrum to Share
Some Users Lack          While federal spectrum users often share spectrum among themselves,
Economic Incentives to   they may have little economic incentive to otherwise use spectrum
Share Spectrum           efficiently, including sharing it with nonfederal users. From an economic
                         perspective, when a consumer pays the market price for a good or
                         service and thus cannot get more of it without this expense, the consumer
                         has an incentive to get the most value and efficiency out of the good as
                         possible. If no price is attached to a good—which is essentially the case
                         with federal agencies’ use of spectrum 13—the normal market incentive to
                         use the good efficiently may be muted. In the case of federal spectrum
                         users, obtaining new spectrum assignments may be difficult, so an
                         agency may have an incentive to conserve and use the spectrum it
                         currently has assigned to it or currently shares efficiently, but the extent of
                         that incentive is likely weaker than if the agency had had to pay a market
                         price for the all of their spectrum needs. As such, federal spectrum users
                         do not fully face a market incentive to conserve on their use of spectrum
                         or use it in an efficient manner. The full market value of the spectrum
                         assigned to federal agencies has not been assessed, but, according to
                         one expert, would most likely be valued in the tens of billions of dollars.
                         Similarly, many nonfederal users, such as television broadcasters and
                         public safety entities, did not pay for spectrum when it was assigned to
                         them and do not pay the full market price for their continuing use of
                         spectrum so, like federal agencies, they may not fully have market-based
                         incentives to use spectrum efficiently.

                         While licensed, commercial users who purchased spectrum at auction
                         generally have market incentives to use their spectrum holdings


                         13
                           Agencies pay only a small, annual fee for their spectrum which is not comparable to its
                         full market value. According to NTIA, federal agencies pay $122 for each frequency
                         assignment, totaling about $30 million paid by 47 agencies to NTIA for fiscal year 2012.




                         Page 12                                                                      GAO-12-1018T
                             efficiently, these users also have incentives that work against sharing
                             spectrum, except in those instances where the incumbent licensee is
                             unlikely to build out its network or offer services to a particular area, such
                             as in certain remote, sparsely populated areas. FCC officials and industry
                             stakeholders and experts told us that these users may prefer not to share
                             their unused spectrum because they are concerned about the potential
                             for interference to degrade service quality to their customers. Also, they
                             may prefer to not give potential competitors access to spectrum. Industry
                             stakeholders and experts also said that companies seeking spectrum
                             may prefer obtaining exclusive spectrum licenses over sharing spectrum
                             that is licensed to another company or federal user, given uncertainties
                             about regulatory approvals, interference, and enforcement if interference
                             occurs.


Several Barriers Can Deter   There are several barriers that can deter sharing. One such barrier is that
Users from Sharing           federal agencies will not risk mission failure, particularly when there are
Spectrum                     security and public safety implications. According to the agency officials
                             we contacted, federal agencies will typically not agree to share spectrum
                             if it puts achieving their missions at risk. The officials stressed that when
                             missions have security and safety implications, sharing may pose
                             unacceptable risks. For example, the military tests aircraft and trains
                             pilots over test ranges that can stretch hundreds of miles, maintaining
                             constant wireless contact. The ranges, according to officials, cannot
                             share the communication frequencies because even accidental
                             interference in communications with an aircraft could result in
                             catastrophic mission failure. Further, sharing information about such
                             flights could expose particular pilots and aircraft, or the military’s larger
                             mission, to increased risk.

                             According to FCC officials, concerns about risk can drive conservative
                             technical standards that can make sharing impractical. In general, the
                             technical analyses and resulting standards are based on worst-case
                             scenarios, and not on assessments of the most likely scenario or a range
                             of scenarios. Moreover, in contrast to FCC’s open rulemaking process,
                             there is little opportunity for public input to the standards setting process.
                             Stakeholders may meet or have discussions with NTIA and the relevant
                             federal agencies, but this occurs without any formal public process. Nor
                             do stakeholders have any effective means to appeal other than by asking
                             FCC to reject NTIA’s analysis or standards.




                             Page 13                                                           GAO-12-1018T
Another barrier is that spectrum sharing can be costly. Stakeholders told
us that sharing federal spectrum can be costly for both the nonfederal and
federal users seeking to share for the following reasons:

•    Mitigation of potential interference can be costly in terms of equipment
     design and operation.

•    Users applying to share federal frequencies may find that those
     frequencies are being used by more than one federal agency or
     program. As a result of needing to mitigate inference for multiple
     users, costs to share spectrum in that band could increase.

•    Federal users often use and rely on proven older technology that was
     designed to use spectrum to meet a specific mission and typically is
     not conducive to operating as efficiently or flexibly as the state-of-the-
     art technologies might now allow. Limited budgets may prevent them
     from being able to invest in newer technology which can facilitate
     easier sharing.

Additionally, we found that spectrum sharing approval and enforcement
processes can be lengthy and unpredictable. FCC and NTIA processes
can cause two main problems when nonfederal users seek to share
federal spectrum, or when nonfederal users share with one another,
according to stakeholders:

•    The spectrum-sharing approval process between FCC and NTIA can
     be lengthy and unpredictable, and the risk associated with it can be
     costly for new entrants. FCC officials told us that its internal processes
     can potentially last years if requiring a rulemaking to accommodate
     shared use of spectrum. 14 In addition to that time, NTIA officials said
     that IRAC’s evaluation of potential harmful interference could take
     months. In one example, the Department of Defense, along with other
     federal agencies and nonfederal entities, currently shares a spectrum
     band between 413-457 MHz with a nonprofit medical devices provider
     for use in implant products for veterans. It took approximately 2 years


14
  The time it takes to complete rules may vary because of the unique nature of each
rulemaking. Certain factors, such as the technical complexity of the issue being addressed
and the priority of the rulemaking in comparison to other issues, can also affect
rulemaking time frames. FCC’s rulemaking process includes multiple steps as outlined by
law with opportunities for the public to participate, and FCC is generally not required by
statute to complete rules within limited time frames.




Page 14                                                                     GAO-12-1018T
                                (from 2009 to 2011) for FCC and NTIA to facilitate this arrangement,
                                as FCC required a rulemaking and NTIA required a lengthy evaluation
                                of potential interference. This nonprofit is funded by an endowment
                                and was not dependent on income from the device to sustain itself
                                during this process, but such delays, and the potential for a denial,
                                could discourage for-profit companies from developing and investing
                                in business plans that rely on sharing federal spectrum.

                           •    Stakeholders we interviewed told us that when federal or nonfederal
                                users share spectrum, both parties have concern that harmful
                                interference may affect their missions or operations if the other party
                                overreaches or does not follow the agreement. They also fear that the
                                enforcement actions that are taken by FCC will happen too slowly to
                                protect their interests or that enforcement outcomes can be
                                unpredictable.

Users May Be Unable to     Besides lacking incentives and overcoming other barriers, users may also
Easily Identify Spectrum   have difficulty identifying spectrum suitable for sharing because data on
Suitable for Sharing       available spectrum is incomplete or inaccurate, and information on some
                           federal spectrum usage is not publicly available. According to NTIA
                           officials, coordinating spectrum sharing requires accurate data on users,
                           frequencies, locations, times, power levels, and equipment, among other
                           things. We recently reported that both FCC’s and NTIA’s spectrum
                           databases may contain incomplete and inaccurate data. 15 Further, federal
                           agency spectrum managers told us that agencies have not been asked to
                           regularly update their strategic spectrum plans, in which they were
                           required to include an accounting of spectrum use. 16

                           As mentioned, NTIA is developing a new data system that officials believe
                           will provide more robust data that will enable more accurate analysis of
                           spectrum usage and potential interference, which may in turn identify



                           15
                             In November 2011, we reported on FCC’s Universal Licensing System, Consolidated
                           Database System, International Bureau Filing System, and Experimental Licensing
                           System. See GAO, Commercial Spectrum: Plans and Actions to Meet Future Needs,
                           Including Continued Use of Auctions, GAO-12-118 (Washington, D.C.: November 23,
                           2011). In April 2011, we reported on NTIA’s Government Master File database. See
                           GAO-11-352.
                           16
                             The Bush Administration directed federal agencies to submit spectrum plans to NTIA
                           and provide updates every 2 years. Since 2008, NTIA has ceased requesting those
                           updates, and has put its strategic planning initiatives on hold due to limited resources.




                           Page 15                                                                       GAO-12-1018T
                   more sharing opportunities. In addition, recently proposed legislation
                   would require in part that FCC, in consultation with NTIA and the White
                   House Office of Science and Technology Policy, prepare a report for
                   Congress that includes an inventory of each radio spectrum band they
                   manage. 17 The inventory is also to include data on the number of
                   transmitters and receiver terminals in use, if available, as well as other
                   technical parameters—coverage area, receiver performance, location of
                   transmitters, percentage and time of use, a list of unlicensed devices
                   authorized to operate in the band and description of use—that allow for
                   more specific evaluation of how spectrum can be shared. However,
                   experts and federal officials we contacted told us that there may be some
                   limitations to creating such an inventory. For instance, measuring
                   spectrum usage can be difficult because it can only be accomplished on a
                   small scale and technologies to measure or map widespread spectrum
                   usage are not yet available. 18 Additionally, FCC and NTIA officials told us
                   that information on some federal spectrum bands may never be made
                   publicly available because of the sensitive and classified nature of some
                   federal spectrum use.


                   We have previously reported that to improve spectrum efficiency among
Incentives and     federal agencies, Congress may wish to consider evaluating what
Opportunities to   mechanisms could be adopted to provide incentives and opportunities for
                   agencies to move toward more efficient use of spectrum, which could free
Share Could Be     up some spectrum allocated for federal use to be made available for
Expanded           sharing or other purposes. 19 Federal advisors and experts we talked to
                   identified several options that could provide incentives and opportunities
                   for more efficient spectrum use and spectrum sharing by federal and
                   nonfederal users, which include, among others: (1) assessing spectrum
                   usage fees; (2) expanding the availability of spectrum for unlicensed
                   uses; and (3) increasing the federal focus on research and development
                   of technologies that can enable spectrum sharing and improve spectral
                   efficiency.



                   17              th
                    S, 455, § 3, 112 Cong. (2011).
                   18
                    The Department of Defense’s Defense Advanced Research Projects Agency is working
                   on frequency mapping.
                   19
                     GAO, 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and
                   Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington,
                   D.C.: February 28, 2012).




                   Page 16                                                              GAO-12-1018T
Assessing spectrum usage fees. Several advisory groups and spectrum
industry experts, including those we interviewed, have recommended that
spectrum fees be assessed based on spectrum usage. As previously
mentioned, with the exception of administrative fees for frequency
assignments, federal users incur no costs for using spectrum. As such,
federal users may have little incentive to share spectrum assigned to
them with nonfederal users or identify opportunities to use spectrum more
efficiently—except to the extent that sharing or more efficient use helps
them achieve their mission requirements. In 2011, the CSMAC Incentives
Subcommittee recommended that NTIA and FCC study the
implementation of spectrum fees to drive greater efficiency and solicit
input from both federal and nonfederal users who might be subject to
fees. 20 The National Broadband Plan has also recommended that
Congress consider granting FCC and NTIA authority to impose spectrum
fees on unauctioned spectrum license holders—such as TV broadcasters
and public safety entities—as well as government users. Fees may help
to free spectrum for new uses, since licensees who use spectrum
inefficiently may reduce their holdings or pursue sharing opportunities
once they bear the opportunity cost of letting it remain fallow or
underused. Further, FCC officials told us that they have proposed
spectrum usage fees at various times, including in FCC’s most recent
congressional budget submission, and requested the legislative
authorities to implement such a program. 21

While noting the benefits, the CSMAC Incentives Subcommittee report
mentions specific concerns about the impact of spectrum fees on
government users. For instance, some CSMAC members expressed
concern that fees do not fit into the federal annual appropriations process
and new appropriations to cover fees are neither realistic nor warranted in
the current budget environment. Other members suggested that fees will
have no effect because agencies will be assured additional funds for their
spectrum needs. Similarly, the National Broadband Plan notes that a
different approach to setting fees may be appropriate for different
spectrum users, and that a fee system must also avoid disrupting public




20
 CSMAC Incentives Subcommittee Final Report (Washington, D.C.: January 11, 2011).
21
 Federal Communications Commission, Fiscal Year 2013 Budget Estimates Submitted to
Congress (Washington, D.C.: February 2012).




Page 17                                                               GAO-12-1018T
safety, national defense, and other essential government services that
protect human life, safety, and property. 22

To address some of the concerns regarding agency budgets, the recent
PCAST report recommended the use of a “spectrum currency” process to
promote spectrum efficiency. Rather than using funds to pay for
spectrum, federal agencies would each be given an allocation of synthetic
currency that they could use to “buy” their spectrum usage rights. Usage
fees would be set based on valuations of comparable private sector uses
for which the market has already set a price. Agencies would then have
incentive to use their assignments more efficiently or share spectrum. In
the PCAST proposal, agencies would also be rewarded for making
spectrum available to others for sharing, by being reimbursed for their
investments in improving spectrum sharing from a proposed Spectrum
Efficiency Fund. 23

Expanding the availability of spectrum for unlicensed use. Unlicensed
spectrum use is inherently shared spectrum access, and according to
spectrum experts we interviewed and other stakeholders, unlicensed use
of spectrum is a valuable complement to licensed spectrum and more
spectrum could be made available for unlicensed use. Spectrum for
unlicensed use can be used efficiently and for high value applications, like
Wi-Fi, for example. 24 Increasing the amount of spectrum for unlicensed
use may allow more users to share without going through lengthy
negotiations and interference mitigations, and also allow for more
experimentation and innovation.




22
  The National Broadband Plan, p. 83, Recommendation 5.6, (Mar. 16, 2010).
23
  The PCAST recommended that the existing Spectrum Relocation Fund be redefined as
a revolving Spectrum Efficiency Fund that reimburses federal agencies for investments in
spectrum sharing and efficiency.
24
   The Industrial (900-928 MHz), Scientific (2.4 – 2.485 GHz) and Medical (5.7 – 5.825
GHz) are examples of the unlicensed spectrum bands. Wi-Fi networks can permit multiple
computing devices in each discrete location to share a single wired connection to the
Internet, thus efficiently sharing spectrum. Wi-Fi technologies are also being used to
relieve network congestion. One report suggests that major wireless carriers, even with
their large portfolios of exclusive-use, licensed spectrum, often rely on Wi-Fi infrastructure
to offload traffic from their networks in congested areas, as much as 21 percent by some
accounts.




Page 18                                                                        GAO-12-1018T
More recently, FCC has provided unlicensed access to additional
spectrum, known as TV “white spaces,” to help address spectrum
demands. 25 The white spaces refer to the buffer zones that FCC assigned
the television broadcasters to mitigate unwanted inference between
adjacent stations. With the more efficient TV transmission capabilities that
resulted from the digital television transition, the buffer zones are no
longer needed and FCC approved the previously unused spectrum for
unlicensed use. To identify available white space spectrum, devices must
access a database which responds with a list of the frequencies that are
available for use at the device’s location. 26 As an example, one local
official explained that his city uses TV white space spectrum to provide a
network of public Wi-Fi access and public safety surveillance functions.

Increasing the federal focus on research and development of
technologies. Several technological advances promise to make sharing
easier, but are still at early stages of development and testing. For
example, various spectrum users and experts we contacted mentioned
the potential of dynamic spectrum access technology. If made fully
operational, dynamic spectrum access technology will be able to sense
available frequencies in an area and jump between frequencies to
seamlessly continue communication as the user moves geographically
and through the spectrum. According to experts and researchers we
contacted, progress has been made but there is no indication of how long
it will be before this technology is fully deployable. Such new technologies
can obviate or lessen the need for extensive regulatory procedures to
enable sharing and can open up new market opportunities for wireless
service providers. If a secondary user or sharing entity employs these
technologies, the incumbent user or primary user would theoretically not
experience harmful interference, and agreements and rulemakings that
are currently needed may be streamlined or unnecessary to enable
sharing.

Although industry participants indicated that extensive testing under
realistic conditions is critical to conducting basic research on spectrum



25
  In the Matter of Unlicensed Operation in the TV Broadcast Bands, 27 FCC Rcd. 3,692
(April 5, 2012).
26
  To date, FCC has designated two administrators to locate available white space
spectrum for users of unlicensed devices, Spectrum Bridge and Telecordia Technologies.
Devices must operate only on those channels designated by the administrator.




Page 19                                                                  GAO-12-1018T
efficient technologies, we found that only a few companies are involved in
such research and may experience challenges in the testing process.
Companies tend to focus technology development on current business
objectives as opposed to conducting basic research that may not show an
immediate business return. For example, NTIA officials told us that one
company that indicated it would participate in NTIA’s dynamic spectrum
access testing project removed its technologist from the testing effort to a
project more closely related to its internal business objectives.
Furthermore, some products are too early in the development stage to
even be fully tested. For example, NTIA officials also said six companies
responded to NTIA’s invitation to participate in the previously mentioned
dynamic spectrum access testing project. However, only two working
devices were received for the testing, and a third device received did not
work as intended. Other companies that responded told NTIA that they
only had a concept and were not ready to test an actual prototype.

Recent federal advisory committee recommendations emphasize the
importance of funding and providing incentives for research and
development endeavors. For example, to promote research in efficient
technologies, PCAST recommended that (1) the Research and
Development Wireless Innovation Fund 27 release funds for this purpose
and (2) the current Spectrum Relocation Fund be redefined as the
Spectrum Efficiency Fund. As discussed, this adjustment would allow for
federal agencies to be reimbursed for general investments in improving
spectrum sharing. Similarly, CSMAC recommended the creation of a
Spectrum Innovation Fund. Unlike the Spectrum Relocation Fund, which
is strictly limited to the actual costs incurred in relocating federal systems
from auctioned spectrum bands, the Spectrum Innovation Fund could
also be used for spectrum sharing and other opportunities to enhance
spectrum efficiency. 28




27
  The Wireless Innovation Fund is a part of the 2012 payroll tax agreement for spectrum
research and development. It will initially be a $100 million fund at the National Institute of
Standards and Technology. The fund will receive an additional $200 million after approved
auction income has been secured.
28
  CSMAC Incentives Subcommittee Final Report.




Page 20                                                                         GAO-12-1018T
                  Radio frequency spectrum is a scarce national resource that enables
Conclusions and   wireless communications services vital to the U.S. economy and to a
Recommendations   variety of government functions, yet NTIA has not developed a strategic,
                  governmentwide vision for managing federal use of this valuable
                  resource. NTIA’s spectrum management authority is broad in scope, but
                  NTIA’s focus is on the narrow technical aspects of spectrum
                  management, such as ensuring new frequency assignments will not
                  cause interference to spectrum-dependent devices already in use, rather
                  than on whether new assignments should be approved based on a
                  comprehensive evaluation of federal spectrum use from a
                  governmentwide perspective. Lacking an overall strategic vision, NTIA
                  cannot ensure that spectrum is being used efficiently by federal agencies.
                  Furthermore, agencies are not required to submit justifications for their
                  spectrum use and NTIA does not have a mechanism in place to validate
                  and verify the accuracy of spectrum-related data submitted by the federal
                  agencies. This has led to decreased accountability and transparency in
                  how federal spectrum is being used and whether the spectrum-dependent
                  systems the agencies have in place are necessary. Without meaningful
                  data validation requirements, NTIA has limited assurance that the
                  agency-reported data it collects are accurate and complete.

                  In our April 2011 report, we recommended that NTIA (1) develop an
                  updated plan that includes key elements of a strategic plan, as well as
                  information on how spectrum is being used across the federal
                  government, opportunities to increase efficient use of federally allocated
                  spectrum and infrastructure, an assessment of future spectrum needs,
                  and plans to incorporate these needs in the frequency assignment,
                  equipment certification, and review processes; (2) examine the
                  assignment review processes and consider best practices to determine if
                  the current approach for collecting and validating data from federal
                  agencies can be streamlined or improved; and (3) establish internal
                  controls for management oversight of the accuracy and completeness of
                  currently reported agency data. 29 With respect to our first
                  recommendation, NTIA has not developed an updated strategic plan and
                  previously noted that the Presidential Memorandum of June 28, 2010,
                  and the Wireless Innovation Initiative provide significant strategic direction
                  for NTIA and the other federal agencies. In September 2012, NTIA
                  officials told us that NTIA intends to update its strategic plan by October



                  29
                   GAO-11-352




                  Page 21                                                           GAO-12-1018T
                  2013. NTIA concurred with our other two recommendations and is taking
                  action to address them. For example, NTIA has proposed approaches to
                  implement new measures to better ensure the accuracy of agency-
                  reported data, and is taking steps to implement internal controls for its
                  data management system in a cost efficient manner.

                  With respect to spectrum sharing, there are currently insufficient
                  incentives to encourage more sharing, and even if incentives were
                  created, several barriers to sharing will continue. Options to address
                  these issues in turn create new challenges, and may require further
                  study.


                  Chairman Walden, Ranking Member Eshoo, and Members of the
                  Subcommittee, this concludes my prepared statement. I will be happy to
                  respond to any questions you may have at this time.


                  For further information on this testimony, please contact me at (202) 512-
GAO Contact and   2834, or by e-mail at goldsteinm@gao.gov. Contact points for our Offices
Staff             of Congressional Relations and Public Affairs may be found on the last
                  page of this statement. Individuals making key contributions to this
Acknowledgments   testimony include Sally Moino and Andrew Von Ah, Assistant Directors;
                  Amy Abramowitz; Colin Fallon; Bert Japikse; Elke Kolodinski; Maria
                  Mercado; Erica Miles; and Hai Tran.




(543313)
                  Page 22                                                         GAO-12-1018T
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