oversight

Spectrum Management: Incentives, Opportunities, and Testing Needed to Enhance Spectrum Sharing

Published by the Government Accountability Office on 2012-11-14.

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

                United States Government Accountability Office

GAO             Report to Congressional Committees




                SPECTRUM
November 2012



                MANAGEMENT

                Incentives,
                Opportunities, and
                Testing Needed to
                Enhance Spectrum
                Sharing




GAO-13-7
                                               November 2012

                                               SPECTRUM MANAGEMENT
                                               Incentives, Opportunities, and Testing Needed to
                                               Enhance Spectrum Sharing
Highlights of GAO-13-7, a report to
congressional committees.




Why GAO Did This Study                         What GAO Found
The increasing popularity of wireless          Some spectrum users may lack incentive to share spectrum or otherwise use it
devices that use spectrum, combined            efficiently, and federal agencies and private users currently cannot easily identify
with federal spectrum needs for                spectrum available for sharing. Typically, paying the market price for a good or
national defense and other public              service helps to inform users of the value of the good and provides an incentive
safety activities, have created                for efficient use. Federal agencies, however, pay only a small fee to the NTIA for
concerns that a “spectrum crunch” is           spectrum assignments and therefore have little incentive to share spectrum.
looming. However, there is also                Federal agencies also face concerns that sharing could risk the success of
evidence that at any given time or             security or safety missions, or could be costly in terms of upgrades to more
place, spectrum lies fallow or is only
                                               spectrally efficient equipment. Nonfederal users, such as private companies, are
intermittently used. In an effort to use
                                               also reluctant to share spectrum. For instance, license holders may be reluctant
spectrum as efficiently as possible,
advisory groups and others have
                                               to encourage additional competition, and companies may be hesitant to enter
proposed solutions to share spectrum.          into sharing agreements that require potentially lengthy and unpredictable
                                               regulatory processes. Sharing can be costly for them, too. For example,
This requested report examines (1)             nonfederal users may be required to cover all interference mitigation costs to use
what factors prevent users from                a federal spectrum band, which might include multiple federal users. Sharing can
sharing spectrum more frequently and           also be hindered because information on federal spectrum use is lacking and
(2) what actions the Federal                   information regarding some federal spectrum use may never be publicly
Communications Commission (FCC),               available, a situation that makes it difficult for users to identify potential spectrum
the National Communications
                                               for sharing.
Information Administration (NTIA), and
others can take to encourage more              Federal advisors, agency officials, and experts have identified several options
sharing and efficient spectrum use.            that could provide greater incentives and opportunities for more efficient
GAO reviewed plans and documents               spectrum use and sharing by federal and nonfederal users. These options
from FCC and NTIA regarding their              include, among other things: considering spectrum usage fees to provide
management of nonfederal and federal           economic incentive for more efficient use and sharing; identifying more spectrum
spectrum-sharing activities,                   that could be made available for unlicensed use, since unlicensed use is
respectively. GAO also interviewed             inherently shared; encouraging research and development of technologies that
federal and commercial spectrum                can better enable sharing; and improving and expediting regulatory processes
users, industry and academic experts,
                                               related to sharing. However, these options involve implementation challenges.
and other stakeholders.
                                               For example, setting spectrum usage fees for federal users may not result in
What GAO Recommends                            creating the proper incentives, because agency budgets might simply be
                                               increased to accommodate their current use. While new technologies that
FCC and NTIA should jointly (1) report         overcome some of the inherent challenges with sharing spectrum are being
to Congress on the potential merits            developed, proving those technologies under real-world conditions can be
and effects of a spectrum fee, (2)             difficult, and few incentives exist at the federal level to encourage such
determine how to best promote
                                               technology development. Finally, FCC and NTIA have taken some actions to
spectrum research and development,
                                               potentially reduce the amount of time and even the need for potential
and (3) evaluate what regulatory
changes might improve the spectrum             rulemakings sometimes associated with spectrum sharing, but stakeholders and
sharing process. The agencies                  experts suggested that more could be done to expedite the approval process,
generally agreed with GAO’s findings           such as automating some steps and developing better capabilities to track the
but identified ongoing efforts that            status of spectrum-sharing applications. However, any changes to federal
address the recommendations. GAO               regulatory processes related to spectrum management and sharing would need
has modified the recommendations as            to be carefully studied with respect to potential benefits and costs.
described further in the report.

View GAO-13-7. For more information, contact
Mark Goldstein at (202) 512-2834 or
goldsteinm@gao.gov.

                                                                                         United States Government Accountability Office
Contents


Letter                                                                                 1
               Scope and Methodology                                                   3
               Background                                                              4
               Some Users Lack Incentives and Face Barriers to Sharing
                 Spectrum                                                            11
               Incentives and Opportunities to Share Spectrum Could Be
                 Expanded                                                            17
               Conclusions                                                           28
               Recommendations for Executive Action                                  28
               Agency Comments and Our Evaluation                                    29

Appendix I     Federal Agencies, Nonfederal Spectrum Users and Experts
               Interviewed Regarding Spectrum Sharing                                32



Appendix II    Comments From the Department of Commerce                              34



Appendix III   Comments From the Federal Communications Commission                   37



Appendix IV    GAO Contact and Staff Acknowledgements                                39



Table
               Table 1: Subject Matter Experts Interviewed                           33


Figures
               Figure 1: Percentage of Federal Agency Frequency Assignments,
                        2012                                                           6
               Figure 2: Illustration and Examples of Spectrum Sharing                 7




               Page i                                           GAO-13-7 Spectrum Sharing
Abbreviations

4G                fourth generation
AIP               Administered Incentive Pricing
CSMAC             Commerce Spectrum Management Advisory Committee
DARPA             Defense Advanced Research Projects Agency
FCC               Federal Communications Commission
FSMS              Federal Spectrum Management System
GHz               gigahertz
IRAC              Interdepartment Radio Advisory Committee
LTE               Long Term Evolution
MHz               megahertz
NTIA              National Telecommunications and Information
                  Administration
OMB               Office of Management and Budget
PCAST             President’s Council of Advisors on Science and
                  Technology
Wi-Fi             wireless fidelity



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Page ii                                                        GAO-13-7 Spectrum Sharing
United States Government Accountability Office
Washington, DC 20548




                                   November 14, 2012

                                   The Honorable Fred Upton
                                   Chairman
                                   The Honorable Henry A. Waxman
                                   Ranking Member
                                   Committee on Energy and Commerce
                                   House of Representatives

                                   The Honorable John D. Rockefeller IV
                                   Chairman
                                   The Honorable Kay Bailey Hutchison
                                   Ranking Member
                                   Committee on Commerce, Science, and Transportation
                                   United States Senate

                                   The Honorable Greg Walden
                                   Chairman
                                   The Honorable Anna G. Eshoo
                                   Ranking Member
                                   Subcommittee on Communications and Technology
                                   Committee on Energy and Commerce
                                   House of Representatives

                                   The propagation and popularity of smart phones, tablets, and other
                                   wireless devices has created an explosion in the demand for and use of
                                   more radio frequency spectrum to support services and data
                                   transmissions on these devices, particularly in dense, urban areas.
                                   Federal users—mostly government agencies—also require spectrum for
                                   national defense, homeland security, and other vital mission activities. To
                                   date, however, nearly all usable radio spectrum has been allocated either
                                   by the National Telecommunications and Information Administration
                                   (NTIA) within the Department of Commerce for federal government use or
                                   by the Federal Communications Commission (FCC) for commercial and
                                   other nonfederal use. Therefore, virtually no “green fields” of spectrum
                                   are currently available to allocate to new uses or technologies. Going
                                   forward, this scarcity could have implications for our economy, our
                                   competitiveness in global markets, and the ability of government at all
                                   levels to meet its key missions.

                                   This situation notwithstanding, there is substantial evidence that at any
                                   given point in time at any given place, there is fallow or intermittently used


                                   Page 1                                                GAO-13-7 Spectrum Sharing
spectrum—certainly in sparsely populated rural areas, and even in
heavily trafficked urban areas. 1 Some experts suggest that the scarcity of
spectrum in the United States is to some extent a result of the manner in
which this resource has been allocated, managed, and used, rather than
because of a physical scarcity of the resource. In an effort to address
increasing demands for spectrum access, the current and past
Administrations, Congress, FCC, and others have proposed a variety of
policy, economic, and technological solutions to address the availability
and efficient use of spectrum. For example, in 2010, the administration
set a goal for 500 megahertz (MHz) of federal and nonfederal spectrum
currently being unused or under-used to be repurposed for mobile
broadband use. However, we have previously reported that repurposing
spectrum has been and can be a contentious and highly protracted
process, typically taking years. 2 As a result, solutions geared toward
greater sharing of spectrum among users—federal and nonfederal—have
become more attractive because of the potential access to more
spectrum and opportunities to use spectrum more efficiently that sharing
presents. For instance, the President’s Council of Advisors on Science
and Technology (PCAST) recently recommended that 1,000 MHz of
spectrum previously occupied only by federal users be shared with
nonfederal users. 3

In light of these issues, and in response to your request, we examined (1)
what factors currently prevent users from sharing spectrum more
frequently and (2) what actions FCC, NTIA and others can take to
encourage more sharing and more efficient spectrum use.




1
 See Commerce Spectrum Management Advisory Committee, Incentives Subcommittee
Final Report (Washington, D.C.: January 11, 2011); 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);
and Department of Commerce, Spectrum Management for the 21st Century, (Washington,
D.C.: 2008).
2
 GAO, Commercial Spectrum: Plans and Actions to Meet Future Needs, Including
Continued Use of Auctions, GAO-12-118 (Washington, D.C.: November 2011).
3
 Report to the President: Realizing the Full Potential of Government-held Spectrum to
Spur Economic Growth.




Page 2                                                        GAO-13-7 Spectrum Sharing
              We reviewed federal legislation, regulations, and processes regarding
Scope and     spectrum management and spectrum sharing, including NTIA’s Manual of
Methodology   Regulations and Procedures for the Federal Radio Frequency
              Management; as well as various FCC plans, notices, orders and other
              publications related to spectrum management and sharing. We conducted
              multiple interviews with FCC, NTIA, and various advisory committees,
              such as the Commerce Spectrum Management Advisory Committee
              (CSMAC). We selected 7 of the 19 Interdepartment Radio Advisory
              Committee 4 (IRAC) agencies—the Departments of Commerce, Defense,
              Homeland Security, Interior, Justice, Transportation, and Treasury—
              based on which agencies were most likely to have experience with
              spectrum sharing. We interviewed the spectrum managers for these
              departments to better understand their experiences with sharing,
              including successes and challenges, and analyzed the extent to which
              spectrum sharing was a part of their spectrum management plans.

              We also interviewed a variety of stakeholders and experts outside the
              federal government with knowledge and experience related to spectrum
              sharing issues. These stakeholders and experts fell into four groups:

              •   Nonfederal spectrum users: We interviewed officials from seven
                  commercial entities such as Verizon, Sprint, and other wireless and
                  communications companies. We also interviewed local government
                  officials regarding their spectrum sharing experiences. We selected
                  these nonfederal users based on their experiences with sharing
                  spectrum, or based on their vested interest in spectrum policy.
              •   Companies that create spectrum-sharing solutions: We interviewed
                  two companies that create spectrum sharing technologies. We
                  selected these companies based on recommendations from spectrum
                  experts and federal agency officials about which companies were
                  most active with spectrum sharing technology development.
              •   Industry and academic experts: We interviewed 16 industry and
                  academic experts. We selected these experts based on their
                  published and recognized research credentials for their work on


              4
               IRAC’s main function is to assist NTIA in assigning frequencies and in developing
              policies, procedures, and technical criteria on management and use of spectrum. The
              Department of Defense has multiple participants on the IRAC from the Army, Navy and Air
              Force. The other member agencies include the Departments of Agriculture, Energy, State
              and Veterans Affairs; Broadcasting Board of Governors; United States Coast Guard;
              National Aeronautics and Space Administration; National Science Foundation and United
              States Postal Service.




              Page 3                                                      GAO-13-7 Spectrum Sharing
                 spectrum management, spectrum sharing and the economic impacts
                 of spectrum related policies, and on other stakeholders’ and experts’
                 recommendations.
             •   International spectrum management officials: We interviewed
                 spectrum management officials from Canada, the United Kingdom,
                 and Australia to compare other countries’ spectrum management and
                 spectrum-sharing practices to that of the United States. We chose
                 these three countries based on their level of experience dealing with
                 spectrum-sharing issues. We also interviewed officials from the
                 International Telecommunication Union to understand its role in
                 advising international spectrum management and spectrum sharing
                 policies. 5
             We also completed a literature search and reviewed recent reports and
             articles related to spectrum sharing, including academic and government
             reports as well as speeches and articles by the groups of officials and
             experts we interviewed as described above.

             A complete list of the departments and agencies, experts and companies
             that we interviewed can be found in appendix I. The information and
             perspectives that we obtained from the interviews may not be generalized
             to all experts and industry stakeholders that have an interest in spectrum
             policy. Rather, comments and views were reviewed in context with
             current literature on spectrum management issues.

             We conducted this performance audit from September 2011 to October
             2012 in accordance with generally accepted government auditing
             standards. Those standards require that we plan and perform the audit to
             obtain sufficient, appropriate evidence to provide a reasonable basis for
             our findings and conclusions based on our audit objectives. We believe
             that the evidence obtained provides a reasonable basis for our findings
             and conclusions based on our audit objectives.


             In the United States, responsibility for managing spectrum—including
Background   allocating, assigning, regulating, and facilitating the sharing of spectrum—


             5
              The International Telecommunication Union allocates global radio spectrum and
             develops technical standards for information and communication technologies and their
             networks, among other things. It was founded in 1865 and became a specialized agency
             of the United Nations in 1947. Its membership comprises 193 countries and over 700
             private-sector entities.




             Page 4                                                      GAO-13-7 Spectrum Sharing
is divided between two agencies, NTIA and FCC. NTIA and FCC jointly
determine the amount of spectrum allocated for federal and nonfederal
use, including both exclusive and shared use. After this allocation occurs,
in order to use spectrum, nonfederal users, such as wireless companies
and local governments, must follow rules and be authorized by FCC to
use specific frequencies. 6 When spectrum is repurposed, FCC may also
be authorized to hold an auction to distribute licenses through a bidding
process. Federal users, like the military, must follow rules, and obtain
frequency assignments from NTIA. 7 Both NTIA and FCC have authority to
issue rules and regulations on use of spectrum as necessary to ensure
effective, efficient, and equitable domestic spectrum use.

Federal agencies use spectrum to help meet a variety of missions,
including emergency communications, national defense, land
management, and law enforcement. More than 60 federal agencies and
departments combined have over 240,000 frequency assignments. As of
September 2012, 9 departments and agencies had the vast majority of
the assignments: the Department of Defense, the Federal Aviation
Administration, the Department of Justice, the Department of Homeland
Security, the Department of the Interior, the Department of Agriculture,
the United States Coast Guard, the Department of Energy, and the
Department of Commerce, respectively, hold 94 percent of all federally
assigned spectrum. (See fig. 1.) 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.




6
 Act of June 19, 1934, ch. 652, 48 Stat. 1064, as amended by the Middle Class Tax Relief
and Job Creation Act of 2012, Pub. L. No. 112-96, Title VI, §§ 6401, 6402, 126 Stat. 156,
223-225 (Feb. 22, 2012) (Communications Act), codified as title 47, United States Code
Annotated §§ 307-3011 (Westlaw 2012).
7
 Telecommunications Authorization Act of 1992, Pub. L. No. 102-538, Title I, 106 Stat.
3533 (Oct. 27, 1992), as amended, codified at 47 U.S.C. ch. 8 (NTIA Authorization Act).




Page 5                                                        GAO-13-7 Spectrum Sharing
Figure 1: Percentage of Federal Agency Frequency Assignments, 2012




                                       Not all spectrum has equal value. The spectrum most highly valued
                                       generally consists of frequencies between 225 and 3700 MHz, as these
                                       frequencies have properties well suited to many important wireless
                                       technologies, such as mobile devices, and radio and television
                                       broadcasting. According to NTIA’s Office of Spectrum Management,
                                       federal agencies have exclusive use of about 18 percent of this highly
                                       valued spectrum, while nonfederal users have exclusive licenses to
                                       approximately 33 percent. 8 The remainder of this spectrum is allocated to
                                       shared use. The types of and degree of sharing between governmental
                                       and nongovernmental users varies across the bands included within this
                                       shared spectrum. In addition, increasing demands on spectrum mean that
                                       federal and nonfederal users increasingly occupy adjacent bands, which
                                       in practice necessitates intensive coordination on technical rules.
                                       Estimates of the extent of predominant federal use within the spectrum
                                       allocated for shared use vary depending on the particular evaluation
                                       model and analyses employed. Depending on the estimate used, the total



                                       8
                                        For many mobile radio systems, this is the portion of the spectrum where scarcity
                                       concerns are the greatest. However, for some industry representatives, the range of high-
                                       value spectrum is larger, located anywhere between 100 MHz to 6 GHz. As spectrum-
                                       dependent technologies improve over time, the definition of high-value spectrum can
                                       change.




                                       Page 6                                                        GAO-13-7 Spectrum Sharing
                                        percentage of the most highly valued spectrum exclusively or
                                        predominantly used by the federal government ranges from
                                        approximately 39 percent to 57 percent.

                                        Spectrum sharing can be defined as the cooperative use of common
                                        spectrum that allows disparate missions to be achieved. 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.)

Figure 2: Illustration and Examples of Spectrum Sharing




                                         Both FCC and NTIA manage the process that leads to spectrum sharing
                                         between federal and nonfederal users. The steps involved in the process
                                         include the following:



                                        Page 7                                             GAO-13-7 Spectrum Sharing
•   Prior to authorizing a nonfederal user to share spectrum with federal
    users, FCC will coordinate with NTIA on the allocation and service
    rulemakings required that define the technical and operating
    conditions for shared access to spectrum. 9 NTIA will provide draft
    findings to IRAC, which provides advice to NTIA regarding federal
    spectrum. FCC participates in IRAC as a liaison. IRAC determines
    which agencies would be affected by the nonfederal use of spectrum
    and acts as the forum where those agencies consider how they may
    accommodate the nonfederal user. According to NTIA, any nonfederal
    user may approach NTIA and IRAC to discuss a proposal to use
    federal or shared bands to determine any obstacles and best ways
    forward. In some cases, FCC encourages nonfederal applicants to
    work directly with concerned agencies to try to reach agreement on an
    arrangement that could then be adapted to FCC rules or licenses.
    Similarly, if federal users request frequency assignments in
    nonfederal or shared bands, these requests must be coordinated with
    FCC through IRAC. According to NTIA, thus far, all requests by
    federal entities to change an allocation have gone through NTIA to
    FCC and have required an FCC rulemaking.
•   To have access to federal spectrum, the nonfederal entity must also
    obtain an FCC license. FCC will coordinate the allocation change or
    license application, including technical and operational conditions, for
    sharing federal spectrum through the Frequency Assignment
    Subcommittee of IRAC.
•   Next, before any spectrum sharing takes place in federal or shared
    spectrum, NTIA must vet the coordinating parties’ requests, assign
    frequencies, and ensure that the systems the parties will be using—
    such as the land mobile radios used by state and local emergency
    responders that share spectrum with federal users—are compatible.
When spectrum sharing occurs solely among federal users within federal
exclusive bands, IRAC’s Frequency Assignment Subcommittee, using
NTIA’s database of federal frequency assignments, reviews the spectrum


9
 Under a Memorandum of Understanding between FCC and NTIA, all proposed actions
that could potentially cause interference to government operations are coordinated with
NTIA. In cases where a rulemaking is necessary to provide parties with access to federal
spectrum, the rulemaking is coordinated with NTIA. For instance, FCC followed this
process when a medical devices company sought to share spectrum used by the
Department of Defense and other federal agencies. The proposed devices required wider
bandwidths of spectrum to operate than similar medical devices that previously operated
in medical network spectrum bands. To accommodate this and other similar uses, an FCC
rulemaking was required to expand the amount of spectrum set aside for medical implant
devices.




Page 8                                                       GAO-13-7 Spectrum Sharing
requests and identifies any potential interference concerns prior to
commencing the shared use. Federal sharing occurs routinely. For
example, the Departments of Defense, and Transportation, and
Department of Commerce’s National Oceanic and Atmospheric
Administration share spectrum for directing aircraft and monitoring
weather conditions. The Department of Defense also frequently shares
spectrum among its own various programs, internal services and
agencies.

When sharing occurs solely among nonfederal users, FCC seeks to allow
flexibility for license holders to coordinate and negotiate spectrum-sharing
agreements among themselves. FCC provides flexibility in a couple of
ways. One way is through the expanded issuance of flexible use licenses.
As opposed to traditional licenses, where usage is limited to the specific
terms of the license (e.g., TV broadcast stations in specific markets),
flexible use licenses allow for a wider array of uses without having to seek
additional FCC authorization. Licensing expands the pool of potential
entities that would be able to innovate and share the spectrum beyond
those that would use the spectrum in a similar manner. However, with
both traditional and flexible use licenses, if a proposed shared use is not
consistent with the terms of a license, an FCC rulemaking would be
required to allow that use. Another way FCC provides flexibility is with
respect to its secondary market policies and rules that permit licensees to
share their spectrum resource through spectrum lease arrangements. 10
While FCC tracks these secondary market transactions, users negotiate
their own terms, making it difficult to gauge the extent to which sharing
occurs among these users, if at all.

Spectrum sharing also occurs through unlicensed access by anyone
using wireless equipment certified by FCC for those frequencies.
Equipment such as wireless microphones, baby monitors, and garage
door openers share spectrum with other services on a non-interference
basis typically within a limited geographic range and at low power levels
to avoid interference with higher priority uses. In contrast with most
licensed spectrum use, unlicensed users have no regulatory protection



10
  In the Matter of Promoting Efficient Use of Spectrum through Elimination of Barriers to
the Development of Secondary Markets, 18 FCC Rcd. 20604 (2003) (First Report and
Order); 18 FCC Rcd. 24817 (2003) (Erratum); 19 FCC Rcd. 17503 (2004) (Second Report
and Order), , 22 FCC Rcd. 7209 (April 11, 2007) (Third Report and Order); see also 47
C.F.R. Pt. 1, Subpt. X.




Page 9                                                        GAO-13-7 Spectrum Sharing
against interference from other licensed or unlicensed users in the band.
Unlicensed use is regulated to ensure that devices do not cause
interference to other operations in the spectrum. For example, wireless
fidelity (Wi-Fi) 11 devices share some band segments in the 5 gigahertz
(GHz) range with military radar subject to the condition that the Wi-Fi
devices are capable of spectrum sensing via dynamic frequency
selection; if the Wi-Fi device detects a radar signal, the device must
immediately vacate the channel the radar signal is on.

Many technological developments have also increased spectrum
efficiency and further enabled sharing. For example, dynamic spectrum
access technologies under development could allow equipment to sense
and select among available frequencies in an area, efficiently using
whatever frequencies might be available. This allows users to share
frequencies in the same location in very small increments of time. 12
Software-defined radios also use spectrum more efficiently by accessing
different frequencies in one location. In addition, these radios use more
efficient batteries that allow them to perform more sophisticated tasks
while using less spectrum than traditional radios. As another example,
small cell technology allows users to share the same frequencies in close
proximity to each other. Further, emerging fourth generation (4G) Long
Term Evolution (LTE) technologies, as used by some smart phones to
access the Internet, promise improvement in data transfer speeds. 13
Research continues on these and other fronts to enable more efficient
use of spectrum, including sharing.




11
  Wi-Fi is a technology that is often used in conjunction with a customer’s Internet service
to connect devices, such as computers and smart phones, located within the customer’s
home or business to the Internet.
12
   Dynamic spectrum access technologies are currently able to sense for available
frequencies before transmission (listen before talk), but not sense during transmission.
(listen while talk) Sensing before transmission involves sensing available frequencies,
then jumping and transmitting, which causes lag time. The technology to enable sensing
during transmission, which would allow a user to seamlessly continue communication
while moving geographically through spectrum bands is still under development.
13
  The international definition of 4G technology is transmitting data at 100 Megabits per
second, but current 4G LTE technologies deliver top speeds of only 15 Megabits per
second.




Page 10                                                         GAO-13-7 Spectrum Sharing
Some Users Lack
Incentives and Face
Barriers to Sharing
Spectrum
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 14—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 to pay market price
                         for all of its spectrum needs. Consequently, 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 industry
                         observer, 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. 15

                         In contrast, licensed, commercial users that purchase spectrum at auction
                         generally have market incentives to use their spectrum holdings
                         efficiently, but these users also have incentives that work against their


                         14
                           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.
                         15
                           It is the case, however, that when ownership of these companies changes hands,
                         purchasers do pay for the value of all the assets of the company—including the value of
                         the spectrum license.




                         Page 11                                                        GAO-13-7 Spectrum Sharing
                             sharing spectrum. 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 not want to
                             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   Federal agencies will not risk mission failure, particularly when there are
Users from Sharing           security and public safety implications. According to the agency officials
Spectrum                     we contacted, federal agencies will typically not agree to share spectrum
                             if it puts achievement of their mission at risk. The officials stressed that
                             when missions have security and safety implications, sharing spectrum
                             may pose unacceptable risks. For example, the military tests aircraft and
                             trains pilots using test ranges that can stretch hundreds of miles,
                             maintaining constant wireless contact. While there may be times and
                             locations where the frequencies are not in use because aircraft are not in
                             the area, communication frequencies in the test ranges cannot be shared,
                             according to officials in the Department of Defense, because even
                             accidental interference in communications with an aircraft could result in
                             catastrophic mission failure. Further, sharing information about such
                             flights could expose pilots and aircraft, or the military’s larger mission, to
                             increased risk. Federal law enforcement agencies are also concerned
                             about how sharing spectrum could put missions at risk. For example,
                             officials at the Departments of Treasury and Justice explained that
                             interference with communications among agents could put the agents in
                             danger and cause them to miss mission critical information. According to
                             officials from the Department of Justice, the department tested sharing
                             spectrum with a major commercial carrier in a metropolitan area in 2008
                             and concluded that the department and the carrier t could not co-exist on
                             the same spectrum. NTIA also reported that although sharing should be
                             accommodated when appropriate, it is necessary to establish clear
                             regulatory mechanisms for sharing to ensure that federal users are not
                             required to assume responsibility for mitigating interference. 16



                             16
                               United States Department of Commerce, Relocation of Federal Radio Systems from the
                             1710- 1755 MHz Spectrum Band: Fourth Annual Progress Report (March 2011).




                             Page 12                                                   GAO-13-7 Spectrum Sharing
According to FCC officials, concerns about risk of mission failure can
drive conservative technical standards for federal agencies’ missions that
can make sharing spectrum impractical. In general, the technical
analyses and resulting standards federal agencies develop 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 federal agencies’
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.

Spectrum sharing can be costly. FCC and NTIA officials, as well as other
agency officials and an industry stakeholder, told us that sharing federal
spectrum can be costly for both the nonfederal and federal users seeking
to share for the following reasons:

•    Users may find that mitigation of potential interference can be costly in
     terms of equipment design and operation. For example, according to
     officials from one agency, sharing spectrum outside a law
     enforcement environment would require cognitive radios, which could
     be costly. 17
•    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 interference 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 may be less
     efficient than more modern systems. Limited budgets may also
     prevent users from being able to invest in newer technology that can
     facilitate easier sharing. For example, officials at one agency said they
     maintain and use systems until the end of the system’s life cycle to
     assure continuity of operations and security.
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,
according to stakeholders:



17
   In any moment in time, cognitive radios have the ability to determine and use spectrum
that is unused and available.




Page 13                                                       GAO-13-7 Spectrum Sharing
•   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 a rulemaking is required to allow shared
    use of spectrum. 18 In addition to that time, NTIA officials said that
    IRAC’s investigation of potential harmful interference could also take
    months. In one example, federal users currently share the spectrum
    band of 413-457 MHz with a nonprofit medical devices provider. The
    spectrum is used for transmissions related to implant products for
    veterans. It took FCC, NTIA and the spectrum users approximately 2
    years (from 2009 to 2011) to facilitate this arrangement because an
    FCC rulemaking was required and all parties agreed to a lengthy
    evaluation of potential interference. 19 The nonprofit in this case was
    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 because of findings of harmful interference risks,
    could discourage for-profit companies from developing and investing
    in business plans that rely on sharing federal spectrum. However,
    officials at one agency commented that they have seen the timing of
    NTIA approval of federal participation drastically reduced over the
    past several years, from many months to less than a month as a
    result of additional coordination and negotiation of sharing done prior
    to the submission of frequency requests.
•   Stakeholders we interviewed told us that when federal and nonfederal
    users share spectrum, both parties worry that harmful interference
    may affect their missions or operations if the other party overreaches
    or does not follow the agreement. They also fear that any
    enforcement actions taken by FCC will happen too slowly to protect
    their interests and that enforcement outcomes may be unfavorable.
    According to officials at one agency, there are not many examples of
    large scale sharing of federal and nonfederal systems and limited




18
  The time it takes to complete rules varies 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. FCC is generally not required to
complete rules within limited time frames.
19
  According to Department of Defense officials, both the federal stakeholders, including
the Department of Defense, and the medical device provider were involved in the
interference analysis.




Page 14                                                        GAO-13-7 Spectrum Sharing
                                governance and enforcement mechanisms exist to support such
                                efforts.

                           Similar problems can arise when nonfederal users share spectrum with
                           each other. Distrust of each other and of FCC’s decision-making and
                           enforcement processes could discourage sharing. For example, if a
                           proposed shared use does not fall within the terms of the incumbent’s
                           license, FCC may need to engage in rulemaking proceedings, which can
                           be long and unpredictable and can make spectrum-sharing arrangements
                           unattractive to companies that otherwise might consider sharing.


Users May Be Unable to     Besides lacking incentives and overcoming other barriers, users may also
Easily Identify Spectrum   have difficulty identifying spectrum available for sharing because data on
Available 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. 20 We reported
                           that a substantial number of surveyed users of FCC’s largest and most
                           accessed license database, the Universal Licensing System, said that
                           inaccurate and missing data hindered their use of the system to a great or
                           moderate extent. 21 NTIA collects basic, descriptive information on federal
                           spectrum use, such as agency name, frequency, and location, in its
                           Government Master File, and relies on agencies to evaluate and report
                           their own current and future spectrum needs, even though agencies have
                           not always provided accurate information on their spectrum use, which
                           could be useful in coordinating sharing arrangements. 22 Further, federal
                           agency spectrum managers told us that agencies have not been asked to


                           20
                             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.: Nov. 23, 2011). In
                           April 2011, we reported on NTIA’s Government Master File database. See 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.: Apr.
                           12, 2011).
                           21
                            GAO-12-118.
                           22
                            GAO-11-352.




                           Page 15                                                    GAO-13-7 Spectrum Sharing
regularly update their spectrum plans, in which they were required to
include an accounting of spectrum use. Federal agencies were directed to
submit spectrum plans to NTIA and provide updates every 2 years. 23
Since 2008, NTIA has ceased requesting those updates and has put its
strategic planning initiatives on hold because of limited resources.

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. The new system may in turn identify
more sharing opportunities. NTIA officials plan for the new Federal
Spectrum Management System (FSMS) to house more detailed data
about agencies’ spectrum usage than the current Government Master
File, including times of use, power levels, and equipment, among other
information not currently collected. FSMS is scheduled to be operational
in fiscal year 2014. However, the data will only be available to IRAC
members and will not be publicly available.

Legislation has been introduced to try to address the lack of publicly
available data on spectrum usage broadly. 24 The legislation would require
in part that FCC, in consultation with NTIA and the White House Office of
Science and Technology, prepare a report for Congress that includes an
inventory of each radio spectrum band they manage. The inventory is
also to include data on the number of transmitters and receiver terminals
in use, if available. Other technical parameters that allow for more
specific evaluation of how spectrum can be shared will also be
inventoried, including coverage area, receiver performance, location of
transmitters, percentage and time of use, and a list and described use of
unlicensed devices authorized to operate in the band. 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. 25 Additionally, FCC and NTIA officials told us
that information on some federal spectrum bands may never be made



23
  See, President’s Memorandum on Improving Spectrum Management for the 21st
Century, 49 Weekly Comp. Pres. Doc. 2875 (Nov. 29, 2004).
24
 S. 455, § 3, 112th Cong. (2011).
25
  The Department of Defense’s Defense Advanced Research Projects Agency is working
on frequency mapping, as discussed later in this report.




Page 16                                                  GAO-13-7 Spectrum Sharing
                          publicly available because of the sensitive or classified nature of some
                          federal spectrum use.


                          Federal advisors and experts we spoke with identified several options that
Incentives and            could provide incentives and opportunities for more efficient spectrum use
Opportunities to          and sharing, by federal and nonfederal users, which include, among
                          others: (1) assessing spectrum fees; (2) expanding the availability of
Share Spectrum            unlicensed spectrum; (3) identifying federal spectrum that can be shared
Could Be Expanded         and promoting sharing; (4) requiring agencies to give more consideration
                          to sharing and efficiency; (5) improving and expediting the spectrum-
                          sharing process; and (6) increasing the federal focus on research,
                          development and testing of technologies that can enable sharing, and
                          improve spectral efficiency. We have previously reported that to improve
                          spectrum efficiency among federal agencies, Congress may wish to
                          consider evaluating what mechanisms could be adopted to provide better
                          incentives and opportunities for agencies to move toward more efficient
                          use of spectrum, which could free up some spectrum allocated for federal
                          use to be made available for sharing or other purposes. 26


Assessing Spectrum Fees   Several advisory groups and industry experts, including those we
                          interviewed, have recommended that fees be assessed based on
                          spectrum usage. As previously mentioned, with the exception of fees for
                          frequency assignments, federal users incur no costs for using spectrum
                          and have few requirements for efficient use. As s result, federal users
                          may have little incentive to share spectrum assigned to them with
                          nonfederal users or identify opportunities to use it 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 and solicit input from both federal and
                          nonfederal users that might be subject to fees. 27 The National Broadband
                          Plan has also recommended that Congress consider granting FCC and
                          NTIA authority to impose fees on unauctioned spectrum license holders—



                          26
                            GAO, 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and
                          Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington,
                          D.C.: Feb. 28, 2012).
                          27
                           CSMAC Incentives Subcommittee Final Report.




                          Page 17                                                GAO-13-7 Spectrum Sharing
such as TV broadcasters and public safety entities—as well as
government users. 28 Fees could help to free spectrum for new uses, since
licensees that use spectrum inefficiently may reduce their holdings or
pursue sharing opportunities once they bear the opportunity cost of letting
their spectrum remain fallow or underused. FCC officials told us that they
have proposed spectrum usage fees at various times including in FCC’s
most recent congressional budget submission and have requested, but
have yet to receive, legislative authority to implement such a program. 29

While noting the benefits of spectrum fees, the CSMAC Incentives
Subcommittee report also notes 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 that 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 avoid disrupting public safety, national defense, and other essential
government services that protect human life, safety, and property. 30

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
an incentive to use their assignments more efficiently or share spectrum.
In the PCAST proposal, agencies would also not bear the costs of making
spectrum available to others for sharing, because they could be




28
  In 2010, an FCC task force issued the National Broadband Plan. Federal
Communications Commission, Connecting America: The National Broadband Plan, p. 83,
Recommendation 5.6, (Mar. 16, 2010).
29
 Federal Communications Commission, Fiscal Year 2013 Budget Estimates Submitted to
Congress, p15 (Washington, D.C.: February 2012).
30
     The National Broadband Plan, p83, Recommendation 5.6 (Mar. 16, 2010).




Page 18                                                     GAO-13-7 Spectrum Sharing
                           reimbursed for their investments that made sharing possible from a
                           proposed Spectrum Efficiency Fund. 31

                           Internationally, some regulatory agencies have moved forward with
                           charging market based rates for spectrum. Officials in two of the countries
                           we spoke with said that the regulatory agency in their country collects
                           user fees for government-agency spectrum use that reflect the
                           opportunity cost of spectrum and serve as a means to encourage greater
                           efficiency. For instance, the Australian Communications and Media
                           Authority assesses two types of license fees for devices: (1)
                           administrative charges to recover the direct costs of spectrum
                           management and (2) annual license taxes to recover the indirect
                           government costs of spectrum management. Officials suggested that
                           license fees provide incentives for efficient use. Similarly, the Office of
                           Communications in the United Kingdom uses a concept known as
                           Administered Incentive Pricing (AIP) to set charges for spectrum holdings
                           to reflect the value of the spectrum and to promote efficient use. Officials
                           in these countries told us that the fee structure also encourages agencies
                           to seek more opportunities to share spectrum. For example, in response
                           to the United Kingdom’s AIP system, one ministry conducted a study of
                           which spectrum bands could be shared or, if not in full use, released for
                           use by others. The ministry identified at least five bands to share and
                           released additional bands because the cost associated with retaining
                           those rights was not economically feasible for intermittent use. As a
                           result, the ministry relinquished its rights to those underused bands.


Expanding Unlicensed Use   According to stakeholders, unlicensed use is a valuable complement to
                           licensed use 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. 32 While FCC has generally



                           31
                             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.
                           32
                             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 19                                                       GAO-13-7 Spectrum Sharing
relied on auctions to license spectrum, which over the years have
generated billions in dollars of revenue for the United States Treasury,
FCC is attempting to make more unlicensed spectrum available in the
hope of fueling innovation and economic growth. Increasing the amount
of spectrum available for unlicensed use allows more users to share
spectrum without going through lengthy negotiations and interference
mitigations, and also promotes more experimentation and innovation. To
access exclusively licensed spectrum, users must enter into sharing
agreements with the license holder sand negotiate access each time they
wish to use that spectrum. By contrast, when spectrum is available for
unlicensed purposes, such negotiation is generally not needed and,
according to some experts, may lead to more widespread
experimentation and the development of innovative technologies.

More recently, FCC has provided unlicensed access to additional
spectrum, known as TV “white spaces,” to help address spectrum
demands. 33 The white spaces refer to the buffer zones that FCC provided
between the television broadcasters to mitigate unwanted interference
between adjacent stations. In the TV white space rules, 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 that responds with a list of the
frequencies that are available for use at the device’s location. 34 As an
example, one local official explained that the City of Wilmington, North
Carolina, uses TV white space spectrum to provide a network of public
Wi-Fi access and public-safety surveillance functions. However, some
experts have noted that the use of white space for rural areas holds more
promise than large, dense urban areas because the sheer number of TV
stations and higher usage in those areas makes use of the white spaces
more challenging.




33
  In the Matter of Unlicensed Operation in the TV Broadcast Bands, 27 FCC 3,692 (Apr. 5,
2012).
34
  To date, FCC has designated two administrators to locate available white space
spectrum for users of unlicensed devices, Spectrum Bridge and Telcordia Technologies.
Devices must operate only on those channels designated by the administrator.




Page 20                                                      GAO-13-7 Spectrum Sharing
Identifying Federal    FCC and NTIA have noted the importance of sharing federal spectrum as
Spectrum That Can Be   a means to address spectrum demand. FCC’s Chairman recently said
Shared and Promoting   that it has become increasingly harder to find free and clear blocks of
                       spectrum. 35 The Chairman further said that it would be counterproductive
Sharing                to be limited to the choices of reallocation or nothing and that it may be
                       the case that in some bands, sharing could allow access to spectrum that
                       might otherwise take years and be costly to make available to other
                       users. As we previously mentioned, in 2010, the President directed
                       federal agencies to clear 500 MHz of spectrum for nonfederal uses by
                       2020. 36 In response to this directive, NTIA identified bands to evaluate for
                       repurposing. For example, an interagency group was formed to determine
                       the viability of accommodating commercial wireless broadband in the
                       1755-1850 MHz band. 37 However, the evaluation found that clearing this
                       95 MHz band may take 10 years, cost $18 billion, and cause significant
                       disruption. Furthermore, some federal systems could remain in the band
                       indefinitely. To support NTIA’s effort regarding this band, FCC recently
                       granted special temporary authority for T-Mobile to conduct tests to
                       explore sharing between commercial wireless services and federal
                       systems operating in the 1755-1780 MHz band. 38 NTIA has also noted
                       that the federal government must ensure effective spectrum use and push
                       for sharing and other innovative uses wherever possible. 39 Further, it is
                       critical that agencies participate in identifying strategies for more efficient
                       use of spectrum, including sharing it, while maintaining essential federal
                       missions. For example, NTIA asked CSMAC to advise on what kinds of
                       sharing are workable in the long term. Consequently, CSMAC is
                       reviewing options to analyze the impact federal systems remaining in the
                       band might have on future commercial uses, and the sharing conditions
                       that might be required to protect incumbent systems.




                       35
                         FCC Chairman Julius Genachowski, Prepared Remarks to International CTIA Wireless
                       (May 8, 2012).
                       36
                        Unleashing the Wireless Broadband Revolution, 75 Fed. Reg. 38,387 (June 28, 2010).
                       37
                         U.S. Department of Commerce, An Assessment of the Viability of Accommodating
                       Wireless Broadband in the 1755-1850 MHz Band (March 2012).
                       38
                        Special license granted to T-Mobile License LLC effective August 13, 2012.
                       39
                        United States Department of Commerce, Plan and Timetable to Make available 500
                       Megahertz of Spectrum available for Wireless Broadband (October 2010).




                       Page 21                                                     GAO-13-7 Spectrum Sharing
                             Recent PCAST recommendations could also create opportunities for
                             nonfederal users to share 1,000 MHz of spectrum previously occupied
                             only by federal users. Out of concern that additional clearing of federal
                             users from spectrum is not sustainable, PCAST recently recommended
                             that the President issue a new policy memorandum calling for the federal
                             government to immediately identify 1,000 MHz of federal spectrum for
                             sharing with nonfederal users. 40 To facilitate sharing this spectrum,
                             PCAST also recommended that FCC and NTIA implement a federal
                             spectrum access system that includes data on when and where federal
                             users could allow access to fallow spectrum. Such a system could help
                             streamline the regulatory processes involved in sharing that we discussed
                             earlier. However, PCAST acknowledged that implementing the structure
                             they recommended will not be easy and could take a long time. Moreover,
                             some experts and industry stakeholders suggest that sharing 1,000 MHz
                             of federal spectrum may be no easier or less costly than previous efforts
                             to vacate half that amount, given the barriers to sharing that exist.


Requiring Agencies to Give   In 2011, the Office of Management and Budget (OMB) updated its
More Consideration to        guidance to federal agencies on preparing the fiscal year 2013 budget by
Spectrum Sharing and         asking agencies to consider the economic value of spectrum when
                             developing their economic justifications for procuring new equipment. 41
Efficiency                   The guidance noted that spectrum should generally not be considered a
                             free resource, but rather should be considered to have value. Therefore,
                             budget requests for systems that require spectrum should include the
                             evaluation of alternative systems or methods that reduce spectrum
                             needs, such as spectrum sharing. In January 2011, CSMAC reported that
                             the focus of this process had been on capital planning. The Committee
                             stated that it believed it would be more useful to focus on ensuring that
                             agencies give more consideration to trade-offs in spectrum use in their
                             management processes. They also said that doing so will likely yield
                             greater improvements in overall spectrum management and use. Toward
                             that end, with respect to the budget for major spectrum-dependent
                             communications systems, the Committee rewrote the circular,
                             recommending that agencies specify in their spectrum proposals (a)



                             40
                              Report to the President; Realizing the Full Potential of Government-held Spectrum to
                             Spur Economic Growth.
                             41
                              Office of Management and Budget, Preparation, Submission, and Execution of the
                             Budget, Circular No. A–11 (Washington, D.C.: August 2011).




                             Page 22                                                      GAO-13-7 Spectrum Sharing
                           whether the system will share with other existing systems, (b) the extent
                           to which replacement systems will be more spectrally efficient compared
                           to the prior system, and (c) that there was consideration of non-spectrum
                           dependent or commercial alternatives. The Middle Class Tax Relief and
                           Job Creation Act required that OMB implement these recommendations. 42
                           We have also reported that federal agencies generally invest in more
                           spectrally efficient technologies when mission needs demand it, not
                           according to any underlying, systematic consideration of spectrum
                           efficiency. 43 As a result, we recommended that FCC and NTIA jointly
                           develop accepted models and methodologies to assess the impact of new
                           technologies on overall spectrum use and that NTIA determine how to
                           provide incentives to agencies to use spectrum more efficiently. 44


Improving and Expediting   FCC and NTIA have taken some actions to potentially reduce the amount
the Spectrum-Sharing       of time and even the need for some potential rulemakings associated with
Process                    spectrum sharing, but stakeholders and experts we interviewed
                           suggested that more could be done to expedite the process. NTIA also
                           encourages communication between federal and nonfederal users
                           regarding sharing plans to deal with potential interference and other
                           technical issues early in the process. These communications are
                           important to provide certainty to nonfederal users about the availability of
                           shared spectrum while also ensuring that critical federal operations are
                           protected.

                           Stakeholders suggested that NTIA and FCC could do more to streamline
                           or automate their processes, and that more complete databases of
                           spectrum use, as discussed earlier, could help potential sharing entities
                           identify opportunities. Some experts argued for FCC to shift from a
                           “command and control” approach for spectrum management to a
                           regulatory approach that was more flexible and adaptable to new
                           technologies. Others argue that the process is further slowed down and



                           42
                            47 U.S.C. § 1456.
                           43
                            GAO, Spectrum Management: Better Knowledge Needed to Take Advantage of
                           Technologies That May Improve Spectrum Efficiency, GAO-04-666 (Washington, D.C.:
                           May 2004).
                           44
                             In response to the recommendation, FCC and NTIA jointly prepared the Federal
                           Strategic Spectrum Plan which established a test bed and models to measure the impact
                           of new technologies on spectrum use.




                           Page 23                                                     GAO-13-7 Spectrum Sharing
                          complicated because two regulatory agencies are involved as opposed to
                          a single agency, as is the case in other countries, and other industries.

                          CSMAC also reported that FCC and NTIA could do more to streamline
                          the sharing approval process. For example, a common frustration is that a
                          nonfederal entity seeking to share federal spectrum is unable to precisely
                          follow the status of its spectrum sharing application once it is filed with the
                          FCC. Further, it is not transparent in the experimental licensing process
                          on the FCC website when FCC transmits applications to NTIA, when
                          NTIA responds to FCC, and whether that response contains questions to
                          which the applicant must respond to progress the application. On the
                          NTIA side, IRAC’s Frequency Assignment Subcommittee established a
                          review period of approximately nine days to respond with concurrence or
                          concerns regarding an application. NTIA’s website provides some
                          information regarding the status of an application in the IRAC process;
                          however, the information is very generic and the nonfederal applicant has
                          no means to obtain information as to why its request was tabled or to
                          engage directly with the concerned parties. For applicants to more
                          proactively engage FCC regarding concerns or other actions, CSMAC
                          recommended that there be a public tracking capability that allows an
                          FCC applicant to readily identify when FCC sent the application to NTIA,
                          when NTIA responded, and whether NTIA had specific questions
                          regarding the merits or technical components of the application.
                          Regardless, any such changes to how spectrum is currently managed
                          and regulated would need to be carefully studied with respect to potential
                          benefits and costs.


Increasing the Federal    Several technological advances promise to make sharing easier, but are
Focus on Research,        still at early stages of development and testing. For example, various
Development and Testing   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 among frequencies to seamlessly continue
                          communication as the user moves geographically through spectrum
                          bands. According to experts and researchers we spoke with, progress
                          has been made but there is no indication of how long it will be before this
                          technology is fully deployable. Similarly, current fourth generation (4G)
                          Long Term Evolution (LTE) technologies promise the ability to facilitate
                          channel sharing as well as much faster data transfer rates over time,
                          which could also potentially free frequencies more quickly for use by
                          others. However, experts we talked to could not predict how long it will be
                          before data networks reach international 4G transmission standards and


                          Page 24                                               GAO-13-7 Spectrum Sharing
thus, maximize spectral efficiency. 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
interference, and agreements and rulemakings that are currently needed
may not be necessary to enable sharing.

Although industry participants indicated that extensive testing under
realistic conditions is critical to conducting basic research on spectrum
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 said six companies
responded to NTIA’s invitation to participate in the previously mentioned
dynamic spectrum access-testing project. However, three handsets were
received for the testing, and one of those 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.

We have previously reported that the federal government has a key role
in performing or otherwise encouraging research that the private industry
would not do on its own. 45 With respect to research and development on
spectrum sharing and spectrum efficiency, we found that FCC and NTIA
are involved in creating test beds and other opportunities for research and
development. 46 For example, when FCC proposed a rulemaking to
improve its experimental license program in November 2010, it invited
comments on a number of ideas including the need to identify locations
for test beds, where new technologies could be tested before being



45
 GAO, Research and Development: Lessons learned from Previous Research Could
Benefit FreedomCAR Initiative, GAO-02-810T (Washington, D.C.: June 2002).
46
  A spectrum test bed consists of specific segments of spectrum set aside to test
technologies, services or related techniques.




Page 25                                                       GAO-13-7 Spectrum Sharing
introduced to the market and frequency bands where FCC might provide
increased flexibility to conduct experiments. Further, FCC is seeking to
establish provisions that encourage the exploration of new technologies,
including technologies that would facilitate spectrum sharing. To expand
testing opportunities, PCAST recommended that real-world test services
be provided to test federal and public-safety frequency bands. Similarly,
the Wireless Spectrum Research and Development’s Senior Steering
Group is conducting workshops regarding the development of a national
wireless test environment. 47 However, spectrum users told us that even
though they understand the benefits of testing and development, they are
reluctant to allow testing in their spectrum because of the potential for
harmful interference. As previously mentioned, NTIA also has a pilot test
bed program to evaluate dynamic spectrum access and technology for
spectrum sharing in land mobile radio bands, but the program is in the
early stages and requires additional access to spectrum for testing to be
fully implemented. 48

The Department of Defense—the federal agency with the largest number
of spectrum assignments—is also involved in researching and developing
new spectrum technologies, although they are still in the early stages.
The Department’s Defense Advanced Research Projects Agency
(DARPA) has several such efforts under way. For example, unlike
existing databases that only provide limited, descriptive frequency
assignment information, DARPA’s Advanced Radio Frequency Mapping
program seeks to provide real-time awareness of spectrum use across
frequency, geography, and time. With this information, spectrum
managers and automatic spectrum allocation and management systems
could operate more efficiently through improved interference mitigation.
However, agency officials told us that this technology is at the basic
research level and years away from market readiness. Also, in the
beginning phases, the Communications Under Extreme Radio Frequency
Spectrum Conditions program plans to address spectrum use and
interference mitigation in a congested communications environment.
According to DARPA officials, the program will work to develop


47
  Formed as result of the President’s 2010 memorandum, Unleashing the Wireless
Broadband Revolution, the Wireless Spectrum Research and Development’s Senior
Steering Group coordinates spectrum-related research and development activities across
the federal government, and helps identify gaps in the government’s research and
development portfolio with respect to spectrally efficient technologies.
48
 Frequencies in the 410-420 MHz land-mobile-radio band will be used in this test bed.




Page 26                                                      GAO-13-7 Spectrum Sharing
interference mitigation technologies (especially for jamming), 49
interference tolerance, and higher spectrum utilization.

Recent federal advisory committee recommendations and international
examples also 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 50 release funds
for this purpose and (2) the current Spectrum Relocation Fund be
redefined as the Spectrum Efficiency Fund. 51 This adjustment would allow
federal agencies to be reimbursed for general investments in improving
spectrum sharing. PCAST also recently suggested that a partnership
between the federal government and the private sector is the best
mechanism to ensure optimal use of federal spectrum and related
spectrum research and testing. 52 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. 53 To deal with similar problems, the
Canadian government instituted tax credits for research and development
efforts by Canadian wireless companies, and required wireless
companies to commit 2 percent of all revenues toward research and
development activities related to spectrum.




49
  FCC defines jamming as illegal radio frequency transmissions that are designed to
block, jam, or otherwise interfere with authorized radio communications.
50
  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.
51
  The Spectrum Relocation Fund exists for the purpose of reimbursing agencies for the
actual costs incurred in relocating or sharing federal spectrum. NTIA Authorization Act,
§ 118, 47 U.S.C. § 928.
52
 Report to the President; Realizing the Full Potential of Government-held Spectrum to
Spur Economic Growth.
53
  CSMAC Incentives Subcommittee Final Report.




Page 27                                                           GAO-13-7 Spectrum Sharing
                      As the demand for and use of spectrum continues to increase, federal
Conclusions           and nonfederal users will need to be more cognizant of how efficiently
                      spectrum is used. Sharing spectrum is one way to use spectrum more
                      efficiently and make more spectrum available. While a number of barriers
                      exist to sharing spectrum—such as incompatible uses, potentially
                      prohibitive costs, and cumbersome regulatory processes—it is clear that
                      first and foremost, users currently lack incentives to share the spectrum
                      that is assigned or licensed to them. To address the incentive problem,
                      spectrum experts, federal advisory groups, and others have made
                      recommendations but have also identified implementation problems
                      associated with different options. First, we agree with experts that
                      spectrum usage fees should be given further consideration. We
                      previously reported that incentive-based fees are designed to promote the
                      efficient use of spectrum by compelling users to recognize the value to
                      society of the spectrum that they use. Yet, designing a fee system is
                      fraught with numerous obstacles and challenges, such as how such fees
                      should be incorporated into agency budgets and the appropriations
                      process in order to create the right incentives. A full evaluation of the
                      potential benefits and impacts of implementing a fee structure would be a
                      potential step in identifying the most prudent and effective approach.
                      Second, because new technologies that could better facilitate sharing are
                      in some cases years from market readiness, spectrum users could be
                      encouraged to dedicate more resources to research and development.
                      Additionally, users need spectrum access for testing new technologies. If
                      there are continued limitations to accessing spectrum for testing, it may
                      be impossible to validate technologies under realistic conditions, further
                      delaying the availability of these technologies to users and the opening of
                      new market opportunities and economic growth. Third, users have
                      expressed concern about the timeliness of FCC and NTIA spectrum-
                      sharing processes. If these processes continue to be lengthy and
                      unpredictable, federal and nonfederal users may continue to be reluctant
                      to share spectrum. As the debate about these options continues, it is
                      clear that more information is needed to further the understanding and
                      discussion about which incentives and opportunities will be the most
                      feasible and effective toward promoting sharing as a viable solution to
                      address increasing spectrum demand.


                      To better identify the most feasible incentives to promote spectrum
Recommendations for   efficiency and sharing, we recommend that the NTIA Administrator and
Executive Action      the FCC Chairman jointly take the following three actions:




                      Page 28                                             GAO-13-7 Spectrum Sharing
                     •   Report their agencies’ views and conclusions regarding spectrum
                         usage fees to the relevant congressional committees, specifically with
                         respect to the merits, potential effects, and implementation challenges
                         of such a fee structure, and what authority, if any, Congress would
                         need to grant for such a structure to be implemented.
                     •   Based on the findings of current research and development efforts
                         under way, determine how the federal government can best promote
                         federal and nonfederal investment in the research and development of
                         spectrally efficient technologies, and whether additional spectrum is
                         needed for testing new spectrum efficient technologies.
                     •   Evaluate regulatory changes, if any, that can help improve and
                         expedite the spectrum sharing process.

                     We provided a draft of this report to the Department of Commerce and
Agency Comments      FCC for review and comment. In response to our draft report, Commerce
and Our Evaluation   and FCC provided written comments, which are reprinted in appendix II
                     and III, respectively. The agencies also provided technical corrections to
                     the draft report, which we incorporated as appropriate. In summary,
                     Commerce concurred with our findings, but believes that activities
                     completed or under way by NTIA and FCC satisfy the recommendations
                     contained in our draft report. In its written comments, FCC noted that the
                     agency was pursuing the goals outlined in the National Broadband Plan,
                     and highlighted several actions it is taking to promote more shared
                     access to spectrum.

                     In our draft report, we included four recommendations. The first
                     recommendation was that NTIA and FCC jointly examine the merits and
                     challenges associated with implementing spectrum usage fees.
                     Commerce noted that the issue was examined by the CSMAC in 2010
                     and 2011 and that consensus could not be reached regarding the
                     imposition of such fees. Moreover, the agency states that further study is
                     unlikely to resolve the issues. We agree that implementation of spectrum
                     usage fees or a similar structure that can provide users with greater
                     incentive to efficiently use or share spectrum raises several difficult
                     questions, such as authority to implement a new fee structure and
                     ensuring that federal operations are not disrupted. We also agree that
                     further study may not resolve these issues. Nevertheless, our findings
                     suggest that additional incentives are still needed for users to seek out
                     more efficient ways of using spectrum, such as sharing, and that
                     Congress could benefit from more information to fully understand the
                     implications of a fee structure. Therefore, we altered our recommendation
                     to state that NTIA and FCC, rather than initiate additional study on the
                     issue, should provide Congress with the agencies’ views and conclusions


                     Page 29                                             GAO-13-7 Spectrum Sharing
regarding the merits, potential effects, and implementation challenges of
such a fee structure, and authorities that Congress would need to grant
that such a structure be implemented. We believe such actions would
help provide members of Congress with information they could use to
evaluate any proposed fee structure or other proposed incentive
schemes.

Our second recommendation was that FCC and NTIA jointly study
whether spectrum should be repurposed and made available for
unlicensed use. However, in written comments the agencies identified
NTIA’s and FCC’s recent efforts to identify spectrum for repurposing,
which have focused on allowing unlicensed users to share the spectrum.
Consequently, we removed that recommendation from our final report.

Our draft report also recommended that the agencies jointly study (1)
actions that could help spur research and development and (2) regulatory
changes that might improve the spectrum-sharing process. Commerce
stated that NTIA and FCC already have efforts under way in these areas
that fulfill the goals of these recommendations and that additional study is
unnecessary. We acknowledge throughout the report that NTIA and FCC
have activities under way in these areas, some of which were initiated
during the course of our review. The intent of our recommendations was
not to displace these activities with additional study, but rather to support
these actions, and to encourage the agencies to take further steps to
enable real world testing of spectrum-sharing technologies and to
streamline and improve the regulatory processes that enable spectrum
sharing. We revised our draft recommendations to clarify that we are
encouraging NTIA and FCC to take further actions in these areas, as
opposed to further study, and we will continue to monitor the agencies’
efforts in these areas.

In addition to Commerce and FCC, we also provided the Departments of
Defense, Homeland Security, Interior, Justice, Transportation, and
Treasury the opportunity to comment on segments of the report that
pertain to the data and information they provided. Except for the
Department of Transportation, which did not provide any comment, the
agencies verified the key facts we obtained from them and provided
technical corrections to the draft report, which we incorporated as
appropriate.


We are sending copies of this report to the Secretary of Commerce, the
Chairman of the Federal Communications Commission, and appropriate


Page 30                                              GAO-13-7 Spectrum Sharing
congressional committees. In addition, the report will be available at no
charge on GAO’s website at http://www.gao.gov. If you or members of
your staff have any questions about this report, please contact me at
(202) 512-2834 or goldsteinm@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last page
of this report. Major contributors to this report are listed in appendix IV.




Mark L. Goldstein
Director, Physical Infrastructure




Page 31                                             GAO-13-7 Spectrum Sharing
Appendix I: Federal Agencies, Nonfederal
                           Appendix I: Federal Agencies, Nonfederal
                           Spectrum Users and Experts Interviewed
                           Regarding Spectrum Sharing


Spectrum Users and Experts Interviewed
Regarding Spectrum Sharing
Selected Interdepartment   •   Department of Commerce
Radio Advisory                 •     National Oceanic and Aviation Administration
Committee Member               •     National Telecommunications and Information Administration
Agencies                   •   Department of Defense
                               •     Army
                               •     Air Force
                               •     Defense Advanced Research Projects Agency
                               •     Defense Information Systems Agency
                               •     Navy
                           •   Department of Homeland Security
                               •     Wireless Service Spectrum Management Office
                               •     Customs and Border Patrol
                           •   Department of the Interior
                           •   Department of Justice
                           •   Department of Transportation
                           •   Department of the Treasury
                               •     Treasury Inspector General for Tax Administration
                           •   Federal Communications Commission

Nonfederal Spectrum        •   City of Wilmington, North Carolina
Users                      •   Google
                           •   Metro PCS
                           •   Microsoft
                           •   Shared Spectrum (a spectrum sharing solutions company)
                           •   Spectrum Bridge (a spectrum user, and also a spectrum sharing
                               solutions company)
                           •   Sprint
                           •   T-Mobile
                           •   United States Cellular
                           •   Verizon




                           Page 32                                             GAO-13-7 Spectrum Sharing
Appendix I: Federal Agencies, Nonfederal
Spectrum Users and Experts Interviewed
Regarding Spectrum Sharing




Table 1: Subject Matter Experts Interviewed

    Name                          Institutiona
    Phillippe Aubineau            International Telecommunications Union
    Coleman D. Bazelon            The Brattle Group
    Michael Christensen           Industry Canada
    Andrew W. Clegg               National Science Foundation
    Larry Downes                  Spectrum consultant and author
    Pierre de Vries               University of Colorado
    Gary M. Epstein               Aspen Institute, International Digital Economy Accords
    Tomas E. Gergely              National Science Foundation
    Thomas W. Hazlett             George Mason University School of Law
    Stephen Jones                 Office of Communications, U.K.
    William Lehr                  Massachusetts Institute of Technology
    Nevio Marinelli               Australian Communications and Media Authority
    Preston F. Marshall           University of Southern California
    Geoff McMillen                Australian Communications and Media Authority
    Linda K. Moore                Congressional Research Service
    Jon M. Peha                   Carnegie Mellon University
    Jerry Pi                      Samsung
    Ravi Prakash                  University of Texas, Dallas Texas
    Francois Rancy                International Telecommunications Union
    Richard Reaser                CSMAC
                                  Raytheon
    Greg Rosston                  Stanford Institute for Economic Policy Research
    Jennifer A. Warren            Lockheed Martin
    Chris Woolford                Office of Communications, U.K.
Source: GAO.
a
 We interviewed experts as individuals, not as representatives of any institution. We provide
information on institutions to help readers identify experts.




Page 33                                                                GAO-13-7 Spectrum Sharing
Appendix II: Comments from the Department
             Appendix II: Comments from the Department
             of Commerce



of Commerce




             Page 34                                     GAO-13-7 Spectrum Sharing
Appendix II: Comments from the Department
of Commerce




Page 35                                     GAO-13-7 Spectrum Sharing
Appendix II: Comments from the Department
of Commerce




Page 36                                     GAO-13-7 Spectrum Sharing
Appendix III: Comments from the Federal
              Appendix III: Comments from the Federal
              Communications Commission



Communications Commission




              Page 37                                   GAO-13-7 Spectrum Sharing
Appendix III: Comments from the Federal
Communications Commission




Page 38                                   GAO-13-7 Spectrum Sharing
Appendix IV: GAO Contact and Staff
                  Appendix IV: GAO Contact and Staff
                  Acknowledgments



Acknowledgments

                  Mark L. Goldstein, (202) 512-2834 or goldsteinm@gao.gov
GAO Contact
                  In addition to the contact person named above, Andrew Von Ah
Staff             (Assistant Director), Eli Albagli, Amy Abramowitz, Michael Clements,
Acknowledgments   Andy Clinton, David Goldstein, Brian Hartman, Bert Japikse, Elke
                  Kolodinski, Jean McSween, Erica Miles, Sally Moino, Joshua Ormond,
                  Amy Rosewarne, Hai Tran, and Jarrod West made key contributions to
                  this report.




(543292)
                  Page 39                                          GAO-13-7 Spectrum Sharing
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