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Why Spectrum Matters

Heretofore, spectrum has been a matter of prime economic concern. Regulatory agencies looked to spectrum allocation as a way to add substantial revenue to treasuries from the exorbitant license fees charged for licensing. For most of the 1990s, this was most pleasing to the Congressional legislators. Likewise, the telecoms placed heavy pressure upon the regulators to satisfy consumer demand anxious for the newest device or wireless "toy." But...what a difference a year makes!

During the summer of 2001, I had the occasion to extensively research and write about the Federal government's position on spectrum allocation. At that time, I characterized it as a major tug-of-war between the commercial interests with concerns for adequate 3G bandwidth and military interests—with national security as their primary goal. At that time, little progress was being made as the Federal Communications Commission (FCC), responsible for allocating spectrum, continued waffling after a protracted administration transition period.

Needless to say, the circumstances have changed. However, Chairman Michael Powell, son of the Secretary of State Colin Powell, has "punted" the issue once again by appointing a commission to study the allocation of spectrum—much to the chagrin of several FCC commissioners.

Inside the beltway, however, it is very clear which way the pendulum has swung. Within days of the FCC's announcement, a bipartisan group of U.S. Senators made the call for a National Spectrum Policy mandated through legislation, citing concern that the FCC might not handle the matter "expeditiously." Further, it noted the Pentagon's needs for 90% more air space within the next five years due to the "smart (wireless) weaponry" now in use and under development. Quoted in Communications Daily, Sen. George Allen (R—VA) said that "while spectrum needs of commercial sector might be greater than the Department of Defense, the Federal government's primary responsibility is national defense, and the Department of Defense should receive priority treatment in spectrum allocation."

Meanwhile, Congress has drafted swift legislation to delay spectrum auctions in the 700MHz block scheduled for mid-June, reinforcing the movement toward bringing all future allocations under the umbrella of a comprehensive national policy. Congress looked toward the auctions as a way to load the U.S. Treasury coffers; however, it is obvious that security concerns have overridden this cash cow that traditionally made auctions a perennial favorite.

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