Adminstrator Roth Discusses NTIA's Plans for the 2.7 GHz Spectrum Band

During the June 4 celebration of the Free State Foundation’s 20^th anniversary, Arielle Roth, currently the Administrator for the National Telecommunications and Information Administration (NTIA), participated in a keynote conversation with former FCC Commissioner and Free State Foundation Adjunct Senior Fellow Michael O’Rielly. Administrator Roth used the occasion to discuss the Administration’s plans for auctioning the 2.7 GHz band of spectrum.

 

NTIA is under a congressional directive to release 500 Megahertz of federal spectrum to be reallocated for commercial licensed use. “The work is on us to get it done in a timely manner and we hope to meet or hopefully exceed our deadlines and targets,” said Administrator Roth.

The Administration is working on the 2.7 GHz band. NTIA “fully agrees” that this band should be devoted to commercial licensed use. A tech panel consisting of the Office of Management and Budget, the Federal Communications Commission, and NTIA recently signed off on spectrum relocation funds so that the incumbent leadership can perform the engineering studies needed to transfer control.

These efforts are currently in the middle of a statutory waiting period of 60 days for notifying Congress of the recommended transfer. This period ends June 30^th after which NTIA can use spectrum relocation funds to conduct the engineering work so that the spectrum can be identified and hopefully auctioned as soon as possible.

Administrator Roth's remarks regarding the progress in getting spectrum in the 2.7 GHz band transferred for private sector commercial use are encouraging.

 

Report Forecasts Impending Spectrum Crisis, Calls for More Licensed Mid-Band Capacity

On March 27, CTIA released a report by Accenture titled "Securing the Future of U.S. Wireless Networks: The Looming Spectrum Crisis." It predicts a near-term shortfall in available spectrum to meet growing demand, which could adversely impact wireless users during peak times as soon as next year. To avert that crisis, the report calls on Congress, the NTIA, and the FCC to make more mid-band spectrum between 3.3-8.5 GHz available for full-power licensed commercial use.  

The Accenture report estimates that U.S. consumers' mobile wireless data of over 100 Gigabits in 2023 was almost double data traffic volumes for 2021, and it cites a wireless industry estimate data traffic per smartphone will increase more than 250% by 2029. The FCC has not auctioned new commercial spectrum licenses since 2022. Without new spectrum inputs to support 5G services, including fixed wireless access (FWA) and emerging artificial intelligence (AI) applications, the report concludes that "[t]he U.S. will reach an available spectrum deficit of 401 MHz by 2027 and 1423 MHz by 2032." 

 

According to the Accenture report, the looming spectrum deficit means that "network capacity will meet only 77% of data demand during peak hours by 2027, and this will worsen to networks meeting only 27% of peak demand by 2035." The report finds a future deficit will cause as much as $1.4 trillion in lost U.S. gross domestic product (GDP) by 2035 – unless more spectrum is put into full-power licensed commercial use for 5G. 

 

There is a widely-recognized need that more spectrum needs to be repurposed from government use or occupancy to commercial use. However, intense disagreements exist over how much spectrum should be reallocated on a licensed basis versus an unlicensed basis. There are also diverging views over whether particular bands should be licensed on an exclusive basis to commercial licensees or on a shared basis with government users. Accenture's report provides an important contribution to the ongoing spectrum policy debate. The report's analysis and conclusions deserve thoughtful consideration.

 

Spectrum policy was also a topic of discussion and debate at the Free State Foundation's Seventeenth Annual Policy Conference – #FSFConf17 – held on March 25, in Washington DC. Be sure to check out videos featuring Senator Ted Cruz's keynote address, touching on his proposed legislation to replenish the spectrum pipeline, as well as the panel on "New Directions in Communications Policy." 

CSIS Reiterates Importance of Spectrum to National Security

Recently published commentary from the Center for Strategic & International Studies (CSIS) makes familiar points regarding America's pressing need for additional, globally harmonized commercial spectrum – but also places the continuing spectrum-allocation impasse in a broader, geopolitical context characterized by serious national security and intelligence implications.

"Spectrum Allocations and Twenty-First-Century National Security," by James Andrew Lewis, echoes arguments raised by another CSIS scholar, Clete Johnson, that I summarized in an October 2024 post to the FSF Blog. Namely, that Congress must act quickly to renew the FCC's spectrum auction authority and work with the Department of Defense and other federal agencies to ensure that the same bands used in other parts of the world are made available for commercial use in the U.S.

The concern, according to Mr. Lewis, is China:

The United States is in a global competition with China over markets, rule setting, and technological leadership…. To remain competitive, the United States will need to adjust how it has allocated radio spectrum to emphasize commercial innovation. The government-centric spectrum allocations of the last century will need to change if we are not to fall behind. 

Specifically, U.S. policymakers must appreciate that, going forward, technological innovation by the commercial, rather than the government, sector is the key to national security in the twenty-first century: "[c]ommercial technologies underpin modern military strength." And that to facilitate that technological innovation, domestic commercial interests must have access to the same spectrum bands used in the rest of the world:

If the United States does not use a harmonized spectrum, it shrinks the economies of scale that trusted vendors need to compete with Huawei…. In simple terms, people will build devices to use specific spectrum bands for commercial purposes designated by the WRC. Essentially, if the United States does not use spectrum allocated everywhere else for commercial purposes, it will be handicapped in any competition.

In other words, U.S. policymakers must move beyond the antiquated notion that government control of certain bands, in and of itself, enhances our national security – and instead recognize that military might today hinges in large part upon America's ability to dictate the technological standards for mobile networks used worldwide. Commercial access to globally harmonized spectrum bands is critical to achieving that objective.

Mr. Lewis concludes with a warning: "[t]he timing for action is short, perhaps a year or two since a failure to act puts the United States at the cusp of a great strategic blunder that will let an ambitious China build the network that forms the backbone of the global economy."

Report Highlights Link Between Spectrum Policy and National Security

A new report published by the Center for Strategic & International Studies (CSIS) warns that absent a heightened focus on our national spectrum policy, "[t]he security of the United States as a market democracy is at stake." In the simplest of terms, online activity is only as secure as the underlying apps and network infrastructure over which it occurs. If that software and hardware is to come from trusted sources, policymakers must foster an environment in which America's mobile marketplace maintains a powerful say in global technology development, "especially as autocratic nations seek to dominate."

In Part 1 of "Concrete National Security Benefits of Spectrum Allocation for Commercial 5G," CSIS Strategic Technologies Program Senior Fellow Clete Johnson identifies two "difficult technical feats" that the U.S. must and can accomplish if it is to achieve the scale necessary to drive technology development down a secure and trusted path. The first is to better harmonize frequency use, as "[t]he more that U.S. spectrum use is harmonized with that of allies and global markets, the more scale trusted suppliers have for secure technology development." The second is to allocate sufficient spectrum so that capacity does not constrain the economic might of American consumers.

Harmonizing the frequencies allocated to 5G (and successor standards) is essential to achieving economies of scale because technology development is frequency specific: equipment developed for one band typically cannot be used in other bands. As the report points out, however, "the United States is becoming a mid-band spectrum 'island,' operating largely outside the core globally harmonized spectrum bands. If this trajectory continues, the U.S. technology ecosystem will be confined to a U.S.-only spectrum 'dialect' that lacks global influence and scale."

Allocating sufficient spectrum to satisfy growing mobile broadband demand, meanwhile, maximizes the economic ability of 350 million American consumers to shape global technology decisions. As the report explains:

U.S. wireless companies need sufficient spectrum resources to collaborate with like-minded nations in innovating and manufacturing advanced wireless technologies and components – including chipsets, software, radios, and more – for use in both the commercial and federal sectors…. The existing disparity between U.S. licensed mid-band spectrum allocations as compared to the rest of the world has become a major national security challenge, as it has created a platform for China to shape the near-term and future technology environment to its strategic advantage.

The report proposes several ways to address this situation. They include:

• Reframing the spectrum deficit as "an optimization challenge, not a scarcity problem."
• Moving from a "zero-sum" mindset that pits government and commercial uses against each other to a collaborative environment that promotes "static" and, in the longer term, "dynamic" spectrum sharing solutions.
• Restoring the FCC's spectrum auction authority.
• Aggressively pursuing harmonization opportunities, which may include the 7/8 GHz band, so that America speaks the same "frequency 'language'" as its allies.

The report's forthcoming Part 2 primarily will focus "on the importance of agile spectrum management capabilities in the context of electronic warfare."

Survey Shows Sharp Increases in Mobile Data, Growth in 5G Home Broadband

On September 10, CTIA released its 2024 Annual Survey. The Survey Highlights report is available online. It shows the strong growth in mobile wireless connections, data usage, cell sites, and 5G Home connections during the year 2023.  

CTIA reported that wireless data traffic in the U.S. grew, as U.S. wireless networks supported 100 trillion MB of traffic last year, up from the nearly 74 trillion MB from the year before. Additionally, nearly 40% of wireless devices were 5G devices, for 216 million total active 5G devices in 2023, and the 558 million total wireless connections were up from 523 million from the year prior. Also, the total number of cell sites in the U.S. grew to 432,469 – up 24% from 2018. This continued growth was supported by annual wireless investment totaling $30 billion in 2023. Regarding 5G Home Broadband – or fixed wireless access (FWA) services – CTIA reported: "Over the past two years, 95% of net new broadband subscribers chose 5G home service—and importantly, 1 out of 5 net 5G home adds were entirely new home broadband subscribers." More stats are contained in the 2024 Annual Survey Highlights.

 

My July 30, 2023, blog post spotlighted CTIA's 2023 Annual Survey Highlights.

 

To fully realize the benefits of 5G connections, more spectrum will need to be available, especially licensed spectrum for commercial wireless uses. In January 2024, Free State Foundation President Randolph May published "Communications Law and Policy Priorities for 2024." One of those priorities is to "Reopen the Spectrum Pipeline and Act to Fill It." As FSF President May explained in a Media Advisory from March of this year, one constructive proposal for doing that is the Spectrum Pipeline Act of 2024 (S.3909).

 

Also, legislation for streamlining and speeding up permit processes for wireless infrastructure construction would help foster continued growth in wireless services and improve as well as increase connections for Americans. My blog post from August 7 identified one measure worth considering, the Accelerating Broadband Permits Act (S.4281), which is intended to help ensure the timely processing of permits for building new wireless infrastructure on federal lands. 

MEDIA ADVISORY: Reaction to Cruz-Thune "Spectrum Pipeline Act of 2024"

 

Regarding the introduction of the proposed “Spectrum Pipeline Act of 2024” by Senators Ted Cruz and John Thune, the following statement may be attributed to Free State Foundation President Randolph May:

“While the Free State Foundation doesn’t support or oppose specific legislation, I applaud Senators Cruz and Thune for introducing their spectrum bill. It has important features that, if adopted, will help ensure the United States does not lose its leadership position in wireless, especially in 5G. Today, spectrum is a key part of the nation’s broadband infrastructure — just like cables and wires. The Cruz-Thune bill would reestablish the FCC’s lapsed auction authority, and it would require that a considerable amount of mid-band spectrum be reallocated for commercial use and be made available by specific dates. The pipeline established would include a much-needed supply of licensed spectrum, while not ignoring the need for more unlicensed spectrum, which also is an increasingly important part of the broadband infrastructure.

No doubt there may be different views regarding the specific dates and amounts identified for reallocation contained in the bill. But there should be widespread agreement that it provides a good basis for moving forward promptly to develop a bipartisan, bicameral plan to address the nation’s now-lagging spectrum efforts."   

Communications Law and Policy Priorities for 2024

It’s usual at the beginning of the year to take stock, look ahead, and articulate priorities for the coming year, and perhaps beyond. Of course, we do that here at the Free State Foundation, not just because it’s usual, but because it is a good management practice that helps us focus more effectively on the tasks ahead. And, truth be told, we don’t just do it at the beginning of the year; we do it all year long.

There’s widespread agreement that, regarding communications law and policy, 2024 almost certainly will be challenging and consequential. In part this is because there is now a 3-2 Democrat majority at the FCC, so Chairwoman Jessica Rosenworcel will be able to move forward to consider items – think, for example, regulating Internet access providers as public utilities – that otherwise might well lack a majority. And, aside from that, 2024 is an election year. Election years present heightened opportunities for education and agenda-setting as public policy priorities are often fashioned and sharpened.

So, I want to call attention to the Free State Foundation’s just-published “Communications Law and Policy Priorities for 2024” compiled by FSF’s senior scholars. Please keep in mind that the Priorities document is not intended to be the “final word.” While it’s the way we see things now, the document necessarily is intended to be a “work in progress.” At the Free State Foundation, we take pride in our ability to anticipate what issues will become priorities that aren’t now and our agility to constantly reevaluate and look ahead.

 

Here are the top-line Priorities addressed in the document:

 

•  Reject Public Utility Regulation of Internet Service Providers

•  Require Proper Implementation of Massive Broadband Subsidies

•  Reopen the Spectrum Pipeline and Act to Fill It

•  Reform the Broken Universal Service Subsidy Regime

•  Remove Outdated Video Regulations

•  Establish a Uniform, National Privacy Framework

•  Protect First Amendment Rights and Cultivate a Culture of Free Speech

 

For each of these, there are bullet points that elaborate and contain specific action items. But please understand that the intent here is not to “write a paper” on each one. That’s part of our week-to-week, month-to-month work.

I should add that at FSF, we also do important work that falls outside this “Communications Law and Policy” list, such as in the Intellectual Property, Constitutional Law, and Administrative Law areas.  

A final important word: On our website, we proclaim our mission to be “to promote, through research and educational activities, understanding of free market, free speech, limited government, and rule of law principles . . . and to advocate laws and policies true to these principles.”

In developing the priorities above, and in all our work, we do our best to remain faithful to those principles. So, in this regard, I keep top-of-mind Alexander Hamilton’s exhortation: “In disquisitions of every kind, there are certain primary truths, or first principles, upon which all subsequent reasoning must depend.”

2.5 GHz Band Spectrum Licensing Legislation Clears House

As I noted in a post to the FSF Blog last Thursday, two days prior the House Energy and Commerce Committee unanimously approved a bill granting the Federal Communications Commission (FCC or Commission) express authority to issue 2.5 GHz band spectrum licenses for which T-Mobile had paid $304 million prior to the lapse of the FCC's spectrum auction authority in March.

On Monday, the full House passed that legislation – the 5G Spectrum Authority Licensing Enforcement (SALE) Act (H.R. 5677) – by voice vote. Companion legislation approved by the Senate in September, S. 2787, now awaits President Biden's signature.

The text of the SALE Act is both short and straightforward:

In the case of any applicant for a license or permit for the use of spectrum in the band of frequencies between 2496 megahertz and 2690 megahertz, inclusive, that the Federal Communications Commission selected through a system of competitive bidding conducted under section 309(j) of the Communications Act of 1934 (47 U.S.C. 309(j)) on or before March 9, 2023, and to whom the Commission has not granted the license or permit as of the date of enactment of this Act, the Commission may process the application of the applicant during the 90-day period beginning on the date of enactment of this Act.

On numerous occasions, Free State Foundation scholars have emphasized the need for prompt action on the specific licenses won at auction and paid for by T-Mobile (here, here, and here) and, more broadly, reinstatement of the Commission's spectrum auction authority (here, here, here, here, and here).

In a November 17, 2023, letter to Representative Anna G. Eshoo (D-CA), FCC Chairwoman Jessica Rosenthal wrote that she was "encouraged" by the SALE Act – and that "[e]xpeditious action … will give the Commission the authority to issue the remaining 2.5 GHz licenses."

Legislation to Liberate 2.5 GHz Spectrum Reaches House Floor

On December 5, the House Energy and Commerce Committee unanimously passed a bill that would grant the Federal Communications Commission (FCC or Commission) clear authority to issue licenses for spectrum in the 2.5 GHz band won at auction and paid for by T-Mobile. It now heads to the House floor.

The 5G Spectrum Authority Licensing Enforcement Act (H.R. 5677) is companion legislation to S. 2787, a short and straightforward Senate bill that, as Free State Foundation Director of Policy Studies and Senior Fellow Seth L. Cooper described in a September 15, 2023, post to the FSF Blog, would do just one thing: establish a 90-day window within which the FCC incontrovertibly is authorized to grant those licenses for which T-Mobile paid $304 million but the agency had not yet processed when the Commission's spectrum auction authority lapsed on March 9, 2023. S. 2787 passed the full Senate without amendment by Unanimous Consent on September 21, 2023.

The underlying question – whether the FCC legally may grant these specific licenses in the absence of general spectrum auction authority – is open to debate. In a November 17, 2023, letter to Representative Anna G. Eshoo (D-CA), Chairwoman Jessica Rosenthal reiterated the Commission's position that it is barred by Section 309 of the Communications Act from doing so – and that, "[if] f the Commission were to expend funds to continue to process the licenses won in Auction 108 notwithstanding the sunsetting of our authority to do so, it would put the agency staff at risk of criminal penalties for violating the Antideficiency Act."

On the other hand, and as Mr. Cooper highlighted in a July 2023 blog post, Joel Thayer has made a "convincing case" that the agency retains the requisite legal authority to proceed even in the absence of general spectrum auction authority.

As H.R. 5677's sponsor, Congressman John Joyce, M.D. (R-PA), stated in a press release, "[t]he 5G SALE Act would cut the red tape that has kept Pennsylvania families from accessing the high-speed internet that is vital for remote workers, students who use the internet to learn from home, and patients who use telehealth to heal from home."

Commissioner Carr to Congress: Renew FCC's Auction Authority

As reported by Christopher Cole in Law360 (subscription required), Commissioner Brendan Carr seized the moment at the FCC's August Open Meeting and urged Congress to renew the agency's spectrum auction authority.

In a recent post to the Free State Foundation's blog, I once again noted the importance of the FCC's auction authority, which was allowed to lapse in March of this year. (I first addressed this topic in "Extending FCC Spectrum Auction Authority Is Essential to the 5G Race," a February 2023 Perspectives from FSF Scholars.)

Before voting to approve a Notice of Inquiry regarding non-federal spectrum usage, Commissioner Carr made a similar plea:

I'd be remiss if I didn't note today, while we have a number of some of the top congressional staffers in the room, to reiterate the call for Congress to reauthorize the FCC's spectrum auction authority. So I know it's August recess, Congress isn't in session, but if, over the August recess, you happen to find some good spectrum auction authority somewhere, we would be happy to put it to good use.

Chairwoman Rosenworcel responded by thanking him for "the shameless plug."

To view this interaction, please click here.

Congress Should Reinstate the FCC's Spectrum Auction Authority

On Monday, four members of the House Energy and Commerce Committee, including Chair Cathy McMorris Rodgers (R-WA), issued a statement indicating that they are "extremely disappointed" that Congress has not yet passed the Spectrum Auction Reauthorization Act of 2023 (H.R. 3565).

In "Extending FCC Spectrum Auction Authority Is Essential to the 5G Race," a February 2023 Perspectives from FSF Scholars, I warned that, absent congressional action, the FCC's auction authority soon would expire – thereby shutting off the spectrum pipeline that is essential not only to our nation's continued global leadership in the mobile space, but also to our overall economic growth. On March 9, 2023, that concern became reality. And over four months later, the wait for a legislative solution drags on.

H.R. 3565 would reinstate the Commission's auction authority through September 30, 2026. It also would appropriate an additional $3.08 billion for the FCC's "rip-and-replace" program, which provides funds to remove from American communications networks suspect hardware manufactured by Huawei, ZTE and other untrustworthy sources.

As Free State Foundation President Randolph J. May noted in a May 25, 2023 post to the FSF Blog, the day prior H.R. 3565 advanced out of committee on a unanimous 50-0 vote. Unfortunately, it has not yet reached the House floor.

The expiration of the Commission's auction authority impacts more than just future auctions. FCC Chairwoman Jessica Rosenworcel has taken the position that the agency can neither grant to T-Mobile the licenses in the 2.5 GHz band for which it paid $304 million nor approve its request for special temporary authority (STA) to use that spectrum in the interim.

In a statement to Fierce Wireless, the FCC's press secretary wrote that subsection 11 of Section 309 of the Communications Act "clearly states that 'The authority of the Commission to grant a license or permit under this subsection shall expire March 9, 2023'; so, any special temporary authority the FCC could have would flow from this section of the statute, which as you know is still currently expired."

T-Mobile and others, including a group of former FCC General Counsels, interpret the relevant statutes and agency precedents quite differently.

Big picture, the path out of this situation is clear: Congress should act expeditiously to reinstate on a long-term basis the Commission's auction authority. In the meantime, the agency can and should consider seriously the legal arguments referenced above that would allow T-Mobile to put to its highest and best use – whether on a licensed or STA basis – the spectrum for which it already has paid.

The Auction Clock Is Ticking - Update

 In a May 24 blog post, "The Auction Clock Is Ticking," I urged Congress to extend the now-expired FCC authority to conduct spectrum auctions in a timely fashion. I said its failure to do so "threatens substantial adverse consequences." I pointed out that, on May 23, in a letter to congressional leadership on communications policy matters, a bipartisan group of 16 former FCC Commissioners, including 6 former permanent FCC Chairmen and two former interim Chairs, urged Congress to restore the FCC’s auction authority, stating that: "On other significant communications policy issues, these former FCC leaders do not always agree. On extending the FCC's auction authority, there is unanimity."

 

Talk about bipartisanship! Yesterday, when the House Commerce Committee adopted, on a 50 – 0 vote, a measure to reinstate the FCC's auction authority through September 2026, the House Commerce Committee members showed the same unanimity that was displayed in the letter from a bipartisan group of 16 former FCC Commissioners.

 

As readers of this space know, I've never been one to tout unanimity, bipartisan or otherwise, just for unanimity's sake, when matters of principle are at stake. But you don't need a Ph.D. degree in political science to appreciate that the display of bipartisan unanimity by House Commerce Committee members and by a large number of former FCC Commissioners, all urging prompt extension of the agency's auction authority, ought to carry substantial weight.

Relatedly, just one example of the deleterious effects of the expiration of the Commission's auction authority is the agency's claimed inability to issue the licenses T-Mobile won in the 2.5 GHz spectrum auction – and for which it paid $304 million. Back on March 23, four former FCC General Counsels explained in a letter to the Commission why, in their view, despite the expiration of the Commission's auction authority, the agency possesses the authority to issue licenses won at an auction conducted when the Commission possessed such authority. They conclude that the Commission’s authority to grant licenses awarded by auction is distinct from the agency's authority to conduct auctions. This too was a bipartisan group of former senior agency officials.

In the meantime, T-Mobile has asked the FCC to grant its request for Special Temporary Authority (STA) to use spectrum in the 2.5 GHz for 180 days.

As I have emphasized many times now, there are adverse consequences to a lapse in the FCC's auction authority, especially as the weeks go by without a renewal. As I said yesterday, "it's past time for Congress to act." Still is.

FCC Chairwoman Jessica Rosenworcel at NSF's 6G Event

Speaking at the National Science Foundation's event titled "6G: Open and Resilient" on April 21, FCC Chairwoman Jessica Rosenworcel said this:   

“For three decades the FCC has had the authority to auction off airwaves to commercial actors to use to deploy, create, and innovate. But on March 9 of this year, that authority expired for the first time Consider it another small, barely recorded moment in history. But if it is not corrected, it could have big impact.”

Big impact, indeed!

Chairman Rosenworcel did an excellent job explaining why "we cannot afford to wait." And her recital of some of the FCC's current spectrum policy efforts that are laying the groundwork for future 6G networks - yes, that's 6G - is worthwhile! The underlying theme is that considerable advance planning and preparation is necessary in order to take advantage of the opportunity for maximizing efficient utilization of spectrum.

I commend Ms. Rosenworcel's remarks to you. 

Also, in an April 18 letter to congressional leadership of the pertinent House and Senate committees, Chairman Rosenworcel and all her fellow commissioners urged Congress promptly to renew the FCC spectrum auction authority "so that we can once again use this authority in service of consumers, businesses, and national security."

It should have been done yesterday.

FCC Should Boost 5G Backhaul by Updating Rules in 70/80/90 GHz Bands

American success in the race to 5G depends on a strong supply of backhaul for transmitting ever-increasing volumes of mobile and fixed wireless data. To help enhance wireless backhaul capacity, the Commission should modernize its antenna rules so that small cells can provide backhaul in the 70/80/90 GHz spectrum bands. 

Backhaul connections route voice and data traffic from mobile and fixed wireless providers' cell sites to mobile switching centers that link to the providers' core networks, the public switched telephone network, and the Internet. Wireless spectrum provides a vitally important transmission medium for backhaul. In its Sixteenth Wireless Competition Report (2013), the FCC recognized that "[m]obile backhaul needs will keep increasing as wireless carriers continue to deploy LTE technology in their networks." This was undoubtedly true as mobile networks transitioned to 4G, and it remains equally true now that 5G networks are being deployed. According to Cisco's 2021 Annual Internet Report, there will be 299 million mobile wireless users in the U.S. in 2023, up from 285.3 million in 2018, and there will be 3.4 connected mobile devices per capita in 2023 compared to 1.7 devices in 2018. Additional backhaul capacity is needed to help support data traffic increases resulting from anticipated future demand, including continuing growth in wireless viewing of HD and even 4K video.

But the Commission's old antenna rules were not established with small cells in mind. Technical changes made to those rules back in 2005 long predate 5G technological advances. In its June 2020 rulemaking notice, the Commission stated that the 70/80/90 GHz millimeter wave bands have been underutilized. Recognizing these facts, the Commission proposed to update its antenna rules for the 70/80 GHz band, and it sought comment on whether to make similar updates to its rules for the 90 GHz band. 

 

Modernization of the Commission's antenna rules requires harmonization between federal and non-federal users of the 70/80/90 GHz bands. Fortunately, there appears to be an industry consensus that antenna rule updates to accommodate small cells won't interfere with other uses of that spectrum. A prime opportunity now exists to boost 5G backhaul in those bands, and that opportunity needs to be seized without delay.

 

A February 2021 report by the Boston Consulting Group (BCG) estimates that 5G infrastructure buildout will directly contribute $400-500 billion to U.S. GDP and create up to 1 million jobs over the next ten years. But BCG also estimates nationwide losses of $25 billion in potential benefits for every 6-month stall in 5G deployment. Given the importance of backhaul to next-generation wireless networks as well as the sizable economic benefits to Americans resulting from timely deployment of 5G, the Commission should take prompt action to update its rules for the 70/80/90 GHz bands. 

Architects of FCC Spectrum Auctions Win 2020 Nobel Prize in Economics

The Free State Foundations offers its congratulations to Paul Milgrom and Robert Wilson, the winners of the 2020 Nobel Prize in Economic Sciences. Milgrom and Wilson's "best-known contribution" is their work in the field of spectrum auctions.

Today it seems rather obvious: auctions serve as an efficient and workable tool to leverage market forces in order to put scarce spectrum resources to their best and highest use. Simply put, those who bid the most, value it the most.

But a number of factors – differences between private (subjective) and common valuations, imperfect information, license coverage areas, and more – once posed challenges to the effective use of auctions in the spectrum context.
Thanks to their work in auction theory, however, the Commission was able to transition to auctions, to the benefit of consumers of telecommunications, the U.S. Treasury, and industry.

Thus, prior to the first spectrum auction designed twenty-five years ago by these two Stanford University professors and frequent collaborators, the FCC relied upon a lottery system – and, before that, so-called "beauty contests" – to determine how spectrum would be distributed.

As the prize committee explained:

[H]ow do you design an auction that achieves the efficient allocation of radio-frequency bands, while at the same time benefitting taxpayers to the greatest possible extent? ... Milgrom and Wilson – partly with Preston McAfee – invented an entirely new auction format, the Simultaneous Multiple Round Auction (SMRA). This auction offers all objects (radio frequency bands in different geographic areas) simultaneously. By starting with low prices and allowing repeated bids, the auction reduces the problems caused by uncertainty and the winner's curse. When the FCC first used an SMRA in July 1994, it sold 10 licences in 47 bidding rounds for a total of 617 million dollars – objects which the American government had previously allocated practically for free.

Between 1994 and 2014, SMRAs run by the Commission generated over $120 billion in revenues. 

FCC Proposal Will Help Increase Mid-Band Spectrum for 5G

At its September 30 public meeting, the FCC is set to consider a report and order and notice of rulemaking that will help free up 100 MHz of spectrum in the 3.45-3.55 GHz band for shared use with government users. The draft report and order would thereby enable commercial 5G services to operate in this important slice of mid-band spectrum.

Prior blog posts have highlighted a recent report by Boston Consulting Group and another report by Analysys Mason that call attention to the pressing need for more spectrum availability for 5G. The draft report and order is precisely the type of action the Commission ought to undertake to meet that pressing need for mid-band spectrum. This blog expresses no view on different proposals for fine-tuning the draft report and order that the Commission will be voting on. But this blog strongly supports the FCC voting to approve the steps needed to put this valuable 100 MHz of mid-band spectrum into shared use for commercial 5G services. 

 

As explained in the Free State Foundation's comments to the Commission in its current Section 706 proceeding on broadband deployment progress, in addition to adopting its pending proposal on the 100 MHz, the agency should "[a]lso identify as much additional spectrum within the 3.1-3.45 GHz band as may reasonably be reallocated for licensed commercial usage. Once it has done so, the Commission should undertake efforts that will be needed to relocate existing users and free up that spectrum for public auction." Also worth serious consideration, as noted in a February 2019 blog, is a report by Analysis Group that identified the hugely positive potential economic impact of reallocating 400 MHz of licensed mid-band spectrum between 3.45 and 4.2 GHz. 

FCC Reluctantly Initiates T-Band Reallocation Process; Will Congress Intervene?

Newton's first law of motion states that "[a]n object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force."

The mandate set forth in the "Middle Class Tax Relief and Job Creation Act of 2012" that the FCC reallocate and auction the T-band? An object in motion. Congressional action to prevent that from happening? A much-needed unbalanced force.

Whatever motivated adoption of the T-band auction mandate eight years ago is of little concern today. What matters in 2020 is that first responders in a number of large metropolitan areas, including New York, Los Angeles, Chicago, Philadelphia, and Boston, depend upon the T-band (470-512 MHz) for mission-critical communications.

Also significant: the U.S. General Accountability Office (GAO) reports that, in many of these locations, there may not be alternative spectrum available to which first responders might relocate. And multiple agencies, including the FCC and the National Public Safety Telecommunications Council, have concluded that relocation costs, which could be as high as $6 billion, likely would far outweigh auction revenues.

That is why FCC Chairman Ajit Pai, when he recently renewed his call for federal legislation to repeal the T-band auction mandate, labeled it a "bad idea." Democratic Commissioner Jessica Rosenworcel said the same, "any way you cut it."

Nevertheless, the Commission's hands are tied, and so on July 6 it adopted a Notice of Proposed Rulemaking (NPRM) in order to initiate the process with sufficient time to meet the statutory deadline of February 22, 2021.

As the NPRM hopefully notes, however, "[b]ipartisan Congressional opposition ... has increased" and "[m]ultiple bills have been introduced that would repeal the T-Band Mandate."

One such piece of proposed legislation, the "Don't Break Up the T-Band Act of 2019" (H.R. 451), was approved by the House Energy & Commerce Committee earlier this week.

A companion bill (S.2748) was introduced in the Senate late last year.

The T-band auction mandate is a threat to public safety and a waste of limited agency resources. It is time for Congress to apply an equal and opposite force to stop its forward motion.

Two Views on Making 3100-3550 MHz Band Spectrum Available

On July 6, NTIA released a report titled "Feasibility of Commercial Wireless Services Sharing with Federal Operations in the 3100-3550 MHz Band." The report's two primary findings are stated in the abstract:

First, the 3450-3550 MHz portion of this band is a good candidate for potential spectrum sharing, including at the commercial system power levels sought by the wireless industry. Second, although ultimately some sharing of spectrum below 3450 MHz may be possible as well, additional analysis of the entire band should be conducted to assess the various sharing mechanisms and the potential for relocating incumbents from some portion of the remainder of the band for commercial use. 

As Free State Foundation scholars have stressed, the U.S. is running a mid-band spectrum deficit compared to our nation's competitors. It is an economic imperative to repurpose as much mid-band spectrum as reasonably possible and as quickly as can be done in order to support 5G services and reap their benefits. As a general matter, licensed spectrum can be put to more economically valuable use and is to be preferred over shared spectrum

This blog post offers no opinion on the merits of NTIA's report. But for another viewpoint on this matter, consider FCC Commissioner Michel O'Rielly's remarks on future wireless bands from July 9 for the New Jersey & New York Wireless Associations' 2020 Update Webinar: 

We cannot afford to rest on our laurels or stop working hard to bring other bands into the spectrum pipeline. Almost all experts agree that the Commission must find upwards of 500 to 800 megahertz of additional spectrum for licensed commercial purposes in the next three to five years. I’ll throw out a couple to consider.  Top of the list of next bands is 3.1 to 3.55 GHz. It currently houses a number of Department of Defense radar systems and has been identified by Congress for possible commercial purposes. I have made the argument that, of this 450 megahertz block, upwards of 200 must be cleared and go towards meeting our insatiable demand for licensed spectrum. I know the upper 100 can be repurposed without much heartburn, and we can work through the second 100 the same way. As for the remaining 250 megahertz in the lower portion of the band, the bulk of it, at a minimum, must be shared, as in the 3.5 GHz tiered structure of priorities. This would protect the DoD purposes while opening these portions to 5G services as well. 

Permanent NTIA Head Needed to Restore the Interagency Coordination Process for Spectrum

On June 15, Free State Foundation Visiting Fellow Gregory J. Vogt published an important Perspectives from FSF Scholars paper titled, "Coordinated Government Decisionmaking on Spectrum Issues: It's Vital to Locating More Spectrum for 5G Use." In that paper, he identified steps that would help restore and revitalize the interagency coordination process regarding spectrum use. 

According to Mr. Vogt, one step for reform is this: "The President should appoint, and the Senate should confirm, a permanent NTIA head whose decisions are supported by the President and the Department of Commerce." On this point A similar view was expressed at FSF's Twelfth Annual Telecom Policy Conference in March by James Cicconi (then) Senior Executive Vice President at AT&T. Here is an excerpt from the transcript of the hot panel in which Mr. Cicconi spoke: 

It doesn't help the government's position on spectrum when you have this revolving door at NTIA.  They are supposed to be the lead in terms of government spectrum policy, especially policy with regard to the use of government spectrum.  We've had three years of dysfunction in that area.  It ought to be a simple thing for the government to address.  But sadly, at least until recent developments, it hasn't been addressed… [Y]ou can't expect any process to work if the person who's supposed to be leading the process is absent or you have a series of people acting in the position, or a situation where someone that does not have the responsibility nor is Senate confirmed is trying to make the calls on that.  I think it has been, at least from the outside, seemed fairly dysfunctional on these. Any interagency process requires people from the agencies to participate.  And when you don't have any degree of continuity or, frankly, a Senate-confirmed person with authority in that position, it's sure hard to make policy.

The importance of this step has also been brought to light by several news reports highlighting tFCC Commissioner Mike O'Rielly's confirmation hearing statement about how NTIA's position regarding Ligado Networks' proposal to use L-Band spectrum for mobile wireless services changed once its administrator was removed. (Free State Foundation President Randolph May and I have written favorably about the FCC's approval of Ligado's license modification request to deliver advanced mobile wireless services, including 5G with currently unused L-Band spectrum.)

Be sure to check it out Mr. Vogt's paper for more on this point and other needed reforms. And for plenty of other interesting discussion on communications policy topics, be sure to check out the event transcript. 

FCC Proposal on 70/80/90 GHz Bands Would Boost 5G Services

At its June 9 public meeting, the FCC unanimously approved a notice of proposed rule making that would make use of 70/80/90 GHz bands for wireless backhaul for 5G and for deployment of broadband services to aircraft and ships. These millimeter bands have gone largely unused or underused. The Commission’s proposal would make changes to the agency’s antenna rules to allow for smaller antennas in the 70/80/90 GHz bands. As the Commission’s announcement of the approval vote states: “This could lower costs, facilitate network densification, and help support the provision of backhaul for emerging 5G services.” Additionally, the proposal includes seeks comment on ways to allow use of those same bands for broadband services on aircraft in flight and ships at sea.

The 70/80/GHz band proposal is a welcome part of the FCC’s 5G Fast Plan. The Commission should be applauded for unanimously launching this commonsense undertaking to put more spectrum into use for 5G and other advanced services.