NTIA to Write Rules on 3G Relocation Reimbursement

(January 18, 2001) The NTIA released a Notice of Proposed Rulemaking regarding compensation of incumbent federal agency users in the 1755-1850 MHz band that may be required to modify their systems as a result of spectrum reallocation to the private sector for 3G wireless uses. Most of these incumbent users are military. Third Generation (3G) wireless services are intended to bring broadband Internet access to portable devices.

The National Telecommunications and Information Administration (NTIA) released its Notice of Proposed Rulemaking (NPRM) on Wednesday, January 17. The 1755 - 1850 MHz band has been identified for possible use by the next generation of wireless devices. This is another step in the process of making available more spectrum for these new services.

Currently, the military and other federal agencies make use of this spectrum for air combat training systems, precision guided munitions, radio relay stations, space systems, and other uses.

If this spectrum were used for 3G, the military would have to move to other spectrum, share spectrum, and/or modify its systems. This NPRM will produce the rules by which the private entities which obtain licenses to use this spectrum compensate the incumbent agency users. Such compensation is required by Strom Thurmond National Defense Authorization Act for Fiscal Year 1999.

This Act sought to encourage the transfer of spectrum from the government to private use by authorizing federal entities to accept compensation payments when they relocate or modify their frequency use to accommodate non-federal users. The Act requires "any person on whose behalf a Federal entity incurs costs" pursuant to frequency spectrum relocation or modification "to compensate the Federal entity in advance" for the entity's modification or relocation expenses.

However, this rulemaking will not just affect relocation in the 1755-1850 MHz band. It will apply to all situations where federal users must modify their systems as a result of having their spectrum reassigned to the private sector.

NTIA chief Greg Rohde announced the NPRM at a public meeting of government and industry representatives on 3G wireless in Washington DC on Wednesday morning. He said in his prepared statement that "The rules are obviously important in the 3G context because one of the spectrum bands designated for study is occupied by Federal users. The reimbursement rules will come into play if that band, 1755-1850 MHz is reallocated for 3G and if Federal users are required to modify their systems as a result."

Greg Rohde

"These proposed rules touch on a number of important subjects. They propose definitions for which costs are eligible for reimbursement, and suggest a dispute resolution system that includes negotiation, mediation and arbitration. They propose a means for determining how to define a facility that will be comparable to what Federal users would have to give up," said Rohde.

Rohde also used the occasion to talk about the importance of 3G wireless. He stated that "the Europeans and the Asians, and other countries, have been moving very aggressively ahead to develop Third Generation wireless systems. It was, at least in my mind, an area of huge concern -- concern that perhaps this would be -- particularly the Europeans and Asians were viewing this as an opportunity to maybe, you know, race ahead of the United States in the area of communications technology. So, I saw this as a very critical area well over a year ago."

Rohde added that "this is going to be the dominant communications system of the future, and at stake is the U.S.'s leadership on the Internet, and the U.S.'s leadership in communications services." Rohde continued that "we stand to loose a great deal in terms of the future of electronic commerce, and our role in the New Economy. So, this has been a critically important issue."

Comments on the NPRM are due within 60 days after publication in the Federal Register. Rohde said that this would likely take place on January 18. Reply comments are due within 90 days after publication in the Federal Register. Rohde said that he expected a final rule to be adopted sometime this "summer."

Rohde stated that the contact people at the NTIA on this NPRM are Cathy Smith and Milton Brown.

President Elect Bush has not yet named his nominee for head of the NTIA. Greg Rohde is currently in the position. For just over one year he has been the Clinton administration's point man on identifying and reallocating spectrum for use by 3G wireless services. He is the former telecom staff assistant to Sen. Byron Dorgan (D-ND), and is popular with industry stakeholders and on Capitol Hill.

James Dederian is handling NTIA transition for the incoming Bush administration. Reporters asked Rohde on January 17 about his job plans. He declined to respond. He was also asked about the transition. "They are playing this pretty close to their chests," said Rohde. He was also asked what would become of the current 3G initiatives under the Bush administration. "Leadership and direction from the very top," said Rohde, "is the only way this can happen." But, he declined to predict what would happen.