IP Democracy: Spectrum Relocation to Cost $936 Million

No doubt hoping the news falls flat in the middle of the holiday season, the NTIA, the Commerce Department arm that advises the President on telecommunications policy, released a report today that documents the costs of moving around 90 MHz of spectrum from the military and other government entities, putting the price tag at approximately $936 million. The government is moving incumbent federal users out of the 1710-1755 MHz band to free up spectrum so that commercial wireless carriers can launch new advanced services.

In a press release, outgoing NTIA head Michael Gallagher said

“With 90 megahertz of additional spectrum, today’s cellular carriers will be tomorrow’s next-generation broadband providers. We found a way to open up ‘beach front’ spectrum for key economic activity without jeopardizing our national security. The determined leadership of the Department of Defense, NTIA’s Office of Spectrum Management, the Federal Communications Commission, and the private sector charted a unique path of ensuring our economic as well as our national security.”

A total of 2,240 frequency assignments will be relocated by twelve federal agencies and the price tag reflects the cost of relocating federal government operations. Under the terms of the Commercial Spectrum Enhancement Act of 2004, the FCC last year notified NTIA that it plans to start auctioning off bandwidth in the 1710-1755 MHz spectrum starting in 2006. As required by that Act, the NTIA developed the cost estimates for relocating the government operations that use that spectrum.

Based on the breakdown of costs provided by NTIA, the relocation expenses will be primarily borne by the military ($289 million) and federal law enforcement agencies FBI, DEA and ATF ($263 million). The $936 million figure sounds expensive, but the FCC plans to auction the spectrum off in a bidding process that could yield a substantial profit for the government. Since 1995, the FCC has auctioned off around $20 billion in spectrum to wireless and other communications carriers.

Posted by Cynthia Brumfield on December 28, 2005 9:34 PM to IP Democracy