Some Users Lack Incentives and Face Barriers to Sharing Spectrum

		Some Users Lack Economic Incentives to Share Spectrum

While federal spectrum users often share spectrum among themselves,  they may have little economic incentive to otherwise use spectrum  efficiently, including sharing it with nonfederal users. 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. Several Barriers Can Deter Users from Sharing Spectrum

Federal agencies will not risk mission failure, particularly when there are  security and public safety implications. 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. Users May Be Unable to Easily Identify Spectrum Available for Sharing

Besides lacking incentives and overcoming other barriers, users may also  have difficulty identifying spectrum available for sharing because data on  available spectrum is incomplete or inaccurate, and information on some  federal spectrum usage is not publicly available. Incentives and Opportunities to Share Spectrum Could Be Expanded

Federal advisors and experts we spoke with identified several options that  could provide incentives and opportunities for more efficient spectrum use  and sharing, by federal and nonfederal users, which include, among  others: (1) assessing spectrum fees; (2) expanding the availability of  unlicensed spectrum; (3) identifying federal spectrum that can be shared  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. 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. 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. 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. Improving and Expediting the Spectrum-Sharing Process

FCC and NTIA have taken some actions to potentially reduce the amount  of time and even the need for some potential rulemakings associated with  spectrum sharing, but stakeholders and experts we interviewed  suggested that more could be done to expedite the process. 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. Similarly,  the Wireless Spectrum Research and Development’s Senior Steering  Group is conducting workshops regarding the development of a national  wireless test environment. If these processes continue to be lengthy and  unpredictable, federal and nonfederal users may continue to be reluctant  to share spectrum. Recommendations for Executive Action

To better identify the most feasible incentives to promote spectrum  efficiency and sharing, we recommend that the NTIA Administrator and  the FCC Chairman jointly take the following three actions:
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. 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.
Why GAO Did This Study

The increasing popularity of wireless devices that use spectrum, combined with federal spectrum needs for national defense and other public safety activities, have created concerns that a "spectrum crunch" is looming. However, there is also evidence that at any given time or place, spectrum lies fallow or is only intermittently used. In an effort to use spectrum as efficiently as possible, advisory groups and others have proposed solutions to share spectrum.
This requested report examines (1) what factors prevent users from sharing spectrum more frequently and (2) what actions the Federal Communications Commission (FCC), the National Communications Information Administration (NTIA), and others can take to encourage more sharing and efficient spectrum use. GAO reviewed plans and documents from FCC and NTIA regarding their management of nonfederal and federal spectrum-sharing activities, respectively. GAO also interviewed federal and commercial spectrum users, industry and academic experts, and other stakeholders.

What GAO Found

Some spectrum users may lack incentive to share spectrum or otherwise use it efficiently, and federal agencies and private users currently cannot easily identify spectrum available for sharing. Typically, paying the market price for a good or service helps to inform users of the value of the good and provides an incentive for efficient use. Federal agencies, however, pay only a small fee to the NTIA for spectrum assignments and therefore have little incentive to share spectrum. Federal agencies also face concerns that sharing could risk the success of security or safety missions, or could be costly in terms of upgrades to more spectrally efficient equipment. Nonfederal users, such as private companies, are also reluctant to share spectrum. For instance, license holders may be reluctant to encourage additional competition, and companies may be hesitant to enter into sharing agreements that require potentially lengthy and unpredictable regulatory processes. Sharing can be costly for them, too. For example, nonfederal users may be required to cover all interference mitigation costs to use a federal spectrum band, which might include multiple federal users. Sharing can also be hindered because information on federal spectrum use is lacking and information regarding some federal spectrum use may never be publicly available, a situation that makes it difficult for users to identify potential spectrum for sharing.
Federal advisors, agency officials, and experts have identified several options that could provide greater incentives and opportunities for more efficient spectrum use and sharing by federal and nonfederal users. These options include, among other things: considering spectrum usage fees to provide economic incentive for more efficient use and sharing; identifying more spectrum that could be made available for unlicensed use, since unlicensed use is inherently shared; encouraging research and development of technologies that can better enable sharing; and improving and expediting regulatory processes related to sharing. However, these options involve implementation challenges. For example, setting spectrum usage fees for federal users may not result in creating the proper incentives, because agency budgets might simply be increased to accommodate their current use. While new technologies that overcome some of the inherent challenges with sharing spectrum are being developed, proving those technologies under real-world conditions can be difficult, and few incentives exist at the federal level to encourage such technology development. Finally, FCC and NTIA have taken some actions to potentially reduce the amount of time and even the need for potential rulemakings sometimes associated with spectrum sharing, but stakeholders and experts suggested that more could be done to expedite the approval process, such as automating some steps and developing better capabilities to track the status of spectrum-sharing applications. However, any changes to federal regulatory processes related to spectrum management and sharing would need to be carefully studied with respect to potential benefits and costs.

What GAO Recommends

FCC and NTIA should jointly (1) report to Congress on the potential merits and effects of a spectrum fee, (2) determine how to best promote spectrum research and development, and (3) evaluate what regulatory changes might improve the spectrum sharing process. The agencies generally agreed with GAO's findings but identified ongoing efforts that address the recommendations. GAO has modified the recommendations as described further in the report.