In the United  States, responsibility for spectrum management is divided between two  agencies: FCC and the Department of Commerce’s National  Telecommunications and Information Administration (NTIA). Since 1994, FCC has primarily  used auctions to assign spectrum for mutually exclusive applications. In March 2010, an FCC task force issued the National Broadband Plan. Since 1994, FCC Has Made Over 520 Megahertz of Spectrum Available for New Uses through a Process That Can Be Lengthy

To accommodate new commercial uses of spectrum, such as wireless  broadband, FCC must often change its rules to move certain bands of  spectrum from an existing use to the new use, a process known as  repurposing spectrum. However, this process can be lengthy—from 7 to  15 years for the six repurposings that we examined. We identified the  following factors that contribute to the time it takes FCC to repurpose  spectrum: the regulatory nature of repurposing, opposition of incumbent  users, FCC and NTIA coordination on the repurposing of federal  spectrum, and concerns about interference. FCC identified voluntary  approaches that it thinks could speed the process by, for example,  avoiding some opposition; however, these approaches generally require  congressional approval and face some stakeholder opposition. Responding Experts and Stakeholders Had Mixed Views on FCC’s Plans and Recent Actions to Meet Future Spectrum Needs

The National Broadband Plan includes recommendations in several areas  aimed at meeting future spectrum needs. To implement the plan’s recommendations to make more spectrum  available for broadband in specific bands, FCC, among other things:    performed technical analysis and worked with broadcast industry  engineers and experts in related fields on how reallocating a portion of  television spectrum to broadband could work;  issued a proposed rule to establish a regulatory framework to facilitate  wireless broadband uses of television bands, in anticipation of the  Commission’s intended future reallocation of this spectrum to  broadband;    granted a waiver to a Mobile Satellite Services provider,  LightSquared, allowing it to expand its terrestrial use of its satellite  spectrum for broadband, conditional on addressing concerns about  interference with Global Positioning System devices;    added co-primary fixed and mobile terrestrial wireless allocations to  the 2 GHz satellite band and gave Mobile Satellite Services licensees  the flexibility to lease their spectrum to terrestrial operators via  spectrum manager leasing arrangements, both of which FCC sees as  steps toward providing flexibility to allow greater use of the band for  mobile broadband;  revised its interference rules in Wireless Communications Services  spectrum to facilitate its use for broadband, along the lines  recommended by the plan; and  issued analyses supporting its recommendation to auction the Upper  700 MHz D block; while the plan recommends the auction of this  band, several proposals in the 112th Congress, such as the  SPECTRUM Act, S.911, and the Public Safety Spectrum and  Wireless Innovation Act, H.R. Respondents expressed a variety of views on FCC’s progress. Experts and stakeholders generally supported the recommendation on  R&D. Responding Experts and Stakeholders Strongly Supported Extending FCC’s Auction Authority but Varied in Their Opinions on Potential Changes to Auctions

In the Omnibus Budget Reconciliation Act of 1993, Congress provided  FCC authority to use auctions to assign certain spectrum licenses. In particular, auctions were quicker, less costly, and  more transparent; were more effective in assigning licenses to entities  that valued them the most; and were an effective mechanism for the  public to realize a portion of the value of a national resource used for  commercial purposes. Experts and stakeholders responding to our survey, by large margins,  supported extending FCC’s authority to assign mutually exclusive  licenses by auction beyond the September 30, 2012, expiration date. Most experts and stakeholders  agreed that FCC should reduce uncertainty by providing a clear road map  for future auctions, including their timing and size, so that potential  bidders can develop effective strategies. Requiring winners of auctions to pay royalties based on the amount of  revenues the winners earn by using the spectrum rather than requiring  them to pay the full amounts of the winning bids up front garnered the  least support. In some instances, these conflicting opinions  arise from participants’ divergent positions in the communications  industry; for example, incumbent licensees, such as broadcasters, are  likely to oppose recommendations that they believe could impose  burdens or costs on their businesses. Matter for Congressional Consideration

Given the continued success of FCC’s use of auctions, and the  overwhelming support among experts and stakeholders for extending  FCC’s auction authority, Congress should consider extending FCC’s  auction authority beyond the current expiration date of September 30,  2012. FCC provided technical comments that we incorporated as appropriate. Appendix I: Scope and Methodology

This report addresses the Federal Communications Commission’s (FCC)  management of commercial spectrum, including (1) the extent to which  FCC has made spectrum available for new commercial uses since it  implemented auction authority in 1994, and the time taken to do so; (2)  experts’ and stakeholders’ views on FCC’s plans and recent actions to  meet future spectrum needs; and (3) experts’ and stakeholders’ views on  the continued use of auctions to assign spectrum. To examine the extent to which FCC has made spectrum available for  new commercial uses, we reviewed six instances where FCC repurposed  spectrum from an existing use to a new use. This could be done securely.
Why GAO Did This Study

The radio-frequency spectrum enables an array of wireless communications services that are critical to the U.S. economy and national security, such as wireless broadband. In 2010, a Federal Communications Commission (FCC) task force issued the National Broadband Plan that included recommendations to reform spectrum policy. Since 1994, FCC has used competitive bidding, or auctions, to assign licenses to commercial entities for their use of spectrum; however, its authority to use auctions expires on September 30, 2012.
Among other things, GAO examined (1) the extent to which FCC has made spectrum available for new commercial uses and the time taken to do so, (2) experts and stakeholders views on FCCs plans and recent actions to meet future spectrum needs, and (3) experts and stakeholders views on the continued use of auctions to assign spectrum. To address these objectives, GAO reviewed FCCs plans, notices, and orders; reviewed six instances in which FCC made spectrum available for new commercial uses; and surveyed 30 experts and 79 industry stakeholders about their views on FCCs efforts to make spectrum available for new uses, its plans and actions to meet future needs, and its continued use of auctions (the survey had a 68 percent response rate).

What GAO Found

Since 1994, FCC has made over 520 megahertz (a measure of quantity) of spectrum available for new uses, such as wireless broadband, through a process that can be lengthy. Because most of the usable spectrum in the United States has been allocated to existing uses, FCC must change its rules to move spectrum from an existing use to a new use, a process known as repurposing spectrum. Yet, this process can be lengthyfrom 7 to 15 years for the six repurposings that GAO reviewed. Four factors contribute to the time it takes FCC to repurpose spectrum: the regulatory nature of the process, which to some extent is guided by statute; opposition of incumbent users, who could be required to vacate spectrum; coordination challenges between FCC and the National Telecommunications and Information Administration (NTIA), which oversees federal agencies use of spectrum, on the repurposing of federal spectrum for commercial use; and concerns about interference from users of spectrum in adjacent bands of spectrum. FCC has identified voluntary approaches that it thinks could speed the process, but these approaches generally require congressional approval and face some stakeholder opposition.
Experts and stakeholders had mixed views on FCCs plans and recent actions to meet future spectrum needs. The National Broadband Plan included a set of recommendations to FCC, FCC and NTIA jointly, and Congress, aimed at meeting future spectrum needs. Some recommendations garnered broad support, including recommendations to auction certain bands of spectrum and enhance research and development. However, experts and stakeholders opinions diverged on other recommendations, such as reallocating a portion of spectrum from television to wireless broadband. Opinions also varied on FCCs progress in implementing the recommendations. In some instances, these conflicting opinions arose from participants divergent positions in the industry, with, for example, incumbent licensees such as broadcasters opposing recommendations that they believe could impose burdens or costs on their businesses.
Experts and stakeholders GAO contacted strongly supported extending FCCs auction authority, but varied in their opinions on potential changes to auctions. Since 1994, FCC has used auctions to assign mutually exclusive licenses to commercial entities providing certain wireless services. GAO previously reported that auctions were effective in assigning licenses to entities that valued them the most; were quicker, less costly, and more transparent than mechanisms FCC previously used to assign licenses; and were an effective mechanism for the public to realize a portion of the value of a national resource used for commercial purposes. Experts and stakeholders responding to GAOs survey strongly supported extending FCCs auction authority53 of 65 respondents supported extending FCCs authority. However, experts and stakeholders held varied opinions on potential changes to auctions. For example, respondents generally supported actions that would provide a clear road map detailing future auctions, which could reduce uncertainty. In contrast, a proposal to require winners of auctions to pay royalties based on their revenues rather than the full amount of their winning bids up front garnered the least support.

What GAO Recommends

Given the continued support of FCC's use of auctions, Congress should consider extending FCC's auction authority beyond the current expiration date of September 30, 2012. FCC provided technical comments that were incorporated as appropriate.