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Remarks of Assistant Secretary Victory at the Federal Communications Bar Association Spectrum Policy Summit

April 16, 2002

Keynote Address of
Assistant Secretary Nancy J. Victory
before the
Federal Communications Bar Association
FCBA Spectrum Policy Summit & CLE
Washington, D.C.
April 16, 2002

Thank you, Laura, for that kind introduction. And thanks to the FCBA and CLE Committee Co-Chairs Laura, Praveen Goyal, and Michael McCoin for organizing this event. It is a pleasure to be here today to address my friends and colleagues in the communications bar. I hope all of you members of the FCBA don't get too sick of me this week. I had the pleasure of addressing the FCBA at its monthly luncheon last Friday and I will be keynoting an event jointly organized by the FCBA and the Computer Law Association on Thursday. Those of you attending all three are really gluttons for punishment. 

But seriously, I am so very pleased to be participating in this continuing legal education opportunity focused on spectrum policy issues. Managing the finite radio spectrum effectively and efficiently is one of our greatest challenges. The issues are extremely difficult, for sure. But to make the stakes even higher, spectrum management is one area we can't afford to get wrong - too much of our country's future is riding on it.

The statistics speak for themselves:

· About 50 percent of long term economic growth in the U.S. since World War II resulted from technology innovations.

· Further, roughly two-thirds of the productivity growth of the late 1990s came from the communications and information technology sectors alone.

Increasingly within the last two decades, a significant part of this growth has resulted from spectrum-based products and services:

· For example, simply for commercial wireless services, it is forecast that industry spending will hit $116 billion this year, with consumer spending accounting for about $85 billion of that. This represents continued growth even in this economic downturn.

· Moreover, wireless services represent almost 20 percent of all telecommunications service revenues, up from less than 5 percent of such revenues at the end of 1992.

Taken together, these figures show that not only is wireless growing, it is becoming an increasingly larger part of the important telecommunications sector. These numbers do not include spending for non-commercial products, such as radio equipment used by the military, law enforcement, and public safety agencies, and so forth. Moreover, they do not even begin to take into account the productivity gains of the people who use these products in their businesses. 

In addition to their positive economic impact, spectrum-based products and services have enhanced the lives of Americans in countless other ways:

· Wireless voice and data services have unchained workers from their desks, allowing them to keep in touch wherever they might be, even enabling them to attend events they might otherwise have missed (that's why you see so many blackberries at children's weekday afternoon sporting events). 

· Wireless devices have also greatly enhanced personal safety, facilitating a simple call for directions or a more urgent call for help.

· Broadcast television and radio have provided free, nearly universal access to information and entertainment.

· Spectrum-related technology is also increasingly important to our national defense and homeland security.

· And, many additional beneficial spectrum-based uses are on the horizon.

If the U.S. is going to continue to be a leader in technology, and if our citizens are going to be able to enjoy all of the benefits such technological advancement can bring, we have got to find spectrum to deploy all of these wonderful new wireless products and services. And just so there is no misunderstanding - we need to find spectrum for commercial and governmental uses because Americans benefit greatly from both. 

That's the reason NTIA convened its own spectrum summit recently to kick off its inquiry into how to better manage this finite resource. The purpose of the summit was to gather information about new and innovative ideas for spectrum policy and management that encourage spectrum efficiency; that provide spectrum for new technologies; and that improve the effectiveness of the domestic and international spectrum management process. Improvement of national spectrum management is a multifaceted undertaking. Government cannot do it alone and neither can the private sector. And that is why we called in a variety of experts in spectrum management from government, industry and academia - a broad cross-section of leadership and thinking in the spectrum arena. I was also particularly pleased about the extensive participation of the FCC in our two-day Summit. Chairman Powell and Commissioners Martin and Abernathy helped co-moderate panels with me and over 40 FCC staffers attended. Pursuant to federal law, the FCC and NTIA are co-managers of the radio spectrum. It is essential that we work together in addressing the challenges of spectrum management and I am pleased that we began this process side-by-side.

The Summit was structured as a two-day event. The first day was built around traditional panel discussions and we had three. The first featured government and private sector users of spectrum. These are the folks who know first-hand the challenges of the current management process. The second panel included economists and analysts who follow spectrum issues. It was interesting to hear their theoretical views on the issues. The third panel was comprised of technologists and futurists. These were the engineers and future thinkers who enlightened us on new techniques for efficient spectrum use and prognosticated on the future.

On the second day, we wanted to roll up our sleeves and have small, but lengthy, group meetings not only to identify issues that needed attention, but also to solicit ideas - and perhaps consensus - on what action was necessary. We had three day-long meetings focused on spectrum management, spectrum efficiency, and international issues. 

As I noted at the opening of the Summit, we were mostly in "listening mode" over the two-day event. While I and my colleagues at NTIA attempted to ask pointed questions to stimulate discussion, the idea was to hear from the experts as to the successes and failures of current spectrum management policies as well as how to further improve the process. And hear we did!

One of the first things we heard was wide agreement that better coordination within the government on spectrum management is needed. Several participants commented about how cooperation and communication among the various agencies engaged in spectrum management - the FCC, NTIA, and, for international issues, the State Department - was so important. Particularly with so much shared spectrum, many spectrum decisions require the review of both FCC and NTIA spectrum managers. On the international level, U.S. positions must be coordinated between the two agencies and with the State Department, as well as with industry. Cooperation and communication are essential to all of these endeavors. Apparently just the notion of putting our heads together - or bashing them together as Chairman Powell and I did by accident at one point that first morning - is something that has been missing from the spectrum management process. 

Length and complexity of process was another issue. Several participants noted how long it takes and how painful it is to allocate spectrum. One criticism was that the process is usually too reactive - waiting until the technology is ready to deploy before beginning the allocation process, rather than anticipating future spectrum needs. Yet, most readily acknowledged how difficult it is to predict the future. Another problem cited was that the allocation process too often pits advocates of new technology against incumbents - making it a contentious "either/or" debate instead of focusing on how best to get publicly beneficial services out to our citizens.

Several of the participants emphasized that the rights inherent in a spectrum license are just not clear. As one panelist said, "you need to know what you're getting into." While there was general agreement that these rights should be better defined, there definitely was not agreement as to what that definition should be. A few indicated that a "one size fits all" strategy would likely not work; license rights probably would need to differ depending on the type of license.

There was also significant discussion as to how to make way for new services in already allocated spectrum. Where the incumbent users are to be relocated to another part of the spectrum, the panelists emphasized that the rules of relocation (and that means of negotiation and compensation) need to be determined up front. Reducing uncertainty and eliminating surprises speeds the process. Others raised the scenario where an incumbent use was unsuccessful or technologically outdated. Several indicated that, in this situation, the government may need to just take back the spectrum. All present recognized that this was easier said than done.

Our technologists and futurists talked at length about new technologies for maximizing spectrum use. Several described the future according to software defined radios or frequency-hopping technology. No need for elaborate allocation plans or channels buffers. Wireless technologies of the future would share spectrum and be smart enough to transmit only on a free channel. There was also some discussion that more sophisticated technology, particularly in receivers, could maximize spectrum use by reducing the size of guard bands and channel spacing. Not surprisingly, there is a sliding scale between cost and efficiency.

One of the things that surprised me most at the summit was the interest expressed by several government and commercial users in exploring ways to share the same system. Obviously, this won't work for all uses, but if we can eliminate some redundant systems, we can clearly increase efficiency and open up some spectrum for new services.

And if the technical and process issues weren't complex enough, there are political overtones that complicate all of the spectrum management issues. One panelist called it the "800 pound gorilla" overshadowing all of these issues. One issue that came out of this discussion was the extent to which revenue from auctions or fees may or have driven recent spectrum management decisions. In a broader context, the question is whether any improvements are needed so that spectrum management remains objectively fair and efficient, and not subject to political influences.

Clearly, our two-day summit gave us lots of food for thought. Tackling spectrum management will not be a short-term project for sure, but one we must tackle thoroughly and thoughtfully. And don't expect that the end result of our efforts will be a report that will get dusty sitting on a shelf. Rather, we intend to turn what we learn into action items to effect the changes needed to better manage this essential resource. 

Our spectrum team at NTIA is already meeting and identifying follow-up "to dos." While we're not quite ready to lay out the full agenda of our spectrum management initiative, I can highlight for you today a couple of themes or issue areas that should figure prominently in that agenda:

Government Working Together - Teamwork Not Turf Wars. First, a core message at the summit was the need for teamwork to replace turf wars. Our country's spectrum needs are too important to be undermined by internecine squabbling between and within branches of government. As head of NTIA, I am committed to building a foundation of trust, collegiality and cooperation in our dealings within the federal government and our interactions with the FCC, the State Department and Congress. In pursuit of that objective, I will be having discussions with Chairman Powell at the FCC and David Gross at the State Department to develop an action plan to facilitate the efficient functioning of the nation's spectrum management team at home and abroad. 

Modernizing Spectrum Policies - Eliminating Out Dated Micro-Managing. Second, we need to make a concerted effort to eliminate unnecessary government micromanaging of spectrum uses. This means taking a fresh look at legacy rules and restrictions to assess their ability to accommodate emerging technologies or spectrum needs. As a starting point, NTIA has already supported the elimination of spectrum caps and the liberalization of spectrum leases. With the FCC's Biennial Review about to begin for wireless services, I will be very interested in hearing where and how vestigial obligations can be removed and improvements can be ensured. 

Better Anticipating Future Technologies - Looking to the Spectrum Future Rather Than the Spectrum Past. Third, the rapid pace of technological innovations in wireless often creates a substantial risk that regulations will be outdated and counterproductive. At NTIA, we will be focusing on where things will be heading rather than where they have been. Our goal will be to fashion forward-looking policies that enable, rather than retard, advances. NTIA's Institute for Telecommunication Services in Boulder, Colorado will be playing an increasingly prominent role in that initiative. 

Removing "Clouds" Over Spectrum Availability - Clear Skies Rather Than a Clouded Vision. Finally, the growth of the wireless industry depends upon continued spectrum availability - either through more efficient technologies or through more efficient management techniques. We need to remove the clouds over spectrum availability and provide certainty for the deployment of new services. The three great possibilities for new mobile spectrum homes - 700 MHz, 800 MHz and the spectrum being assessed for 3G - are the subject of intense debates and continuing uncertainties. There are no easy solutions. We will need to search for outcomes that benefit all of the participants fairly rather than gains for some at the expense of others.

In conclusion, the NTIA Spectrum Summit was not a one-time event with all show and no substance. We will be aggressively building upon the ideas and contributions of the event's participants. We will be working hard to identify and implement solutions. We will be soliciting ideas and reactions along the way. And, most importantly of all, we will be working as part of one Spectrum Team in which collaboration for the common good must be the hallmark of our efforts.