Congress Seeks Info on 11, 18, and 23 GHz Fixed Microwave

Bill extending payroll tax cut requires reports on frequency coordination.

Among the little surprises buried in the 250+ page legislation to extend the payroll tax cuts is a provision instructing the General Accounting Office and the FCC to investigate the use of the 11, 18, and 23 GHz fixed microwave bands.

Currently these bands, along with some others, are licensed on a “link by link” basis. An applicant sends the coordinates and elevations of its proposed stations, preferred frequency band, and other technical data to a frequency coordinator, who tries to fit the new user into the band without threatening interference to the incumbents. The process usually works. Few applicants need be turned away, and unexpected interference from one system to another almost never happens. The arrangement also results in highly efficient use of the spectrum. But it does not bring in revenues to the Treasury, as auctions do.

The new bill (the relevant portion of which is reproduced below) requires the FCC to report on the number and percentage of common carrier applications in these three bands that fail to make it through frequency coordination. Separately, GAO must assess whether the current rules provide “adequate incentive” for use of the bands, and whether they “ensure that the Federal Government receives maximum revenue for such spectrum through competitive bidding.” The bill further instructs GAO to consider adjacent spectrum that has been auctioned (which is just the 24 GHz band), and also the present and projected failures of frequency coordination in markets having high demand for common carrier use of these bands.

The object, apparently, is to lay the groundwork for auctioning these bands. But the bill has some odd features.

For one thing, although auctions have succeeded for mobile spectrum, such as the bands used for PCS voice and 3G and 4G data, they have never worked well for fixed point-to-point applications. The bands previously auctioned for that purpose, including 24, 28, 31, and 39 GHz, are all severely underused. They did raise some cash for the Government, but make poor examples of spectrum efficiency. At least according to historical precedent, auctioning off a fixed point-to-point band is almost tantamount to removing it from productive use.

For another, the bill looks primarily to common carrier uses of the three bands. Although we don’t have hard data, we strongly suspect that non-common-carrier applications account for the large majority of licenses.

Finally, the focus on failures of frequency coordination is curious, considering that most coordination efforts ultimately succeed, thanks in large part to the skills of the companies that provide this service.

The current system of regulation, in short, has worked well for decades. We respectfully suggest that Congress should have left it alone.

Both reports are due in nine months. No doubt the FCC will soon have to seek public comment on the issues raised in the bill. We will let you know when that happens. In the meantime, the relevant text from the bill appears below.

SEC. 6412. DEPLOYMENT OF 11 GHZ, 18 GHZ, AND 23 GHZ MICROWAVE BANDS.

 (a) FCC REPORT ON REJECTION RATE.—Not later than 9 months after the date of the enactment of this Act, the Commission shall submit to the Committee on Energy and Commerce of the House of Representatives and the Committee on Commerce, Science, and Transportation of the Senate a report on the rejection rate for the spectrum described in subsection (c).

 (b) GAO STUDY ON DEPLOYMENT.—

 (1) IN GENERAL.—The Comptroller General of the United States shall conduct a study to assess whether the spectrum described in subsection (c) is being deployed in such a manner that, in areas with high demand for common carrier licenses for the use of such spectrum, market forces—

(A) provide adequate incentive for the efficient use of such spectrum; and  

(B) ensure that the Federal Government receives maximum revenue for such spectrum through competitive bidding under section 309(j) of the Communications Act of 1934 (47 U.S.C. 309(j)).

 (2) FACTORS FOR CONSIDERATION.—In conducting the study required by paragraph (1), the Comptroller General shall take into consideration—

 (A) spectrum that is adjacent to the spectrum described in subsection (c) and that was assigned through competitive bidding under section 309(j) of the Communications Act of 1934; and

(B) the rejection rate for the spectrum described in subsection (c), current as of the time of the assessment and as projected for the future, in markets in which there is a high demand for common carrier licenses for the use of such spectrum.

 (3) REPORT.—Not later than 9 months after the date of the enactment of this Act, the Comptroller General shall submit a report on the study required by paragraph (1) to—

 (A) the Commission; and

 (B) the Committee on Energy and Commerce of the House of Representatives and the Committee on Commerce, Science, and Transportation of the Senate.

 (c) SPECTRUM DESCRIBED.—The spectrum described in this subsection is the portions of the electromagnetic spectrum between the frequencies from 10,700 megahertz to 11,700 megahertz, from 17,700 megahertz to 19,700 megahertz, and from 21,200 megahertz to 23,600 megahertz.

 (d) REJECTION RATE DEFINED.—In this section, the term ‘‘rejection rate’’ means the number and percent of applications (whether made to the Commission or to a third-party coordinator) for common carrier use of spectrum that were not granted because of lack of availability of such spectrum or interference concerns of existing licensees.

 (e) NO ADDITIONAL FUNDS AUTHORIZED.—Funds necessary to carry out this section shall be derived from funds otherwise authorized to be appropriated.

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