NTIA ISSUES NPRM ON REIMBURSEMENT FOR GOVT. RELOCATIONS

“The rules are not limited to 3G,” Rohde said of NPRM. “They will apply whenever federal users must leave or modify their systems as a result of having their spectrum assigned to the private sector.” Rules implement requirement of 1999 Defense Dept. authorization law that mandated that govt. users be compensated for cost of relocating as result of spectrum reallocations. Besides future reallocations, bands covered under NPRM include: (1) 1710-1755 MHz under 1993 Balanced Budget Act and 216-220, 1432-1435 and 2385-2390 MHz from 1997 Budget Act. In Nov., FCC released NPRM that would allocate 27 MHz in those bands to nongovt. from govt. uses.

NPRM sets forth mechanism for federal entities to provide estimates of relocation costs and provides procedures for successful private sector bidders to pay govt. entity following auction. It also proposes process for settling differences that may arise between bidders and federal govt. on estimates. If there is disagreement, 134-day mandatory negotiation and/or 3rd party mediation period would be used. If that period didn’t result in agreement on relocation costs, parties would have to enter nonbinding arbitration. NPRM also would allow reimbursement to federal agency where frequency assignment was classified.

NPRM said that in some cases, incumbent federal agencies might find it technically possible to continue to share reallocated spectrum with new licensees. To that end, it seeks comment on whether federal entities should be required to relocated where sharing is possible. “If not, we seek comment on the conditions whereby such federal entities should be permitted to remain in the band and who would pay for any system modification that would enhance spectrum sharing,” proposal said. In separate NPRM by FCC earlier this month, actions for spectrum below 3 GHz explored for 3G include possible spectrum sharing, segmentation and reallocation options (CD Jan 5 p1). Proposal on reimbursement of relocation costs for federal entities is modeled on similar mechanisms that FCC put in place when microwave operations were relocated from PCS bands, Rohde said.

NTIA proposed 4 factors for determining what constituted “comparable” facility to which federal entity could relocate. (Rules don’t require govt. agency to relocate until comparable spectrum is available.) Four factors are: (1) Communications throughput, meaning amount of information transferred within system in particular time period. (2) System reliability, defined as percentage of time information is transferred accurately within system, accounting for factors such as availability of frequency channel. (3) Operating costs of replacement systems under which federal entities would be compensated for increased recurring costs associated with replacement facilities for 5 years after relocation. (4) Operational capability, which measures system’s ability to perform within service, and interoperability requirements.

One key part of document, Rohde said, is proposed cost- sharing plan so that relocation expenses don’t disproportionately fall on one potential bidder or licensee or small number of bidders. Point is to cover scenarios such as single auction winner being compelled to pay for entire spectrum allocation held by federal agency, even if only part of that bandwidth is needed, NPRM said. NTIA seeks comment on what measures might “reasonably be implemented” to ensure that federal entity receives full payment from multiple licensees. If cost-sharing plan is put in place, NTIA also asks for feedback on whether govt. should administer it or whether industry-supported organization should do so.

NPRM also covers spectrum where classified or sensitive frequency assignments are made, Rohde said. In such cases, before auction, federal entities would provide single consolidated and unclassified figure to NTIA covering costs of relocating, retuning or modifying those systems. NTIA then would provide that information to FCC, which would furnish it to bidders under certain conditions. Rohde said he expected final rule from NPRM, which is expected to be published in Federal Register as early as today (Thurs.), to be issued within next year.

Several industry representatives also questioned FCC and NTIA officials on when certain 3G analysis information would be made available. Industry and govt. representatives have been meeting in smaller groups as well as larger forums such as one Wed. to discuss 3G spectrum scenarios. FCC and NTIA released interim reports in fall on frequency sharing, segmentation and relocation options for frequencies occupied by MMDS licensees and military users. Under White House memorandum last fall, final report on 3G deployment options, including cost figures, is due in March from both agencies. Several industry participants expressed concern that industry’s own analyses would be hard to complete in time for March deadline without estimates on potential relocation costs and alternative bands for relocating users. Officials emphasized industry input on technical issues was important to agency’s work on final reports. “I appreciate your concerns,” NTIA Assoc. Administrator William Hatch said in responding to comments on cost estimates. “I'm not sure I'm in a position to solve it now.”

VoiceStream’s Gary Jones also expressed concern about information that might not be available until after March report was published. “There is information we need,” he said. He cited number of point-to-point microwave links that exist in particular band. FCC Wireless Bureau Assoc. Chief Diane Cornell told meeting that point of process in 2 months leading up to final reports was “to crystallize the issues. We are trying to get as much agreement as possible on technical issues.” Actual decisionmaking process will begin after March, although she stressed that agencies anticipated dialog would continue among parties that don’t agree on particular issues after March reports were released.