NTIA ISSUES REIMBURSEMENT RULE FOR REALLOCATED GOVT. SPECTRUM
NTIA released rules Mon. for how private sector would carry out mandatory reimbursement obligations for govt. agencies that relocated to make spectrum available for private sector use. Rules call for federal agencies to prepare estimate of relocation costs and provide that amount to potential bidders at future auctions. Payment details then would be negotiated directly between federal incumbent and new licensee. Notice of proposed rulemaking issued by NTIA last year had sought comment on whether federal entities should be required to relocate in cases when spectrum sharing was possible. Final rule acknowledged that sharing “appears to be an option that private sector parties favor.” But agency said legislation such as Balanced Budget Act of 1997 required that federal users not otherwise exempt must be relocated from bands reallocated to nongovt. users “in order to exercise their rights to reimbursement.” Rule also said NTIA shortly would release further notice addressing cost- sharing mechanism, such as spectrum clearinghouse, to ensure that federal agencies were reimbursed when multiple licensees shared that responsibility.
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Rules, which take effect July 17, apply to 216-220 MHz, 1432-1435 MHz, 2385-2390 MHz and 1710-1755 MHz, all of which have been reallocated from govt. to commercial use. Last month, FCC adopted service rules for those bands as part of total of 27 MHz in 7 separate bands that have been reallocated from govt. to nongovt. use, including 216-220 MHz, which will be licensed for telemetry service on secondary basis using site-by-site frequency coordination. That order also assigned 6 economic area groupings for 1392- 1395 MHz paired with 1432-1435 MHz and would assign on single, nationwide basis 2385-2390 MHz. Besides 1710-1755 MHz already allocated to non-govt. from govt. users, adjacent 1755-1780 MHz band has been under consideration by federal govt. as part of spectrum that could be used for 3G services if agreement can be reached on whether incumbent military systems can be relocated to comparable bands.
NTIAS’s final reimbursement rules stem from requirement of 1999 National Defense Authorization Act that federal agencies be compensated for relocating to accommodate nonfederal users. Once requirements of that legislation are met, sharing by federal systems won’t be permitted, according to rules. “To the extent that a nonexempt federal entity decides to remain in a reallocated band, the federal entity would remain in the band on a noninterference basis and would not be entitled to reimbursement for any modification costs under these rules.” Rules acknowledged it could take “a number of years” for govt. systems to be relocated in some cases, during which incumbent govt. systems would remain on primary basis and be protected by nongovt. licensee.
NTIA said cost-sharing plan “may be appropriate” for scenarios in which mandate to reimburse govt. entity for moving could disproportionately fall on one licensee or small group. Last year’s NPRM had sought comment on best way to create clearinghouse to administer cost-sharing plan to ensure that govt. agency was compensated in circumstances in which part pf band was “not licensed or acquired by any particular licensee.” Groups such as PCIA had backed clearinghouse model similar to one that FCC used when relocating microwave incumbents to make way for PCS bidders. NTIA said it wasn’t ready to create such plan but would issue “in the near future” further notice to develop cost-sharing plan and seek proposals for clearinghouse or similar mechanism. Absence of cost-sharing plan doesn’t affect scheduled auction of 2385-2390 MHz band because Commission adopted nationwide licensing scheme, rule said. “However, we recognize that addressing the cost-sharing question would be necessary prior to the auction of bands that are licensed in smaller geographic areas or multiple spectrum bands.”
NTIA rejected arguments by Securicor that agency cap total relocation costs as ceiling in postauction negotiation and mediation to bar new costs from being added after bidders had relied on cost estimate of original bid calculation. Defense Dept. had argued against such relocation cost cap, saying original estimates could turn out to be too high or too low as circumstances changed. NTIA said Congress didn’t appear to have intended to limit reimbursement costs incurred by federal agency in relocating or changing their operations. NTIA also turned down recommendation by AT&T to limit cost overruns to 10% above estimated costs as alternative cap.