Auction of US Defence Department spectrum delayed

The US federal government has postponed for three years any plans to auction spectrum used by the US Department of Defence to the cellular telecommunication industry for commercial, high-speed mobile data services.

          The US federal government has postponed for three years plans to auction spectrum used by the US Department of Defence to the cellular telecommunication industry for commercial, high-speed mobile data services.

          Analysts say the decision recognises the political difficulty of trying to wrest spectrum from the Pentagon while it is on a war-footing after the September 11 terrorist attacks on the US. The analysts also pointed to the slowdown in the economy, which has diminished interest by the cash-strapped cellular industry in multibillion-dollar spectrum auctions.

          The decision also removed from consideration for commercial use the 1770Mhz to1850Mhz frequency bands used by Defence Department satellite systems but did leave the department's 1710MHz to 1770MHz bands up for grabs. It also added another federal band, 2110MHz-2170MHz, which is already allocated for commercial use, to support high-speed, third-generation (3G) wireless services.

          The National Telecommunications and Information Administration (NTIA), an arm of the US Commerce Department, said in a statement Friday that the decision to delay action on the spectrum issue was reached through mutual agreement between Michael Powell, chairman of the Federal Communications Commission, and Commerce Secretary Donald Evans.

          Besides looking at the federal bands for new 3G spectrum, the NTIA statement said the FCC will spend the next three years studying other bands for new high-speed data services, including the 2500-2690 MHz UHF television band.

          Jim Lewis, director for technology policy at the Centre for Strategic and International Studies in Washington, says that while the cellular industry had done well in advancing its case for transferring Pentagon spectrum to industry for the past year, the situation was altered with the attacks on the World Trade Centre and the Pentagon.

          "Politically, the equation has changed. No one has figured out a way to gracefully move [the Defence Department] from its spectrum, and now is not the time to even start thinking about it," Lewis says, referring to the start of air strikes in Afghanistan by US forces. But Lewis adds, the Defence Department "could probably do a better job" with the wide swath of spectrum it occupies.

          Emory Winship, who helped launch wireless data services at Charles Schwab & Co five years ago and is currently a partner in the Conversus Group of New York, an investment banking firm, said the delay makes sense because many US carriers don't have the billions of dollars needed to spend on new spectrum auctions now that the US has entered what he called a recession. Delaying spectrum auctions is a smart financial move by the government, Winship said, because right now "spectrum has a discounted value," which could rebound in three years.

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