Two federal agencies are moving forward with conflicting plans to commercialize a valuable chunk of wireless spectrum controlled by the Defense Department, leaving the future of an asset worth tens of billions of dollars in doubt.
The Pentagon is drafting a request for proposals for a new fifth-generation military cellular network that would lease its extra capacity to private-sector users like cellphone carriers, auto makers and factories, according to people familiar with the plan. This RFP includes more specific requirements than a separate request for information released last month and could go public before the Nov. 3 election, the people said.
At the same time, the Federal Communications Commission, the independent agency in charge of licensing airwaves to the private sector, is pursuing a plan to auction some of the same Pentagon-controlled band late next year.
The military currently uses the spectrum for radar and aviation, but the same frequencies are ideal for the ultrafast 5G signals commercial operators are working to deploy.
The dueling proposals have prompted an energetic response from the telecommunications industry. Telecom industry experts say the more aggressive Pentagon proposals could threaten the value of other cellular licenses that companies such as
Verizon Communications Inc.
paid tens of billions of dollars to amass.
AT&T Chief Executive John Stankey visited the White House on Sept. 30 to argue against proposals that might skirt the regular auction process, according to people familiar with the visit.
“As America’s largest infrastructure investor, it was another opportunity for us to visit with policy makers about key topics like 5G, spectrum policy and how the government can help foster expansion of internet access and affordability,” AT&T said in a statement. “Competing with China on 5G is about more than just spectrum, it requires considerable investment in fiber broadband and smart regulation.”
Spokespeople for the White House and Department of Defense didn’t immediately comment on Friday.
Some members of Congress have closed ranks behind the FCC’s traditional spectrum plan. A bipartisan group of senators and representatives on Wednesday sponsored legislation that would order the federal government to begin an auction before 2022. The bills, both called the Beat China for 5G Act of 2020, are still at the committee level.
In September, a group of lawmakers including Sen. John Thune (R-S.D.) wrote President Trump to argue against the Pentagon’s request, saying it “contradicts the successful free-market strategy you have embraced for 5G.”
Rep. Frank Pallone (D., N.J.), chairman of the House Energy and Commerce Committee, on Friday wrote the Commerce Department’s telecom administration office seeking information on federal policies the lawmaker called “incoherent and erratic.”
The Defense Department “clearly doesn’t have the authority to end auction-focused spectrum policies for the nation, let alone act unilaterally towards that goal,” Mr. Pallone wrote. The letter also raised concerns about media reports of political operatives close to the president working outside normal channels to promote a “seismic shift in spectrum policy.”
The federal government uses wireless licenses to make sure things ranging from airplane radar to mobile phones don’t emit signals that interfere with each other. The FCC granted licenses to television and radio stations free of charge until the late 20th century, when cellphone carriers’ explosive growth allowed the government to auction new licenses and steer the proceeds to the U.S. Treasury.
Companies including Google owner
have argued that new technology allows the latest smartphones to share the airwaves with other devices, reducing the need for expensive licenses. The FCC has also turned over more frequencies for Wi-Fi and other uses that don’t require a license, but the commission retained ultimate authority over the process.
Craig Moffett, an analyst for telecom and media research firm MoffettNathanson LLC, said the dispute illustrates a chaotic policy-making process that has left telecom companies unsure of where they stand.
“We constantly field questions about how the country’s telecom policy might change under a Biden presidency,” Mr. Moffett wrote in a note to clients. “The focus on what might change, however, seemingly ignores the utter incoherence of the status quo.”
Write to Drew FitzGerald at [email protected]
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