FCC’s O’Rielly proposes federal agencies free up spectrum in exchange for budgetary relief

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The Republican commissioner suggested federal agencies be permitted to use their spectrum holdings to offset the annual budgetary caps and sub caps.

FCC Commissioner Michael O’Rielly is not giving up on his earlier idea for federal spectrum, but he is proposing a new idea: the option of allowing agencies to free up some of their spectrum holdings in exchange for budgetary relief.

“While I still believe the imposition of Agency Spectrum Fees is the best course of action, this new proposal represents a compromise between differing carrot and stick approaches,” he said in a blog post. “And it is particularly timely today, as many of these federal agencies face increasing budgetary pressure.”

O'Rielly, FCC Comissioner Image: FCC
FCC Commissioner Michael O’Rielly

In what he said amounts to a spectrum-for-cash swap, O’Rielly outlined how it would work: Federal agencies would be permitted to use their spectrum holdings to offset the annual budgetary caps and sub caps. “This would mean that, in achieving its respective budget limits, a federal agency could substitute the market value—as determined by an average of Congressional Budget Office and Office of Management and Budget estimates—of their surrendered spectrum to offset other cuts or even expand its spending options,” he said.

Such an option may be most attractive for the Department of Defense (DoD), which faces direct budget caps imposed by law, he said. In operation, it would force its leadership to evaluate all its budget priorities and operations against the others, including whether net savings could be achieved by vacating or sharing spectrum with the private sector.

In some cases, DoD might be able to use more efficient technology to reduce its spectrum footprint and still generate net savings, he added. For example, the DoD’s Office of Spectrum Policy and International Engagements might determine that the cost of making particular radar facilities more frequency agile would be more than offset by the budgetary relief received from the resulting cleared spectrum. “Importantly, the benefits to the DoD would be immediate,” he said.

While O’Rielly acknowledged that bringing market forces to bear on federal users of radio spectrum has not been easy and reform efforts have thus far failed to gain sufficient traction.

But there is some degree of precedent in the DoD’s spectrum policy reform. When it came to the Citizens Broadband Radio Services (CBRS) band, a lot of collaborative work had to occur between the NTIA and DoD to substantially reduce the size of exclusion zones along the nation’s coasts. That was an entirely different situation but showed the DoD's willingness to work on spectrum issues.

RELATED: FCC’s O’Rielly makes case for rule changes at CBRS Alliance meeting

O’Rielly has been a proponent of tweaking the CBRS rules since the FCC voted on them last year under the prior administration. He told the CBRS Alliance last month that since the commission started the 3.5 GHz proceeding in 2012, circumstances with regards to the service band have changed.  

The commissioner at the time reiterated that he is not predisposed to disrupt the three-tier structure of the spectrum sharing system; he just wants all three tiers of the so-called "experiment" to work. His view is the band should be designed to permit as many uses as possible and the market should decide the highest value for the spectrum.