Uncertainty persists in fate of 1755-1850 MHz band

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A Pentagon rough estimate that it would cost the Defense Department $12.6 billion over a decade to relocate most of its 11 major systems dependent on a 95 megahertz spectrum band that could potentially be auctioned to the private sector was mostly methodologically sound, says the Government Accountability Office.

In a preliminary report (.pdf), the GAO also notes assumptions made in the DoD's estimate of relocating from the 1755-1850 MHz band--which was not intended as precise estimate--could change and depends on yet unresolved matters, such as the bands to which the DoD would relocate it systems.

One assumption was that the DoD could operate in the 2025-2110 MHz band, spectrum currently allocated to commercial use, including television networks that use it to transmit live reports. The farther away the new spectrum from the current band the systems would operate in, the higher the costs--but the Federal Communications Commission has taken no rulemaking moves to withdraw the 2025-2110 MHz band from commercial use.

An earlier DoD estimate about the costs of relocating from the 1710-1755 MHz band, which the FCC auctioned in September 2006 for almost $6.9 billion, turned out in fact to be about $80 million more than actual costs, the GAO says. Civilian agency cost projections fared less well, with the overall cost to government to migrate out of the band exceeding estimates by $474 million, as of March 2013.

Whether an auction of the 1755-1850 band would be profitable is difficult to determine. No government revenue forecast exists, the GAO says. Consulting firm the Brattle Group in 2011 published a forecast that projected revenues of $19.4 billion, but that study assumed among other things that the band would be mostly cleared of federal users.

The National Telecommunications and Information Administration in a March 2012 report (.pdf) found "significant challenges" in vacating the 1755-1850 MHz band from federal users, stating that certain federal operations would remain in band indefinitely. The NTIA report estimated the cost of migrating all federal systems away from the band to be around $18 billion over a decade.

For more:
- download the report, GAO-13-563T (.pdf)

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