Though telecommunications experts welcomed the move, industry analysts questioned whether it was sufficient to deliver "3G" or third-generation services, such as wireless live-streaming broadcasts.
Debate over the decision weighed national security vs. business interests. The new frequencies will be in the 1710-1755 MHz and 2110-2170 MHz ranges, with much of the first segment being reallocated from the Department of Defense. The latter section comes from civil users a Federal Communications Commission spokesman said.
"While the plan requires some changes to certain of our systems the Defense Department concludes that military capabilities will not be degraded," said Steven Price, deputy assistant secretary of defense for spectrum, space, sensors and C3. He noted in prepared statement that DoD would gain access to comparable spectrum and receive reimbursement and enough time to shift its usage.
At a news conference Tuesday morning, Commerce Secretary Don Evans said, "This plan promotes our country's economic growth while protecting national security and public safety."
Industry trade groups applauded the move, saying the announcement from the Bush administration will help add certainty to today's fragile telecommunications industry, hard hit by economic difficulties in general and WorldCom's bankruptcy announcement this weekend in particular.
"For too long, spectrum decisions have been an unstable dynamic driven by ad hoc budget determinations," said Tom Wheeler, chief executive officer of the Cellular Telecommunications and Internet Association. "Today's decision eliminates that instability."
Some wireless analysts, though, saw the announcement differently.
The FCC has projected the U.S. needs an additional 200 MHz of spectrum. The compromise announced Tuesday not only falls short of this but divides up the 90 MHz into two 45-MHz allocations from two non-contiguous frequency bands, said Rudy Baca, a former FCC chief of staff, who today serves as a global and wireless strategist for The Precursor Group, an investment advice firm in Washington. "No matter how you slice it, 90 doesn't cut it," he said.
Baca said he is concerned Commerce's proposal is too small to deliver true high-speed wireless services, thereby continuing to keep U.S. wireless businesses far behind European and Asian businesses. Furthermore, Commerce's timetable is too far off as well as too uncertain, he said.
"This is not anywhere near 3G. The data rates are not going to even come close," Baca said. "This is not going to cheer the street. Companies are going to abandon efforts for 3G."
Michael Gallagher, the Commerce Department's deputy assistant secretary, defended delaying implementation until 2008.
"That 2008 date is the absolute clearance date," Gallagher told United Press International in a telephone interview. "Clearing can -- and more than likely will -- commence much sooner than that."
Gallagher tied implementation to the availability of funds, from both the public and private sector, which might push up the schedule by a year or two.
Another telecommunications analyst, David Chamberlain, research director for wireless Internet services at Probe Research of Cedar Knolls, N.J., said he saw the move as a "step in the right direction." However, Chamberlain said he is concerned it still will keep the United States from being globally on a par with other nations. Today, U.S. wireless businesses use about 189 MHz, compared with 300.1 MHz in Japan, 305 MHz in Germany and 364.6 MHz in the U.K.
"This does not give us full harmonization with other countries in the world," said Chamberlain. "We're still sort of an island of technology -- but it's far closer than we have been."
Gallagher questioned comparisons with Europe and Asia, noting the way European and Asian governments have handled high-speed wireless access "is not the model we should be following." For example, he said, "the European 3G auctions had been pretty universally panned as being a mortgaging of their future. They are going to be living with that hangover for a long time."
Military systems impacted by the Commerce deal include six microwave links used for communications by all the military services, Price told UPI. Also affected will be frequencies for airborne testing, training, video and telemetry.
Tactical radio users also may be shifted Price said. "In some cases they will stay in the band and in some cases they will tune to other frequencies."
Gallagher confirmed that assessment. "Certainly some of their systems were aging and were going to be replaced," he said, adding that DOD planners already had been avoiding the bands they knew the civilian government wanted to redeploy. Therefore, he said, their concessions didn't hamper their abilities.
"DOD's mission is, without question, expanded with regard to spectrum use," Gallagher said. "We have a military advantage today that we intend to expand, but not at the expense of our domestic economy."
(Reported by Evan Schuman, UPI Technology News, in Whippany, N.J., with additional reporting by Dee Ann Divis, UPI Science & Technology Editor, in Washington)