Opening 3G spectrum will cost $936M

The National Telecommunications and Information Administration today said that reallocating 45 MHz of government spectrum earmarked for 3G would cost $936 million, much less than the billions of dollars originally estimated.

The NTIA, a branch of the U.S. Department of Commerce, is laying out the transition plan for 90 MHz of spectrum used by the Department of Defense and other government agencies to the commercial sector. While the reallocation of spectrum has been planned for years despite protests from the Department of Defense, President Bush signed a law last year that allows the agencies to be reimbursed for the costs of migrating to other frequencies.

Last year, the FCC notified the NTIA that it would auction the first half of that spectrum--45 MHz in the lower half of the 1.7 GHz band--as soon as 2006, prompting the NTIA to collect cost estimates and timelines from the 12 federal agencies affected. Though the FCC has set no firm date for the auction, the NTIA's actions today clear the way for an auction in six months.

The spectrum is picked from across a broad range of government departments, from NASA to Homeland Security. In terms of actual bandwidth forked over, almost half comes from the Department of Agriculture and the Department of Energy, but in terms of transition costs, the DOD and Department of Justice are sporting the biggest price tags. Moving the DOD's 482 frequency assignments--including some allocated for classified uses--will cost $289 million. The Justice Department's 133 frequency assignments--almost all of which are being used by the FBI--will cost $263 million to vacate.

While the spectrum has been labeled as 3G spectrum, it won't necessarily go to cellular carriers. The FCC has mandated that any broadband wireless service could be built on the spectrum, leaving the door open for future WiMAX deployments. The second half of the 90 MHz identified by the FCC is in the lower 2.1 GHz bands, but the FCC has set no timeline yet for its auction.