Third AnnualProgress Report U.S. DEPARTMENT OF COMMERCE GARY LOCKESECRETARY OF COMMERCE LAWRENCE E. STRICKLINGASSISTANT SECRETARY FORCOMMUNICATIONS AND INFORMATION March 2010 RELOCATION OF FEDERAL RADIO SYSTEMS FROMTHE 1710-1755 MHz SPECTRUM BAND:THIRD ANNUAL PROGRESS REPORT This report is submitted pursuant to Section 207 of the Commercial SpectrumEnhancement Act (CSEA), Title II of P.L. 108-494, which requires annual reporting onFederal agencies’ progress in vacatingcertain wireless communications systems from the1710 megahertz (MHz) to 1755 MHz radio spectrum that has been reallocated tocommercial use. The National Telecommunications and Information Administration(NTIA) published the first annual report to Congress in March 2008. That report coveredrelocation activity during the period from March 2007 through December 2007. Thesecond annual report documented the cumulative progress from March 2007 throughDecember 2008. This third annual report documents the cumulative progress since thecommencement of relocation activity in March 2007 through December 2009. As created by the CSEA, the Spectrum Relocation Fund (SRF) provides a centralized andstreamlined funding mechanism through which Federal agencies can recover the costsassociated with relocating their radio communications systems from spectrum reallocatedand authorized to be auctioned for commercial purposes. The CSEA appropriated suchsums as are required for relocation costs, which are financed by auction proceeds. In 2004, the CESA designated the 1710-1755 MHz band as“eligible frequencies”forwhich Federal relocation costs could be paid from the SRF. The FederalCommunications Commission (FCC) designated the commercial 2110-2155 MHz bandfor Advanced Wireless Services (AWS), which does not require relocation of Federalsystems. In September 2006, the FCC concluded the first auction of licenses for AWS inthe 1710 to 1755 MHz band paired with the 2110 MHz to 2155 MHz band. In August2008, the FCC held a second auction of licenses that were not sold in the first auction.The NTIA and FCC jointly reallocated the 1710-1755 MHz band of spectrum used byFederal agencies for non-Federal use and the FCC designated the spectrum for AWS.The AWS auctions raised over $13.7 billion in net winning bids, and are facilitating theprovision of innovative new wireless services in the commercial market. Auctionproceeds attributable to Federal frequencies were deposited in the SRF in accordancewith the CSEA. For the two auctions, a total of 115 different bidders participated and theFCC issued a total of 1122 AWS licenses. In February 2007, the Office of Management and Budget (OMB), in consultation withNTIA, submitted a report to Congress detailing a transfer of $1.008 billion from the SRFto 12 Federal agencies to relocate their wireless systems from the 1710-1755 MHz band.OMB transferred this amount to the agencies in March 2007. During 2007 through 2009,OMB, consistent with the provisions of the CSEA, in consultation with NTIA and afterCongressional notification, made several transfers from the SRF to accommodateunanticipated relocation expenses. A summary of these transfers are listed in Table 1. Also in October 2008, OMB issued guidance to Federal agencies participating in the SRFthat specifies the information they are required to provide when requesting additionalresources or an extension of their approved project timeframes.1OMB directed theagencies to adhere to their original cost and timeline estimates to the extent possible,which are crucial to the success of the relocation initiative. However, in unforeseencircumstances where agencies need additional resources or time to vacate the auctionedspectrum, section 204 of the CSEA authorizes OMB, in consultation with NTIA, toapprove changes to the timeframe and cost estimates associated with relocation ofFederal systems. To the extent that agencies have indicated a possible delay beyond theirpreviously approved timeframes, OMB and NTIA review extension requests to ensure thetimely relocation of Federal systems from the 1710-1755 MHz band, and to minimize anypotential impact to commercial licensees. As required by section 207 of the CSEA, this report describes the progress Federalagencies have made in adhering to relocation timeframes. It also details, on a system-by-system basis, the estimated relocation costs, the actual costs incurred, and the amountspaid from the SRF. The report is based on data submitted by the Federal agencies toNTIA. A vast majority of Federal agencies report that they are meeting their original relocationtimeframe and cost estimates. For example, a total of 71 systems (approximately 39percent of the total systems) agencies have relocated from the 1710-1755 MHz band,including 54 systems (approximately 30 percent of the total systems) that had relocationtimeframes of 24 months or less. In addition, five agencies (Department of Treasury,Department of Homeland Security, United States Postal Serv