Move to New Frequencies to Cost Government Nearly a Billion Dollars

WASHINGTON – Freeing wireless airwaves for industry by moving the Defense Department and 11 other agencies to new frequencies will cost almost $936 million, the government said Wednesday.

Previous estimates from the industry had reached into the billions of dollars.

The airwaves to be relinquished by the dozen agencies will be auctioned by the Federal Communications Commission as early as June.

Legislation signed into law last year by President Bush requires the auction to bring in at least 10 percent more than what the government paid to move to the new spectrum.

That makes the minimum about $1.03 billion, based on this latest cost estimate from the Commerce Department.

Cell phone companies and other wireless providers need the space -- 90 megahertz worth -- to help satisfy a growing appetite for advanced wireless services, said Michael Gallagher, a Commerce Department assistant secretary.

Gallagher heads the department's National Telecommunications and Information Administration, which compiled the estimate based on information from the affected agencies.

He said the additional airwaves will help transform today's wireless carriers "into the broadband providers of tomorrow."

"These frequencies will come on line just when the industry needs them," he said in an interview.

Broadband offers Internet services at high speeds.

The 90 megahertz represents a nearly 50 percent increase in the amount of spectrum, 185 megahertz, currently available, Gallagher said.

There are more than 194 million wireless subscribers in the United States, representing more than 65 percent of the population, according to the Wireless Association, an industry trade group.

The wireless industry welcomed the government's announcement.

"Not only will the wireless consumer and the nation's economy benefit from the ... auction, but today we have learned that the American taxpayer has emerged as a big winner as well," said Steve Largent, president and chief executive of the Wireless Association.

By law, the government was required to provide the Bush administration and Congress with cost estimates for the relocation and a timetable for the moves six months before the scheduled auction.

It could take some agencies up to four years to complete the move.

The 12 departments and agencies are: Defense, Justice, Energy, Agriculture, Treasury, Interior, Housing and Urban Development, Homeland Security, the Federal Aviation Administration, NASA and the U.S. Postal Service and the Tennessee Valley Authority.

In terms of individual cost, the three most expensive moves are: the Department of Defense, at nearly $289 million, followed by the Department of Justice, at almost $263 million, and the Department of Energy, more than $173 million.