Order Code RS20993
Updated May 27, 2004
CRS Report for Congress
Received through the CRS Web
Wireless Technology and Spectrum Demand:
Third Generation (3G) and Beyond
Linda K. Moore
Analyst in Telecommunications and Technology Policy
Resources, Science, and Industry Division
Summary
Advances in wireless telecommunications technology are converging with Internet
technology to foster new generations of applications and services. Presently, the United
States and other countries are moving to a third generation (3G) of mobile telephony.
The defining feature of 3G technology is that transmission speeds are significantly faster
than prevailing technology.
A related trend is the growth in use of Wi-Fi (wireless fidelity); these are localized
wireless networks providing high-speed access to the Internet. Whereas 3G could be
described as bringing Internet capabilities to wireless mobile phones, Wi-Fi provides
wireless Internet access for portable computers and handheld devices, such as Personal
Digital Assistants. The two technologies are seen by some as competing for customers
and by others as complementary — providing a broader base and greater choice of
devices for wireless communications and networking. From the perspective of
spectrum management, a significant difference between the two technologies is that 3G
services operate on designated frequencies licensed by the Federal Communications
Commission (FCC), while Wi-Fi shares unlicenced spectrum with other technologies.
Providers of the two technologies share in common the concern that there is insufficient
spectrum available for their services to be developed to full market potential.
Industry experts have noted that more efficient uses of spectrum must be developed
to meet future demand. The U.S. Congress and federal government departments and
agencies are examining the impact that new technology will have on bandwidth demand
and spectrum allocation, prompting Congress to review the policies and laws that guide
spectrum management. Legislation, supported by the Administration, has been
introduced that would make it easier for government agencies to relinquish spectrum to
private wireless carriers for use in providing 3G and other services (H.R. 1320,
Representative Upton and S. 865, Senator McCain).
This report will be updated.
Congressional Research Service ˜ The Library of Congress

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Wireless Technology: Development and Demand
In order to deploy third-generation (3G) and other advanced wireless technologies,
telecommunications carriers and their suppliers are seeking effective strategies to move
to new standards, upgrade infrastructure, and develop software for new services. This
migration path includes decisions about using spectrum.
Radio frequency (RF) spectrum is used for all wireless communications. It is
managed by the Federal Communications Commission (FCC) for commercial and other
non-federal uses and by the National Telecommunications and Information
Administration (NTIA) for federal government use. International use is facilitated by
numerous bilateral and multilateral agreements covering many aspects of usage, including
mobile telephony. Spectrum is segmented into bands of radio frequencies and typically
measured in cycles per second, or hertz.1
Spectrum bandwidth is a finite resource that is infinitely re-usable. Commercial
wireless communications currently rely on bandwidth within a narrow range.2 American
competitiveness in advanced wireless technology may be constrained by the limited
amount of exploitable bandwidth that is available. This constraint is both specific, in the
inherent finiteness of useful spectrum, and relative, in comparison to the amount of
spectrum available for commercial use in other countries. Developments in technology
have in the past facilitated the more efficient use of bandwidth within a given portion of
the spectrum. New technologies, such as Software-Defined Radio (SDR) and “smart”
antennae for terrestrial wireless, are being explored and implemented to increase the
efficiency of spectrum and to expand its usable range.
Technology Development. Mobile communications became generally available
to businesses and consumers in the 1980s. This “first generation” technology, still in use,
is analog, the prevailing telecommunications technology of the time. Second generation
(2G) wireless devices are characterized by digitized delivery systems that provide
qualitatively better delivery of voice and small amounts of data, such as caller ID. The
next major advance in mobile technology is referred to as the third generation —3G—
because it represents significant advances over the analog and digital services that
characterize current cellular phone technology. A dramatic increase in communications
speed is the most important technical feature of 3G.3
Wireless communications services have grown significantly worldwide, and
explosively in some countries. Consumer demand for wireless telephony in the United
States has soared in recent years, totaling over 164 million mobile phone subscribers in
1 One million hertz = 1 megahertz (MHZ); 1 billion hertz = 1 gigahertz (GHz).
2 The FCC limits consideration of bandwidth available for 3G to frequencies below 3 GHz.
3 The Federal Communications Commission (FCC) identifies key service attributes and
capabilities of 3G as the following: capability to support circuit and packet data at high bit rates;
interoperability and roaming; common billing and user profiles; capability to determine and
report geographic position of mobiles; support of multimedia services; and capabilities such as
“bandwidth on demand.” 3G speeds are: 144 kilobits per second at vehicular traffic speeds; 384
kilobits for pedestrian traffic; 2 megabits or higher for indoor traffic, [http://www.fcc.gov/3G].
(Visited May 27, 2004.)

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May 2004.4 In approximately the same time frame, use of the Internet expanded
dramatically from an arcane tool for specialized research to a popularized, user-friendly
service providing near instant access to information and entertainment. Wireless Internet
is widely expected to redefine how computers are used in the future. 3G technologies
bring the wireless Internet revolution to cell phones. Business and consumer demand for
new, advanced wireless services — including 3G and Local Area Networks (LANS),
such as those using Wi-Fi ( wireless fidelity) — is considered by many to be an engine
for future growth in American and global economies.
Third-generation and future developments in wireless technology will be able to
support many services for business and consumer markets, such as: enhanced Internet
links, mobile intranet/extranet, mobile commerce (m-commerce)—including the ability
to make payments—“always on” capabilities, high-quality streaming video and location-
identification. In the United States, location-finder technology for existing cellular phones
is being introduced through the nationwide wireless enhanced 911 (E911) program.5
Public Policy and 3G
International Agreements on 3G. International agreements that coordinate and
enable global telecommunications are negotiated under the aegis of the International
Telecommunication Union (ITU), a specialized agency of the United Nations. Delegates
to the ITU World Radio Conference in 2000 (WRC-2000) agreed that harmonized
worldwide bands for advanced commercial wireless services were desirable in order to
achieve global roaming and economies of scale. Resolutions voted by delegates of WRC-
2000 encouraged nations to make available some part of one or more of the three
spectrum bands identified in committee (806-960 MHZ, 1710-1885 MHZ, and 2500-2690
MHZ) for use as harmonized spectrum. In the United States, most of the frequencies
within these bands had been allocated for other uses, requiring reassignment and
relocation in order to provide harmonized spectrum to meet WRC accords.
Harmonized Spectrum. The applications of wireless technology are tied to
spectrum. Infrastructure, such as towers, relay stations, and handsets, must be able to
provide communications along pre-designated frequencies. A benefit of harmonization
is to provide common bands of spectrum dedicated to 3G technology worldwide. This
makes it easier for carriers to cover large geographical areas and for the
telecommunications industry to develop 3G hardware and software. Many industry
observers, however, believe that WRC-2000 did not evaluate the practical considerations
of achieving global roaming capabilities and economies of scale through harmonization.
They argue that countries like China and Brazil are using spectrum to develop 3G
technology in bandwidths not covered by the WRC-2000 resolution, and that global
roaming exists today without the benefit of harmonized spectrum.
Policy Decisions in the United States. Following WRC-2000, President
Clinton directed the Secretary of Commerce to work with the FCC, in coordination with
the NTIA, to prepare studies on allocating bandwidth for harmonized spectrum. In
4 Statistic updated regularly at [http://www.ctia.org].
5 See CRS Report RS21028, Emergency Communications: Wireless Enhanced 911 (E911) Issues
Update.

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response, the NTIA and the FCC issued reports, respectively, on 1710-1850 MHZ and
2500-2690 MHZ use.6
FCC Actions. The report provided by the FCC covered spectrum used primarily
by Fixed Service operators for Multipoint Distribution Service (MDS), Multichannel
Multipoint Distribution Services (MMDS) and Instructional TV Fixed Service (ITFS).
As part of the effort to provide additional spectrum for 3G and other new wireless
technology, the FCC subsequently adopted a First Report and Order and Memorandum
Opinion and Order7 adding a mobile allocation to the 2500-2690 MHZ range. In March
2003, the FCC announced a Notice of Proposed Rulemaking that will probe alternative
uses for underutilized portions of this spectrum. One of the announced objectives of the
proposal is to promote broadband wireless.8
In line with the actions of the 3G planning group, the FCC allocated new spectrum
for advanced wireless services, a category that includes but is not limited to 3G.9 The
spectrum bands are two blocks of 45 MHz each of contiguous spectrum at 1710-1755
MHz and 2110-2155 MHz. The 1700 MHz band spectrum is used primarily by federal
agencies, including the DOD. Plans are for a rapid relocation of federal agencies other
than the DOD from the 1710-1755 MHz band, with a slower relocation plan for
frequencies used by the DOD. The speed and efficacy of this relocation will be impacted
primarily by the ability to fund the costs of relocation. As part of its plan for relocation
within the 2100 MHz band, the FCC is also looking at other bandwidths that might be
freed for advanced wireless services.10
NTIA Actions and the Department of Defense. In its report, the NTIA
divided the band into two segments: the 1710-1755 MHz band, already scheduled to be
made available for commercial use,11 and the 1755-1850 MHZ band occupied by the
Department of Defense (DOD) and 13 other government agencies. In particular, the
report addressed the issue of reallocating spectrum now used by the DOD. The DOD also
issued a report on the subject with different conclusions than those of the NTIA.12 The
6 “The Potential for Accommodating Third-generation Mobile Systems in the 1710-1850 MHz
Band,” Final Report, March 2001, U.S. Department of Commerce, NTIA
[http://www.ntia.doc.gov/ntiahome/threeg/33001/3g33001.pdf]; and “Spectrum Study of the
2500-2690 MHz Band,” Final Report, March 30, 2001, FCC, [http://www.fcc.gov/3G].
7 FCC 01-256, September 6, 2001, September 24, 2001.
8 Action by the FCC on March 13, 2002, by Notice of Proposed Rulemaking and Memorandum
Opinion and Order (FCC03-56), FCC News Release, “FCC Initiates Proceeding to Facilitate
Wireless Broadband in the 2500-2690 MHz Bands,” March 13, 2003 [http://www.fcc.gov].
9 FCC, Second Report and Order, ET Docket No. 00-258 (2002).
10 FCC, Third Report and Order, Third Notice of Proposed Rulemaking and Second Memorandum
Opinion and Order, ET Docket No. 00-258 (2003).
11 The Omnibus Budget Reconciliation Act of 1993 (47 U.S.C. 927) directed the FCC to
allocate frequencies from the 1710-1755 MHz band on a “mixed-use” basis.
12 “Investigation of the Feasibility of Accommodating the International Mobile
Telecommunications (IMT) 2000 Within the 1755-1850 MHz Band,” 9 February 2000, DOD.

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NTIA, DOD and others continue to study and debate Defense’s use of spectrum and
possible plans for migration from the 1755 - 1850 MHz band to other spectrum ranges.
Spectrum Relocation.13 In October 2001 the NTIA announced that a new plan
for the selection of 3G spectrum would be prepared with the FCC, the DOD and other
Executive Branch agencies.14 After receiving this and other interagency assessments,
the FCC announced the allocation of additional spectrum for advanced wireless services.15
In mid-2002, the Department of Commerce circulated draft legislation that proposed the
creation of a Spectrum Relocation Fund. This would make it possible for federal agencies
to recover relocation costs when they are required to vacate spectrum slated for
commercial auction. Previously, the Strom Thurmond National Defense Authorization
Act of 1999 (P.L.105-261) authorized agencies to accept compensation payments when
they relocate or modify frequency use in order to accommodate non-federal users. It
authorized the NTIA and FCC to develop procedures for this. The NTIA subsequently
ruled that agencies must submit detailed estimates of costs. The FCC suggested that these
estimates be included in the auction process for the relevant spectrum; in effect,
commercial bidders would be covering the costs of relocation. The Communications Act
of 1934 would need to be modified to permit the agencies access to auction funds, even
if part of the proceeds have been earmarked for their use. A bill (H.R. 1320, Commercial
Spectrum Enhancement Act) introduced in the House on March 18, 2003 called for the
creation of a Spectrum Relocation Fund. It was approved by the House Committee of
Energy and Commerce on April 30 with an amendment to clarify that federal spectrum
could be transferred for non-commercial uses, such as public safety, and for uses where
spectrum is not now auctioned, such as unlicenced spectrum. The bill was passed by the
House on June 11, 2003. The bill was passed, with an amendment, in mark up by the
Senate Committee on Commerce, Science and Transportation on June 26. The addition
of a controversial amendment that could benefit Northpoint Communications reportedly
could harm the bill’s chances for passage by the Senate.16 Reportedly, the Acting Director
of the NTIA, Michael Gallagher, has written to Vice President Richard B. Cheney
suggesting that the passage of the Commercial Spectrum Enhancement Act would spur
the development of 3G. He is quoted as saying in the letter that the NTIA “would not
support such an action until identification of alternative frequencies for the affected
federal systems has been completed.”17
13 See also CRS Report RS21508 Spectrum Management: Special Funds.
14 An Intra-Government 3G Planning Group (IG3GPG) was created, comprising the NTIA, the
FCC, DOD, the Office of Management and Budget, the Office of Science and Technology Policy,
and the Department of State.
15 FCC News Release, “FCC Allocates Spectrum for Advanced Wireless Service and Proposes
Licensing and Service Rules,” November 7, 2002 [http://www.fcc.gov].
16 National Journal’s CongressDaily (AM Edition), “Administration Disapproves of Northpoint
Funding Language,” November 11, 2003.
17 “Gallagher Recommends Govt Actions to Forward 3G Deployment,” TELECOM A.M.,
(Today’s News), April 23, 2004.

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Wi-Fi
Wireless Local Area Networks (W-LANs) operate on unlicenced spectrum, using
radio frequencies in the free 2.4 GHz and 5.4 GHz spectrum bands. A group of standards
for frequency use in these bands is known as the 802.11 family. The 802.11b standard
is currently the most widely used and is commonly referred to as Wi-Fi, for wireless
fidelity. Wi-Fi provides high-speed Internet access for personal computers and Personal
Digital Assistants (PDAs) and is also widely used by businesses to link computer-based
communications within a small area. The current operating radius for Wi-Fi is 300-350
feet. Links are connected to a high-speed wireline (landline) either at a business location
or through HotSpots. HotSpots are typically located in homes or convenient public
locations, including many airports and café environments such as Starbucks. Another
standard for wireless Internet is Bluetooth, which has a shorter range than Wi-Fi but
works well in cell phones. Bluetooth handles both voice and data; Wi-Fi is mostly data
only, with some use of Voice over Internet Protocols (VoIP). Many industry experts
predict that Wi-Fi and its successor technologies will be the primary link for wireless
Internet, while 3G mobile phones and Bluetooth-enabled PDAs will provide other
services.18 Legislation was introduced in the 108th Congress (S. 159) that would require
the FCC to allocate “not less than an additional 255 megahertz of contiguous spectrum”
in the 5 GHz band. In response, the FCC has provided 255 MHz of spectrum between
5.47-5.725 GHz, adjacent to one of the frequency bands now used by Wi-Fi.19
Conclusion
The continued growth in demand for bandwidth for private and public sector use has
prompted Congress to review the policies and laws that guide the management of this
resource. Some future legislative initiatives regarding spectrum policy might be
influenced by the formation of a Spectrum Policy Initiative by President George W.
Bush.20 Among the issues are consideration of the law, policies and rulings for spectrum
allocation that will best meet the sometimes conflicting objectives of protecting
consumers, fostering new technology, encouraging efficiency, bolstering international
competitiveness, and promoting competition, fairness, and access in domestic markets.
18 Financial Times, “Wi-Fi and 3G; cheaper, faster and actually here,” March 12, 2003.
19 FCC, “Revision . . . of Rules to Permit Unlicenced . . . Devices in the 5 GHz Band,” Docket
No. 03-122, released November 18, 2003.
20 By Executive Memorandum, June 5, 2003 [http://www.whitehouse.gov/news/releases/
2003/06/20030605-5.html]. (Viewed May 27, 2004.)

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