- Commerce secretary nominee Howard Lutnick provided new hope for the 5G industry during his confirmation hearing
- Lutnick said he leans toward the commercial sector vs. the federal government
- His comments come as the wireless industry seeks to wrest 3 GHz spectrum away from the Pentagon
What’s the likelihood of the wireless industry getting a piece of the lower 3 GHz band, currently occupied by the Department of Defense (DoD)?
The prospects look a lot better since President Donald Trump took residence at the White House, as well as Texas Republican Ted Cruz seizing control as chairman of the Senate Commerce, Science and Transportation Committee. Wireless industry evangelists are downright giddy over the prospects of lower 3 GHz spectrum being made available for wireless operators.
Their hopefulness was buoyed this past week when Secretary of Commerce nominee Howard Lutnick talked about how the U.S. needs to be the leader in 5G and 6G. As Secretary of Commerce, he will oversee the National Telecommunications and Information Administration (NTIA), which advises the administration on federal use of spectrum.
During Lutnick’s confirmation hearing, Cruz noted that he worked with fellow Republican Senators John Thune of South Dakota and Marsha Blackburn of Tennessee to introduce the Spectrum Pipeline Act of 2024. The act directs the FCC to auction at least 1,250 megahertz of spectrum between 1.3 and 13.2 GHz for full-power commercial wireless services.
Cruz asked Lutnick if he would commit to work closely with lawmakers on solutions to expand commercial sector access to key midband spectrum while protecting U.S. security.
Lutnick’s answer? “Absolutely yes.”
Then he reinforced that a little more. “With all due respect, if I’m going to be your secretary of Commerce, I kind of lean towards commerce,” he said. “So I’d like to try to help us drive some of that spectrum towards our businesses to free us to be the leader in spectrum in the world.”
Those comments led to headlines like: “Commerce Nominee Lutnick Leans Toward 5G Carriers on Spectrum” and “Lutnick eager to tap Pentagon spectrum for commercial use.”
For wireless carriers that love full-power, licensed spectrum, what’s not to like? It’s the icing on the cake.
“What you’re seeing now is a different landscape,” industry analyst Roger Entner of Recon Analytics told Fierce. “This administration is a lot more favorable to commercial wireless providers than the last one.”
The first Trump administration managed to get the DoD to vacate the 3.45 GHz portion of the band, which was auctioned off in 2021, raising more than $21.8 billion. The thinking is that if Trump was able to make that happen, he’ll be able to persuade the DoD to make more spectrum available this time around.
Yeah, but …
Not everyone is convinced that’s the case. “No one is moving off their prior positions,” wrote New Street Research analyst Blair Levin in a report for investors following Lutnick’s hearing. “Our read is that the Trump/Lutnick team has not yet developed a strategy to address that [DoD] conflict.”
New America’s Wireless Future Project Director Michael Calabrese came away from the hearing with a similar read.
“Nothing fundamental has shifted in Congress,” he told Fierce.
“Republicans remain divided among those who support a mandate to auction military spectrum for high-power, very wide area use even if that would require the military to vacate substantial portions of the lower 3 GHz band, and those who prioritize national security and support DoD’s willingness to share the spectrum without disrupting their operations,” Calabrese said.
Indeed, given the Pentagon’s response to calls for it to give up spectrum, the prevailing thought has been that some sort of sharing mechanism will be applied to whatever spectrum is made available in the lower 3 GHz band. However, the wireless industry is still gunning for a slice of full power, licensed spectrum, saying they could get by with a 150 megahertz-wide swath from 3.3 to 3.45 GHz to satisfy their needs.
Most important player: Guess who?
A lot of people (self-included) have assumed that the world’s richest man, Elon Musk, would be pulling the spectrum strings in Washington, D.C., given his ownership in satellite companies. But Levin said the most important player in this spectrum debate is not Musk or even FCC Chairman Brendan Carr.
No, the most important player here is the not-quite-as-celebrated Congressional Budget Office (CBO), according to Levin, who noted that the spectrum decision will be reflected in the upcoming reconciliation bill as the Republicans are hoping to use auction revenues to pay for tax cuts.
“In short, the CBO may score the auction in a way that makes it easy for Cruz to win but it also might score it in a way that makes it impossible for Cruz to win by having the results of the equation being so low, or even negative, that forcing the DoD to give up its spectrum is not worth the effort,” Levin wrote.
Bottom line: “This Congress is very different than the previous Congress, but the dynamics that created the stalemate on spectrum in the last Congress are still present,” Levin concluded. “The reconciliation bill might provide a carrot that, eventually, could cause a compromise that enables spectrum legislation to move forward. But there were no signs at the hearing that any compromise is close.”