WASHINGTON - With growing congestion of the airwaves threatening the development of a new generation of handheld wireless devices, President Clinton ordered the federal government yesterday to review and then reassign wide swaths of the spectrum now controlled by such agencies as the Defense Department, as well as by private companies.
The extraordinary review ordered by Clinton is expected to culminate in a huge auction in 2002 for new licenses to use the airwaves for items such as high-speed Internet telephones, after a fundamental reshuffling of how the spectrum is used.
While the auction promises to raise tens of billions of dollars for the U.S. Treasury, it may also require the government to make huge payments to companies and to the Defense Department to shift their existing radio, telephone and other services to new bands on the spectrum.
Clinton's announcement follows months of dire predictions by experts and federal officials that the United States may have already fallen behind Asian and European countries that have managed their airwaves more efficiently and have conducted multibillion-dollar licensing auctions that will enable them to move ahead in the development of a wide array of innovative handheld devices, from high-speed Internet telephones to wireless electronic credit cards.
The volume of Internet traffic is doubling every 100 days, and that traffic has been rapidly migrating from personal computers to wireless devices like cell phones and handheld computers, quickly crowding the airwaves.
A report published yesterday by the White House Counsel of Economic Advisers concluded that the two main industries affected by the order - wireless communications and the Internet - have been the linchpins in productivity improvements of the U.S. economy, and that it was vital to continue to foster their development.
Airwave spectrum has become the most valuable asset of this new economy, as important as oil and coal were in the industrial revolution. But the proliferation of handheld devices and expanding consumption of the airwaves have begun to limit its availability.
For years, the Defense Department and other major consumers of the airwaves have been resistant to giving up their licenses, and yesterday's announcement is only the first step in what is likely to be protracted negotiations over how much of the spectrum can be reassigned.