Strategic Petroleum Reserve: Preliminary Observations on the Emergency Oil Stockpile

Over 4 decades ago, Congress authorized the SPR—the world's largest government-owned stockpile of emergency oil—to release oil to the market during supply disruptions and protect the U.S. economy from damage. The SPR is managed by DOE. According to DOE's strategic plan, the SPR benefits the nation by providing an insurance policy against actual and potential interruptions in U.S. petroleum supplies caused by international turmoil and hurricanes, among other things. The SPR also helps the United States meet its obligations, including to holding reserves of oil or refined petroleum products equaling 90 days of net petroleum imports, as one of 29 members of the IEA—an international energy forum established to help members respond to major oil supply disruptions. The SPR held almost 674 million barrels of oil at the end of September 2017.

This testimony primarily focuses on preliminary observations from ongoing work on (1) DOE's use of the SPR in response to domestic petroleum supply disruptions, (2) the extent to which the SPR is able to respond to domestic petroleum supply disruptions, and (3) how other IEA members structure their strategic reserves and extent to which DOE has examined these structures. GAO reviewed past work from August 2006 through September 2014 and DOE and IEA documentation. GAO also interviewed DOE and IEA officials, as part of GAO's ongoing work.

GAO's preliminary analysis of Department of Energy (DOE) documents indicates that DOE has primarily used the Strategic Petroleum Reserve (SPR) to an exchange of oil to companies in response to domestic supply disruptions, such as hurricanes. In the event of a supply disruption, the SPR can supply the market by either exchanging oil for an equal quantity of oil plus an additional amount as a premium to be returned to the SPR in the future or selling stored oil. Since the SPR was authorized in 1975, DOE has released oil 11 times in response to domestic supply disruptions. All but one were in the form of an exchange, including six exchanges in response to hurricanes. For example, Hurricane Harvey in 2017 closed or restricted ports through which 2 million barrels of oil per day were imported. In response, DOE exchanged 5 million barrels of oil to Gulf Coast refineries. According to DOE officials, exchanges from the SPR allowed refineries to operate, ensuring continued production of refined petroleum products for use by consumers.

Based on past GAO work and preliminary observations, the SPR is limited in its ability to respond to domestic supply disruptions, including severe weather events, for three main reasons. First, as GAO reported in September 2014 (GAO-14-807), the SPR is almost entirely composed of oil and not refined products like gasoline, which may not be effective in responding to all disruptions. For example, following Hurricanes Katrina and Rita, nearly 30 percent of U.S. refining capacity was shut down for weeks, disrupting supplies of gasoline and other petroleum products. The SPR could not mitigate the effects of disrupted supplies. Second, as GAO also reported in September 2014, the SPR is nearly entirely located in the Gulf Coast, so it may not be responsive to disruptions in other regions, such as the West Coast. Third, GAO's ongoing work reviewed DOE and energy task force reports that found that statutory authorities governing SPR releases may inhibit their use for regional disruptions.

GAO's preliminary observations show that other International Energy Agency (IEA) member countries generally have used one of five reserve structures configured in various ways. The structures are defined by whether countries hold either public reserves (e.g., the SPR), industry reserves (e.g., placing reserve holding requirements on industry), or a combination. Most IEA members hold refined petroleum products in reserve, with many members holding at least a third of their reserves in these products. For example, in Germany, 55 percent of reserves are in petroleum products. In addition, some IEA members' reserves are geographically dispersed in their countries to respond to disruptions. For example, France has reserves in each of its seven regions and has used these to address fuel supply disruptions as a result of recent domestic strikes. DOE has taken some steps to evaluate other structures but has not formally evaluated the structures of other countries in over 35 years. In addition, DOE contractors studied the feasibility of regional product reserves in the Southeast and West Coast regions to address supply vulnerabilities from hurricanes and earthquakes, respectively but DOE did not finalize the two 2015 studies. In 2016, DOE released a long- term strategic review of the SPR that Congress had required and GAO recommended. However, DOE did not include the results of the two studies in its 2016 review.

GAO is not making recommendations but will consider making them, as appropriate, as it finalizes its work.

I am pleased to be here today to discuss our work on energy resilience,  specifically preliminary observations from our ongoing work looking at the  Strategic Petroleum Reserve (SPR)—the world’s largest government  owned stockpile of emergency oil. U.S. energy systems are vulnerable to  a range of potential disruptions, including from international events, such  as conflicts or terrorism incidents that may affect oil supplies, and  domestic ones, such as from hurricanes and other severe weather  events, which can disrupt oil and gas supplies and cause temporary fuel  or electricity shortages. Because of the central role that energy plays in  the U.S. economy and the configuration of the nation’s energy system,  vulnerabilities may have wide-ranging implications for energy production  and use, ultimately affecting transportation, industrial, agricultural, and  other critical sectors of the economy that require reliable energy. We have  reported on energy vulnerabilities as well as on federal efforts to address  them. Recent experience with Hurricanes Harvey, Irma, and Maria  underscores these vulnerabilities. In addition to damaging infrastructure  and property, and causing the loss of life, the hurricanes disrupted the  operations of refineries representing at least 15 percent of the nation’s  refining capacity, affected fuel distribution, and left millions of U.S.  citizens without electricity.

After the Arab oil embargo, over 4 decades ago, Congress authorized the  creation of the SPR to include the ability to release oil to the market  during supply disruptions and protect the U.S. economy from damage.  The SPR is managed by the Department of Energy (DOE). The SPR held  673.7 million barrels of oil as of September 30, 2017 which is worth about  $38.4 billion at prices as of October 30, 2017. According to DOE’s 2014- 2018 strategic plan, the SPR benefits the nation by providing an  insurance policy against actual and potential interruptions in petroleum  supplies caused by international turmoil, hurricanes, accidents, or terrorist  activities. Releasing SPR oil during a disruption is intended to mitigate  damage to the economy by replacing disrupted oil supplies, thereby  reducing price increases that can result in economic damage. When  processed, oil is converted into refined petroleum products such as  gasoline and diesel fuel.

The SPR also helps the United States meet its stockholding obligations  as a member of the International Energy Agency (IEA)—an international  energy forum of 29 member nations established in 1974 to help members  respond to major oil supply disruptions. IEA members have agreed to  fulfill obligations, including holding reserves of oil or refined petroleum  products equaling 90 days of net petroleum imports, and to release these  reserves, utilize demand restraint measures, increase surge production,  or utilize fuel switching during an IEA collective action in response to oil  supply disruptions. In September 2014, we found that changes including  increasing oil production, shrinking oil imports, and changing oil and fuel  distribution patterns have important implications for the SPR. In that  report, we concluded that changing market conditions have implications  for the size, location, and composition of the SPR, and recommended that  the Secretary of Energy undertake a comprehensive reexamination of the  appropriate size of the SPR. In addition, in 2015, Congress required the  Secretary of Energy to complete a long-range strategic review of the  SPR. DOE completed its review in August 2016 which reviewed the size,  composition, infrastructure needs, and distribution capability of the  reserve.

My statement today is based primarily on preliminary observations from  ongoing work and focuses on (1) how DOE has used the SPR to address  domestic petroleum supply disruptions; (2) the extent to which the SPR is  able to respond to domestic petroleum supply disruptions; and (3) how  other IEA members have structured their strategic reserves and the  extent to which DOE has evaluated these structures.

As part of our ongoing work, we reviewed reports and studies, including  by DOE, IEA, and the U.S. Energy Information Administration (EIA) and  interviewed DOE and IEA officials. Specifically, to describe how DOE has  used the SPR to address domestic petroleum supply disruptions, we  reviewed DOE, IEA, and EIA documents. To examine the extent to which  the SPR is able to respond to domestic petroleum supply disruptions, we  reviewed documents and reports from DOE, IEA, and DOE’s Inspector  General and interviewed DOE officials. We also reviewed our past work  from August 2006 through September 2014. To describe how other IEA  members have structured their strategic reserve systems to respond to  disruptions, we reviewed IEA documents on members’ reserve systems,  reviewed a French document on its reserve system, and interviewed IEA  officials about these systems. To describe the extent to which DOE has  evaluated these structured, we reviewed DOE documents and  interviewed DOE officials. We shared the information in this statement  with DOE, and the agency provided comments.

We are conducting the work upon which this statement is based in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

The Energy Policy and Conservation Act (EPCA) of 1975 authorized the  SPR, partly in response to the Arab oil embargo of 1973 to 1974 that  caused a shortfall in the international oil market. The SPR is owned by  the federal government, managed by DOE’s Office of Petroleum  Reserves, and maintained by Fluor Federal Petroleum Operations LLC.  The SPR stores oil in underground salt caverns along the Gulf Coast in  Louisiana and Texas. DOE established an initial target capacity for the  SPR of 500 million barrels based on U.S. import levels and implemented  a phased approach to create large underground oil storage sites in salt  formations, to reach a physical storage capacity of 750 million barrels.  The SPR currently maintains four storage sites with a physical capacity of  713.5 million barrels.

Three recent laws required sales of oil from the SPR to fund its  modernization and other national priorities. The Bipartisan Budget Act of  2015 provided for the drawdown and sale of 58 million barrels of oil from  fiscal years 2018 through 2025 and authorized the sale of up to $2 billion  worth of oil through fiscal year 2020 to be used for an SPR modernization  program. The Fixing America’s Surface Transportation Act provided for  the drawdown and sale of 66 million barrels of oil from fiscal years 2023  through 2025. The 21st Century Cures Act provided for the drawdown  and sale of 25 million barrels from fiscal years 2017 through 2019. DOE  estimates that, as a result of these sales, the SPR will hold between 506  and 513 million barrels of oil by 2025. For member countries to meet net  petroleum import obligations, the IEA counts both public and private oil  reserves, although the United States meets its IEA obligation solely  through the SPR. As of July 2017, according to IEA data, the SPR held  the equivalent of 141 days of import protection and U.S. private oil held  the equivalent of an additional 216 days, for a total of about 356 days.  Based on EIA projections of net imports, between 506 and 513 million  barrels of oil would be equivalent to about 242 and 245 days of net  imports in 2025.

The United States has two regional refined product reserves—Northeast  Home Heating Oil Reserve and Northeast Gasoline Supply Reserve.

The Northeast Home Heating Oil Reserve, which is not part of the  SPR, holds 1 million barrels of ultra-low sulfur distillate, used for  heating oil, for homes and businesses in the northeastern United  States, a region heavily dependent upon the use of heating oil,  according to DOE’s website. The distillate is stored in leased  commercial storage in terminals located in three states: Connecticut,  Massachusetts, and New Jersey. In 2000, President Clinton directed  the creation of the reserve to hold approximately 10 days of inventory,  the time required for ships to carry additional heating oil from the Gulf  of Mexico to New York Harbor.

The Northeast Gasoline Supply Reserve, a part of the SPR, holds a  1 million barrel supply of gasoline for consumers in the northeastern  United States. According to DOE’s website, this region is particularly  vulnerable to gasoline disruptions as a result of hurricanes and other  natural events. In response to Superstorm Sandy, which caused  widespread gasoline shortages in the region in 2012, DOE conducted  a test sale of the SPR and used a portion of the proceeds from the  sale to create the reserve in 2014. The gasoline is stored in leased  commercial storage in terminals located in three states: Maine,  Massachusetts, and New Jersey.

Under conditions prescribed by EPCA, as amended, the President has  discretion to authorize the release of petroleum products from the SPR to  minimize significant supply disruptions. In the event of an oil supply  disruption, the SPR can supply the market by selling stored oil. Should  the President order an emergency sale of SPR oil, DOE conducts a public  sale, evaluates and selects offers, and awards contracts to the highest  qualified bidders. Purchasers are responsible for making their own  arrangements for the transport of the SPR oil to its final destination. The  Secretary of Energy also is authorized to release petroleum products from  the SPR through an exchange for the purpose of acquiring oil for the  SPR. According to DOE officials, this authority is sometimes utilized in  oil supply disruptions when a specific volume of SPR oil is provided to a  private sector company in an emergency exchange for an equal quantity  of oil plus an additional amount as a premium to be returned to the SPR  in the future. According to DOE’s website, emergency exchanges are  generally requested by a company after an event outside the control of  the company, such as a hurricane, disrupts commercial oil supplies. The  Secretary of Energy is also authorized to carry out test drawdowns  through a sale or exchange of petroleum products to evaluate SPR’s  drawdown and sales procedures. When oil is released from the SPR, it  flows through commercial pipelines or on waterborne vessels to  refineries, where it is converted into gasoline and other petroleum  products, and then transported to distribution centers for sale to the  public.

Petroleum markets have changed substantially in the 40 years since the  establishment of the SPR, including increases in global markets,  increases in domestic oil production, and declines in net petroleum  imports.

Increases in global markets. At the time of the Arab oil embargo,  price controls in the United States prevented the prices of oil and  petroleum products from increasing as much as they otherwise might  have, contributing to a physical oil shortage that caused long lines at  gasoline stations throughout the United States. Now that the oil  market is global, the price of oil is determined in the world market,  primarily on the basis of supply and demand. In the absence of price  controls, scarcity is generally expressed in the form of higher prices,  as purchasers are free to bid as high as they want to secure oil  supply. In a global market, an oil supply disruption anywhere in the  world raises prices everywhere. Releasing oil reserves during a  disruption provides a global benefit by reducing oil prices in the world  market.

Increases in domestic oil production. Reversing a decades-long  decline, U.S. oil production has generally increased in recent years.  According to EIA data, U.S. production of oil reached its highest level  in 1970 and generally declined through 2008, reaching a level of  almost one-half of its peak. During this time, the United States  increasingly relied on imported oil to meet growing domestic energy  needs. However, recent improvements in technologies have allowed  producers to extract oil from shale formations that were previously  considered to be inaccessible because traditional techniques did not  yield sufficient amounts for economically viable production. In  particular, the application of horizontal drilling techniques and  hydraulic fracturing—a process that injects a combination of water,  sand, and chemical additives under high pressure to create and  maintain fractures in underground rock formations that allow oil and  natural gas to flow—have increased U.S. oil and natural gas  production.

Declines in net petroleum imports. One measure of the economy’s  vulnerability to oil supply disruptions is to assess net petroleum  imports—that is, imports minus exports. Net petroleum imports have  declined by over 60 percent from a peak of about 12.5 million barrels  per day in 2005 to about 4.8 million barrels per day in 2016. In 2006,  net imports were expected to increase in the future, increasing the  country’s reliance on foreign oil. However, imports have declined  since then and, according to EIA’s most recent forecast, are expected  to remain well below 2005 import levels into the future. Canada and  Mexico are the nation’s major foreign sources for imported oil.  Furthermore, the United States has increased its exports of oil and  refined petroleum products.

DOE Has Primarily Used Exchanges from the SPR to Private Companies to Address Domestic Petroleum Disruptions

To quantify how DOE has used the SPR to address domestic petroleum  supply disruptions, we reviewed DOE and EIA documents. We also  reviewed our past work from August 2006 to January 2014.

Our preliminary analysis indicates that DOE has primarily used  exchanges to private companies in response to domestic supply  disruptions such as hurricanes and other events. DOE has released oil 24  times from 1985 through September 2017, including 11 releases in  response to domestic supply disruptions. Of these 11 releases, 10 were  exchanges, including 6 exchanges in response to hurricanes. One of the  11 releases was an SPR sale in response to Hurricane Katrina, which  was part of an IEA coordinated action release. Historic releases from the  SPR are shown in figure 1.

Our preliminary analysis also indicates that the six exchanges from DOE  to U.S. refineries in response to hurricanes totaled about 28 million  barrels.

Based on our preliminary analysis of DOE documents, most recently,  in response to Hurricane Harvey in 2017, DOE exchanged 5 million  barrels of oil to Gulf Coast refineries that requested supplies. Refinery  operations largely depend on a supply of oil and feedstocks.  Hurricane Harvey closed or restricted ports through which 2 million  barrels of oil per day were imported, and several refineries had no  supply options except for SPR oil. According to DOE officials,  exchanges from the SPR have allowed refineries to continue to  operate until alternative supply sources became available, ensuring  continued production of refined petroleum products for use by  consumers.

Based on our preliminary analysis of DOE documents, DOE’s most  significant response to a hurricane was in 2005 following Hurricane  Katrina. As we reported in January 2014, oil platforms were  evacuated and damaged, virtually shutting down all oil production in  the Gulf region as a result of the hurricane. Based on our  preliminary analysis of DOE documents, exchanges from the SPR,  totaling 9.8 million barrels of oil, helped refineries offset this short-term  physical supply disruption at the beginning of the supply chain,  thereby helping to moderate the impact of the production shutdown on  U.S. oil supplies. In addition to these exchanges, DOE also  participated in an IEA collective action that was called in response to  Hurricane Katrina by selling 11 million barrels of oil from the SPR, and  IEA member countries delivered and sold much needed gasoline and  other products to the United States. In total, DOE sold or exchanged  20.8 million barrels of oil from the SPR.

Our preliminary analysis of DOE documents and reports also showed that  although almost all of DOE’s releases in response to domestic supply  disruptions have been from the SPR, DOE also used the Northeast Home  Heating Oil Reserve in response to Superstorm Sandy in 2012. According  to DOE’s website, the agency transferred approximately 120,000 barrels  of fuel to the Department of Defense to help provide fuel for first  responders.

The SPR Is Limited in Its Ability to Respond to Domestic Disruptions

Based on our past work and preliminary observations, the SPR is limited  in its ability to respond to domestic petroleum supply disruptions for three  main reasons. First, as we reported in September 2014, reserves are  almost entirely composed of oil and not refined products, which may not  be effective in responding to all disruptions that affect the refining  sector. Second, as we reported in September 2014, reserves are nearly  entirely located in one region, the Gulf Coast, which may limit  responsiveness to disruptions in other regions. Third, during the course of  our ongoing work, we reviewed DOE and energy task force reports that  found that the statutory authorities governing SPR releases may inhibit  their use for regional disruptions.

Composition: As we reported in September 2014, the SPR is almost  entirely composed of oil, which may not be effective in responding to  all disruptions that affect the refining sector. In September 2014, we  reported that many recent economic risks associated with supply  disruptions have originated from the refining and distribution sectors,  which provide refined products, such as gasoline, rather than from  shortages of oil. Oil reserves are of limited use in such instances.  We reported in May 2009 that following Hurricanes Katrina and Rita,  nearly 30 percent of U.S. refining capacity was shut down for weeks,  disrupting supplies of gasoline and other products. The SPR could  not mitigate the effects of disrupted supplies because it holds oil. As  of September 2017, over 99 percent of the SPR and its Northeast  Gasoline Supply Reserve component (about 674 of 675 million  barrels) is held as oil rather than as refined products, such as gasoline  and diesel. Moreover, Gulf Coast hurricanes severely impacted  refinery operations, such as Hurricane Katrina in 2005, Hurricane Ike  and Hurricane Gustav in 2008, and Hurricane Harvey this year.  According to DOE officials, oil reserves are not able to mitigate the  potential effects of large-scale Gulf Coast refinery outages that may  impact refined product deliveries.

Location: As we reported in September 2014, the SPR is nearly  entirely located in one region, the Gulf Coast, which may limit its  ability to respond to disruptions in other regions. In the Gulf Coast,  the SPR is located close to a major refining center as well as to  distribution points for tankers, barges, and pipelines that can carry oil  from it to refineries in other regions of the country. Most of the system  of oil pipelines in the United States was constructed in the 1950s,  1960s, and 1970s to accommodate the needs of the refining sector  and demand centers at the time. Given the SPR’s current location in  the Gulf Coast, transporting oil from the reserve may impact  commercial distribution of oil. Based on our ongoing work, according  to DOE’s 2016 long-term strategic review of the SPR, the agency  reported that the expanding North American oil production and the  resulting shifts in how oil is transported around the country have  reduced the SPR’s ability to add incremental barrels of oil to the  market under certain scenarios in the event of an oil supply crisis.  This means that while the SPR remains connected to physical assets  that could bring oil to the market, in many cases, forcing SPR oil into  the distribution system would result in an offsetting reduction in  domestic commercial oil flows. As we reported in September 2014, it  may be more difficult to move oil from the SPR to refineries in certain  regions of the United States. For example, since no pipelines connect  the SPR to the West Coast, supplies of petroleum products and oil  must be shipped by pipeline, truck, or barge from other domestic  regions or by tanker from foreign countries. Such modes of transport  are slower and more costly than via pipelines. For example, it can  take about 2 weeks for a vessel to travel from the Gulf Coast to Los  Angeles—including transit time through the Panama Canal.

Statutory release authorities: In the course of our ongoing work, we  reviewed DOE and energy task force reports that found that the  statutory authorities governing SPR releases may inhibit their use for  regional disruptions. DOE is authorized to release petroleum distillate  (fuel) from the Northeast Home Heating Oil Reserve upon a finding by  the President of a severe energy supply interruption that includes a  dislocation in the heating oil market or other regional supply  shortage. On the other hand, because the Northeast Gasoline  Supply Reserve is a part of the SPR, DOE can release gasoline from  that reserve only after the President makes the statutorily required  findings for release from the SPR, which do not explicitly include the  existence of a regional supply shortage. According to DOE’s 2016  long-term strategic review of the SPR, a regional product reserve is  meant to address regional supply shortages, whereas the SPR of  which the Northeast Gasoline Supply Reserve is a part of, is meant to  address severe energy supply interruptions that have a national  impact. As a result, according to DOE’s 2016 long-term strategic  review of the SPR, in practice, this means that the release of the  gasoline reserve would have to have a national impact. The  Quadrennial Energy Review of 2015 recommended that Congress  integrate the authorities of the President to release products from the  regional product reserves—the Northeast Home Heating Oil Reserve  and Northeast Gasoline Supply Reserve—into a single, unified  authority by amending the trigger for the release of fuel from the two  refined product reserves so that they are aligned and properly suited  to the purpose of a product reserve, as opposed to an oil reserve.

As discussed, based on our preliminary observations, DOE has used the  SPR in response to domestic supply disruptions, but the effectiveness of  these releases is unclear because DOE has not formally assessed all of  them. DOE has exchanged about 28 million barrels of oil in response to  hurricanes, but we found only two reports assessing DOE’s response to  Hurricanes Gustav, Ike, Katrina, and Rita, and it is unclear whether DOE  has examined other responses. According to a 2006 DOE Inspector  General report, DOE used the SPR and its assets with great  effectiveness to address emergency energy needs in the crises  surrounding Hurricanes Katrina and Rita,  but the concentration of SPR  sites along the Gulf Coast meant the United States also had to rely on  refined petroleum products from Europe. The report noted that despite  being in the path of the hurricanes’ destruction, the SPR promptly fulfilled  requests for oil from refineries suffering from storm-related supply  shortages. However, the damage caused by Hurricane Katrina  demonstrated that the concentration of refineries on the Gulf Coast and  resulting damage to pipelines left the United States to rely on imports of  refined petroleum products from Europe, as part of an IEA collective  response. Consequently, regions experienced a shortage of gasoline, and  prices rose. DOE testified in 2009 that despite a response from the SPR  and IEA, some markets south of Virginia and north of Florida could not be  immediately supplied with refined products due to a lack of infrastructure  to receive and distribute imports from the Atlantic coast to inland  population centers. Exchanges with multiple refiners totaling 5.4 million  barrels of SPR oil were authorized to Hurricanes Gustav and Ike in 2008.  DOE assessed this response and submitted a report to Congress in  2009. According to DOE’s 2009 report, the exchanges conducted in  September and October 2008 were successful in providing emergency  petroleum supplies to refiners experiencing shortages caused by  Hurricanes Gustav and Ike.

As we reported in May 2009, as originally enacted, EPCA envisioned the  possibility that the SPR would include a variety of petroleum products  stored at locations across the country. In a 2009 hearing, the then  Deputy Assistant Secretary for Petroleum Reserves testified that DOE still  considers a large SPR focused on oil storage to be the best way to  protect the nation from the negative impacts of a short-term international  interruption to U.S. oil imports; however, the hurricanes of 2005 and 2008  showed that the SPR may be limited in its ability to address some short- term interruptions to domestic refined products supply and distribution  infrastructure.

Other IEA Members Structure Their Reserves Differently, with Some Holding Industry Reserves and Refined Products, and DOE Has Taken Steps to Explore These Structures

Based on information reviewed during the course of our ongoing work, to  respond to disruptions, 27 of the 29 IEA member countries use one of five  reserve structures, also known as stockholding structures, in which these  countries hold public reserves, industry reserves, or a combination of  these. The five structures are shown in figure 2. Also, most members  hold refined petroleum products, with many members holding at least a  third of their reserves in refined petroleum products. Some members hold  their refined petroleum products in different regions across their country  to respond to disruptions.

Based on our preliminary analysis of information on the 29 IEA member  countries, 18 place a stockholding obligation on industry either exclusively  or in part to meet their total emergency reserve needs. Most of these  countries distribute the stockholding obligation in proportion to  companies’ share of oil imports or of sales in the domestic market.  However, several member countries instead impose a higher obligation  on refineries because of their high amount of operating oil.

According to a 2014 IEA report, most IEA members hold some amount  of refined petroleum products, and a European Union (EU) directive  generally requires EU members to ensure that at least one-third of their  stockholding obligation is held in the form of refined petroleum products.  For example, according to the IEA’s website, Germany’s stockholding  agency, Erdolbevorratungsverband (EBV), holds 55 percent of its reserve  in refined petroleum products such as gasoline, diesel fuel, and light  heating oil. In contrast, the United States holds almost all of its reserves  in oil rather than refined petroleum products.

Some IEA member countries geographically disperse their reserves of  refined petroleum products to be able to respond to domestic disruptions.  For example, according to the IEA’s website, to maintain a wide  geographical distribution of emergency reserves, the French stockholding  agency stores refined petroleum products in each of its seven geographic  zones. Moreover, according to the IEA’s website, France’s agency  stores petroleum product reserves in each zone; reserves in each zone  should represent specified amounts based on consumption in order to  respond to emergencies. During a labor strike in December 2013,  France used its emergency reserves to supply local gas stations when  delivery of fuel was impeded for a prolonged period of time, according to  a French document. In another example, the IEA reported that Germany  holds petroleum product reserves in several regions in the country and  that the reserves are to be distributed throughout Germany, so that a  minimum reserve equivalent to a 15-day supply is maintained in each of  five designated supply areas. The rationale for this is to prevent  logistical bottlenecks that could occur if all emergency reserves were  stored centrally, according to a 2014 IEA report.

Based on our preliminary observations, DOE has taken some steps to  evaluate different structures for holding reserves. However, the agency  has not formally evaluated other countries’ structures in over 35 years  and has not finalized its 2015 studies on regional petroleum product  reserves. According to DOE officials, the agency explored the feasibility  of adopting the industry structure shortly after creating the SPR and  concluded that this and other structures were not feasible in the United  States. In 1980, DOE studied the feasibility of adopting the agency  structure, which is the most similar to the SPR since the only major  difference is how the reserve is funded, according to DOE officials.  According to IEA documents, in the agency structure, generally the  reserve is funded by a tax or levy on products or industry, which is  passed down to the consumer. In contrast, the SPR is funded through  congressional appropriations. However, DOE officials we interviewed  cautioned that the agency has not reassessed its findings from 35 years  ago. As mentioned above, in 2016 DOE reassessed the SPR in light of  the changing global oil market, but this assessment did not include a  review of other IEA countries’ structures.

Our preliminary review indicates that DOE examined the feasibility of  additional regional petroleum product reserves in two 2015 studies, but it  did not finalize these studies or expand the SPR to include additional  reserves. In September 2014, we reported that DOE officials told us they  were conducting a regional fuel resiliency study that would provide  insights into whether there is a need for additional regional product  reserves and, if so, where these reserves should be located. The  Quadrennial Energy Review of 2015 recommended that the agency  analyze the need for additional or expanded regional product reserves by  undertaking updated cost-benefit analyses for all of the regions of the  United States that have been identified as vulnerable to fuel supply  disruptions. Figure 3 illustrates vulnerabilities that DOE identified in 2014.

In response to the 2015 recommendation, DOE contractors studied the  feasibility of additional regional petroleum product reserves, as part of the  SPR, in the U.S. Southeast and West Coast regions to address supply  vulnerabilities from hurricanes and earthquakes, respectively. According  to DOE officials, weather events in the Southeast are of higher probability  but lower consequence, and events in the West Coast are of lower  probability but higher consequence. DOE did not finalize its 2015 studies  on regional petroleum product reserves and make them publicly available.

According to DOE officials, because consensus could not be reached  within the Administration on several issues associated with the refined  product reserve studies, these studies were not included as part of DOE’s  2016 long-term strategic review of the SPR. Our ongoing work indicates  that DOE’s 2016 long-term strategic review of the SPR did not account for  the risks of domestic supply disruptions as a factor in determining the  appropriate size, location, and composition of the SPR. Prior to the two  2015 studies, in 2011, DOE carried out a cost-benefit study of the  establishment of a refined product reserve in the Southeast and  estimated that such a reserve would reduce the average gasoline price  rise by 50 percent to 70 percent in the weeks immediately after a  hurricane landfall, resulting in consumer cost savings, according to the  Quadrennial Energy Review of 2015.

In closing, I note that we are continuing our ongoing work examining  issues that may help inform future considerations for the SPR. Given the  constrained budget environment and the evolving nature of energy  markets and their vulnerabilities, it is important that DOE ensures the  SPR is an efficient and effective use of federal resources. We look  forward to continuing our work to determine whether additional DOE  actions may be warranted to promote this objective.

Chairman Upton, Ranking Member Rush, and Members of the  Subcommittee, this concludes my prepared statement. I would be  pleased to respond to any questions that you may have at this time.

If you or your staff have any questions about this testimony, please  contact Frank Rusco, Director, Natural Resources and Environment, at  (202) 512-3841 or ruscof@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this statement. Key contributors to this testimony include Quindi  Franco, Assistant Director; Philip Farah, Ellen Fried, Nkenge Gibson,  Cindy Gilbert, Gregory Marchand, Patricia Moye, Camille Pease, Oliver  Richard, Danny Royer, Rachel Stoiko, Marie Suding, and Kiki  Theodoropoulos.

This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.

Congress created the Strategic Petroleum Reserve more than 4 decades ago to release oil during supply disruptions and protect the U.S. economy.

In this testimony, we noted that since then, oil has been released 11 times in response to domestic disruptions, including 6 caused by hurricanes.

However, the reserve’s ability to respond is limited. We found 3 main reasons:

it is almost entirely made up of unrefined oil, and refineries may also be disrupted;

almost all reserve storage sites are on the Gulf Coast, potentially complicating distribution; and,

the law generally limits releases to times of national rather than regional disruption.


Internet of Things: FCC Should Track Growth to Ensure Sufficient Spectrum Remains Available

IoT generally refers to devices (or “things”), such as vehicles and appliances, that use a network to communicate and share data with each other. The increasing popularity of wireless IoT devices that use spectrum has created questions about spectrum needs. GAO was asked to examine issues related to spectrum and IoT. This report discusses, among other things, (1) spectrum challenges related to IoT, (2) how the federal government plans for IoT’s spectrum needs, and (3) how selected leading countries prepare for IoT’s spectrum needs.

GAO reviewed documents and interviewed officials from FCC and the National Telecommunications and Information Administration as well as 24 officials from a variety of sectors, including government, commercial, and manufacturing. Stakeholders were selected based on a literature review, among other factors. GAO interviewed government and commercial representatives from four leading countries regarding IoT planning and development and reviewed associated documents. These countries were selected based on criteria that included level of economic development among other criteria.

The stakeholders GAO spoke with identified two primary spectrum-related challenges for the internet of things (IoT)—the availability of spectrum and managing interference. Although not considered an immediate concern, Federal Communications Commission (FCC) staff and some stakeholders noted that rapid increases in IoT devices that use large amounts of spectrum—called high-bandwidth devices—could quickly overwhelm networks, as happened with smart phones. Stakeholders and FCC staff also indicated that managing interference is becoming more challenging as the number of IoT and other wireless devices grows, particularly in bands that do not require a spectrum license. The figure below illustrates the uses of radio frequency spectrum, including unlicensed use.

FCC plans for IoT’s spectrum needs by broadly tracking spectrum demand and making additional spectrum available as needed. Ensuring sufficient spectrum to support commercial demand is one way FCC pursues its strategic goal of promoting economic growth. FCC has made additional spectrum publicly available at least four times since 2015 by repurposing over 11 gigahertz of spectrum. However, FCC does not track the growth of IoT devices in two areas that pose the greatest risk to IoT’s growth—high bandwidth and unlicensed-spectrum devices. In 2014, FCC’s Technical Advisory Council (TAC) recommended that FCC monitor high-bandwidth IoT devices and make sufficient unlicensed spectrum available. FCC officials said that FCC monitors spectrum use broadly and makes spectrum available as needed. However, since the process of reallocating spectrum is lengthy, FCC may not have adequate time to take actions to avoid a shortage, possibly hindering IoT’s growth and associated economic growth.

Spectrum planners in four leading countries—France, Germany, the Netherlands, and South Korea—have taken steps similar to those taken by the United States in preparation for IoT’s expansion, including taking a technology-neutral approach that stakeholders believe encourages innovation. Unlike the United States, officials from two leading countries said they are concerned about spectrum congestion from the growth of IoT devices, but only one is actively monitoring congestion. In addition, three leading countries have developed nationwide low power wide-area networks that use unlicensed spectrum with potential benefits including low costs and low barriers to entry.

FCC should track the growth in (1) high-bandwidth IoT devices and (2) IoT devices that rely on unlicensed spectrum. FCC did not believe these actions are necessary but noted that it would ask its TAC to periodically review and report on IoT’s growth. GAO continues to believe the recommendations are valid.

The number of connected devices—ranging from goods like phones and  cameras to connected vehicles to automated manufacturing facilities—is  currently estimated in the billions and rising. The Internet of Things (IoT)  generally refers to these connected devices (or “things”) that use a  network to communicate with one another and process data. These  connected devices are integrated into the daily activities of consumers,  businesses, and government. For example, wearable IoT devices enable  users to track information about their health and fitness activities. In  agriculture, IoT technology can analyze soil quality and harvest yield to  automatically deposit seed in fertile parts of a field. Further, some cities  now use connected traffic sensors to monitor traffic flow and air quality.  These devices may connect to networks through a wired connection, but  the trend in new technology is increasingly to connect wirelessly.  Connected wireless devices use radio frequency spectrum (spectrum) to  communicate. Wireless communications allow devices to remain  connected while mobile but also allow connected devices in locations  where a wire may not be possible. While specific estimates vary, wireless  IoT devices are expected to grow exponentially and this means many  more devices using spectrum. Some experts forecast 25–50 billion  devices will be competing for spectrum by 2025. Continued growth in the  number of connected devices could require more spectrum be made  available or more efficient ways of using available spectrum, more  spectrum sharing, or a combination of all three.

The National Telecommunications and Information Administration (NTIA)  within the Department of Commerce and the Federal Communications  Commission (FCC) are responsible for managing spectrum within the  United States. FCC manages spectrum used for consumer, commercial,  and state and local public safety purposes, and NTIA oversees spectrum  used by the federal government. Both are responsible for planning ways  to meet increasing demands for spectrum created by IoT and other  wireless devices. You asked us to examine the challenges facing federal  spectrum managers and the steps they are taking to address those  challenges. In this report we discuss: (1) the spectrum-related challenges  selected stakeholders identified due to the anticipated growth of IoT, (2)  steps the federal government is taking to plan for the anticipated growth  in the demand for spectrum as a result of IoT, and (3) efforts that selected  leading countries are undertaking to plan for IoT’s spectrum needs and  ways that these efforts compare with those of the United States.

To identify the spectrum-related challenges stemming from the expected  growth of IoT, we conducted interviews and reviewed relevant hearings,  reports and literature. We identified relevant stakeholders (1) by  reviewing comments submitted to NTIA in response to its request for  comment on the government’s role in planning for IoT growth, (2) by  reviewing records of three congressional hearings related to IoT growth,  and (3) by conducting a review of literature on topics that encompassed  academic articles, government reports, and trade journals. We conducted  24 telephone, and in-person interviews with stakeholders, including  industrial and commercial users of IoT, nonprofit groups, subject matter  experts, manufacturers, and telecommunications companies and FCC  and NTIA regarding the spectrum-related challenges presented by the  anticipated growth in IoT. The views of these stakeholders are not  generalizable to those of all IoT stakeholders in the United States;  however, we believe that these interviews provide a balanced and  informed perspective on the topics discussed. We then analyzed the  results of these interviews and related documents to identify the main  themes and develop summary findings. To characterize the views  captured during the interviews, we defined the terminology used to  quantify the views as follows:  “most” users represents 18 to 24 users,  “a majority of” users represents 11 to 17 users,  “several” users represents 6 to 10 users, and  “some” users represents 3 to 5 users.”

Further, we reviewed the previously mentioned hearings, reports, and  journals for additional insight on the spectrum challenges related to IoT  and to understand the projected growth of IoT devices. We also reviewed  literature concerning the growth of wireless devices, such as smart  phones, to determine if there are any lessons learned from the demand  these devices placed on spectrum that could be applied to the expected  growth of IoT. To identify the steps FCC and NTIA are taking to plan for  the anticipated growth in the demand for spectrum as a result of IoT, we  interviewed FCC and NTIA officials and reviewed relevant agency  documents including reports and plans. We compared FCC’s and NTIA’s  efforts against their strategic goals and federal internal control standards  for identifying, analyzing, and responding to risks to achieving agency  objectives.

To identify the efforts that selected leading countries are undertaking to  plan for IoT’s spectrum needs and ways that these efforts compare with  those of the United States, we identified leading countries by reviewing  trade journals, industry publications, foreign governments’ websites and  publications, and asking the stakeholders identified above. Through this  process, we identified seven countries of potential interest, all of which  have conducted spectrum planning in support of IoT: China, France,  Germany, Netherlands, Japan, Singapore, and South Korea. We selected  four of these countries—France, Germany, the Netherlands, and South  Korea—as having similarities to the United States and being leaders in  IoT development, based on additional criteria including the level of their  economic development, the maturity of their telecommunications  infrastructures, and the comparability of their governments to the United  States and the accessibility of their spectrum planning information. We  reviewed documents and conducted telephone and written interviews with  officials from the spectrum management agencies in each of these four  countries. We also conducted eight telephone and written interviews with  officials from telecommunications companies in these four countries, with  IoT manufacturers, and with officials from international spectrum planning  groups to gather information about IoT development, challenges, and  responses to these challenges in the leading countries that we contacted.  While the experiences of the interviewees are not generalizable to those  of all spectrum-planning officials and IoT stakeholders worldwide, we  believe that the information we gathered from them provides a balanced  and informed perspective on the topics discussed. See appendix I for  completed scope and methodology.

We conducted this performance audit from August 2016 to November  2017 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

Spectrum is a natural resource used to provide a variety of  communication services to businesses and consumers, as well as  federal, state, and local governments. Businesses and consumers use  spectrum for a variety of wireless services including mobile voice and  data, WiFi- and Bluetooth-enabled devices, broadcast television, radio,  and satellite services. Federal, state, and local governments’ uses of  spectrum include national defense, law enforcement communication, air- traffic control, weather services, military radar, and first responder  communications. IoT applications that rely on spectrum are highly diverse  and include connected vehicles, devices in the home, and personal  mobile devices. IoT devices communicate using wireless networks,  including wide area networks that use cellular networks to cover large  areas (e.g., cellular transmission), local area networks that cover about  100 meters (e.g., Wi-Fi within a house), and personal networks covering  about 10 meters (e.g., Bluetooth inside a room) (see fig. 1).

Each of these wireless devices, like other wireless IoT devices,  communicates using spectrum, and the number of connected devices is  expected to increase. In 2013, the number of devices connected to the  internet globally was estimated to be over 9 billion. In 2015, the  Organisation for Economic Cooperation and Development (OECD)  estimated that a family of four had an average of 10 devices connected to  the Internet in their household, and that this average will increase to 50  devices by 2022. As companies bring new IoT technologies and services  to market and government users develop new mission needs, the  demand for spectrum will increase.

The frequencies, or frequency bands, of spectrum have different  characteristics that make them more or less suitable for specific  purposes, depending on the specific band (see fig. 2). These bands have  different levels of ability to penetrate physical obstacles and cover  distances, known as “propagation,” and different limits to the amount of  information that they can carry, known as data capacity, and are used for  different communication purposes. Low frequency bands are  characterized by strong propagation, and are used by numerous IoT  devices, some of which may only transmit small amounts of information  such as temperature, location, or activity status. The strong propagation  of low bands means they can transmit over long distances. Mid-band  frequencies have higher data capacity than low bands (because, in part,  frequency allocations in higher bands are larger, allowing wider  channels), as well as, stronger propagation qualities than higher bands.  The bands above 30 GHz have high data capacity but relatively poor  propagation, to the point that bands at the highest frequencies can be  easily obstructed. This spectrum is currently used by a variety of services,  including satellite, fixed microwave, and radio astronomy, and is expected  to be important for the next generation wireless technology (5G).

FCC is the federal agency responsible for allocating spectrum for various  consumer and commercial purposes, assigning spectrum licenses, and  making spectrum available for use by unlicensed devices. Licensing  assigns frequencies of spectrum, in a specific area, to a specific entity,  such as a telecommunications company that operates a network using  licensed spectrum. We refer to these bands as licensed spectrum. In  some frequency bands, FCC authorizes unlicensed use of spectrum  bands—generally referred to as unlicensed spectrum—that is, users do  not need to obtain a license to use spectrum. Rather, users of unlicensed  devices can share frequencies on a non-interference basis, such as with  home wireless networks, cordless phones, and garage door openers. In  addition, FCC supports federal emergency-communications activities.

NTIA is responsible for establishing policy on regulating federal spectrum  use, assigning spectrum bands to government agencies, and maintaining  spectrum use databases. Additionally, like FCC, NTIA participates in  federal emergency communications activities. NTIA also determines what  spectrum bands reserved for the federal government can be made  available for commercial use.

In managing spectrum, one factor that FCC and NTIA consider is the  potential for interference. Harmful interference occurs when two  communication signals are either at the same frequencies or close to the  same frequencies in the same vicinity, a situation that may lead to  degradation of a device’s operation or service. Co-channel interference  occurs when two communications systems operate on the same  frequency assignment in the same vicinity. Adjacent band interference  occurs between two communication systems operating on different, but  adjacent frequencies in the same geographic area. Another source of  interference can be signals on adjacent spectrum bands leaking into  another band.

FCC and NTIA work to make more efficient use of spectrum that has  been assigned. One means of more efficiently using spectrum is to share  it, between and among both federal users and commercial users. In 2017,  FCC and NTIA continued oversight of the development of a new- spectrum sharing mechanism called the Spectrum Access System (SAS)  in the 3.5 GHz band. Among other things, the SAS allows multiple users  access to the same band at different times or places. Within this spectrum  band the SAS establishes a three-tiered system of access priority, with  federal and non-federal incumbent users having first priority, new non- federal users who have paid for licensed access as second priority, and  other users as third priority. This system relies on the SAS to assign  frequencies by determining if a frequency is in use by a higher priority  user before assigning it to a lower priority user.

Selected Stakeholders Identified Spectrum Availability and Managing Interference as Challenges Affecting IoT Devices

Stakeholders representing IoT network providers, device manufacturers,  users, and federal regulators consistently identified two spectrum-related  challenges to the continued growth and development of IoT 1) ensuring  the availability of sufficient spectrum and 2) managing the harmful  interference from the increasing number of IoT devices.

While not currently a crisis, the stakeholders we spoke to agreed that  ensuring the availability of sufficient amounts and the right kinds of  spectrum is a key challenge for supporting the growth of IoT. Specifically,  stakeholders cited three dimensions of the spectrum availability  challenge: the amount, the balance between licensed and unlicensed,  and the variety of spectrum bands available. According to some reports,  incorrectly anticipating industry needs in any of these areas could weaken  IoT growth and development in the United States.

Amount of spectrum: The amount of spectrum needed for IoT devices is  expected to increase with their growth. According to a majority of  stakeholders we interviewed, FCC will need to continue to make  additional spectrum commercially available in order to meet the demand  from expected rapid growth in wireless devices, including IoT devices.  FCC officials told us the current amount of available spectrum will be  sufficient for the growth of IoT unless devices that use a disproportionally  large amount of spectrum become more prevalent. Such devices, like  those that stream video, could lead to a spectrum shortage that  negatively impacts IoT growth. According to several stakeholders  spectrum availability will become an issue as use of these devices  increases. FCC officials said that cellular providers experienced similar  issues when they introduced smart phones, spurring rapid, exponential  growth in consumer demand to send and receive wireless data. Despite  the potential for a shortage of spectrum for IoT devices, most of the  stakeholders agreed that there should not be specific spectrum set aside  for IoT devices; rather, some noted spectrum policies should remain  flexible, allowing licensees to determine the best use.

Licensed and unlicensed spectrum: A majority of stakeholders said that  the spectrum availability challenge includes making both licensed and  unlicensed spectrum available. According to FCC staff, FCC is  responsible for ensuring sufficient spectrum exists for commercial  purposes and will continue to identify new spectrum that can be used for  a variety of uses, including by IoT and other wireless devices. This  identification of new spectrum includes making spectrum available on  both a licensed and unlicensed basis to meet the needs of IoT and other  wireless devices. For example, some devices may need to send a signal  over a long distance and with a high quality of service to ensure a signal  will go through, such as a fire alarm, something licensed spectrum can  provide. However, for other devices, cost is a more important  consideration. Licensed spectrum has costs that can come from  purchasing the license or accessing the spectrum. For example, an  official from a supply-chain automation company that develops radio- frequency identification tags told us the lack of inexpensive, low power  networks that provide broad coverage is a challenge for their business.  With such a network, the company’s tags could send out small amounts  of data at intervals to help manufacturers track their goods. However, the  cost of such a service is important if these tags are to attach to all size  packages because paying for GPS or a wireless connections for each  would make it unfeasible. According to several stakeholders, the correct  balance between licensed and unlicensed spectrum is difficult to know.

Spectrum bands: Several stakeholders indicated that the need to make  various spectrum bands available for IoT devices contributes to the  spectrum management challenge. As previously described, each band of  spectrum has different characteristics, such as the ability to carry data  long distances and penetrate obstacles. IoT devices have diverse  spectrum needs, such as needing to send a signal over a distance or  send a constant stream of information. For example, in the package  delivery industry there could be IoT devices, sending signals over a  distance, that read the location of the vehicle and direct the driver on a  different route based on traffic and deliveries. In addition, there are IoT  devices that can monitor containers being delivered including their  location, temperature within the container, and other characteristics. In  both these examples, the devices can send signals over long distances to  systems that can monitor the information.

Some stakeholders and FCC staff also agreed that managing interference  caused by the increasing number of IoT devices will challenge the  continued growth of IoT. As previously stated, interference occurs when  signals in the same vicinity attempt to access the same spectrum bands  or bands close to each other, causing the signals to degrade. This can  lead to intermittent access, poor reception, or no reception. As the  number of wireless IoT devices grows, the chances of harmful  interference increases. The number of IoT devices is predicted to grow so  fast the instances of harmful interference could be difficult to track.  Furthermore, according to one stakeholder, with devices being made by  more manufacturers, not all devices are created of equal quality,  potentially further increasing the chance that such devices will cause  interference. A recently issued GAO report found that according to FCC  staff, the expansion in wireless services and devices, not just IoT, has  contributed to interference becoming more of a challenge for FCC. FCC  staff agreed that managing interference is becoming more challenging as  the number of wireless IoT devices grows. However, according to FCC  staff, relatively few complaints pertaining to licensed services involve  devices that are compliant with FCC regulations and operating properly.

Managing interference may be particularly difficult in homes where many  devices rely on unlicensed spectrum. The FCC Technical Advisory  Council’s (TAC) report from 2014, expressed concerns that the rapid  growth of IoT could exacerbate interference issues in the home.  Particularly, the growing reliance on unlicensed spectrum for many  consumer IoT devices has contributed to this concern. For example,  many IoT devices using unlicensed spectrum, such as digital assistants  or wireless speaker systems, use Wi-Fi, Bluetooth or similar technology to  transmit a short distance to a smart phone or Wi-Fi router. Not all agree  however, that this use is an issue. One spectrum expert we interviewed  for a recently-issued report said that interference among consumer  devices is less likely to be an issue because they only transmit for short  durations and over short distances. If the devices only transmit a short  distance then many devices can transmit on the same spectrum.  Similarly, if devices only transmit for short durations then they can take  turns transmitting over the same spectrum.

The Federal Government Has Plans to Meet Spectrum Needs but Does Not Track IoT Devices That Could Cause Congestion

To plan for spectrum needs, FCC has repurposed spectrum by making  additional spectrum available for commercial purposes and, according to  FCC officials, the agency is continuing to look for additional opportunities  to do so. For example, in 2016, FCC issued a final order that opened up  high-band spectrum (above 24 GHz) for use with 5G networks and  applications. This particular rulemaking from FCC opened up a total of  10.85 GHz of spectrum, 3.85 GHz for licensed mobile use and 7 GHz for  unlicensed use. According to FCC, this order follows a technology  neutral approach to planning by allowing spectrum users to develop  technologies for the spectrum and not have FCC dictate its specific use.  Advances in technology that now allow use of spectrum above 24 GHz for  high-speed mobile services led the FCC to initiate the proceeding  resulting in this order. Previously, this spectrum was best suited for  various satellite or fixed microwave applications. As shown in table 1, in  recent years FCC has freed up spectrum for licensed use, unlicensed  use, and sharing between the two.

In 2016, FCC issued a proposed rule to allow mobile uses in an additional  17.7 GHz of spectrum. In 2017, the FCC issued a Notice of Inquiry  seeking input on potential opportunities for additional flexibility,  particularly for wireless broadband services, in spectrum bands between  3.7 and 24 GHz. However, according to FCC staff, the process of  identifying and freeing up new spectrum can take a significant amount of  time as FCC must complete a rulemaking and either relocate existing  users or define sharing arrangements between the existing users and  new users. FCC has also proposed sharing mechanisms it hopes will  allow some bands to be used by existing users as well as additional uses  in the future. Other efforts to make additional spectrum commercially  available have included examining the potential for sharing the 5.9 GHz  band that FCC designated for transportation safety. This band was  allocated over 15 years ago and designated exclusively for safety  communication between vehicles and between vehicles and  infrastructure. In recent years, FCC has worked with the automobile  industry and Department of Transportation to assess whether all or a  portion of that spectrum could be shared. FCC is also monitoring  development of specifications to support 5G—the next generation of  wireless networks. According to FCC, the 5G technologies that providers  develop are projected to bring wireless networks lower latency, better  coverage, faster Internet connections, and allow for more connections  than the existing cellular network, all of which may enable more IoT  devices to be connected. However, 5G technology is still being  developed, and while specifications are not fully defined, according to the  plans from the standards-making bodies there will be particular standards  designed to support IoT communications.

In 2016, NTIA issued a report on the potential roles of the federal  government in support of the growth of IoT. It addressed specific  questions regarding the spectrum needs and potential interference  related to IoT devices and reaffirmed the government’s role in supporting  technology growth. Furthermore, the report identified ongoing initiatives  that support IoT as well as proposed future steps the Department of  Commerce can take to further support IoT development. For example,  NTIA’s report proposed that it continue to analyze the usage and growth of IoT devices through its survey used to collect its Digital Nation data.  Recent Digital Nation surveys have asked about wearable devices, use of  smart televisions, and use of Internet-enabled mobile phones, all uses  that include IoT applications. The most recent survey, in 2015, also  asked Internet users whether they interact with household equipment or  appliances via the Internet. NTIA officials recently told us that they will  continue to monitor these connected items to track trends in their use but  do not intend to expand the survey to include questions about additional  IoT devices. Specifically, in January 2017, NTIA sought out public  comment on its November 2017 Digital Nation survey including comment  on a proposed questionnaire. NTIA subsequently submitted its proposed  questionnaire to Office of Management and Budget for final approval.

NTIA also has ongoing spectrum studies through its Institute for  Telecommunications Sciences and the findings may apply to IoT’s use of  spectrum. As shown in table 2, these studies touch on a number of areas  related to IoT including interference issues and spectrum use. NTIA also  co-chairs the Wireless Spectrum Research and Development Interagency  Working Group that coordinates spectrum-related research and  development activities across the federal government, academia, and the  private sector. Among other activities, this working group has developed  the Wireless Spectrum Research and Development Inventory that, in its  2016 iteration, provides information on completed projects or those  scheduled to be completed between January 1, 2015 and December 31,  2018.

FCC has a strategic goal of promoting economic growth, and one way  FCC pursues that goal is by ensuring that there is sufficient spectrum to  support commercial demand. Most stakeholders agree that the growth in  mobile IoT devices will eventually require additional spectrum to operate  effectively. According to some stakeholders we interviewed and reports  we reviewed, rapid, unexpected growth in two areas could lead to  congestion and interference that could slow the growth of IoT in the  United States: (1) high-bandwidth devices and (2) devices that operate  in unlicensed bands. Federal standards for internal control instruct  agencies to address risks such as these by estimating the significance of  the risk, analyzing the likelihood of it occurring, and assessing its  nature. Such assessments can be used to determine how to respond to  the potential risks that could prevent agencies from meeting their goals.  Rapid growth in high-bandwidth and unlicensed spectrum devices  represent risks to FCC achieving its goal of promoting economic growth  by ensuring that sufficient spectrum is available.

FCC officials said that the agency tracks industry-produced trends and  projections related to spectrum demand and use but does not focus on  specific devices. Rather, it relies on network providers to manage and  track the spectrum related to specific device types. When more spectrum  is needed, FCC officials said that FCC identifies additional spectrum and  makes it available to the commercial sector. However, this reactive  approach may not adequately address the risks caused by high- bandwidth and unlicensed-spectrum devices.

High-bandwidth devices: Some stakeholders we interviewed and FCC  officials said that rapid increases in high-bandwidth IoT devices could  overwhelm current wireless networks. Such IoT devices could include  video-streaming devices or unmanned drones, which have much  higher data needs and will require a lot of bandwidth. FCC officials  said that the supply of spectrum has not always kept pace with  demand caused by rapid increases in high-bandwidth devices. For  example, the officials said that wireless networks were overwhelmed  when providers introduced smart phones. Until then, ringtones  represented the bulk of demand for wireless data, but mobile Internet  browsing caused the demand for wireless data to increase several  fold. In 2014, the FCC TAC warned that new IoT applications could  overwhelm networks the same way smartphones and other new  technologies have in the past. The TAC recommended that FCC  monitor IoT wireless networks with a specific focus on high-bandwidth  devices.

Unlicensed spectrum use: Some stakeholders also said that  unlicensed bands are particularly vulnerable to congestion and  potential interference because of expected growth in IoT devices. For  example, all the commercial, industrial, and personal devices that  connect using WiFi and Bluetooth networks use unlicensed spectrum.  In 2014, the TAC indicated that the majority of wireless IoT devices  will rely on unlicensed spectrum and recommended FCC make  sufficient unlicensed spectrum available for devices operating on local  and personal area networks, like WiFi and Bluetooth. However, FCC  may not have enough information to determine when the amount of  unlicensed spectrum is sufficient. While network providers can  manage the number of devices on their own licensed networks, this  approach does not work for devices that use unlicensed spectrum,  and FCC does not track unlicensed spectrum utilization. It does not  track use of unlicensed spectrum because congestion of unlicensed  spectrum is geographically and technically challenging to track.  Specifically, it is geographically challenging because network  congestion and demand can vary over very short distances and  technically challenging because there are so many bands of spectrum  that would have to be tracked at one time and unlicensed spectrum  typically propagates over relatively short distances. However, there  may be ways to track unlicensed use that does not require monitoring.  For example, NTIA’s Digital Nation survey provides information on  select IoT devices using unlicensed spectrum that could help track  unlicensed spectrum use.

While FCC makes additional spectrum available when needed, it lacks an  early warning system for high-risk sectors, like high-bandwidth and  unlicensed-spectrum devices. The process of identifying and reallocating  spectrum is a lengthy process that can take years, including the need to  identify new bands, address the needs of existing users on the bands,  establish service rules, and license or assign the spectrum for commercial  uses. Without tracking the high-bandwidth and unlicensed-spectrum  devices, FCC is not assessing a key risk associated with its goal of  promoting economic growth. Rapid, unexpected growth in these IoT  sectors could lead to spectrum congestion and interference that could  slow or halt the economic growth associated with IoT until FCC can make  additional spectrum available.

Selected Leading Countries Vary in Spectrum-Planning Approaches for IoT

Approaches to Spectrum Planning in Selected Leading Countries

Like the United States, France, Germany, the Netherlands, and South  Korea are among the world leaders in the development of IoT. We  contacted public and private officials in these countries to identify their  approaches to spectrum planning to address the growth of IoT. Those  officials described approaches to planning for future spectrum needs that  are similar to the United States in one area but different in others (see  table 3). Specifically, we found that all four countries practice technology  neutral spectrum planning, an approach that was broadly supported by  the stakeholders we interviewed, including wireless carriers, a technology  manufacturer, academics, and a nonprofit group. Some of these  stakeholders indicated that this approach to spectrum planning  encourages innovation as it allows developers to choose the most  appropriate spectrum bands for new technology without having to take  the extra step of getting regulators’ permission for each new device or  application.

Two of the selected leading countries, Germany and South Korea, have  developed national IoT plans focused on developing IoT for industry;  however, only South Korea has a plan that specifically addresses  spectrum issues. South Korea’s national IoT plan seeks to increase  collaboration among IoT stakeholders, promote innovation, and develop  services for the global market in order to promote productivity and  efficiency in Korean business. South Korea also developed a mid- to  long-term spectrum plan to respond to the expected growth in demand for  spectrum as IoT expands and 5G cellular networks are deployed.  Released in 2016, the plan intends to makes more spectrum available to  support new services such as smart homes, smart factories, smart cities,  remote medical treatment, and unmanned vehicles. Specifically, the  South Korean spectrum plan that includes IoT and establishes the  following goals: almost doubling the amount of available spectrum available,  expanding from 44 GHz of available spectrum to 84 GHz by 2026,  and  increasing the efficiency of spectrum use, promoting spectrum  sharing, and advancing international coordination in spectrum  planning.

Officials from France and the Netherlands told us that making more  unlicensed spectrum available is a high priority in their spectrum planning.  These officials told us that unlicensed spectrum promotes greater  innovation by lowering barriers to access, and many IoT devices are  expected to be designed to operate on unlicensed bands. German and  Dutch officials told us that numerous smart city IoT applications have  been developed in their respective countries, most of which operate on  unlicensed spectrum. For example, German and Dutch networks use  unlicensed spectrum for purposes that include managing street lighting,  preventing the theft of property such as bicycles, monitoring parking  spaces, and managing agricultural resources.

To provide service options for low power IoT devices, private companies  in France, the Netherlands, and South Korea developed nationwide low- power wide-area networks (LPWAN) which use unlicensed spectrum to  transmit data. These LPWANs use the 800 and 900 MHz bands to  transmit data from wireless IoT devices such as sensors and location  trackers. Signals in these bands can be transmitted over long distances  and can penetrate obstacles. According to one LPWAN provider, the  distance served by a LPWAN site is greater than a single cellular network  site. However, according to the same LPWAN operator, the bands used  for LPWAN networks have limited data capacity compared to those used  by cellular networks. According to officials and telecommunications  industry stakeholders in these countries, LPWANs offer several potential  benefits including low barriers to entry, low costs, and broad coverage.

According to a Dutch telecommunications industry stakeholder most  devices that use LPWANs transmit only small amounts of data. A  telecommunications industry stakeholder in France told us that the long  range and strong propagation of these LPWANs make them useful for  utility metering data and South Korean official told us that LPWANs are  used to transmit location or temperature data. For example, in the  Netherlands, LPWANs are used to monitor water depth and quality,  manage street lighting, and to track the location of business inventory and  personal property. In France, LPWANs are used for similar tracking as  well as smoke detectors. Other uses for the LPWANs are currently in  development. For example, a representative of a Dutch  telecommunications company told us that in the Netherlands, IoT devices  operating on the nationwide LPWAN are being tested at an airport for use  in logistical processes such as baggage handling. Additionally, a Dutch  railway station is experimenting with IoT technology that monitors rail  switches using the LPWAN, and depth sounders at the port of Rotterdam  have been fitted with devices to connect them to the network. South  Korean officials said that the LPWAN in their country also provides  specialized location-tracking services.

Selected Leading Countries Face International Coordination and Potential Spectrum Congestion Challenges

Selected leading countries take many similar approaches to each other  and the United States to managing spectrum in order to address related  challenges (see table 4). Like the United States, spectrum-planning  officials in France, Germany, and the Netherlands told us that it was  necessary to coordinate spectrum planning with other countries on their  borders. Officials in each of these countries told us that European  spectrum planning is complicated by the number of countries that share  borders. Germany, for example, borders nine other countries. As each  country is responsible for its own spectrum planning, if their plans are not  closely coordinated, there is a potential for cross-border interference. This  coordination is complicated by the fact that European countries have  legacy spectrum allocations, and these must be accommodated in  spectrum planning. The United States, by contrast, shares its border with  only Mexico and Canada. According to FCC officials, both of these  countries generally align their spectrum plans to those of the United  States, reducing interference issues.

In order to facilitate international coordination of spectrum planning, each  of the four selected leading countries, like the United States, belongs to a  regional spectrum-planning association that works to harmonize spectrum  planning among member states. Officials of regional groups we spoke  with told us that harmonizing can reduce interference issues across  borders and facilitate interoperability of devices across different countries.  Officials from the manufacturing and telecommunications industries told  us that this interoperability creates a larger potential market for IoT  devices, thereby improving the economies of scale for the manufacture of  IoT devices and reducing production costs. Regional planning  associations are also taking steps to prepare their member countries for  the spectrum needs of IoT. For example, an official of one association,  the Inter-American Telecommunication Commission, told us that in 2016  it held a workshop on “machine-to-machine” technologies that brought  together spectrum planners and stakeholders from IoT-related  industries. Regional-planning associations also represent their member  countries at World Radiocommunications Conferences (WRC). An  official from one association told us that due to the diverse nature of IoT  devices and applications it is unnecessary for IoT to be explicitly  addressed as an agenda item at WRCs. However, the official further  stated that the spectrum needs of specific IoT applications— including  low power sensors, robotics, and connected vehicles—are included on  the agenda. For example, the next WRC is scheduled for 2019 and  includes an agenda item addressing connected vehicles, which are  closely linked to IoT.

Spectrum-planning officials in each of the selected leading countries told  us they are concerned about the potential for spectrum congestion, due to  growth in the number of IoT devices. However, like FCC in the United  States, these officials do not currently believe such congestion presents  an immediate problem. Representatives of the four countries we spoke  with told us that one way that they address the potential challenge of  spectrum congestion is through the use of spectrum-sharing  arrangements. Representatives from Germany specifically stressed the  importance of finding additional sharing arrangements in response to the  expected spectrum needs for IoT. In 2016, both France and the  Netherlands initiated pilot programs for spectrum sharing in which  multiple users’ access the same bands while prioritizing use by the  licensee. These pilot programs are similar to the dynamic-sharing model  that FCC adopted in 2015, as described previously. However, whereas  the model adopted by FCC has three tiers of users, the model used by  France and the Netherlands has only two, and lacks the third tier of  general access users.

Unlike the United States, officials from Germany and France told us that  they directly monitor spectrum congestion. For example, German officials  told us that there are spectrum-monitoring services at six locations  around the country, and that they perform mobile measurements of  spectrum congestion. FCC officials told us that their primary means of  tracking congestion is to communicate with spectrum licensees.  According to officials from the Netherlands, the Dutch spectrum  management agency takes a similar approach and has struck an  agreement with a group of telecommunications companies to share  information concerning IoT’s interference and congestion issues. Officials  also told us that it is easier to monitor spectrum congestion in smaller  countries, as there is simply less geographical space to monitor.  Nevertheless, officials in France, Germany, and the Netherlands told us  that monitoring spectrum is a challenging task, as it is difficult to  determine how many wireless devices are active at any given time.

FCC has a strategic goal to promote economic growth and effective  spectrum management represents a key way that FCC can support  meeting that goal. To that end, FCC officials said that the agency  continuously seeks to make additional spectrum available and broadly  tracks spectrum demand. However, stakeholders and FCC’s own  technical advisors have identified rapid, unexpected growth in both high- bandwidth devices and unlicensed spectrum as risks to effective  spectrum management. By overwhelming existing networks before FCC  can make more spectrum available, rapid growth in spectrum demand  could slow or halt IoT’s potential to facilitate economic growth. Absent  additional efforts to assess the risks to effective spectrum management  by focusing on high-bandwidth and unlicensed-spectrum devices,  spectrum congestion and interference could slow IoT growth.

We are making the following two recommendations to the Chairman of  FCC.

The Chairman of FCC should track the growth in high bandwidth IoT  devices, such as video-streaming devices and optical sensors.  (Recommendation 1)

The Chairman of FCC should track the growth in IoT devices relying on  unlicensed spectrum. (Recommendation 2)

We provided a draft of this report to FCC and the Department of  Commerce for their review and comment. FCC provided comments in a  letter, which is reprinted in appendix IV. FCC and the Department of  Commerce provided technical comments that we incorporated as  appropriate.

In its written comments, FCC did not concur with our recommendation  that it track growth in high-bandwidth devices. FCC noted that it continues  to believe that the best approach to track growth of devices is by  monitoring overall traffic statistics and forecasts and how these devices  affect aggregate spectrum requirements for all applications and services.  However, FCC noted that it would task the Technological Advisory  Council (TAC) to periodically review the state of the IoT ecosystem to  ensure that the planned communications infrastructure is sufficient to  support the needs of the growing sector and advise on any actions the  FCC should take. We continue to believe that tracking the growth of high- bandwidth devices is necessary to avoid the potential spectrum shortage  and that the TAC may be able to help FCC accomplish that.

FCC did not concur with our recommendation to track IoT devices that  rely on unlicensed spectrum. FCC noted that it may not be practical to  determine which devices qualify as IoT or quantify their effect on  spectrum utilization. As a result, FCC said that the best way to monitor  growth in unlicensed IoT devices is to continue to monitor published  papers and conferences and work with industry. However, since most of  the projected IoT growth is expected to occur in unlicensed bands that  are not protected from interference, we continue to believe that FCC  should place a greater focus on tracking IoT devices in these bands. For  example, the TAC may also be well positioned to help FCC track  unlicensed IoT devices.

As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the Secretaries of  Homeland Security and Commerce, the Chairman of FCC, and  appropriate congressional committees. In addition, the report will be  available at no charge on the GAO website at http://www.gao.gov.

If you or members of your staff have any questions about this report,  please contact me at (202) 512-2834 or goldsteinm@gao.gov. Contact  points for our Offices of Congressional Relations and Public Affairs may  be found on the last page of this report. Major contributors to this report  are listed in appendix IV.

Appendix I: Objectives, Scope, and Methodology

We were asked to examine the challenges facing federal spectrum  managers and the steps they are taking to address those challenges. In  this report we discuss: (1) the spectrum-related challenges stakeholders  identified due to the anticipated growth of IoT, (2) steps FCC and NTIA  are taking to plan for the anticipated growth in the demand for spectrum  as a result of IoT, and (3) efforts that selected leading countries are  undertaking to plan for IoT’s spectrum needs and ways that these efforts  compare with those of the United States.

To identify the spectrum-related challenges stemming from the expected  growth of IoT, we reviewed documents from the Federal Communications  Commission (FCC) and the National Telecommunications and  Information Administration (NTIA), the two federal agencies that have  direct authority over spectrum planning. Further, in order to identify  relevant literature for review, we (1) conducted a key word search of data  bases; (2) searched IoT and spectrum related websites, such as those of  cellular carriers, telecommunications industry groups, and nonprofit  organizations; (3) reviewed prior GAO reports on IoT and spectrum  issues; and (4) asked FCC and NTIA officials, researchers, and non-profit  organizations to identify relevant documents. Through our literature  search, we identified a number of documents, including academic reports,  government reports, congressional committee hearings, and trade  journals addressing the projected growth of IoT to understand the number  of devices that would be relying on the spectrum in the coming years. We  also reviewed literature concerning the growth of other wireless devices,  such as smart phones, and the burden they place on the spectrum, to  assess if there are any lessons learned from the demand these devices  placed on the spectrum that could be applied to the expected growth of  IoT.

In addition, we interviewed FCC and NTIA officials, and conducted 24  telephone and in-person interviews with officials from industry  associations, industrial and commercial users of IoT, nonprofit groups,  subject matter experts, manufacturers, and telecommunications  companies to obtain their perspectives on the challenges presented by  the expected growth of IoT. The experiences of the stakeholders are not  generalizable to those of all IoT stakeholders in the United States;  however, we believe that the information we gathered from selected  stakeholders provides a balanced and informed perspective on the topics  discussed. We identified relevant stakeholders by reviewing comments  submitted to NTIA in response to its request for comment on the  government’s role in planning for IoT growth, reviewing congressional  hearings, and conducting a literature review encompassing academic  articles, government reports, and trade journals. We interviewed officials  from businesses that manufacture Internet-connected devices or  equipment that would be considered part of IoT, including agriculture,  telecommunications, and manufacturing. We spoke with these officials to  gather information about the spectrum challenges they face as  businesses working with and developing IoT devices. We then analyzed  the results of these interviews and related documents to identify the main  themes and develop summary findings. To characterize the views  captured during the interviews, we defined the terms to quantify the views  as follows:  “most” users represents 18 to 24 users,  “a majority of” users represents 11 to 17 users,  “several” users represents 6 to 10 users, and  “some” users represents 3 to 5 users.”

To identify the steps FCC and NTIA are taking to plan for the anticipated  growth in the demand for spectrum as a result of IoT, we interviewed FCC  and NTIA officials and reviewed agency reports and documents. We  interviewed officials to understand any agency plans to address spectrum  needs for IoT devices and how these plans aligned with the spectrum  planning for other wireless devices. We reviewed agency reports and  documents on spectrum planning, IoT planning, and the role of the  federal government in planning for IoT. Specifically, we reviewed  comments submitted in response to NTIA’s request for comment and the  final report developed in response to the comments received on the role  of the federal government. To identify other relevant reports and literature  from FCC and NTIA, we asked officials at the meetings and conducted a  literature search. We also compared those planning efforts against FCC’s  and NTIA’s strategic goals and the federal internal control standards  related to risk management. Specifically, we compared FCC’s planning  against its strategic goal to promote economic growth and national  leadership in telecommunications, and NTIA’s efforts against its mission  to expand the use of spectrum by all users and to ensure that the Internet  remains an engine for continued innovation and economic growth. We  also assessed the efforts of both agencies against leading practices that  we previously developed for identifying, analyzing, and responding to  risks related to achieving agency objectives.

To identify the efforts that selected foreign governments are taking to plan  for the expected spectrum needs of IoT and ways their efforts compare  with those of the United States, we surveyed trade journals, industry  publications, and foreign governments’ websites and publications.  Through this survey, we identified seven countries of potential interest, all  of which have conducted spectrum planning in support of IoT: China,  France, Germany, Netherlands, Japan, Singapore, and South Korea. We  selected four of these countries—France, Germany, the Netherlands, and  South Korea—as being like the United States and leaders in IoT  development based on additional criteria including the level of their  economic development, the maturity of their telecommunications  infrastructures, the comparability of their governments to the United  States, and the accessibility of their spectrum-planning information. We  categorized a country’s economy as fully developed if the United Nations  Statistics Division categorized it in 2016 as existing in a developed  economic region. When determining the maturity of a country’s  telecommunications infrastructure, we followed the United Nation’s  International Telecommunication Union (ITU) in categorizing a country’s  telecom infrastructure as mature if it was included in the top quartile of the  175 countries ranked in ITU’s 2016 Information and Communications  Technology Development Index. We considered a country to have a  government structure comparable to that of the United States if Freedom  House’s 2016 Freedom in the World report rated it as “free” and the Polity  Project categorized it as a “democracy” in 2015. Finally, we considered  the extent to which information could be efficiently procured from each  country under consideration. We reviewed documents and conducted  telephone and written interviews with officials from the spectrum  management agencies in each of these four countries. We also  conducted eight telephone and written interviews with officials from  foreign telecommunications companies, IoT manufactures, and  international spectrum-planning groups to gather information about IoT  development, challenges, and responses to these challenges in the  leading countries that we contacted.

Appendix II: Agencies, Organizations, and Individuals GAO Interviewed

Barcoding  Case IH  Deere & Co.  O-I  Consumer Technology Association  CTIA  National Association of Manufacturers  Telecommunications Industry Association  U.S. Chamber of Commerce  Wi-Fi Alliance  World Shipping Council  New America Foundation  Public Knowledge  Technology and Innovation Foundation  Jeffrey Reed, Ph.D. (Virginia Polytechnic Institute  and State University)  Douglas Sicker, Ph.D. (Carnegie Mellon University)

AT&T  Sigfox  Verizon  Agence Nationale des Fréquences (France)  Agentschap Telecom (Netherlands)  Bundesnetzagentur (Germany)  Ministry of Science, ICT, and Future Planning  (South Korea)

Appendix III: Regional Spectrum- Management Associations and Their Member States

Appendix IV: Comments from the Federal Communications Commission

Appendix V: GAO Contact and Staff Acknowledgment

In addition to the individual named above, Keith Cunningham (Assistant  Director); Eric Hudson (Analyst-in-Charge); Camilo Flores; Adam Gomez;  Josh Ormond; Andrew Stavisky; Hai Tran; and Michelle Weathers made  key contributions to this report.