A much-anticipated 3G auction in the U.S. this summer could be nearer fruition after the National Telecommunications and Information Administration (NTIA) last week released a report estimating that incumbent federal users in the 1710-1755 MHz band could be relocated for less than $1 billion.

Most of the federal users are part of the U.S. Department of Defense, which last year joined other federal agencies in reaching a historic agreement to clear airwaves for commercial auctions in return for full reimbursement of spectrum-relocation costs. In the 1710-1755 band, NTIA estimates 2240 frequency assignments will be relocated by 12 federal agencies at a cost of $935.9 million.

According to NTIA, this cost estimate is much less than previous projections made by the wireless industry, which has anxiously awaited the auction of the 1.7 GHz airwaves and those in the 2110-2155 MHz band. Michael Gallagher, outgoing assistant secretary of Commerce for Communications and Information, described the estimate announcement as “American consumers and the U.S. economy.”

“With 90 MHz of additional spectrum, today's cellular carriers will be tomorrow's next-generation broadband providers,” Gallagher said. “We found a way to open up ‘beach front’ spectrum for key economic activity without jeopardizing our national security.”

An FCC official said the agency announced in December 2004 that it would like to auction the 1.7 GHz spectrum as early as June 2006. The NTIA report indicates that the federal spectrum clearance program would allow the FCC to conduct an auction in that timeframe, if it wishes.