Implications of Hegseth’s Woes on Key Spectrum Battle

What’s New:  Secretary of Defense Hegseth continues to struggle in controlling the narrative about his leadership, leading to reports that the White House is looking for a replacement (which the White House denies.)  In this note we analyze the implications of those struggles for the key spectrum battle involving the Department of Defense (DoD) and the wireless industry.

Background

Wireless seeks spectrum utilized by the Department of Defense

Hegseth has been told to find a way to free up the spectrum

There is resistance inside the Pentagon to freeing up the spectrum

Analysis

Whatever Trump says publicly, Hegseth knows he is on thin ice.

If there is a change at the top of DoD, that will delay any action relating to freeing up the spectrum.

Bottom Line: We continue to think the wireless industry has an uphill battle in freeing up the lower three for commercial use.  Hegseth’s troubles add, rather than subtract, from that difficulty.


[1] While the carriers would no doubt like access to the whole band, we believe they would be happy to get access to part of the band, particularly the 3.3-3.45 portion.  In this regard, the distinction between exclusive use and sharing often used in the public debates and the media coverage is not a 100% accurate description.  That is, the wireless industry understands that DoD cannot be cleared from this band in a manner that would allow “exclusive” use. In that way, it’s like the band directly above it, 3.345-3.55, where licensees share with DoD ground-based radars. The hope of the wireless industry is that airborne radars, which can operate across a large range of frequencies, could limit their range to frequencies to below 3.3-3.45, and that 3.3-3.45 could then be licensed for wireless use, but would be shared between wireless users and ground-based radar systems. In that sense, the conflict is between different approaches to sharing, and particularly the power levels allowed, and not sharing vs. pure clearing.  Having said that, however, from an investor perspective, it is easier, and accurate, to think of the debate as largely between exclusive v. shared as that is how the debate will be characterized by stakeholders.

[2] At the hearing, Senator Cruz said “As you know, the Department of Defense has been highly resistant to giving up any spectrum and for a long time they have given a parade of horribles as to what could occur if any spectrum would move today to the commercial sector.  I find that parade of horribles high incredible and the result of bureaucracy that began when General Milley was the General of the Joint Chiefs and DOD choose a strategy of absolutely resisting and refusing to work on freeing up spectrum.”

[3] As in, saying “pretty please”?

[4] As in, saying “do this or you are fired.”  We don’t know whether it was the pretty please ask or the Apprentice threat but if we had to guess, we would guess it was somewhere in between but closer to pretty please, with the background music being “wouldn’t it be nice” from the Beach Boys.

[5] Somehow, we don’t think saying the entire Pentagon is working against him is as good a defense as the White House thinks it is.

[6] This is a bit counter intuitive.  The general view is that Trump appointees are playing to an audience of one (Trump) and that complaints arising from below will not injure the appointee as Trump might consider opposition from the Deep State as a metric for success.  The DoD, however, is different, as complaints about mismanagement, chaos, and other such things related to national security could create a problem for Trump that he will not like.

[7] For example, in her written questions for Roth, Senator Fisher both demonstrated her support for the Department of Defense (DoD) keeping the spectrum as well as providing further evidence of something we have written before; that the DoD will characterize the band as critical to Trump’s Golden Dome initiative. Senator Fisher asked “I also appreciated your understanding of how critical the Iron Dome has been to Israel’s missile defense, and how President Trump’s plans for the United States’ own Golden Dome – which will need to defend against different and more complex threats – are essential to our national security. As USSTRATCOM and USSPACECOM testified publicly on March 26, 2025, these plans involve key bands of Department of Defense spectrum, including the 3.1-3.45 gigahertz (GHz) and the 7/8 GHz bands.  Are there segments of the 3.1-3.45 GHz band that should be auctioned for full-power use, in your view? If yes, would you please identify the specific frequencies? ”Further, in the Trusty FCC Confirmation hearing, Senator Fisher asked a question demonstrating her support for the DoD position.