What's the frequency? For Palestinians, not 3G.

As Israelis and Palestinians get ready to restart negotiations, one area of disagreement isn't tied to land but in the air above it.

Secretary of State John Kerry has yet to reveal the details of a $4 billion economic plan to boost Palestinians and sweeten the prospect of engaging in serious negotiations with the Israeli side. But one initiative that would both delight Palestinians and boost economic growth would be allowing them to use 3G.

Even as $800 smartphones proliferate in Ramallah, Israel has yet to allow Palestinian phone companies access to the spectrum needed to offer mobile data services such as email and Facebook access. As a result, those companies are losing tens of millions of dollars annually to Israeli operators, which serve settlements in the West Bank and thus have coverage – including data – across much of the territory, enticing many Palestinians to sign up for service.

The issue is not only economic, but political. It reflects deep Palestinian frustration at Israel’s control over everything from water to frequency spectrum, and Israeli exasperation with Palestinians demanding rights without satisfactorily fulfilling prior agreements. The resulting dysfunction virtually paralyzes both sides from resolving matters of concern.

At stake, some say, is not only whether 20-something Palestinians can check out a new YouTube clip of pop star Mohammed Assaf before they get home to their computer, but whether a viable economy can be built that will channel Palestinian energies in a positive direction rather than toward militancy.

“If part of what you’re trying to do is to keep the West Bank from becoming Gaza, you’ve got to create more economic opportunity,” says Alec Ross, who served as a senior adviser on innovation to Mr. Kerry’s predecessor, Hillary Clinton.

He has advocated for Israel to open up the spectrum needed for Palestinian 3G, and encouraged Arab countries to respond by lifting an economic boycott on Israeli products that have Palestinian companies in their supply chain.

“What is reasonable is for there to be some mutuality here,” he says. “If something is being done for Palestinians, it’s also good for something to be done for Israelis.”

Oslo setup

Under the Oslo Accords, which laid out a blueprint for relations between Israel and a transitional Palestinian government of up to five years, Israel was given the responsibility of managing the frequency spectrum – including radio, TV, and cellular networks. A Joint Technical Committee, comprised of Israeli and Palestinian representatives, was established to, among other things, meet the “future growing needs" of the Palestinians.

Palestinians were to present their frequency requirements through the JTC, and the JTC was to meet those requirements within a month.

But nearly two decades later, the JTC has become so mired in disagreement that it has not even met in more than a year. The Palestinian Authority has long been negotiating radio and TV frequencies with the International Telecommunication Union (ITU) rather than the JTC, and has resisted Israeli attempts to bring that process back under the aegis of the JTC. Israel says that with dozens of “illegal” Palestinian stations causing “severe interruptions to the electromagnetic spectrum,” it has no choice but to shut them down.

For radio journalists, that feels like censorship.

“We can say that there is a vicious war being launched in the area of frequency,” says Shareef Yaghmour, a talk show host on the Hebron-based Siraj Radio, which has had to switch its frequency three times in the past few years. “The Israeli occupation authority is trying to annihilate the Palestinian voice.”

The JTC has established a subcommittee on frequency interference to deal with such issues, but it has never met.

Israel says it is willing to meet at any time, but the Palestinian side says Israel is putting preconditions on meeting that are unacceptable, such as asking the Palestinian Authority to fulfill agreements from previous meetings that from the PA standpoint were not agreed on.

Throttling an industry

The JTC deadlock and lack of progress toward 3G leaves the Palestinian telecom sector in a serious bind.

“Our revenues are going in a negative direction,” says Ammar Aker, CEO of Palestine Telecom (PalTel) Group, noting the rapid trend away from voice communications to email, social networks, and Internet applications such as Skype. “Our only opportunity, not to grow but just to maintain our revenues, is to have mobile data revenue, which only comes through 3G.”

For Wataniya, the only other Palestinian telecommunications company, the problem is compounded. For more than two years, it has had GSM equipment sitting in a warehouse in Tel Aviv pending Israeli approval to enter the Hamas-run Gaza Strip. That means that for now, PalTel’s Jawwal network has exclusive access to the territory’s more than 1.7 million people.

Wataniya, which is funded in part by a Qatari firm, represents the single largest foreign investment in the West Bank and some say it is in danger of folding if it does not gain access to the Gaza market.

Israel’s Coordination of Government Activities in the Territories (COGAT) said in a statement to the Monitor that “The issue regarding an additional communication network to Gaza is yet to be finalized. It is currently in discussion between the Israeli government and the Palestinian Authority.”

Wataniya CEO Fayez Husseini compares the wait to trying to stay alive with one lung. But he insists Wataniya will ride it out. “We will not shut down,” he says in an interview in his sleek Ramallah office, adding wryly, “It’s going to take an F-16 dropping something on top of this building, and that will [only] delay us for a few months.”

But he is more sober about his options when it comes to 3G. Even though Wataniya has signed a $140 million 3G contract, Mr. Husseini knows there is little the PA Ministry of Telecommunications and Information Technology (MTIT) can do to make good on his contract.

“The Palestinian ministry cannot commit to frequency because they don’t have it. If they fail to [provide] it, what am I going to do? Arrest them, sue the government?” he asks. “I can call the minister names and then take her to dinner. There’s not much I can do.”

Israel: No frequencies available

In a statement to the Monitor, Israeli Ministry of Communication spokesman Yechiel Shabi said that 3G frequencies “have been yet to be assigned for use by the Palestinian side because there are currently no 3G frequencies available.”

The MTIT says, however, that two Israeli companies have been given 3G frequencies since the initial Palestinian request.

“We will not be paying money for renting spectrum from companies who are not supposed to use the spectrum in the first place,” says Enas Abu Laban of the MTIT. “Second, if you’re saying that we can rent from the Israeli operators, then there is spectrum available. It is not the Palestinians’ problem that you allocated that spectrum to Israeli operators. You go and reallocate the spectrum and bring us back the spectrum that we need.”

But perhaps more indicative of the Israeli source of frustration is an additional point in Dr. Shabi’s statement that the PA has not fulfilled its obligations under a 2008 agreement on 2G frequencies, under which the PA was to end use of frequencies that had been assigned to Wataniya only for temporary use.

However, the PA desperately needs that bandwidth. Wataniya and Jawwal are already creating all sorts of run-arounds to be able to accommodate their customers on minimal bandwidth, at considerable extra cost. Jawwal, for example, has more than 2 million subscribers on a bandwidth originally intended for 120,000.

That took some innovative thinking, which Mr. Aker of PalTel would like to apply to the 3G issue. If Kerry’s team or other international officials could pressure Israel to clearly state its concerns about Palestinian 3G, he says, then he could have an opportunity to present solutions.

“Now if the Israelis have reasons to block [3G], we have to know those reasons. Put the burden on us. Say that the Israelis want 1, 2, 3, 4. They want you to do this. At least make them say it. And then let us decide if we’re ready to accept those things or not,” he says, adding that it would appear to be in Israel’s interest to give tech-savvy Palestinian youths more access to information. Mobile data, he says, has shown to increase Internet usage more than 10-fold.

“I don’t understand why Israel would want some kid in Gaza to go to the mosque and listen to a Hamas leader giving a speech and give him probably false information …[and] if that kid is using their phone, they will not have access to Internet [to] get more accurate information,” says Aker. “Who is benefiting out of this?”