[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
USING SPECTRUM TO ADVANCE PUBLIC SAFETY, PROMOTE BROADBAND, CREATE JOBS,
AND REDUCE THE DEFICIT
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
----------
APRIL 12, 2011
----------
Serial No. 112-36
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
USING SPECTRUM TO ADVANCE PUBLIC SAFETY, PROMOTE BROADBAND, CREATE
JOBS, AND
REDUCE THE DEFICIT
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
APRIL 12, 2011
__________
Serial No. 112-36
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
_____
U.S. GOVERNMENT PRINTING OFFICE
67-523 PDF WASHINGTON : 2011
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
JOE BARTON, Texas HENRY A. WAXMAN, California
Chairman Emeritus Ranking Member
CLIFF STEARNS, Florida JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky EDWARD J. MARKEY, Massachusetts
JOHN SHIMKUS, Illinois EDOLPHUS TOWNS, New York
JOSEPH R. PITTS, Pennsylvania FRANK PALLONE, Jr., New Jersey
MARY BONO MACK, California BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon ANNA G. ESHOO, California
LEE TERRY, Nebraska ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan GENE GREEN, Texas
SUE WILKINS MYRICK, North Carolina DIANA DeGETTE, Colorado
Vice Chairman LOIS CAPPS, California
JOHN SULLIVAN, Oklahoma MICHAEL F. DOYLE, Pennsylvania
TIM MURPHY, Pennsylvania JANICE D. SCHAKOWSKY, Illinois
MICHAEL C. BURGESS, Texas CHARLES A. GONZALEZ, Texas
MARSHA BLACKBURN, Tennessee JAY INSLEE, Washington
BRIAN P. BILBRAY, California TAMMY BALDWIN, Wisconsin
CHARLES F. BASS, New Hampshire MIKE ROSS, Arkansas
PHIL GINGREY, Georgia ANTHONY D. WEINER, New York
STEVE SCALISE, Louisiana JIM MATHESON, Utah
ROBERT E. LATTA, Ohio G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington JOHN BARROW, Georgia
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey DONNA M. CHRISTENSEN, Virgin Islands
BILL CASSIDY, Louisiana
BRETT GUTHRIE, Kentucky
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia
(ii)
Subcommittee on Communications and Technology
GREG WALDEN, Oregon
Chairman
LEE TERRY, ANNA G. ESHOO, California
Vice Chairman EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida MICHAEL F. DOYLE, Pennsylvania
JOHN SHIMKUS, Illinois DORIS O. MATSUI, California
MARY BONO MACK, California JOHN BARROW, Georgia
MIKE ROGERS, Michigan DONNA M. CHRISTENSEN, Virgin
MARSHA BLACKBURN, Tennessee Islands
BRIAN P. BILBRAY, California EDOLPHUS TOWNS, New York
CHARLES F. BASS, New Hampshire FRANK PALLONE, Jr., New Jersey
PHIL GINGREY, Georgia BOBBY L. RUSH, Illinois
STEVE SCALISE, Louisiana DIANA DeGETTE, Colorado
ROBERT E. LATTA, Ohio JOHN D. DINGELL, Michigan
BRETT GUTHRIE, Kentucky HENRY A. WAXMAN, California, ex
ADAM KINZINGER, Illinois officio
JOE BARTON, Texas
FRED UPTON, Michigan, ex officio
C O N T E N T S
----------
Page
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, opening statement...................................... 1
Prepared statement........................................... 3
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 5
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 6
Prepared statement........................................... 7
Hon. Edward J. Markey, a Representative in Congress from the
Commonwealth of Massachusetts, opening statement............... 8
Witnesses
Slade Gorton, Former U.S. Senator, Member of the 9/11 Commission. 10
Prepared statement........................................... 12
Answers to submitted questions............................... 327
Charles Dowd, Deputy Chief and Commanding Officer, Communications
Division, New York Police Department........................... 17
Prepared statement........................................... 20
Answers to submitted questions............................... 330
Coleman D. Bazelon, Principal, The Brattle Group................. 243
Prepared statement........................................... 245
Mary N. Dillon, President and Chief Executive Officer, U.S.
Cellular....................................................... 249
Prepared statement........................................... 251
Answers to submitted questions............................... 335
Robert Good, Chief Engineer, WGAL-TV............................. 264
Prepared statement........................................... 266
Answers to submitted questions............................... 337
Julius P. Knapp, Chief, Office of Engineering and Technology,
Federal Communications Commission.............................. 279
Prepared statement........................................... 281
Answers to submitted questions............................... 347
Peter Pitsch, Executive Director of Communications Policy and
Associate General Counsel, Intel Corporation................... 288
Prepared statement........................................... 290
Answers to submitted questions............................... 364
Submitted Material
Letter of April 6, 2011, from Stanford Institute for Economic
Policy Research to President Barack Obama, submitted by Mr.
Markey......................................................... 321
Four studies submitted by Mr. Dowd............................... 23
USING SPECTRUM TO ADVANCE PUBLIC SAFETY, PROMOTE BROADBAND, CREATE
JOBS, AND REDUCE THE DEFICIT
----------
TUESDAY, APRIL 12, 2011
House of Representatives,
Subcommittee on Communications and Technology,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to notice, at 1:30 p.m., in
room 2123, Rayburn House Office Building, Hon. Greg Walden
(chairman of the subcommittee) presiding.
Present: Representatives Walden, Terry, Shimkus, Blackburn,
Bilbray, Bass, Gingrey, Scalise, Latta, Guthrie, Kinzinger,
Upton (ex officio), Markey, Matsui, Barrow, Dingell (ex
officio), and Waxman (ex officio).
Staff Present: Ray Baum, Senior Policy Advisor/Director of
Coalitions; Michael Beckerman, Deputy Staff Director; Andy
Duberstein, Special Assistant to Chairman Upton; Neil Fried,
Chief Counsel, C&T; Debbee Keller, Press Secretary; Carly
McWilliams, Legislative Clerk; Jeff Mortier, Professional Staff
Member; David Redl, Counsel, Telecom; Roger Sherman, Minority
Chief Counsel; Shawn Chang, Minority Counsel; Jeff Cohen,
Minority Counsel; Sarah Fisher, Minority Policy Analyst; and
Pat Delgado, Chief of Staff for Mr. Waxman.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. We are going to call to order the Subcommittee
on Communications and Technology and open our hearing on
``Spectrum to Advance Public Safety, Promote Broadband, Create
Jobs, and Reduce the Deficit.''
We are here this afternoon for a broad overview on how
spectrum can help expand broadband availability, advance public
safety, help broadcasters further innovate, create jobs, and
reduce the deficit. Spectrum is a critical input for broadcast
television, wireless voice and broadband services, and public-
safety communications. As a former radio broadcaster and
licensed ham radio operator, spectrum is a medium with which I
am somewhat familiar. These critical uses of spectrum have
shaped the way Americans live, work, and stay connected to
their families and the world.
None of the services we enjoy today would be possible
without the hard work of the FCC and the NTIA, who manage the
commercial and governmental spectrum assets of the American
people. The FCC's commercial-licensing process has evolved over
time from lotteries--literally ping-pong balls in a machine
like a Mega Millions drawing--to the so-called ``beauty
contests'' of competitive hearings. The FCC has used a number
of tools over the years to determine who would receive licenses
and for what purposes.
But, in 1993, Congress found a way that not only put
spectrum to better use but raises money for taxpayers in the
process. Spurred in part by Nobel Prize-winning work of Dr.
Ronald Coase and ``A Beautiful Mind'''s Dr. John Nash, the
Congress to the bold step of reducing the government's role and
letting the market decide through government auctions how
spectrum should be allocated for commercial wireless services.
Since the FCC began auctions of spectrum for commercial
mobile radio services, they have been a resounding success,
producing a vibrantly competitive and innovative wireless
industry and generating more than $50 billion for the Treasury.
In the last major spectrum auction, which covered the
spectrum vacated as part of the DTV transition, Congress
allocated 24 megahertz of spectrum for public safety, provided
$1 billion for public-safety equipment, and raised nearly $20
billion through auction of spectrum for commercial wireless
services. That auction is largely responsible for the 4G
wireless broadband services coming on line today.
Today, we will begin discussing how we will get the next
wave of spectrum deployed. There is growing consensus we need
between an additional 100 megahertz and 300 megahertz in the
short term, say, 5 to 10 years, to meet the exploding consumer
and economic demand for wireless broadband. Given the
staggering growth in smartphone sales, App Store sales, and
demand for streaming video content, it is no surprise that the
FCC's National Broadband Plan and the President of the United
States are calling for an additional 500 megahertz of spectrum
to be allocated for wireless broadband use in the next 5 years.
There are a variety of options that could be used in
combination to start addressing this need. There are bands of
spectrum that are already close to ripe for auction. For
example, spectrum in the Advanced Wireless Services band is
currently clear. If paired with other spectrums, such as some
currently held by government users, that spectrum could be
auctioned in the near future.
This raises a related issue. The Federal Government is a
major tenant on Federal spectrum. There may be opportunities to
make government use more efficient, clear some spectrum for
commercial purposes, and use some of the auction proceeds to
pay for the cost of relocating the government and improving
agency communications facilities. The Commercial Spectrum
Enhancement Act is designed to do some of that, but that act
could potentially, itself, use some enhancing to make the
government clearing process smoother.
There is also the 700 megahertz D block, 10 megahertz of
spectrum that was designated for commercial use in the DTV
transition. This spectrum is separate from the 24 megahertz
already cleared for public safety in the DTV legislation based
on recommendations of the 9/11 Commission.
Some advocate allocating the D block to public safety, as
well. Others say it should be auctioned to meet our growing
commercial wireless needs and that funding, not spectrum, is
the key to creating the nationwide interoperable public-safety
broadband network that we all seek. Indeed, the auction
approach was the central plank of the FCC's National Broadband
Plan. That approach enjoyed bipartisan support last Congress in
this committee, and I look forward to examining this issue
again.
While we are on the topic of D block, I want to thank
Senator Gorton and Deputy Chief Dowd for being here today. I
think I can speak for all of us when I say we thank you for
your commitment to public safety and look forward to a vibrant
discussion of the communications needs of America's first
responders.
Another potential tool is incentive auctions, in which
current FCC licensees can volunteer to relinquish some or all
of their spectrum in exchange for a portion of auction
proceeds. This can present a win-win-win situation for
participating licensees, auction bidders, and the U.S.
Treasury.
While broadcast television spectrum holds great potential
as a candidate for voluntary incentive auctions, it is by no
means the only option. There are many other spectrum licensees
who may be willing to participate in incentive auctions. So I
look forward to a robust discussion of how incentive auctions
could be applied to licensees of all sorts as an economic tool
to maximize the value of spectrum to existing licensees,
potential bidders, and the Treasury.
While there have been a lot of discussions about innovation
in the wireless communications space, innovation is not limited
to that industry alone. America's broadcasters continue to work
to bring innovative services to over-the-air television
viewers. But the broadcasting rules in Title III of the
Communications Act are a relic to an era that could not have
imagined the technological changes that we have seen in the
communications sector.
Could incentive auction legislation help provide capital
for broadcasters to explore new-generation services such as
mobile DTV and broadband-like broadcast services? Could that
legislation help strip regulatory obstacles that are hindering
broadcasters' continuing efforts to innovate and bring novel
services to the U.S. TV airwaves? Innovation should be
encouraged to flourish in every part of the spectrum
marketplace.
So I thank all of our witnesses for their participation
today, and I look forward to their testimony.
[The prepared statement of Mr. Walden follows:]
Prepared statement of Hon. Greg Walden
We're here today for a broad overview on how spectrum can
help expand broadband availability, advance public safety, help
broadcasters further innovate, create jobs, and reduce the
deficit. Spectrum is a critical input for broadcast television,
wireless voice and broadband services, and public safety
communications. As a former radio broadcaster and licensed HAM
radio operator, spectrum is a medium with which I am somewhat
familiar. These critical uses of spectrum have shaped the way
Americans live, work, and stay connected to their families and
the world.
None of the services we enjoy today would be possible
without the hard work of the FCC and the NTIA to manage the
commercial and government spectrum assets of the American
people. The FCC's commercial licensing process has evolved over
time. From lotteries--literally ping pong balls in a machine
like a Mega Millions drawing--to the so-called ``beauty
contests'' of comparative hearings, the FCC has used a number
of tools over the years to determine who would receive licenses
and for what purposes. But in 1993, Congress found a way that
not only puts spectrum to better use but raises money for
taxpayers in the process. Spurred in part by Nobel prize-
winning work of Dr. Ronald Coase and ``A Beautiful Mind's'' Dr.
John Nash, the Congress took the bold step of reducing the
government's role and letting the market decide through
government auctions how spectrum should be allocated for
commercial wireless services.
Since the FCC began auctions of spectrum for commercial
mobile radio services they have been a resounding success,
producing a vibrantly competitive and innovative wireless
industry and generating more than $50 billion dollars for the
Treasury. In the last major spectrum auction--which covered the
spectrum vacated as part of the DTV transition--Congress
allocated 24 MHz of spectrum for public safety, provided $1
billion for public safety equipment, and raised nearly $20
billion dollars through auction of spectrum for commercial
wireless services. That auction is largely responsible for the
4G wireless broadband services coming online today.
Today we begin discussing how we will get the next wave of
spectrum deployed. There is growing consensus we need between
an additional 100 MHz and 300 MHz in the short term- say 5 to
10 years-to meet the exploding consumer and economic demand for
wireless broadband. Given the staggering growth in smartphone
sales, app store sales, and demand for streaming video content,
it is no surprise that the FCC's National Broadband Plan and
the President of the United States are calling for an
additional 500 MHz of spectrum to be allocated for wireless
broadband use in the next five years. There are a variety of
options that could be used in combination to start addressing
this need.
There are bands of spectrum that are already close to ripe
for auction. For example, spectrum in the Advanced Wireless
Services band is currently clear. If paired with other
spectrum, such as some currently held by government users, that
spectrum could be auctioned in the near future.
This raises a related issue. The federal government is a
major tenant on federal spectrum. There may be opportunities to
make government use more efficient, clear some spectrum for
commercial purposes, and use some of the auction proceeds to
pay the cost of relocating the government and improving agency
communications facilities. The Commercial Spectrum Enhancement
Act is designed to do some of that, but the Act could
potentially itself use some enhancing to make the government
clearing process smoother.
There is also the 700 MHz D block: 10 MHz of spectrum that
was designated for commercial use in the DTV transition. This
spectrum is separate from the 24 MHz already cleared for public
safety in the DTV legislation, based on recommendations of the
9/11 Commission. Some advocate allocating the D Block to public
safety, as well. Others say it should be auctioned to meet our
growing commercial wireless needs, and that funding-not
spectrum-is the key to creating the nationwide, interoperable
public safety broadband network we all seek. Indeed, the
auction approach was a central plank of the FCC's national
broadband plan. That approach enjoyed bipartisan support last
Congress in this Committee. I look forward to examining this
issue again.
While we are on the topic of the D block, I want to thank
Senator Gorton and Deputy Chief Dowd for being here today. I
think I can speak for all of us when I say we thank you for
your commitment to public safety and look forward to a vibrant
discussion of the communications needs of America's first
responders.
Another potential tool is ``incentive auctions,'' in which
current FCC licensees can volunteer to relinquish some or all
of their spectrum in exchange for a portion of auction
proceeds. This can present a win-win-win situation for
participating licensees, auction bidders, and the U.S.
Treasury. While broadcast television spectrum holds great
potential as a candidate for voluntary incentive auctions, it
is by no means the only option. There are many other spectrum
licensees who may be willing to participate in incentive
auctions. I look forward to a robust discussion of how
incentive auctions could be applied to licensees of all sorts
as an economic tool to maximize the value of spectrum to
existing licensees, potential bidders, and the Treasury.
While there has been a lot of discussion about innovation
in the wireless communications space, innovation isn't limited
to that industry. America's broadcasters continue to work to
bring innovative services to over the air television viewers.
But the broadcasting rules in Title III of the Communications
Act are a relic of an era that could not have imagined the
technological changes that we have seen in the communications
sector. Could incentive auction legislation help provide
additional capital for broadcasters to explore next generation
services, such as mobile DTV and broadband-like broadcast
services? Could that legislation help strip regulatory
obstacles that are hindering broadcasters' continuing efforts
to innovate and bring novel services to the U.S. TV airwaves?
Innovation should be encouraged to flourish in every part of
the spectrum marketplace.
I thank the witnesses for their participation today, and
look forward to their testimony.
# # #
Mr. Walden.
With that, I would now recognize the ranking member of the
full committee, Mr. Waxman, for an opening statement.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you very much, Mr. Chairman.
From the start of this Congress, we have had a contentious,
partisan divide over efforts to overturn the FCC's open
Internet order. This kind of partisanship is unusual for this
subcommittee, so I look forward to returning to bipartisan
efforts to address the numerous communications and technology
issues that require our urgent attention.
Spectrum policy is a good place to start. Smart spectrum
policy can help improve public safety, promote broadband,
create jobs, and reduce the deficit. These aren't easy goals to
achieve because the spectrum policy issues are complicated, but
if we work together, I believe we can succeed.
One essential task is to provide public safety with a
nationwide interoperable broadband network. There are different
views on the best way forward. Some want the FCC to auction the
D block to a wireless provider and encourage collaboration
between the winning bidder and public safety. The FCC's
broadband plan recommended this approach, and in the last
Congress, bipartisan staff circulated a discussion draft that
proposed to implement a number of the FCC's recommendations.
Others want Congress to reallocate the D block to public
safety. This approach is favored by public-safety leaders and
President Obama and has bipartisan support in the House and the
Senate. Both approaches have promise.
With the 10th anniversary of 9/11 fast approaching, we need
to settle on a path forward and work cooperatively together to
ensure that public safety has what it needs to deploy an
interoperable broadband network nationally. And I will work
with my colleagues in the House and in the Senate to find the
best solution.
Second, we need to determine the best way to implement
incentive auctions. I believe incentive auctions are an
innovative proposal for using underutilized spectrum to advance
public safety, promote broadband, and create jobs.
As noted by 112 economists who wrote to the President in
support of incentive auctions last week, quote, ``Incentive
auctions can facilitate the repurposing of spectrum from
inefficient uses to more valuable uses while minimizing
transaction costs incurred. Giving the FCC the authority to
implement incentive auctions, with flexibility to design
appropriate rules, would increase social welfare,'' end quote.
I recognize some are concerned about whether we can ensure
that voluntary actually means voluntary. I am confident we can
find a way to avoid unfairly disadvantaging broadcasters in
this process, and I appreciate the broadcasters' willingness to
work with us to figure this out.
And, finally, we need to examine Federal uses of spectrum
resources. The administration deserves credit for directing
NTIA and FCC to identify and make available 500 megahertz of
spectrum over the next 10 years.
I am glad we are having this important hearing so we can
begin our work on these important issues. I look forward to
what our witnesses will have to say.
And I want to yield the balance of my time to Mr. Barrow.
Mr. Barrow. I thank the gentleman for yielding.
Today, we begin the important conversation of how best to
use spectrum to serve our national interests. Wireless
technologies relying on spectrum have become essential to
economic growth. And because of the growth in demand for
spectrum, we face a spectrum crunch in the next decade. We have
to find ways to free up spectrum to meet that demand.
I look forward to discussing incentive auctions with
today's panel and how these auctions can be used to free up
spectrum and reduce our national debt.
I have introduced a bill, H.R. 911, that authorizes a
comprehensive spectrum inventory on how spectrum is being used
and gives financial incentives for licensees who relinquish
spectrum they are not making good use of.
I understand the FCC is making progress on a spectrum
inventory, and I commend them for their efforts.
I look forward to working with my colleagues on this
committee to address our spectrum goals.
And I thank the ranking member for yielding me time.
With that, I yield back to Mr. Waxman the balance of my
time.
Mr. Waxman. I yield back my time.
Mr. Walden. The gentleman yields back his time.
Now I would recognize the chairman of the full committee,
the gentleman from Michigan, Mr. Upton.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Thank you, Mr. Chairman.
As the title of this hearing indicates, spectrum policy can
help meet several of our committee's goals: promoting
broadband, advancing the communications needs of our public-
safety officials, creating jobs, and also reducing the Federal
deficit. Today, we begin that discussion to maximize our
spectrum resources.
One thing that we will consider is the spectrum allocated
in the Federal Government and whether those spectrum bands can
be better allocated at both the government and commercial
sectors. There is already legislation designed to help relocate
government users and provide them with better communications
resources to be paid for with auction proceeds from spectrum
that they clear. And there may also be ways to make that
legislation work better.
There is the 700 megahertz D block, 10 megahertz of
spectrum that Congress specifically allocated for commercial
use in the DTV legislation. That legislation also gave the
public safety a completely separate 24 megahertz block of
spectrum to create an interoperable broadband network. And an
amendment that I offered added a billion dollars for the
purchase of interoperable equipment. For a number of reasons,
the D block remains unauctioned and unused today.
The question now is how best to create the interoperable
broadband communications network recommended by the 9/11
Commission. Today, we will discuss auctioning the D block as
required by current law and as this committee and the FCC
favored last Congress, on a bipartisan basis, as compared to
recent proposals for reallocating the spectrum to public
safety. I look forward to that discussion.
We are also going to discuss incentive auctions as a way to
present a win-win-win for existing licensees, potential
licensees, and the U.S. Treasury. Such auctions would allow the
FCC to share the proceeds from the auction of spectrum that
current licensees voluntarily return.
The work we begin today on spectrum issues can help us
extend the reach of broadband, meet the needs of public safety,
create jobs, reduce the deficit, and allow the economics of the
spectrum market to permit innovation to flourish across all
spectrum-based services.
I thank our witnesses, the members of this committee, and,
particularly, my good old friend, Slade Gorton. I know we had
lots of battles in years past in his days in the Senate.
I yield to the vice chair of the subcommittee, Lee Terry.
[The prepared statement of Mr. Upton follows:]
Prepared statement of Hon. Fred Upton
As the title of this hearing indicates, spectrum policy can
help meet several of our committee's goals: promoting
broadband, advancing the communications needs of public safety
officials, creating jobs, and reducing the federal deficit.
Today we begin a discussion of ways to maximize our spectrum
resources.
One thing we will consider is the spectrum allocated to the
federal government and whether those spectrum bands can be
better allocated to both the government and commercial sectors.
There is already legislation designed to help relocate
government users and provide them with better communications
resources, to be paid for with auction proceeds from spectrum
they clear. And, there may be ways to make that legislation
work even better.
There is the 700 MHz D block--ten megahertz of spectrum
that Congress specifically allocated for commercial use in the
DTV legislation. That legislation also gave public safety a
completely separate 24 MHz block of spectrum to create an
interoperable broadband network, and an amendment I offered
added $1 billion for the purchase of interoperable equipment.
For a number of reasons, the D-block remains unauctioned--and
unused--today.
The question now is how best to create the interoperable
broadband communications network recommended by the 9/11
Commission. Today, we will discuss auctioning the D-block, as
required by current law and as this committee and the FCC
favored last Congress on a bipartisan basis, as compared to
recent proposals for reallocating the spectrum to public
safety. I look forward to that continued discussion.
Today we will also discuss ``incentive auctions'' as a way
to present a win-win-win for existing licensees, potential
licensees, and the U.S. Treasury. Such auctions would allow the
FCC to share the proceeds from the auction of spectrum that
current licensees voluntarily return.
The work we begin today on spectrum issues can help us
extend the reach of broadband, meet the needs of public safety,
create jobs, reduce the deficit, and allow the economics of the
spectrum market to permit innovation to flourish across all
spectrum-based services. I thank the witnesses for being here
today and look forward to their testimony.
# # #
Mr. Terry. Thank you, Full Committee Chair and Mr. Walden.
I welcome our witnesses and thank you for testifying and
your answers later. It will help us develop a well-balanced
spectrum policy.
Any spectrum policy that this committee establishes will
play a critical role in bringing interoperable broadband
communications to public safety, advancing our exponentially
growing appetite for wireless broadband, and, most importantly,
reducing our deficit.
I look forward to hearing our witnesses flesh out what the
true definition of ``voluntary'' means. I also look forward to
learning more about repacking and some of the concerns
associated with relocation.
I also welcome testimony from our witnesses today on the
details pertaining to an interoperable public-safety network.
Is more spectrum really needed or are efficiencies needed?
Should proceeds from an auction be used to help construct a
nationwide network or does public safety currently have what it
needs to go interoperable?
Those are many questions. I look forward to receiving
answers.
I thank the distinguished chairman and yield back my time.
Mr. Walden. The gentleman yields back his time.
I now recognize the gentleman from Massachusetts, Mr.
Markey, for 5 minutes.
Mr. Markey. I thank the chairman.
I ask unanimous consent to enter into the record a letter
from 112 economists in support of the incentives auction
authority for the FCC.
Mr. Walden. Without objection.
[The information appears at the conclusion of the hearing.]
OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF MASSACHUSETTS
Mr. Markey. I thank you.
We have moved very quickly from the day when the chairman
of AT&T, in 1981, thought 1 million people would have cell
phones by the year 2000 to the day where we have spectrum being
at the core of the debate that we have in our country for
economic growth and for public safety.
In 1993, I was the chair of the subcommittee. We were able
to move over 200 megahertz of spectrum, which created the
third, fourth, fifth, and sixth cell phone licenses. The first
two were analog and charged 50 cents a minute. If you had a
brick that you were carrying around, something the size of a
brick, you were using it. But, by 1996, we all had a cell phone
in our pocket because the four new companies all went digital,
dropped their prices to under 10 cents a minute, and that is
the year you all put cell phones in your pocket for the first
time.
And we are very proud of that on this committee, and it
just changed everything. Although, let me be honest with you:
The two incumbents, whose names are well-known, weren't happy
with that decision.
We have the same kind of choices that we have to make
today. And I think the Obama administration's national wireless
initiative to make available high-speed wireless services to at
least 98 percent of Americans is a tremendously important
undertaking. It will spur innovation, create nationwide
interoperable wireless services for public safety, while
reducing the national deficit by approximately $10 billion.
Spectrum is the oxygen of the wireless ecosystem, so we
have to find more spectrum. We have to manage that which we
have better, but we also have to find more because of all of
the tremendous opportunities which it presents.
And we have to free up TV white space spectrum to enable
new technologies like Super Wi-Fi and make new innovative Super
Wi-Fi devices available soon. But the broadcasters should do
that on a voluntary basis. We have to have a formula here which
ensures that that happens.
But at the end of the day, public safety has to be at the
core of this. There were two planes that were hijacked in
Boston with 150 people from my district and the surrounding
districts that flew into the World Trade Center. There was a
communications failure on that day. We have to make sure that
our public-safety first responders never face another day like
they did on 9/11. We have to make sure they have the spectrum
they need in order to respond.
I served on the Homeland Security Committee for 6 years
working on this issue because I saw what happened and I saw
what the casualties were in my own life and in the lives of
tens of thousands, millions of others. So we have to be able to
accomplish this, to take care of public safety while ensuring
that we see the economic growth that we want.
And for the remaining 2 minutes, I yield to the gentlelady
from California, Ms. Matsui.
Ms. Matsui. Thank you, Mr. Markey, for yielding to me.
I would also like to thank the witnesses for joining us
today.
There are approximately 270 million wireless subscribers in
the United States, and that number is growing. President Obama
recently identified the need for increased spectrum in the
market. The FCC has said our Nation will soon face a spectrum
crisis. There are some estimates that, by 2014, the demand for
spectrum will exceed supply.
It is our job to remain focused on getting the spectrum out
there, and we should move as quickly as possible. The FCC
should have the flexibility to structure and conduct incentive
auctions that will truly maximize the economic and social value
of the spectrum.
On the issue of public safety, we must provide public
safety with interoperable capabilities they need and deserve to
protect our Nation during challenging times. As we approach the
10th anniversary of the tragic events of September 11th, it is
not acceptable that our Nation does not have a public-safety
communications system with a nationwide level of
interoperability in place.
While we will debate the merits of how to fund and
construct a nationwide public-safety system, we can all agree
that we must find a path that provides the funding required to
build an interoperable system that fulfills the needs and
security of our public-safety goals. We must also do so in a
fiscally responsible manner. It will not be easy, but we must
get there.
I also believe that spectrum should be preserved for the
advancement of technologies, including smart grid and health IT
capabilities.
I thank you very much for being here.
And I yield back the balance of my time to Mr. Markey, who
may want to use 12 seconds.
Mr. Markey. And that would just be to say that we welcome
you, Senator Gorton.
As you all know, he wound up on the west coast, but
Gorton's of Gloucester is where it originated. So we still
have, I think, a lot of things in common that we can work on.
And thank you for your service to our country.
Mr. Walden. And, with that, I welcome Senator Gorton and
your testimony. Thank you for coming today. We appreciate your
service on the 9/11 Commission and in the United States Senate,
and we look forward to your counsel. Please go ahead.
STATEMENTS OF THE HON. SLADE GORTON, FORMER U.S. SENATOR,
MEMBER OF THE 9/11 COMMISSION; DEPUTY CHIEF CHARLES DOWD,
COMMANDING OFFICER, COMMUNICATIONS DIVISION, NEW YORK POLICE
DEPARTMENT; COLEMAN D. BAZELON, PRINCIPAL, THE BRATTLE GROUP;
MARY N. DILLON, PRESIDENT AND CHIEF EXECUTIVE OFFICER, U.S.
CELLULAR; ROBERT GOOD, CHIEF ENGINEER, WGAL-TV; JULIAS P.
KNAPP, CHIEF, OFFICE OF ENGINEERING AND TECHNOLOGY, FEDERAL
COMMUNICATIONS COMMISSION; PETER PITSCH, EXECUTIVE DIRECTOR OF
COMMUNICATIONS POLICY AND ASSOCIATE GENERAL COUNSEL, INTEL
CORPORATION
STATEMENT OF SLADE GORTON
Mr. Gorton. Mr. Chairman, one minor annoyance of being on
your side of the dais for some 18 years was to listen to people
read testimony that I had already read and that added very
little to the debate. So I will spare you that and hope that
you have or will read my written testimony and simply make a
handful of points.
And the first of those points is that the nature of this
debate has changed profoundly, I believe, just in the course of
the last few months. You all are more aware than I am--and I am
plenty aware--of the debates that have taken place in this
House and the Senate over the course of the last 3 or 4 weeks
and continue, and the blood, sweat, and tears that has gone
into a continuing appropriation designed to save some $38
billion.
Well, Mr. Chairman, the demand that the D block be turned
over for free to public safety would automatically reduce that
saving by roughly 10 percent, just the gift of the spectrum
itself. To provide the amount of money that local governments
think that they need actually to exploit that would very likely
take that whole $38 billion and would require a continuing
subsidy.
Mr. Chairman, I submit to you, even from this side of the
table, that is not going to happen. You are not in this
Congress, or I think for several Congresses to come, going to
start a major new Federal program of subsidization for this
particular purpose. I just don't believe that that is in the
cards. That is the first point I want to make.
The second is that the auction of the D block itself will
not only bring money into the Treasury, which you can use for
one or two things--as I looked through the testimony here, some
talk about reducing the deficit, some talk about using that
money to help subsidize the public-safety mission. Obviously,
it can't be used for both. But the overall economic impacts of
that auction will be far greater in the investment that the
private sector will make in using the D block spectrum itself.
That will be a major investment in better communications in the
country. It will meet at least some of the demand, which is
huge.
Congressman Markey, I think, talked about that, thousand
cell phones. Even 2 or 3 years ago, we could not have imagined
the demand for private spectrum that exists in the country
today. It will provide better communications for the people of
the United States. It will provide jobs. It will provide tax
receipts, of course. And the money almost certainly will be
better used than it would be if it went through various
government agencies for technologies that are often outmoded by
the time the governmental process gets them contracted for.
But that does bring us to the other very real need, and
that is the need for public-safety agencies and entities.
Several of you have mentioned the fact that the 9/11
Commission, on which I served, as one of its recommendations
recommended additional spectrum for public-safety entities.
That is true.
And a year after the 9/11 Commission was formally
dissolved, we got back together again and had the gall, I
guess, to give the Congress a report card on how well it had
done. I may say that Congress probably adopted more of our
commission's recommendations than any other such commission in
my lifetime. Nevertheless, at that point, after the first round
in 2004, Congress got an F on that score, on new spectrum. But
on the second round of 9/11 legislation, that grade went up to
a C. Now, that may not be a great grade by any stretch of the
imagination, but we were hard graders, and there weren't many
elements that got C grades from us at all.
So the recommendation that the 9/11 Commission made for
additional spectrum has essentially been carried out by
Congress. That doesn't settle the question completely by any
stretch of the imagination, but it allows me to be here
testifying, as I am, for a much more dynamic solution. And that
solution is to go forward with those auctions and allow it
primarily, but not exclusively, to the Federal Communications
Commission to see to it that that auction and those private
sales benefit our public-safety agencies as well.
And on that score, without going into the technicalities, I
am convinced that they not only can do it but that it will
provide additional spectrum and additional equipment for
public-safety entities across the country much more rapidly
than will the dead-end street of a huge new Federal program,
which, very bluntly, Congress is not going to fund in any
event.
[The prepared statement of Mr. Gorton follows:]
Mr. Walden. Senator, thank you very much for your
testimony, both prepared and your oral. Thank you very much.
We are going to go now to Deputy Chief Charles Dowd,
Commanding Officer, Communications Division, New York Police
Department.
Deputy Chief Dowd, thank you for being with us. Thanks for
your service to the people of New York and to America. And on
9/11, we were all New Yorkers. And I welcome your testimony
today.
STATEMENT OF CHARLES DOWD
Mr. Dowd. Thank you, Mr. Chairman, Congressman Markey. It
is a pleasure to be here again.
Unlike the Senator, who is far more experienced at this, I
am going to read my testimony.
Again, thank you for the opportunity to testify today. Let
me begin by expressing gratitude to Representatives Peter King
and Bennie Thompson for their bipartisan effort that has
resulted in the introduction of H.R. 607, the ``Broadband for
First Responders Act of 2011,'' and, as well, to Senator Jay
Rockefeller introducing Senate bill, S. 28, the ``Public Safety
and Wireless Innovation Act.''
Due to their efforts and the cosponsors on both bills, we
are closer than ever to providing our Nation's first responders
with a tool they desperately need: a nationwide, mission-
critical broadband network dedicated to public safety. We are
also grateful for the President's support on this vital issue.
However, we are missing one essential element to accomplishing
this goal. We need the support of the members of this
subcommittee to get this legislation passed.
I come to Washington today not only on behalf of the New
York City Police Department but as the representative of every
public-safety organization and agency in the country and the
over 32,000 law enforcement, fire, and emergency medical chiefs
whose agencies and lifesaving operations will benefit
enormously from this technology. We consider it essential to
the future of our mission. The need to reallocate the D block
spectrum to public safety is a view shared by agencies large
and small, urban and rural, across the country.
Like virtually all public-safety organizations, the New
York City Police Department relies principally on two-way voice
radios to communicate. This technology is extremely limited. It
cannot exchange electronic data or video. We have made some
progress in radio interoperability since the 9/11 attacks, but
disparate spectrum and aging technologies prevent first
responders from attaining truly nationwide, seamless,
interoperable communications. Broadband on 700 band spectrum
would allow us to be seamlessly interoperable on all levels:
local, State, and, very importantly to this issue, Federal.
Police Commissioner Ray Kelly recently testified that a 16-
year-old teenager has more communications capability on a
smartphone than a police officer or firefighter with their
portable radio. I hope the members of this subcommittee
consider that fact and agree that this situation cannot
continue. Inaction on D block's reallocation risks not only the
public's safety but also the lives of those whose job it is to
protect them.
Two weeks ago, the co-chairs of the President's 9/11
Commission, Governor Tom Kean and Congressman Lee Hamilton,
testified before Congress about first-responder needs. Their
testimony in part was, and I quote, ``The inability of first
responders to communicate with each other was a critical
failure on 9/11 that led to needless loss of life. We support
the immediate reallocation of the D block spectrum to public
safety. We must not approach these urgent matters at a
leisurely pace. We don't know when the next attack or disaster
will strike. Further delay is intolerable.''
A number of recent studies, some of which I would like to
submit for the record--there are four of them--have proven the
need for public safety to have a 20 megahertz block of spectrum
for a broadband network. New York City issued a white paper
based on throughput analysis of its current NYCWiN network that
identified the need for more than 10 megahertz. A report
commissioned by the Government of Canada for public safety
indicated spectrum need would exceed 20 megahertz in the long
term. A study by the Phoenix Center in Washington found that
assigning the D block to public safety provides at least $3.4
billion more in social benefits as opposed to an auction. And,
lastly, several papers by Mr. Andrew Seybold, a nationally
recognized expert, concluded that 10 megahertz is not enough.
[The information appears immediately following Mr. Dowd's
prepared statement.]
Mr. Dowd. For some time now, we in public safety have
stated we want to be as spectrally efficient as possible. We
know that the flexibility of broadband technology allows for
potential use of the network by other governmental agencies,
public utilities, as well as public-private partnerships that
could bring broadband technology to the public in underserved
rural areas.
The efficiencies of such a network would dramatically
reduce operating costs for local and State governments, while
maintaining the public-safety mission-critical nature of the
network. We have agreed to use commercial technology that will
allow us to take advantage of the economies of scale.
We are also prepared to work with the FCC to study the
feasibility of returning currently held public-safety spectrum
if sufficient broadband spectrum is allocated to us. We
understand the current fiscal realities, but the need for the
network, coupled with the cost savings, means we simply cannot
afford not to build it.
Some have made the argument that reallocation is not
necessary because public-safety communications can use
commercial networks. You should know that every major public-
safety organization in the country has explicitly rejected this
option as unworkable. Our experience with commercial networks
and especially the failures that sometimes occur, like on 9/11
and during Hurricane Katrina, tell us these networks are
definitely not interchangeable with dedicated public-safety
networks. There are fundamental differences in the architecture
that go to the heart of public-safety communications. Simply
put, commercial networks are not designed for the crisis demand
that first responders will inevitably put on them.
A dedicated public-safety network would enable the NYPD to
fully leverage the powerful technology that we use in the
NYPD's Real Time Crime Center. This state-of-the-art facility
is a massive database containing billions of public and
classified records. We have made these databases searchable
with the latest smartware. Twenty-four hours a day, detectives
call from investigations in the field, looking to follow up on
various leads they have obtained: a partial license plate, a
seemingly untraceable cell number, a nickname, or even a
tattoo. They conduct instant searches, sometimes that would
previously take us days.
Now we are looking to put this technology in the hands of
thousands of officers on patrol. An officer operating in this
network could be sent highly detailed information about a
location to which he or she is responding, even before those
officers arrive. They will be able to know who resides there,
whether or not the police have been there before and why, if
any of the occupants has an outstanding warrant, prior arrest,
an order of protection, or a firearms license. They will be
able to take electronic fingerprints at the scene and compare
those records instantaneously with State and city records.
There are other examples here, but, in the interest of
time, I am going to skip ahead and just say, right now these
capabilities simply don't exist, and they don't exist because
we need Congress to reallocate the D block and provide the
necessary funding to public safety to build this hardened
mission-critical network.
With the 10th anniversary of 9/11 rapidly approaching, we
urge the Congress in the strongest possible terms to pass the
above legislation and send it expeditiously to the President
for his signature. The City of New York Police Department looks
forward to the day when public-safety users can share a
nationwide network that supports voice, video, and data on an
integrated wireless network. For the sake of the security of
cities and towns all across the country, we sincerely hope we
see that day before a new attack or disaster.
Thank you for the opportunity. I will answer any questions
that you may have.
[The prepared statement of Mr. Dowd follows:]
Mr. Walden. Thank you very much, Chief.
Now I would like to welcome for his testimony Dr. Coleman
D. Bazelon with The Brattle Group.
We welcome you, and thank you for being here today.
STATEMENT OF COLEMAN D. BAZELON
Mr. Bazelon. Thank you, Chairman Walden, Congressman
Markey, members of the committee. It is an honor to speak here
today.
This committee is considering an important issue of
spectrum policy that will have profound impacts on the
development of wireless broadband. I am sure everyone is
familiar with the projections of demand for wireless broadband,
including forecasts of wireless data demand virtually doubling
every year for the next few years. Industry capacity will
struggle to keep up.
Rising demand will be met, in part, by rapidly building out
spectrum acquired at auction----
Mr. Walden. Doctor, could I just ask you to move that
microphone a little bit closer? We are having a little trouble
hearing. Thank you.
Mr. Bazelon. Is that better?
Mr. Walden. Much better.
Mr. Bazelon. Thank you.
Carriers will also use other techniques to increase
effective capacity, such as Wi-Fi offloading, off-peak
transmission and on-device storage, and innovative pricing
schemes aimed at reducing peak usage.
Nevertheless, if future demand for wireless broadband
services is to be met and those services are to remain
affordable, it is clear that new allocations of spectrum will
be needed. Absent those additional allocations, much of the
potential benefits of mobile broadband to consumers and the
economy will be lost.
Exactly how much more radio spectrum is needed for wireless
broadband is uncertain. Given the uncertainty, policymakers
should apply a principle of spectrum reallocation. Based on
current allocations, if a higher-valued use exists, spectrum
should be reallocated from the lower-valued use to the higher-
valued use.
Our economy benefits when resources are moved to higher-
valued uses. Other bands of spectrum should be examined with
this principle of spectrum reallocation in mind. As long as
there are financial gains and additional consumer welfare to be
had from reallocating more spectrum, further reallocation
should take place.
This principle of spectrum reallocation has been applied to
the television band twice before. First, the initial cellular
allocations were from the upper reaches of the UHF band
originally allocated to TV broadcasters. Then, as a result of
the digital television transition, the 700 megahertz band was
reallocated to wireless broadband and public-safety uses.
Or perhaps I should say, the principle of spectrum
reallocation has almost been applied twice to the TV band. The
D block remains unassigned. There seems to be three options:
assign the D block to public safety, auction it for wireless
broadband uses with public-safety obligations, or auction it
without public-safety obligations.
I have testified before and reiterate today my belief that
auctioning the D block unencumbered with any public-safety
obligations would be best. Last summer, I told this committee
that I estimated a well-structured auction of the D block would
raise between $3 billion and $4 billion, and I believe that to
still be true.
The loss in value from public-safety obligations on private
licensees or the relatively small amount of cost savings to
public safety from an additional 10 megahertz of spectrum
suggests that an unencumbered auction would put the D block to
its highest-valued uses.
There is an option to apply the principle of spectrum
reallocation to the TV bands again through the use of incentive
auctions. One of the key advantages of incentive auctions is
that they are designed with the principle of spectrum
reallocation in mind. That is, by design, they will not
reallocate spectrum from a higher-valued use to a lower-valued
use.
My colleague, Charles Jackson, and I are working on a
detailed analysis of what an incentive auction of the
television bands might produce. This research was sponsored by
the High Tech Spectrum Coalition, but today I am testifying on
my own behalf. I want to provide the committee with a few
highlights of our preliminary findings.
An incentive auction could clear 120 megahertz of spectrum
that could be reallocated to wireless broadband uses.
Broadcasters that do not participate in the auction or whose
bids are not accepted in the auction will not have any
diminution in their service areas. At a minimum, 4 full-powered
broadcasters would remain in every top-30 market, serving the
same households they do today, although probably more than 4
existing stations would continue broadcasting by moving to VHF
channels, co-broadcasting with other broadcasters, or adjusting
their service areas.
Payments to broadcasters in the incentive auction would
probably not be more than about $15 billion and likely would be
much less. Expected revenues from auctioning 120 megahertz of
spectrum would likely exceed $35 billion. So an incentive
auction would be expected to raise at least $20 billion for
deficit reduction or for other priorities Congress may have,
such as funding a public-safety network.
Finally, in closing, I would like to remind the committee
that the real beneficiaries of spectrum reallocations are
consumers. Broader access to higher-bandwidth wireless networks
at lower cost is the real benefit of applying the principle of
spectrum reallocation. The benefits to consumers are generally
estimated to be 10 to 20 times auction receipts. Consequently,
the cost of inaction in reallocating these valuable spectrum
bands is very high.
Thank you very much.
[The prepared statement of Mr. Bazelon follows:]
Mr. Walden. Thank you for your testimony.
We will now turn to Ms. Mary N. Dillon, the President and
Chief Executive Officer of U.S. Cellular.
We are delighted to have you here before the subcommittee
this afternoon. Thank you, and look forward to your testimony.
STATEMENT OF MARY N. DILLON
Ms. Dillon. Thank you, Chairman Walden, Congressman Markey,
and the rest of the committee. It is a pleasure to be here
today.
As you know, throughout its very brief history the wireless
industry has provided consumers and businesses with an ever-
evolving array of innovations--first, of course, voice
communications, and now broadband. In fact, wireless has become
an essential service for most Americans today. The growth in
demand for mobile services in recent years has been absolutely
dramatic, and it really shows no signs of abating. We must
ensure that wireless networks are able to continue to meet
America's growing needs for access to information and
communication.
Today's hearing on spectrum raises several important issues
currently facing the wireless industry, and they also have
broader implications for the Nation's economy and safety. And
those issues are: first, the critical need for additional
spectrum to meet growing consumer demand for mobile services;
secondly, the need to provide an interoperable, nationwide
public-safety communications network; and, third, the need for
rules that maximize the efficient use of that spectrum going
forward.
Of these topics, the most important is the increasing
demand for mobile services and the need to make more spectrum
available. There is widespread agreement among carriers, the
high-tech industry, the FCC that we are, in fact, facing a
severe spectrum shortage in the next few years.
My written testimony contains additional facts, but it is
very intuitive and I think we can all appreciate how increasing
consumer demand for high-tech devices and the services they
provide are placing enormous strain on networks and, in turn,
creating critical need for more spectrum.
For example, smartphones and tablets are the fastest-
growing segments of wireless, and they drive 24 and 122 times
more data usage than traditional handsets alone, respectively.
So it is really no wonder that data traffic has tripled in 2010
for the third year in a row.
There is also widespread public support for freeing
additional spectrum for mobile uses, as demonstrated in a
recent nationwide survey that we conducted where we saw that
nearly 60 percent of Americans support making more spectrum
available to wireless carriers.
As the leader of a company that consistently gains awards
for our high-quality network and our overall consumer
satisfaction, I am very concerned about the consequences to
consumers of severe network congestion, where video would
freeze and calls would drop and surfing the Web could become
very slow. In addition, potential innovation in areas such as
health care and education would suffer as well.
So, remember, of course, it will take years following the
passage of legislation before auctions are complete, spectrum
is cleared, and services are deployed. So that is why time is
of the essence and why Congress really should act now. So what
should you do?
First, the most efficient way to meet this rise in demand
is to give the FCC the authority to conduct incentive auctions
for whatever underutilized broadcaster spectrum exists. And the
most effective way to maximize the value of is licensed
spectrum is to structure auctions in small blocks rather than
in large mega regions or national slots so that U.S. Cellular
and other small carriers, in fact as many companies as
possible, have a fair opportunity to bid and to be successful.
More participants will mean more money for the Treasury and
more competition in the marketplace.
Second, we must determine how to provide public-safety
agencies with a network that meets their needs. And we believe
there are three policy principles that should govern that
decision. First, a national, interoperable broadband network
should be deployed quickly. Second, there should be an
opportunity to expand competitive broadband services and also
serve the needs of public safety. And, third, the first two
policy considerations must ensure that there is an efficient
use of the spectrum as well as taxpayer dollars.
Now, U.S. Cellular has previously supported the concept of
a regional public-private partnership model and the FCC's
broadband plan to recommend a commercial auction of the D
block. So, while we do see ways where the transfer of spectrum
to public safety might work, we continue to believe that an
arrangement where commercial operators conduct and operate the
network at their expense and then work in partnership with
regional public-safety agencies to ensure it meets their needs
represents a unique and fiscally sound solution.
And, third, we need to update the rules that govern the use
of spectrum with regard to interoperability and ubiquitous
availability of mobile services. In order to maximize consumer
benefits, auctions should be structured to guarantee that
services deployed over newly available spectrum are capable of
being used with maximum efficiency. Legislation should mandate
that carriers be required to deploy network services that are
interoperable across the industry. For example, wireless
carriers should not be able to deploy 4G handsets that only
work in a limited subset of the 700 megahertz spectrum, as is
happening today. Without interoperability, consumers and public
safety will not be able to seamlessly travel and have access to
the data services that they need on other networks or take
their devices to other carriers if they should choose to
switch.
And, lastly, I would ask that any consideration of
broadband deployment not lose sight of the needs of people
living in rural communities, who deserve access to the same
kind of mobile voice and data communications that consumers in
urban areas enjoy. While it is not the central focus of this
hearing, as you consider reforming USF, remember there are
still rural areas today where calls drop, access is very
limited, and dead zones are quite common in the community.
So thank you very much.
[The prepared statement of Ms. Dillon follows:]
Mr. Walden. Thank you for your testimony.
We are going to go now to Mr. Bob Good, who is the Chief
Engineer of WGAL-TV in Lancaster, Pennsylvania.
Mr. Good, thank you for being here. We look forward to your
testimony.
STATEMENT OF ROBERT GOOD
Mr. Good. Good afternoon, Chairman Walden, Congressman
Markey, and members of the subcommittee.
My name is Bob Good, and I am assistant general manager,
director of operations, and chief engineer of WGAL-TV in
Lancaster, Pennsylvania. I am testifying on behalf of Hearst
Television, Incorporated, which owns and operates 29 television
stations across the country, including WGAL-TV.
Less than 2 years ago, during the DTV transition, billions
were spent upgrading facilities, purchasing converter boxes for
viewers, educating viewers of the impending switch. In the
process, the FCC repacked the television band and local
broadcasters gave back 108 megahertz of spectrum, freeing up
space for public safety and new commercial wireless services.
From over-the-air HD signals to new multicast channels,
broadcasters across the Nation are providing a more diverse and
richer viewing experience.
Free over-the-air local broadcast television is not only
the Nation's most watched and trusted platform for local news,
virtually every local station, including mine, works hand-in-
hand with first responders to provide public-safety information
in time of local emergencies.
Local broadcast television is relied upon by 99 percent of
the American people. In fact, some 43 million Americans depend
exclusively on free over-the-air broadcasts as their only
source of television. Many of these viewers are impoverished,
elderly, live in rural areas, and/or are members of an ethnic
minority. These are our viewers and your constituents, and it
is essential that Congress not leave them behind in the
consideration of spectrum reallocation.
I am an engineer, and I am here to offer an overview of
WGAL-TV's transition experience and a real-world perspective on
some of the technical issues that would accompany another
repacking of existing broadcast spectrum.
The FCC staff and wireless industry propose to remove 20 of
the current 37 channels in the UHF broadcast band. This would
be a reduction of more than 50 percent of existing UHF
broadcast channels. The consequences of that proposal, if
implemented, would be staggering. The relocation of channels is
not a simple matter of flipping a switch. The substitution of
one channel in one market will create a domino effect across
the entire country. One channel change in Chicago, for example,
would require a channel change in Kalamazoo, which would
require changes in Lansing, and in turn affecting Detroit, and
so on and so forth.
The Lancaster market is bounded by five other television
markets, including Philadelphia and D.C. After the repacking
following the DTV transition, our station was initially
authorized to transmit at a low power level to protect other
stations from interference. That created significant gaps in
our over-the-air coverage, and many of our longstanding viewers
lost WGAL. Even some cable systems, with their tall towers and
high-gain antennas, lost over-the-air access to our signal.
That prevented them from retransmitting our station to their
subscribers.
Within days of the transition, we received thousands of
viewer complaints, and we still do. Today, we still haven't
reached a point where our station's coverage replicates our
pre-DTV service area. We are not sure, frankly, if it ever
will.
We have petitioned the FCC for several power increases, and
we have plans to install six new translator stations at a
collective cost of at least another $1.5 million. That is on
top of the $2.5 million we already spent on the DTV transition.
Local viewers have also incurred additional costs by having to
buy new home antennas to receive our VHF digital signal.
Unfortunately, this new repacking proposal has the
potential to be more difficult. This time around, any repacking
process would start with fewer alternative channels to assign
to stations and the likelihood of greater interference for more
closely packed channels. Also, due to the FCC's white spaces
decision, we will have to contend with thousands of new
unlicensed devices that have been authorized to operate in
television bands.
Additionally, during the DTV transition, we had the luxury
of operating two channels simultaneously, one analog and one
digital. This time broadcasters would have to make a flash cut,
because additional channel capacity no longer exists. That
means that the viewers will not have adequate time to prepare
for another repacking. The level of service disruption to your
constituents could be unprecedented.
Broadcasters take their public stewardship commitment
seriously, and we look forward to expanding and enhancing the
important service our industry provides to you and your
constituents. We will continue to work with the committee to
strike an appropriate balance in achieving the Nation's overall
communications policy goals.
Thank you. I will be happy to answer any questions you
might have.
[The prepared statement of Mr. Good follows:]
Mr. Walden. Thank you, Mr. Good. We appreciate your being
here today.
Now we would like to go to Mr. Julius Knapp, the Chief,
Office of Engineering and Technology at the Federal
Communications Commission.
We welcome you here and look forward to your testimony,
sir.
STATEMENT OF JULIUS P. KNAPP
Mr. Knapp. Thank you. Good afternoon, Chairman Walden,
Congressman Markey, and members of the subcommittee. I
appreciate the opportunity to speak to you today.
Mobile broadband holds great promise for economic growth,
for creating jobs, for improvements to our quality of life, and
for our global competitiveness. However, the explosion in
demand for mobile broadband services is putting a strain on the
limited supply of spectrum available for mobile broadband.
As you have heard, today's smartphones consume 24 times as
much data as traditional cell phones, and the recently
introduced tablets consume about 120 times more spectrum.
Analysts have projected that there will be a 35 to 60 times
increase in mobile broadband traffic over the next 5 years.
All we need to do to verify these projections firsthand is
look in the palm of our hands at our wireless devices and how
we use them. We check our e-mails, monitor the news and
weather, get directions, watch sporting events and other
programs that stream live to our phones.
Only a fraction of wireless users have these capabilities
today, but the number is rapidly increasing. My little 3-year-
old granddaughter doesn't yet know how to spell but she sure
knows how to work the iPhone.
While we must continue to drive efficient use of spectrum,
improvements in efficiency are not going to be enough. We will
be facing a spectrum crunch in which demand for spectrum will
exceed the supply by the year 2014 unless we promptly take
action to make more spectrum available.
To address these challenges and seize the opportunities of
mobile, the FCC is moving forward aggressively with a
comprehensive mobile broadband agenda. Over the past year, the
Commission has taken actions to open up additional spectrum for
wireless broadband, including opening up spectrum in the 2.3
gigahertz band for mobile use and providing greater flexibility
to offer terrestrial service in the mobile satellite spectrum.
We have also freed TV white spaces spectrum, the most
significant amount of unlicensed spectrum that we have made
available in 25 years, to enable new technologies like Super
Wi-Fi.
For more than a year, the Commission has conducted and we
have now completed a baseline spectrum inventory. We have
developed two tools, LicenseView and the Spectrum Dashboard,
that are online and provide unprecedented transparency into the
use of spectrum.
Our baseline spectrum inventory, together with our
extensive prior work on spectrum, has allowed us to determine
that the best opportunities for providing access to suitable
spectrum for wireless broadband services lie in the TV
broadcast bands and the mobile satellite service bands.
Nearly 20 years ago, Congress authorized and the FCC
implemented a breakthrough, market-driven policy to better
allocate this scarce resource: spectrum auctions. The idea was
the right one at the right time, and, since 1993, spectrum
auctions have not only raised more than $50 billion for the
Treasury but have also generated hundreds of billions of
dollars in private investment and productivity gains and
enabled new competition that has dramatically lowered prices
for consumers and accelerated the pace of innovation, which, in
turn, has helped grow our economy.
Voluntary incentive auctions are the next tool for bringing
market-based mechanisms to bear on spectrum allocation. Under
this proposal, Congress would grant the FCC the authority to
run two-sided, voluntary spectrum auctions in which current
licensees would voluntarily contribute spectrum and would, in
return, receive a portion of the proceeds from the auction.
Last week, 112 of the Nation's leading economists from
across the ideological spectrum released a letter they had
signed endorsing incentive auctions. The economists who signed
this letter include Nobel and Nemmers Prize winners, former
members of both Republican and Democratic administrations, and
FCC chief economists who served under chairmen of both parties.
We recognize that some are concerned that voluntary
incentive auctions will come at the expense of TV broadcasting.
To the contrary, we believe that voluntary incentive auctions
can be conducted in a manner that encourages a healthy and
robust broadcasting industry.
While realignment of broadcast stations will be necessary
to ensure efficient use of the spectrum freed up from an
incentive auction, our proposal seeks to limit the number of
stations that would need to switch frequencies as part of the
realignment process. For those that do, we would work to limit
any loss of service to over-the-air television viewers and
would fully reimburse the broadcasters for any costs associated
with relocating.
No stations would be required to move from the UHF band to
the VHF band unless they freely chose to do so in exchange for
a share of the auction proceeds. And, finally, because digital
technology allows stations to use virtual channel numbers, even
if a station's actual channel number changes through
realignment, it can continue to have the former channel number
display on television screens and set-top boxes.
In closing, let me suggest that voluntary incentive
auctions are the right idea at the right time. I thank you for
your attention.
Mr. Walden. Mr. Knapp, thank you. Thank you for your good
work and thank you for testifying today.
[The prepared statement of Mr. Knapp follows:]
Mr. Walden. Now we would like to go to Peter K. Pitsch, the
Executive Director of Communications Policy and associate
general counsel of Intel. Welcome.
STATEMENT OF PETER PITSCH
Mr. Pitsch. Thank you. Good afternoon, Chairman Walden,
Congressman Markey, members of the subcommittee. It is a
pleasure to testify before this committee on this issue of
whether or not to grant legislative authority to the FCC to
conduct incentive auctions.
Intel strongly supports passage of such legislation this
year. Intel, along with Alcatel-Lucent, Apple, Cisco, Ericsson,
Nokia, Qualcomm and Research In Motion, formed the high tech
spectrum coalition to advocate specifically for passage of this
legislation.
Today I want to make three points. First, the U.S. is
facing a severe mobile broadband spectrum shortfall. Second,
voluntary incentive auctions would help address this problem.
Third, incentive auctions can prudently be implemented on the
broadcasting spectrum now.
First, as many already noted, including Julius Knapp,
longtime friend, United States faces a severe global broadband
spectrum shortage. In the interest of time, suffice it to say I
strongly concur, would only add that it is important to
recognize that the FCC's command and control administrative
process for reallocating spectrum does not work well.
Furthermore, the low hanging spectrum band suitable for mobile
use already have been reallocated.
Incentive auctions can break this logjam which brings me to
my second point: Voluntary incentive auctions would help
address our Nation's spectrum shortfall in a way that is
beneficial to incumbents and to new users, to taxpayers and
society. The voluntary nature of the process would ensure that
incumbents who choose to sell and mobile broadband operators
who choose to buy spectrum both would be better off. Also,
taxpayers will benefit because incentive auctions, by reducing
transactions problems and the holdout problems, can produce
valuable cleared spectrum.
Much of the revenue raised from the spectrum would go to
the U.S. Treasury. For instance my fellow panelist, Coleman
Bazelon and his colleague, Chuck Jackson, in an analysis
underway for the high tech spectrum coalition estimate that
those benefits might well exceed $20 billion. But most
importantly, and the reason why I am here today, is that the
gains, the long-term gains to consumers and society for lower
prices, more minutes, less congestion were valuable services
dwarf the gains to the broadband operators, the broadcasters or
the taxpayers. Economists Hazlett and Munoz estimate
conservatively that the benefits to consumers would be on the
order of 10 times the private gains and the taxpayers effects.
The net gains to consumers could easily be in the hundreds of
billions of dollars.
Lastly, the U.S. policy leadership in this sector could
create a global competitive advantage, fostering American jobs
and innovation. Conversely, if our broadband networks become
more congested, if prices go up, then the creation of
innovative services will be stymied and American workers and
consumers will be denied valuable jobs and services.
Finally to, my third big point, incentive auctions can be
used prudently to reallocate TV spectrum, a full 120 megahertz
of TV broadcasting spectrum now.
In the interest of time, I will just summarize a few
points, but hopefully in the Q&A session, we can get into the
objections that have been made. My contention is that they are
either wrong or misplaced. Over-the-air broadcasting will
remain available. Broadcasters whose channels are repacked
could, should, and would be fully compensated. They would be
kept whole. I would add, however, that the repacking process
was never intended to be, itself, made voluntary, and that if
we were to make the repacking process voluntary we would give
holdout power to the broadcasters who are on these clear bands
of contiguous spectrum. Either they wouldn't exercise their
holdout power collectively and we wouldn't get the spectrum, or
there would be virtually no money leftover for the taxpayer.
So in sum, Intel strongly urges the members of this
subcommittee and Congress to act this year to give the FCC
broad authority to conduct voluntary incentive auctions. Such
legislation represents one of the most important opportunities
to free up much needed additional spectrum for mobile
broadband. The benefits to U.S. consumers, taxpayers, and
American society would be enormous. Thank you.
[the prepared statement of Mr. Pitsch follows:]
Mr. Walden. Mr. Pitsch, thank you. We appreciate the
testimony of all of our witnesses today. We will move into our
questions, and as you can see, we have a good turn out of our
members and look forward to your answers.
Mr. Pitsch, let me go right back to you, because you
suggest we should auction or give the FCC authority to do an
auction right away. Do you support, then, the FCC following
through on the auction authority they have today on the D
Block?
Mr. Pitsch. Chairman Walden, Intel doesn't have a position
on----
Mr. Walden. Why?
Mr. Pitsch [continuing]. Public safety.
Mr. Walden. Just wondered. Never mind, you don't have to
answer that. Dr. Bazelon, let me go to you. The question I
have, your testimony and your evaluation of the value of the
auction, one of the issues that has come up in recent days--and
I hear from everybody on every side of all these issues, let me
assure you, and that is a good thing--is that with the
potential proposed merger of AT&T and T-Mobile that you might
not have as many entrants into an auction. Do you find that
plausible, possible and just knowing that merger--do you see
that as having an affect on the value of an auction?
Mr. Bazelon. So let me begin by saying that I am here
representing my own views solely. The broad spectrum value is
long-term supply and demand forces in this industry. And I
don't believe that the pending merger changes any of those
fundamental demands for spectrum were supply of spectrum. So I
don't suspect that it will have any long-term effect on the
value of spectrum.
Mr. Walden. All right, thank you.
Deputy Chief Dowd, Congress now allocated 24 megahertz of
spectrum for public safety use in the DTV legislation 6 years
ago, which I supported. In your testimony, you say that 2-way
voice is, and I quote, ``an extremely limited service that
fails to meet the modern needs of public safety,'' correct?
Mr. Dowd. Yes.
Mr. Walden. And so, I am curious then, why do you think
public safety community, including NYPD, chose to use more than
half of the allocated spectrum to expand that very legacy voice
service?
Mr. Dowd. Well, the issue there is that, you know, that was
done a number of years ago, when the potential of broadband and
its ability to transform how public safety does its business
had not yet been fully realized. So there were a couple of
things going on there. Number 1, you had a mandate from the FCC
for folks to narrowband their radio systems and that they had
dedicated that spectrum for that purpose.
Mr. Walden. All right.
Mr. Dowd. The issue there is that you have over 30 States
that are building out on that spectrum because a lot of them,
kind of like led into this and were end of life on their
existing systems and therefore, needed to build out on that
spectrum. You know, if we had a preference--if voice on
broadband were ready for public safety prime time, we would
prefer to put that spectrum into a broadband capability. But
the reality is, it is out and it is necessary right now for
narrowband.
Mr. Walden. So when the technology comes in the full view
and availability, do you see then a migration over to voice
on----
Mr. Dowd. Yes, our----
Mr. Walden. That would free up a lot of spectrum, probably
half of what you are using today.
Mr. Dowd. Well, it has the potential to free up a lot of
spectrum in other areas too. And that is one of our main
arguments for the D Block is that if you had sufficient
spectrum to do all of your communications capability, voice
data, video, all of those things in broadband, then that would
potentially, in the long term, free up spectrum that public
safety has now to return to the FCC and also potentially to
free up that 700 narrowband spectrum, again, the long term. But
the problem with trying to use that spectrum now for broadband
purposes is simply the fact that it is necessary for
narrowband.
Mr. Walden. Well, and obviously we are not going to get
anything down in the very short term here, so when we get it
done, we want to get it done right for the long-term and make
sure we only invest in this correctly and appropriately going
forward and efficiently.
Senator Gorton, maybe I can turn to you, and Chief Dowd,
you may want to comment on this. Because we have heard public
safety wants to run its own networks, there is no--I don't
think have you any argument with that context. However, in my
own State of Oregon, the Oregon wireless interoperability
networks ballooned in costs to over $150 million and failed to
meet its benchmarks.
We know in San Francisco Bay Web is currently under
investigation for apparently some alleged improprieties. So we
are trying to figure out how we make sure we have an
interoperable network that you can rely on, your men and women
can rely on, and taxpayers can rely on. So maybe, Senator
Gorton, what safeguards are in place to ensure public safety
gets that capacity in the time of crisis? And could public
safety benefit from a public private partnership as recommended
by some?
Mr. Gorton. The answer to that question is overwhelmingly
in the affirmative, Mr. Chairman. It would probably happen
quicker, and almost certainly happen at less expense, your
experience in Oregon is, by no means, unique. On a related but
independent matter, remember how much money the FBI has spent
on computerization, billions and billions of dollars wasted
because the holdover metal structure for contracting for these
things is so slow that the technology is well beyond them by
the time that they have implemented a certain system, and I
think that Chief Dowd's answer to your last question
illustrates that. By the time they get something up and
operating, something else is better that is out there.
I just have to come back to my principal point, however.
Unless you feel that there is an extra 25 to $50 billion out
there somewhere, not only to reallocate the spectrum, but to
help governments that don't have any money to do it themselves,
to do it through a Federal subsidy. And unless you feel that
that is worth giving up at least an equal private investment in
spectrum that can be used right now with all its jobs, this is
an almost irrelevant argument. I don't think that money is
there. I don't think your appropriations committees are going
to come up that at any time in the immediate future, so a
public-private partnership is going to be best for both side
sides of the----
Mr. Walden. I am a minute and 40 over my time. So I will
yield now and to turn to the gentleman from Massachusetts, Mr.
Markey.
Mr. Markey. Thank you, Mr. Chairman, very much. Mr. Knapp,
how much of a spectrum that we need do you think we can garner
just from a more efficient use of the spectrum that we already
have?
Mr. Knapp. We are going to need to continue to apply
efficient techniques.
Mr. Markey. A significant percentage?
Mr. Knapp. A fair percentage, it is hard to put a number on
it.
Mr. Markey. More than 10 percent?
Mr. Knapp. More than 10 percent, it is an ongoing process.
Mr. Markey. More than 10 percent, less than 50 percent.
Mr. Knapp. Ten percent, less than 50 percent, probably
somewhere in there.
Mr. Markey. OK, good. And so we can get a big chunk of this
problem solved just by ensuring that there is more efficient
use of the spectrum. And as you have to work under the
Communications Act of 1934, you have certain public interest
principals you have to abide by, huh?
Mr. Knapp. Of course.
Mr. Markey. In putting this together. And a lot of that
goes to public safety, but also ensuring that there is spectrum
out there so that we have further economic growth in our
country as well?
Mr. Knapp. Of course.
Mr. Markey. That is your job, your division that you are
responsible for?
Mr. Knapp. With others, yes.
Mr. Markey. Thank you. Now, Mr. Good, you seem to be saying
that the broadcasters can go along, as long as it is voluntary,
and as long as is there a no interference. And if we can meet
those two criteria, and you are going to be very tough as an
engineer in ensuring that those criteria are met that the
broadcasters are open-minded in the reallocation of spectrum if
they are compensated and interference is not created for other
stations that are along that same perspective, is that correct?
Mr. Good. Well, yes, voluntary but as long as the
broadcasters are held harmless.
Mr. Markey. That is what I am saying. And by ``held
harmless,'' you mean that they are compensated and that----
Mr. Good. Coverage areas are the same and they are back
exactly where they were as far as coverage and the quantity of
viewers they can get their signal.
Mr. Markey. And you think that can worked out as long as
everyone is open-minded and engineers of common sense and
goodwill from all sides are able to get together and agree upon
those principles?
Mr. Good. That tends to bring us to repacking.
Mr. Markey. Yes.
Mr. Good. And I am not confident that we can achieve that
type of coverage in that scenario.
Mr. Markey. Now, obviously, the broadcasters are a big part
of our safety response capacity, because people turn to radio,
people turn to television to get their information, so we want
to make sure that those local broadcasters are there.
So, Chief, if we come over to you, in terms of the approach
which the public safety community is bringing to these issues,
just so it can be reduced down to a simple kind of set of
principals that you are bringing here to the process. The
public safety community wants a specifically allocated part of
this spectrum just getting over to the public safety community
so that they can make sure that there is a specifically
dedicated network construction that has voice, video, data so
that what happened on 9/11 does not reoccur; is that correct?
Mr. Dowd. That is correct.
Mr. Markey. And is there a way in your mind of reconciling
that goal with other interests that other people who testified
here today have in terms of the economic goals that are also
here and testifying and of interest to the country as well?
Mr. Dowd. Well, certainly. In our view, in public safety,
we have gone to great lengths over the last couple of years to
consolidate on this issue. And let me point out that that is
probably a historic consolidation of public safety support
this. Here on the right, you see a chart that I brought, it
indicates two organizations, the Public Safety Alliance on the
right, which represents every public safety organization and
many other governmental agencies that support our position. And
on the left is what is referred to as the Connect Public Safety
Now Coalition. The good and distinguished Senator represents
them here today according to his written testimony. I have to
point out though, however, that there is no one in public
safety that supports that position.
Mr. Markey. I see.
Mr. Dowd. As far as the flexibility and reconciling these
issues, you know, we can certainly do that. We are looking to
do public private partnerships, but we don't want to put the
cart in front of the horse. We want to make sure that public
safety gets the mission critical----
Mr. Markey. My time is going to run out. Are you having
conversations with the group that Senator Gorton represents,
are there any conversations going on? Chief, answer that and--
--
Mr. Dowd. Well, there is not too many people to have
conversation with.
Mr. Markey. Ah.
Mr. Dowd. You know, there are a couple of major commercial
entities that are a part of that. But again, to stress it, you
know, listen, the Senator is a man of high integrity and I know
that his position is a sincere one. But quite frankly, we
question the credentials of this coalition.
Mr. Markey. Senator, you deserve an opportunity to respond
to your question.
Mr. Gorton. Well, of course, if your position is that you
want to get something free and get it subsidized, you are all
going to join in on that, it is an easy position to take. Give
it to us and then give us all the money that is necessary to
carry it out. That doesn't answer the question, and of course,
they would prefer that to any kind of public private
partnership.
The question is, are you going to give it away? Are you
going to come up with a huge new Federal program? Are you going
to subsidize it? I don't think you are. And I think once you
announce a position like that, I imagine that the work back and
forth, the consultations between the private sector that wants
to buy this spectrum and the public spectrum will be
constructive and will be successful.
Mr. Markey. I just want to say, Chief, on a bipartisan
basis, I just want to say that public safety is our highest
priority throughout this entire process, I hope you know that.
Mr. Dowd. If I may comment on that, and again, having heard
testimony and questions before this committee before the
characterization that public safety wants something for free, I
mean, why do we want it? We want it because we know we need it
to protect the people of this country. So I am puzzled as to
what the expectation is should public safety pay for the
spectrum? Because if public safety pays for it, guess where the
money comes from? From the taxpayers, so I don't understand the
logic of that comment.
Mr. Markey. Thank you for your service, sir.
Mr. Walden. Move on to Mr. Terry for 5 minutes.
Mr. Terry. Thank you, Mr. Chairman. Staying somewhat on
that theme. One of the accusations is not the right term, but
information is that not all of the spectrum currently assigned
public safety is even being used now. So Senator Gorton and
Deputy Chief Dowd, once again, thank you for your service and
your willingness to come down here. We should have an office
for you.
And Mr. Knapp, if you could answer or retort or put into
perspective that statement that public safety isn't using all
of the spectrum that they are assigned now. Senator, are you
aware if there is squatting occurring now on public safety
spectrum?
Mr. Gorton. I can't claim to be an expert on that subject.
I don't believe it is, but I don't believe it is because they
are squatting, I believe it is almost certainly because they
don't have the money to do it.
Mr. Terry. Chief?
Mr. Dowd. I am not sure what spectrum you are referring to.
But again, in my prepared comments, one of the things that we
are saying to you, and we would love the opportunity--we know
there are a lot of new members on this committee and this is a
new issue for them, and there are a lot of things they have to
address, but we want to engage you in detail on this.
One of the things public safety is suggesting is that if we
get enough spectrum in this new and future technology to do all
our capabilities within that spectrum, within that broadband
capability, that there will be opportunities to return other
spectrums, like the spectrum that the NYPD uses now, UHFT band
for land mobile radio system. Over time, if we have the
capability to do everything in the broadband network that would
be fully interoperable, which we can't on UFT band, then
certainly, why wouldn't we want to return that spectrum? And
your question as to what spectrum we may be squatting on, I am
not sure what spectrum you are referring to.
Mr. Terry. All right. Mr. Knapp, can you clarify?
Mr. Knapp. Sure. Public safety operates in multiple
different frequency bands.
Mr. Terry. 800.
Mr. Knapp. Yes, part of what is where we are with the
interoperability issue. I would venture that the spectrum is
generally used by public safety. The one band that comes into
focus is 700, and the narrow band channels we know are not used
everywhere in the country and we have initiated a public notice
to try to gather more information to get a better handle on how
much it is being used.
Mr. Terry. Thank you.
Then Senator Gorton, going back to you and your testimony,
and Mr. Markey has already helped frame this, but you talk
about a public and private partnership that technology is
available to assure that public safety communications can have
priority access on commercial 700 megahertz network. Didn't we
try that once and there were no bidders?
Mr. Gorton. I think your FCC witness is better able to
answer that. But the answer to that question is yes. There were
no bidders when those requirements were so onerous as to not
worth it, that did not make it worth it to bid. However since
then, we have financed the study by the chief technology--
former chief technology office of--office of Motorola, who I do
believe has come up with a system under which the spectrum
would be valuable to the private sector and would have an
automatic override in case of public service--public safety
necessity. We don't----
Mr. Terry. I don't, Senator. I want to interrupt, so I can
get Ms. Dillon, because she is part of this discussion too.
Is there technology today that would incent you or other
wireless carriers to bid on this knowing that, at some point,
public safety can come in and say we want it?
Ms. Dillon. Yes, well, we have proposed that on a regional
basis, a public partnership private model works. And
potentially, it is one of the reasons that it didn't work in
the last auction, it was on a nationwide basis. So for us, we
believe that carriers of our size and smaller, there is two
reasons why we believe this sort of----
Mr. Terry. So if we break it down into regions or smaller--
--
Ms. Dillon. Yes. And we have incentive to then work on a
region-wide basis. If we were granted a license today in
western Iowa, our priority would be to build that out, and
certainly we would work with public safety to meet their needs
as well.
Mr. Walden. I might just put this in perspective, some data
I had seen. Public safety has 97 megahertz of spectrum
allocated to it with about 2 million users. And by comparison,
although they are different missions, Verizon has 115 megahertz
of spectrum with 91 million users. So it really gets down to,
in terms of spectrum, there is a wide variation on who uses
what and for what purpose.
I would turn now, I believe Mr. Barrow was here when the
gavel fell, but Mr. Dingell is also here. I don't know how you
all want to----
Mr. Barrow. Mr. Dingell has been kind enough to allow me to
go first, but I would like to defer my turn, but not waive my
time to questions to Ms. Matsui as the presiding ranking
member, if that is OK with the Chairman.
Mr. Walden. I am happy if you all are happy, that is all we
are here for.
Ms. Matsui. Thank you, Mr. Barrow, and thank you, Mr.
Walden. We all know that the cost of constructing a nationwide
public safety system will be substantial. This question is to
Senator Gorton, and also the Chief. Aside from whether the
deeplog is reallocated to public safety and added to the public
safety existing 700 megahertz broadband spectrum, how do we
ensure that the speech front spectrum is built out in the most
efficient manner achieving interoperability while keeping the
prices within reach given the Federal and State budget crisis?
Mr. Gorton. Well, I think you can assure that best by an
auction system in which those users who think that the spectrum
is worth most are willing to bid most, and have such conditions
on them that allow their use in emergencies by the public
sector. I think history indicates a formal straight-out
allocation set by Congress or by someone else is not likely to
result in that degree of efficiency. The chairman referred to
the fact that we began the incentive auctions, or auctions,
back in the 1990s, I was on the Senate Commerce Committee at
the time.
Ms. Matsui. Right.
Mr. Gorton. I think the history of dealing with spectrum in
that fashion has proved itself time and time again.
Ms. Matsui. I know the chief differs. Chief?
Mr. Dowd. Well, again, you know, as I said in my prepared
comments, I made the statement that public safety based on its
years of experience in dealing with commercial networks, knows
that we cannot rely on public networks as a backup during
mission critical and critical times. We know that those systems
fail. So the notion or the suggestion that we would use those
networks at those points is just an unworkable model. And the
other problem is, that there would be an expectation that we
would have to pay it for that service, and when we say ``pay,''
that is the taxpayers that has to pay.
Ms. Matsui. That is right. Now, it is my understanding that
public safety has an assigned spectrum and provided with
Federal funding before to achieve interoperability. I know
there is been some successes but we still haven't achieved full
interoperability especially on a Nationwide basis. What needs
to be different this time so that we don't repeat history,
Chief?
Mr. Dowd. Again, the issue there is why we are not
interoperable is that a long history of issuing public safety
spectrum in a patchwork fashion. So on a nationwide basis, you
have public safety all over the spectrum map, so to speak. The
only way you are going to fix that successfully is if you
dedicate enough spectrum in the new technology so that we can
be seamlessly interoperable across the country, and also give
us the flexibility to utilize that spectrum for other purposes
in government, public utilities and potentially, in public
private partnerships. We have no objection to that.
Ms. Matsui. I see the Senator is disagreeing, but I have a
follow-up question to that. Go ahead, a quick comment there.
Mr. Gorton. Ms. Matsui, are you going to pay for it? The
Chief says, well, gosh, if we have to buy it, the taxpayers
have to pay for it. Well, you represent the taxpayers too, all
of those taxpayers. The real question is, how much are the
taxpayers going to pay, less if there is huge private
investment in it, clearly very much less. And who is going to
provide a more efficient use, almost certainly, history shows
the private sector will do so.
Ms. Matsui. OK. All right, I have an additional question
here. How do you envision a plan for how the development and
deployment of public safety broadband network would be managed,
would there be a Federal entity to oversee it? Who should
possess ultimate responsibility and accountability for ensuring
achieving of nationwide interoperability, Chief?
Mr. Dowd. Yes, the answer is that there would have to be
some sort of entity created by the Federal Government to have
oversight of this effort in order to coordinate it, to ensure
interoperability and consistency in the use of the spectrum and
other issues that have to be addressed. That being said, each
regional area, each locality has its own unique public safety
concerns, and the network of networks would have to have the
flexibility so public safety could do their job locally while
still being interoperable with everybody else.
Ms. Matsui. Senator, would you think there would be another
entity here?
Mr. Gorton. I think the Chief made my case. Works for
another Federal agency. If you think that is a good idea, go do
it.
Ms. Matsui. I want Ms. Dillon to get involved.
Mr. Dowd. I apologize. I didn't suggest that there should
be another Federal entity. I suggested that there should be an
entity created to oversee this.
Ms. Matsui. OK. Ms. Dillon, do you have any additional
thoughts about that?
Ms. Dillon. The question?
Ms. Matsui. About whether there should be another entity, a
Federal entity to oversee it or any other entity?
Ms. Dillon. I think there are probably lots of options, the
PSSP, it could be on a statewide or a Federal basis, but we do
believe that the notion of working on a local basis on the 700
megahertz spectrum with compatible technology around the
country, but manage and operate on a local basis would make
sense.
Ms. Matsui. I see my time is gone, thank you.
Mr. Walden. Thank you, Ms. Matsui. We will go now to Mr.
Shimkus for 5 minutes.
Mr. Shimkus. Thank you, Mr. Chairman. I knew that the
spectrum is a big broad area, but I knew it would come down to
D Block and additional 10 megahertz. And I will try to move
away from that for a few minutes too, but it is something I
have dealt with because I authored the first 911 Wireline bill,
I chair the E-911 caucus, now the Nextgen Communication caucus.
And I have been very involved in the use of new technology to
help first-line responders. I am a little bit--no one wants to
have this fight, Chief. We all want to get there.
You mentioned in Hurricane Katrina. Didn't the public
safety network fail, and it was a commercial wireless that was
able to help the communications?
Mr. Dowd. The fact that it may have failed doesn't justify
the----
Mr. Shimkus. No, I am just making a point. And I think also
we have broadcasters here, wasn't the public broadcasters
during Katrina who helped get back on the air to help inform
the public, wasn't that correct, Mr. Good?
Mr. Good. The Hearst Company has a station in New Orleans,
and that is WDSU, and that station was on the air through the
event and a great expense and effort to do, but it was there
and present.
Mr. Shimkus. And that is really, even when we go to the
broadcasters, which is also very important debate that we have,
and their spectrum is their responsibility to be able to
provide real-time information. With all the new gadgets, it is
still amazing that more people are getting information over the
radio band on their car--instead of satellite, instead of all
this stuff. They are still getting more information for free
over the air, which we forget about a lot of times, and their
public safety responsibilities.
Senator Gorton and Chief Dowd, Mr. Knapp, how are the
public safety waivers progressing and what can we learn from
these waivers that help us on these broader questions? You know
what I am referring to is the original 10 megahertz that you
all have.
Mr. Gorton. I am going to have to defer that answer to
someone else.
Mr. Shimkus. Well, maybe Chief can help us out. Chief?
Mr. Dowd. Well, I can only speak for New York City, and
quite frankly, we are engaged with a number of vendors to do
pilot projects on that spectrum in order to understand better--
--
Mr. Shimkus. So how long have you had this block?
Mr. Dowd. Since they were granted, that was last year
sometime. Was it June?
Mr. Shimkus. So nothing other than Research, nothing has
moved forward yet?
Mr. Dowd. Well, no. Other than, again, planning.
Mr. Shimkus. I know that takes a long time. It is
bureaucracy, it is government. Mr. Knapp.
Mr. Knapp. The waivers you are talking about, I think, were
granted in May of 2010, it takes a bit of time to get them up
and running. I can provide for the record an update to the
status of all of those.
Mr. Shimkus. Thank you. And going back to, Ms. Dillon
mentioned a regional approach. Those of us in rural, small town
America are kind of worried that if this goes to the public
safety folks, that regional small town, poor areas will get
left out because it will focus around the major metropolitan
areas. Now that is important if you are from the major
metropolitan area. But Senator Gorton, can you talk to me, and
Chief Dowd and Ms. Dillon, on the regional aspect? Would a
regional approach solve some of my concerns?
Ms. Dillon. That is our contention that certainly there is
room for a lot of players to play here in terms of both
providing for public safety, maximum efficient use of available
spectrum, which is not going to be solved simply by engineering
alone. There was a question asked earlier, if it was only
engineering, we wouldn't need to look to spend more money on
spectrum. But we do believe that there are many ways we can
look at smaller regional areas and make sure that all parts of
the country are considered. And we believe that if it went only
on a national basis that it would, in fact, be the urban areas
built out first, which makes sense from an economy of scale
perspective.
Mr. Shimkus. And I want to finish up. So Chief, do you have
anything on the regional approach? I only have 12 seconds.
Mr. Dowd. OK.
Mr. Shimkus. Well, let me go to Mr. Knapp. Just so we just
talk about the spectrum as a whole. If the FCC is correct, and
mobile demand is poised out to its capacity in the future, what
are the consequences for consumers?
Mr. Knapp. Dropped calls, slow data rates, services that
don't work very well. And as the carriers are likely to
respond, with setting higher prices for consumptions, consumer
prices go up.
Mr. Shimkus. Thank you. Typical economics 101 supply and
demand, I would say, right?
Mr. Knapp. Correct.
Mr. Shimkus. Thank you. Thank you, Mr. Chairman.
Mr. Walden. Thank you, Mr. Shimkus. I want to add on to
your notion of everybody being involved in Hurricane Katrina.
Don't forget the ham radio operators, too.
Mr. Shimkus. Who, who?
Mr. Walden. The amateur radio operators.
Let's go now Mr. Dingell from Michigan, the esteemed former
chairman of the committee for 5 minutes.
Mr. Dingell. I thank you, Mr. Chairman, and I thank my good
friend from Georgia for your kindness to me.
Mr. Knapp, these questions to you, I would appreciate a yes
or no answer. And it may be that at some future time you want
to come back with some further answers with regard to this and
we will see when that comes. Mr. Knapp, I believe you were
involved in drafting the spectrum provisions to the national
broadband plan, yes or no?
Mr. Knapp. Yes.
Mr. Dingell. Mr. Knapp, it has been reported that those who
drafted the proposal contained in the NPB failed to take into
account the channel reservations of the Canadians which we are
bound to honor by treaty. Were the Canadian channel
reservations taken into account in the proposals that I have
mentioned, yes or no?
Mr. Knapp. No, and the report acknowledges that.
Mr. Dingell. That is going to cause some problems, isn't
it?
Mr. Knapp. And as we have done further work, we are doing
just that, we are taking into account the Canadians and we are
talking to the Canadians.
Mr. Dingell. Now, Mr. Knapp, let's turn to a market with
which I am familiar, namely Detroit. Detroit is the tenth
largest market in the country, it has 14 stations licensed in
the Detroit DMA, is that your understanding?
Mr. Knapp. That is correct.
Mr. Dingell. Now, Mr. Knapp, the MBP recommends relocating
120 megahertz from the broadcast television to the wireless
broadband access. I understand that if the Canadian channel
reservations that were taken into account, there would not be
any available channels for any of Detroit's 14 stations; is
that correct?
Mr. Knapp. No, I don't believe that will be correct.
Mr. Dingell. I am sorry?
Mr. Knapp. No. I don't believe that will be correct.
Mr. Dingell. It is not correct, OK. We will come back to
that because I think it merits further consideration. Put it
another way, if less than 120 megahertz were reallocated and
even one Detroit station were to be relocated, would there be a
channel available for that station, yes or no?
Mr. Knapp. I would just preface that we will have to go
through the process, but yes, we are confident that there will
be.
Mr. Dingell. I am hearing two answers. On one hand, I am
hearing you tell me that it is not correct, that there would be
no channels available to the 14 Detroit stations. And then I am
hearing some doubt in your remark. What is the truth of this
matter? Why is it that--why is it I am hearing these things,
and why is it you can't give me firm, full assurances that you
have taken already into consideration with regard to my city
the availability of channels? What is the answer to that?
Mr. Knapp. Because the repacking will depend on which
stations decide to participate in the incentive auction and we
don't know which those will be.
Mr. Dingell. So that information is not, at this time,
available to us, we are forced to speculate what will be the
consequences of that, is that right?
Mr. Knapp. Of course, it will depend on which stations
participate.
Mr. Dingell. I must assume we have two borders, the
Canadian border and Mexican border. I must assume that the
Canadian channels are going to create, a, perhaps, a common
problems stretching all the way from the Maine coast through
Vermont, Rochester, Buffalo and onto Detroit stretching and
then on west to where the Senator comes from, am I right?
Mr. Knapp. Those areas would be taken into account in the
repacking and negotiations with Canada.
Mr. Dingell. Do we have assurances that that is so or is
that just your pious hope and expectation?
Mr. Knapp. I believe that we can do that. We won't know
until we have completed----
Mr. Dingell. So we don't know.
Now, Mr. Knapp, finally on a related note, you state in
your written testimony no stations would be required to move
from the UHF band to the VHF band unless they freely chose to
do so in exchange for a share of the auction proceeds. Does the
Commissioner believe that the broadcaster would receive a
portion a voluntary incentive auctions proceeds only if the
broadcaster agrees to move from the UHF band to the VHF band,
yes or no?
Mr. Knapp. Only if they--yes.
Mr. Dingell. So.
Mr. Knapp. If they stayed where they were, there would be
no change.
Mr. Dingell. It looks to me here a little like we are
buying a pig in the poke, where the commissions come up here
and they are going to do all the wonderful things and we don't
know exactly what they are going to do.
Now just one last question: Do you have statutory authority
to do this. Do you have to have statutory authority?
Mr. Knapp. We would need statutory authority for incentive
auctions.
Mr. Dingell. So when are we going to get the precise
character of what it is you are doing so that we can know what
it is that we are voting for or against?
Mr. Knapp. What we are seeking is the authority to conduct
the incentive auctions, it would be voluntary. Once we
conducted the auction and saw who was going to participate and
worked with the stakeholders, that is when we would know the
final plan.
Mr. Dingell. Am I to assume that this same problem is going
to plague us on the Mexican border?
Mr. Knapp. We also will need to negotiate with Mexico.
Mr. Dingell. You have comforted me but little. Thank you
for your kindness.
Mr. Walden. And you are not the first witness to achieve
that high praise.
Mr. Knapp. Thank you.
Mr. Walden. We go now to Mr. Latta for 5 minutes.
Mr. Latta. Well, I thank the chairman and I thank our
witnesses for being here today, it is very, very important
subject, and as you can tell from the questions from the
members.
Ms. Dillon, if I could kind of go back to what Mr. Terry
and also Mr. Shimkus were talking about again, talking about
the small, the auctioning in the small area of blocks, and also
providing for other smaller, not mega-region type folks to be
buying into the spectrum. Could you define what a smaller
carrier would be?
Ms. Dillon. What a smaller carrier could be?
Mr. Latta. Right.
Ms. Dillon. I would suppose anybody who is operating on a
less than national basis, like ourselves and there is many
others that are smaller than us. And so back to the question of
auctions, in fact, I think history would show that when the
auction--when the spectrum is auctioned on a less than national
basis, more money can be raised. There are more participants in
the room. So there was a question earlier about AT&T and T-
Mobile, if that deal goes through it underscores even more so
the opportunity and the need to have less than national swaths
here for the auction because there will, in fact, be more
bidders in the room and more bidding means--raises the prices
and more money for the Treasury.
Mr. Latta. Let me at least follow up on that if I may.
Again, if you are a smaller carrier, will you be able to come
to the table with as much money?
Ms. Dillon. Well, it is all relative. We are not going to
buy on a national basis because it is not relevant for our
business but we have spectrum before and we would be interested
in bidding on more, and I am sure other carriers would as well.
It is really the life blood of our business. And we see the
need for spectrum in spite of a tremendous amount of efforts
around engineering and innovation, which we are really proud of
as an industry. There is a need for more spectrum as well. So
for any carrier to continue to compete, we need more spectrum.
Mr. Latta. Thank you. Mr. Good, if I could go back and ask
you a question with the incentive auctions being approved, what
cost would you anticipate the broadcasters would incur?
Mr. Good. That is a question that is totally unknown at
this point. I can't answer that. I would have to have a crystal
ball. I can tell that you our company doesn't plan to take
advantage of that.
Mr. Latta. OK. Thank you. And Mr. Pitsch, how would you see
that by freeing up additional spectrum how that helped
manufacturing in America because, you know, I come from a
manufacturing area of the country, and how would you see that
spectrum freeing up helping manufacturing?
Mr. Pitsch. Well, as Mr. Knapp has pointed out, given the
burgeoning demand for mobile data, if we don't get more
capacity, more spectrum, prices are going to have to go up,
congestion will increase, new services won't be available. So I
would contend, and I think the members of our coalition will
contend that if we get the type of spectrum freed up that the
FCC, the administration, lots of folks have recognized as
needed, then we are going to enable new services and create
jobs, it is going to be mean lower prices and this important
part of our information infrastructure is going to be more
robust.
So I can't give you a precise number. Frankly, I am fairly
distrustful of these fancy-dancy econometric models. But I
think the basic insight of Congressman Shimkus is fairly right,
is economics 101. If we get more capacity, we are going to have
lower prices, less congestion, more minutes, and that is going
to be good for American consumers and workers.
Mr. Latta. Could you define new services?
Mr. Pitsch. Well, I think many of the video rich
applications that consumers are using on Smartphones, the tens
of thousands of apps could be considered new services. I think
we are only limited by the fertility of the imagination of the
American people here. If we look at all of the trends from my
company in the silicon area, the semiconductor area, to
compression technologies, and storage technologies, and the
digital technologies, the 4G technologies in the wireless area,
if we marry all of those improvements, there is an enormous
opportunity for growth and innovation.
Mr. Latta. Thank you. Mr. Chairman, I yield back.
Mr. Walden. We turn now to the gentleman, Mr. Barrow.
Mr. Barrow. I thank the Chairman. Ms. Dillon touched on
some of the practical considerations and in actually conducting
a voluntary incentive auction regime, so I want to explore that
just a little bit.
You know old Aesop, that old fable spinner told a bunch of
fables. One of them he titled the Fable of the Dog in the
Manger. This is the story of the dog that made his bed in a
manger of hay. He couldn't eat the hay, but he would snap and
snarl at animals that could whenever they would come by. And
the moral of the fable is folks often begrudge others what they
can't use themselves or won't use themselves. That is a
negative characteristic of human nature in some folks. I think
it could actually describe a practical real world problem if
folks end up, through no motive of their own, begrudging folks
what they can't use. And so you can imagine lots of license
holders with enough money to get a license, but not enough
money to be able to develop it. You can find folks scattered to
hell and gone who have got licenses all over the place, but the
buyers and sellers aren't together. It seems to me that
bringing folks together who have the spectrum but would rather
have the money, together with folks who have the money would
rather have the spectrum is something we can all agree on, and
it is something we would all want to get behind some way or
another.
But Ms. Dillon touched on some of the practical
considerations in talking about that you can't do this on a
dime, creating this marketplace and market opportunity is going
to entail some consideration and some practical consideration.
So Ms. Dillon, based on your experience at U.S. Cellular, have
you all ever acquired any of your licenses in an auction
format?
Ms. Dillon. Have we all--I am sorry----
Mr. Barrow. Have you acquired any of your licensing
authority as the result of an auction format? Have you gotten
any of what you have to use through the auction process.
Ms. Dillon. Yes, we have.
Mr. Barrow. How long, based on your experience, if have you
had any idea, how long did it take between the time that the
spectrum was identified as being available on the one hand, and
the time of the resulting auction on the other, how much----
Ms. Dillon. Honestly, I would probably need to get back to
you with our specific experience, because our last auction, or
purchase to spectrum predated my time at U.S. Cellular, but it
is my understanding that it is not a fast process. The process
of making it available, conducting an auction, clearly spectrum
and then deploying services is probably a multi-month, multi-
year process.
Mr. Barrow. I imagine the next phase, the time we actually
buy the spectrum and of course auction you can actually deploy
services is going to take a far greater period of time. Based
on your experience, what kind of time are we talking about
there? Because we talked earlier in testimony about the fact
the crunch times coming in 2014 which is right around the
corner. Generally speaking, give us some idea of how long it
would take between the time someone acquires a broadband
spectrum through an auction an the time they can actually
deploy services over what they bought?
Ms. Dillon. Yes, it is my understanding that it is probably
a multi month, 18-month to 2-years process. But I would like to
come back with specific examples from our experience. I think
more importantly the point is and that is why there is urgency,
the spectrum crunch is on us now, and there is engineers around
this industry very hard at work driving efficiencies, deploying
LTE fourth generation networks to drive more efficiency, and to
handle the demand, but we believe that the need is now to start
that process because it is time consuming.
Mr. Barrow. Thank you, Ma'am. We have got some dogs out
there sitting on a bed of hay and they want to sell it to the
other animals. We ought to encourage that as much as we
possibly can. Thank you very much, and I yield back the balance
of my time.
Mr. Walden. Thank you, Mr. Barrow. At the price of hay--
well, anyway. We are going to go to Mr. Bass now for 5 minutes.
Mr. Bass. Thank you, Mr. Chairman. Senator Gorton, welcome
back, fellow Dartmouth alumnus. This is my first hearing on
spectrum policy. When I left the Congress 4 years ago, we were
completing the debate on DTV, whole new set of issues. Now we
heard about the imperative that we move forward on this; we
reviewed, I think, adequately, the debate that exists between
public safety and the rest of the telecommunications economy.
Senator, can you expand a little bit on your testimony
regarding the timing advantages of public private partnership
resulting in public safety having access to the 700 megahertz
spectrum now?
Mr. Gorton. Well, I think all of history has shown that the
private sector has actually built out the spectrum that it
received much more rapidly than the public sector has done. The
chairman that started this hearing, what, I think four goals of
the hearing: Reducing the deficit, increasing investment,
adding needed spectrum, jobs and public safety. The only way,
the only possible way of reaching all of those goals with what
is at issue here is to go through a public auction procedure.
The capital to exploit that will be available, no one is going
to bid on it unless they are going to use it, and use it fairly
properly. And that I think inevitably is going to lead to a
public private partnership because the public safety community
will then want that to happen.
I am convinced that, in fact, it will happen. If, on the
other hand, this is, the spectrum is given away, it isn't going
to be used until the money is available from the taxpayers at
one point or another, in multi billions of dollars to do so.
And in this economic situation, that is going to take a long,
long time.
Mr. Bass. I think you testified as to the cost. You thought
the cost might be something in the vicinity of $50 billion, can
you elaborate on that?
Mr. Gorton. That would be the upper end of the estimates we
have, but first, you lose the 3 or $4 billion from not having
the auctions, and again, that is going to cost somewhere
between $25 and $50 billion, or maybe more, to build it out.
And bluntly, that is all going to be taxpayers money. If it is
bid for, the money comes in and goes against the deficit, and
the buildout is private sector.
Mr. Bass. Mr. Pitsch basically defined his ideas giving the
FCC authority to conduct voluntary incentive auctions as
quickly as possible. We know that Chief Dowd, what his position
is. Do others of you have different variations on this issue as
to what the appropriate legislative remedy is, or course of
action is for the issue before us, the spectrum? Anybody have
any further comments? If not, it looks like we have got it
nailed. I will yield back to the chairman.
Mr. Walden. OK, I guess we are ready to go to a vote. I now
recognize the gentlewoman from Tennessee, Ms. Blackburn, for 5.
Mrs. Blackburn. Thank you, Mr. Chairman, and I thank all of
you for your patience. I think it is so evident here today that
there is such a demand and a request for spectrum. I had
someone in my office earlier today for a meeting, and we were
talking a little bit about the spectrum, as you would well
imagine, and the need for it and the need for broadband
expansion because of the estimation that within the next few
years, we are going to have not a billion but a trillion
devices that are going to be connected to the broadband.
And when you look at all of the help IT, just take my
district there in Nashville and Memphis, and up to the Kentucky
line. Look at that swath, I would like to say it is a creative
community, a lot of entrepreneurs, a lot of people that are
inventing and innovating. And you look at the auto engineering,
and you look at the digital music labels and distribution
systems and the entertainment distribution systems and you look
at the health infomatics and health IT components and all that
we are doing. It is no wonder that pretty soon you are going to
hit that trillion number. That means we are going have to have
more access; you certainly can see how this debate is going to
tee up and everybody wants a little bit more room on the
spectrum.
Mr. Bazelon, I want to come to you and talk a little bit
about the mobile DTV. Last year about this time, in May, we
will forever be known as the May floods in Tennessee. And 47 of
our counties ended up as federally-declared disaster areas.
Well, WSMV in Nashville broadcast in mobile DTV, and we had a
lot of constituents that kept up with what was happening
through those floods through that format. And let's just say if
there were to be spectrum relocation and some of this was to be
relocated so that companies like Cellular South or Ms. Dillon's
U.S. Cellular could get on there and access some of that
spectrum. Would my constituents in Tennessee have difficulty
pulling in that mobile DTV band?
Mr. Bazelon. It would be impossible to say the specifics of
what would happen in your district.
Mrs. Blackburn. What would your estimation be, your best
guess?
Mr. Bazelon. I think the answer to your question is that
there will be more available bandwidth to your constituents
from having reallocated television spectrum. You are quite
right that on the other side of the mobile television
broadcasting, there may or may not be less of that, depending
on what the choices the broadcasters in your district make are,
but the clear point is that any value they place on that
service, any value that is placed on that service can be
compensated for in an auction. And as my principle spectrum
reallocation suggests that the spectrum shouldn't be
reallocated if it is, in fact, more valuable for that service,
and the auction is there to help discover the answer to that
question.
Mrs. Blackburn. OK. Mr. Good.
Mr. Good. Well, my company is involved in mobile TV, and it
certainly has the ability to provide a lot of public service,
as you described. People can see what is happening. And I just
question, you know, we talk about mobile wide band. Why can't
television be considered part of the solution rather than a
problem that has to be set aside? It can provide that service,
and it still continues to provide the public service to----
Mrs. Blackburn. Let me interrupt you. I did have a question
for you because when we hear a lot about relocating spectrum,
and you know, saying, well, it could weaken this or it could
weaken our coverage for that, and you have a TV station there.
Let me ask you this: As you transferred your signal from
analog over into the DTV and going into the DTV transition, did
any of your viewers ever have trouble pulling your signal down?
Was there a problem with them doing it? And what percentage of
yours can no longer receive your broadcast today, or has there
been any diminishment of your market area?
Mr. Good. The conversion from analog to digital has been a
very difficult situation for my station, sure. We initially
went from channel 8 analog to channel 58 digital. That channel
was out of bands. So eventually, it ended the process. Bands
are repacked. We have to go back to channel 8, went back to
channel 8 digital. In the meantime, because of the repacking,
other stations have been dropped in close to us. We operate on
channel 8. There was another channel 8 dropped in in Brunswick,
New Jersey. Channel 9 was dropped into Bethlehem, Pennsylvania.
All those things impact on the power levels you are able to
broadcast with.
We went from 110 kilowatts to 5.4 in the digital world. We
have gone back to the FCC through consultants and attorneys and
have gradually worked up in steps to 32.2 kilowatts. That still
falls short. We still have complaints from viewers. We had
thousands of complaints initially. We still get complaints. We
have one cable system that despite their best efforts----
Mrs. Blackburn. But you are using the mobile DTV?
Mr. Good. At that point, we were not.
Mrs. Blackburn. OK. But you are now?
Mr. Good. There are stations within my company that are.
Mrs. Blackburn. Mr. Pitsch, did you have something you want
to add? I am over my time and I need to yield back.
Mr. Walden. Go ahead.
Mr. Pitsch. Thank you. Just very briefly to make two
points.
It is important to separate the vacating sharing process
from the repacking process, and the decision to vacate or share
or move to a VHF band, that is only going to occur if the
parties to the transaction both agree that the new use is going
to be higher value. That is what it means because it is
voluntary.
I think Mr. Good is quite correct to be concerned about
repacking costs. I think we have to address those. I think
Congress should make clear that they are kept whole, but just
very briefly, the new spectrum would likely be worth $35
billion. The money to the Treasury would likely be $20 billion.
Even if we doubled our own estimate and met the numbers in Mr.
Good's testimony, we are talking $2 billion. So I think this
problem, if it is put in the proper context, shouldn't cause or
derail this important reform.
Mrs. Blackburn. Thank you. I yield back, Mr. Chairman.
Thank you for your courtesy.
Mr. Walden. Indeed, and before I go to Mr. Scalise, I am
going to ask unanimous consent to put in the record a statement
of the National Association of Broadcasters. I believe it has
been cleared with the minority. Without objection, so ordered.
And now, I would turn to the gentleman from Louisiana, Mr.
Scalise, for 5 minutes.
Mr. Scalise. Thank you, Mr. Chairman. Appreciate the first
of what I guess would be a few hearings on this important
issue.
I know right after Hurricane Katrina, we experienced with
Chief Dowd, I know you and some of your colleagues experienced
in New York after September 11, and that was that you literally
had first responders cut off from the ability to communicate. I
know it was said by some that we went from the Jetsons to the
Flintstones in a matter of moments, where literally you could
not communicate, towers were knocked down, power was off, and
it literally sent us back, it seemed like, to the stone ages in
terms of communication and being able to get that vital
information sent from local responders on the ground to others,
and I know personally when I would go into the city in those
first few days after trying to deal with issues, that is how I
learned to text message because you couldn't use your cell
phone but yet a text message could get through. And I think I
burnt out a couple of phones just trying to get text messages
to people because that was the only way you could get
communications, and obviously, that is not a situation that we
should have to deal with.
And 4 years after September 11, we were still in that
position, and here yet another 6 years later, we are still, it
seems like, in that position. And so I think that challenge we
face, as the FCC faces, is how we finally build an
interoperable network.
I know you addressed some of this earlier in your
questions, but as we look at the cost of building that out, the
spectrum that would be used to build that out, as you look at
the money that would be generated from an incentive auction to
supply some of that money, have you addressed that yet of how
those could play hand-in-hand, Chief Dowd?
Mr. Dowd. Sir, let me be clear. Some of the numbers that
are being thrown around here today are grossly overinflated.
Those are estimates of how much it would cost if you were
building a public safety network from the ground up. That is
not the case. We already have existing infrastructure that can
be leveraged. There are other infrastructure that can be
leveraged. We have talked about public and private
partnerships, public utilities. So the cost is more likely
going to be in the $10 billion range rather than the idea of
$25 or $50 billion. It is simply not going to be that
expensive.
So, again, looking at how we move forward in this, clearly
what has become evident from many independent studies that have
been done is that 10 megahertz of spectrum is simply not going
to be enough for public safety. I have four studies right here,
and of course, I would like to enter them for the record if
that is permissible.
Mr. Walden. Absolutely. With your testimony, without
objection.
Mr. Dowd. That indicates that 10 megahertz of spectrum for
public safety is simply not enough. So, as we move forward on
this effort, again, we want to engage in the maximum
flexibility to leverage the network, the public safety network,
in order to ensure that we are as efficient as possible while
still being able to accomplish the primary mission, which is
mission-critical public safety capability. But that doesn't
mean we don't want to use that network or allow for, for
example, with smaller cellular companies around the country to
make partnerships with public safety in those regions where it
is appropriate to utilize that spectrum.
The problem here is, again, we understand the fiscal
realities of this, but the fact of the matter is we simply
cannot, in today's environment and the threats that this
country faces, not have enough spectrum to do the job. It is
like suggesting that the Navy, when they are building an
aircraft carrier because of a lack of funding should sell half
the steel from the buildout of the aircraft carrier so that it
can be funded.
You simply to need to have the resources you need to have,
and the finite resource here is spectrum, and again, I point to
the studies. These are real studies, real evidence of the use
of public safety in broadband that indicates that 10 megahertz
of spectrum is simply not going to be enough to do the job.
Mr. Scalise. Thank you. Mr. Knapp, I don't know if you want
to respond to that as well as--just really quickly if you can
respond because my clock is running here. I am almost out. Do
you want to----
Mr. Knapp. Well, it is more than just the technical
problem, and most of the disagreements about exactly how much
spectrum is going to be needed centered on projections of the
use and concerns about when there is an emergency and there is
a crisis, that is when the demand blooms.
Mr. Scalise. The broadcasters and the wireless carriers are
saying that they are using their spectrum efficiently. I don't
know if you want to comment on whether one technology is more
efficient than the other or just address that.
Mr. Knapp. Well, the different technologies have different
applications, and we like to think we are driving all of them
to efficiency.
On the wireless side, there have been tremendous advances
through cellularization, smaller and smaller cells. At the
cellular show, I saw a number of vendors that are introducing
even more efficient techniques. So this is something we at the
Commission are continuing to encourage and drive.
Mr. Scalise. And final question, when you talked to--I am
not sure what your process has been, but if you do, as you go
forward with a voluntary incentive auction, the assumption
would be that there would be willing participants who would
volunteer to participate in that auction, and Mr. Good has said
he wouldn't want to be involved in something like that. But
have you talked to other stations? How do y'all poll to
determine what kind of interest there would be to see if you
could generate the $35 billion or so that have been discussed?
Mr. Knapp. It clearly would be voluntary. The chief of our
media bureau, Bill Lake and his staff, have been talking to
literally hundreds of broadcasters. They conducted seminars,
Webinars, about it where we have had about 500 different
participants, so we know there is interest.
Mr. Scalise. So they have expressed interest? Some have
expressed interest?
Mr. Knapp. Absolutely. At the end of the day, it will be up
to them individually once they see the plan and what they might
get in return for them to make those decisions.
Mr. Scalise. Thank you, Mr. Chairman. I yield back.
Mr. Walden. I thank the gentlemen for his questions. I want
to thank each of the witnesses for your testimony today and for
your very candid and forthright answers to our questions. Our
record will remain open for 10 days if other members of the
subcommittee who either were here today or could not be here
today have questions, they could submit to you. I would
appreciate your responses in writing to that.
We will have additional hearings on this issue. We want to
make sure that our brave men and women who protect us and
defend us have the equipment they need and a communication
system that works wherever they are in our country. We want to
make sure the taxpayers are protected as well, and so we have a
lot of issues we are going to flesh out here. That is why we
are going to have several hearings. I want to make sure members
of the subcommittee have every opportunity to get their
questions answered and learn as much as they can about a very
complex issue.
We hope to only go through this once in terms of allocating
this spectrum, and so we want to make sure we get it right. And
so we are going to take our time. We are going to do that. We
will have additional hearings. We will announce that schedule
along the way here, probably not today.
And with that, I again thank you all for participating, and
with that, the hearing is adjourned.
[Whereupon, at 3:40 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]