[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



                                _____

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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:]




                                 
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