[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
    LEGISLATIVE HEARING TO ADDRESS SPECTRUM AND PUBLIC SAFETY ISSUES

=======================================================================

                                HEARING

                               BEFORE THE

             SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 15, 2011

                               __________

                           Serial No. 112-76



      Printed for the use of the Committee on Energy and Commerce

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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                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        EDOLPHUS TOWNS, New York
MARY BONO MACK, California           FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina   GENE GREEN, Texas
  Vice Chairman                      DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma              LOIS CAPPS, California
TIM MURPHY, Pennsylvania             MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas            JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California         JAY INSLEE, Washington
CHARLES F. BASS, New Hampshire       TAMMY BALDWIN, Wisconsin
PHIL GINGREY, Georgia                MIKE ROSS, Arkansas
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 
BILL CASSIDY, Louisiana              Islands
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia

                                 7_____

             Subcommittee on Communications and Technology

                          GREG WALDEN, Oregon
                                 Chairman
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
  Vice Chairman                        Ranking Member
CLIFF STEARNS, Florida               EDWARD J. MARKEY, Massachusetts
JOHN SHIMKUS, Illinois               MICHAEL F. DOYLE, Pennsylvania
MARY BONO MACK, California           DORIS O. MATSUI, California
MIKE ROGERS, Michigan                JOHN BARROW, Georgia
MARSHA BLACKBURN, Tennessee          DONNA M. CHRISTENSEN, Virgin 
BRIAN P. BILBRAY, California             Islands
CHARLES F. BASS, New Hampshire       EDOLPHUS TOWNS, New York
PHIL GINGREY, Georgia                FRANK PALLONE, Jr., New Jersey
STEVE SCALISE, Louisiana             BOBBY L. RUSH, Illinois
ROBERT E. LATTA, Ohio                DIANA DeGETTE, Colorado
BRETT GUTHRIE, Kentucky              JOHN D. DINGELL, Michigan
ADAM KINZINGER, Illinois             HENRY A. WAXMAN, California (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)

                                  (ii)


                             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...........................................     4
Hon. Lee Terry, a Representative in Congress from the State of 
  Nebraska, opening statement....................................     8
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     8
Hon. John Shimkus, a Representative in Congress from the State of 
  Illinois, opening statement....................................    12
Hon. Cliff Stearns, a Representative in Congress from the State 
  of Florida, opening statement..................................    12
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................    13
    Prepared statement...........................................    15
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................   194
Hon. Edolphus Towns, a Representative in Congress from the State 
  of New York, prepared statement................................   197

                               Witnesses

Christopher M. Moore, Chief of Police, San Jose Police Department    17
    Prepared statement...........................................    20
    Answers to submitted questions...............................   224
Peter Cramton, Professor of Economics, University of Maryland....    23
    Prepared statement...........................................    25
    Answers to submitted questions...............................   231
Hon. Gordon H. Smith, President and CEO, National Association of 
  Broadcasters...................................................    29
    Prepared statement...........................................    31
    Answers to submitted questions...............................   236
Michael Z. Calabrese, Director, Wireless Future Project, Open 
  Technology Initiative, New America Foundation..................    56
    Prepared statement...........................................    58
    Answers to submitted questions...............................   241
Christopher Guttman-McCabe, Vice President, Regulatory Affairs, 
  CTIA-The Wireless Association..................................    85
    Prepared statement...........................................    87
    Answers to submitted questions...............................   251

                           Submitted Material

Letter, dated June 7, 2011, from Tom Kean, Chairman, 9/11 
  Commission, and Lee Hamilton, Vice Chairman, 9/11 Commission, 
  to Senator Rockefeller and Senator Hutchison, submitted by Ms. 
  Eshoo..........................................................    11
Statement, dated March 18, 2010, of Thomas H. Kean, Former 9/11 
  Commission Chair, and Lee H. Hamilton, Former 9/11 Commission 
  Vice Chair, via Broadband.gov, submitted by Mr. Walden.........    95
Article, dated January 27, 2011, titled ``Congress should 
  implement FCC plan to improve first-responder communications,'' 
  by Slade Gorton in The Seattle Times, submitted by Mr. Walden..    96
Study, dated February 2008, titled ``A Market-based Approach to 
  Establishing Licensing Rules: Licensed Versus Unlicensed Use of 
  Spectrum,'' for the Federal Communications Commission, 
  submitted by Mr. Shimkus.......................................   102
Statement, dated July 14, 2011, of the High Tech Spectrum 
  Coalition, submitted by Mr. Walden.............................   143
Statement, dated July 13, 2011, of Gordon Smith, President and 
  CEO, National Association of Broadcasters, submitted by Mr. 
  Walden.........................................................   144
Statement, dated July 14, 2011, of CTIA-The Wireless Association, 
  submitted by Mr. Walden........................................   145
Statement, dated July 13, 2011, of Verizon, submitted by Mr. 
  Walden.........................................................   146
Statement, dated July 14, 2011, of AT&T, submitted by Mr. Walden.   147
Letter, dated June 30, 2011, from Phillip J. Bond, President and 
  CEO, TechAmerica, to Senator Rockefeller and Senator Hutchison, 
  submitted by Mr. Walden........................................   148
Letter, dated June 29, 2011, from Brian J. Raymond, Director, 
  Technology Policy, National Association of Manufacturers, to 
  Senator Rockefeller and Senator Hutchison, submitted by Mr. 
  Walden.........................................................   150
Letter, dated June 22, 2011, from Dean Garfield, President and 
  CEO, Information Technology Industry Council, to Senator 
  Rockefeller and Senator Hutchison, submitted by Mr. Walden.....   151
Letter, dated June 23, 2011, from Grant Seiffert, President, 
  Telecommunications Industry Association, to Senator Wicker and 
  Senator Begich, submitted by Mr. Walden........................   153
Excerpt, undated, from Federal Communications Commission Docket 
  RM-11592, titled ``Wireless Device Manufacturers on 700 MHz 
  Device Mandates,'' submitted by Mr. Walden.....................   155
Study, dated June 2010, titled ``The Public Safety Nationwide 
  Interoperable Broadband Network: A New Model for Capacity, 
  Performance and Cost,'' submitted by Mr. Walden................   156
Report, dated May 2010, OBI Technical Paper No. 2, ``A Broadband 
  Network Cost Model: A Basis for Public Funding Essential to 
  Bringing Nationwide Interoperable Communications to America's 
  First Responders,'' Federal Communications Commission, 
  submitted by Mr. Walden........................................   201
Letter, dated July 13, 2011, from Mr. Rush et al., to House 
  leadership, submitted by Mr. Towns.............................   222


    LEGISLATIVE HEARING TO ADDRESS SPECTRUM AND PUBLIC SAFETY ISSUES

                              ----------                              


                         FRIDAY, JULY 15, 2011

                  House of Representatives,
     Subcommittee on Communications and Technology,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:17 a.m., in 
room 2123, Rayburn House Office Building, Hon. Greg Walden 
(chairman of the subcommittee) presiding.
    Members present: Representatives Walden, Terry, Stearns, 
Shimkus, Blackburn, Bilbray, Bass, Latta, Guthrie, Eshoo, 
Matsui, Barrow, Dingell (ex officio), and Waxman (ex officio).
    Staff present: Jim Barnette, General Counsel; Ray Baum, 
Senior Policy Advisor/Director of Coalitions; Michael 
Beckerman, Deputy Staff Director; Neil Fried, Chief Counsel, 
Communications and Technology; Kirby Howard, Legislative Clerk; 
Debbee Keller, Press Secretary; Carly McWilliams, Legislative 
Clerk; David Redl, Counsel, Communications and Technology; Lyn 
Walker, Coordinator, Admin/Human Resources; Nicholas Degani, 
FCC Detailee; Kelsey Guyselman, Legal Intern; Roger Sherman, 
Minority Chief Counsel; Shawn Chang, Minority Counsel; Jeff 
Cohen, Minority Counsel; Sarah Fisher, Minority Policy Analyst; 
Phil Barnett, Minority Staff Director; and Pat Delgado, Chief 
of Staff for Mr. Waxman.
    Mr. Walden. We are going to go ahead and get started so 
that we can get our statements and the witnesses' statements. 
Today is a little challenging because we do have a series of 
votes on the floor, they estimate in about an hour and 15. So 
we will try to get through as much of this as we can.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Good morning. I welcome our witnesses. I appreciate your 
counsel, along with that of dozens of others whom I think we 
have all met with and I have met with, from whom we have 
received testimony at our four prior hearings on spectrum 
policy and the individual meetings that we have had and the 
information that has come in. It has all been helpful.
    I am a firm believer that open and fair public processes 
can lead to better public policy outcomes, and the competing 
discussion drafts are a welcome addition to this process. 
Despite the differences on paper, the reality is we are not as 
far apart as it might seem, and we are personally committed to 
doing all within our power to write a bipartisan bill in the 
end.
    I believe we share common goals on this subcommittee when 
it comes to spectrum policy. We want to finally answer the call 
of our public safety officials and ensure that they have the 
best, most innovative and affordable technology operating on a 
bulletproof network in an inoperable basis in times of need. 
And we will do our part as a Federal partner to make sure that 
that happens. We want to ensure that the scarce and valuable 
spectrum that the public owns is put to its best and highest 
use, with any proceeds enuring to the benefit of the public. 
And we want to ensure that those who voluntarily help us 
achieve this goal are treated respectfully and appropriately 
for their assistance.
    We all want to spur new American innovation and create 
high-paying jobs, especially in our own districts. We can enact 
the biggest jobs bill in the Congress that actually creates 
private-sector jobs throughout the land and results in deficit 
reduction at the same time. This is within the power of this 
committee to do. Chairman Upton has given us wide latitude as a 
subcommittee to achieve these goals. And throughout this 
process, he has encouraged us at every turn to find a 
bipartisan solution, and I thank him for his calm, and 
thoughtful and patient leadership.
    And let us be honest, but for the President's call in 
February to allocate the D-block, we would be much further 
along today. After all, about a year ago, then-Chairman Waxman 
eloquently and forcefully argued that his discussion draft that 
auctioned the D-block was the right public policy. The National 
Broadband Plan calls for auctioning the D-block, and the 
principles endorsed by the 9/11 Commission Chair and Vice Chair 
last year, former Commission Chair--or former Commission member 
Senator Slade Gorton this year, and is still supported by the 
current FCC Chairman. It is also current law. And any plan to 
allocate this prime spectrum opens a $3 billion hole in the 
Nation's budget.
    I know there are arguments about how that was then, and 
this is now, and things have changed, but the heart of the 
matter, absent the President's proposal, D-block would not be 
quite the stumbling block it has become.
    Now, my comments are not intended to be partisan; however, 
they are intended to just state the political reality that has 
befallen our committee. I am just stating the obvious about the 
awkward. Our staffs on both sides of the aisle have joined us 
in healthy and vigorous discussions about other policy issues. 
Our product is strengthened by these discussions. When it 
became clear we could not reach agreement in time for this 
hearing, both sides chose to release their drafts in current 
form to facilitate further discussion and to solicit your 
input. Republicans have included the Inslee-Upton-Boucher 
government relocation bill from the last Congress in that same 
spirit. Our discussion draft reflects input from the minority, 
and that input is very much appreciated.
    The Republican draft relies on the local expertise at the 
State level for implementation of the public safety network 
while providing for a strong Federal role in assuring 
interoperability. To capitalize on the United States' leading 
position in wireless broadband technology and services, it also 
relies heavily on the commercial sector's expertise through 
public-private partnerships.
    We still have unresolved issues regarding the unlicensed 
space, interoperability requirements beyond those of public 
safety, and conditions on licenses, to name just a few. We will 
continue to work on these issues. Meanwhile, I welcome the 
input and counsel of my colleagues, our witnesses and others 
who can help us get this policy right for the public. But we 
all know the clock is ticking, and we must close out this 
matter sooner rather than later.
    With that, I would yield the balance of my time to the vice 
chair of the committee.
    [The prepared statement of Mr. Walden follows:]

    [GRAPHIC] [TIFF OMITTED] T3418.001
    
    [GRAPHIC] [TIFF OMITTED] T3418.002
    
    [GRAPHIC] [TIFF OMITTED] T3418.003
    
    [GRAPHIC] [TIFF OMITTED] T3418.004
    
   OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEBRASKA

    Mr. Terry. Thank you. And I just want to commend you for 
the methodical and mature way of processing through very 
complicated and sometimes divisive issues. This is something we 
have to get done.
    We have to have a comprehensive spectrum bill. There is no 
doubt everyone agrees with that. The dividing points have been 
public safety, D-block, and I think you took a path that 
addressed both of the issues. They need help, public safety, 
``they.'' You have tried to resolve the issues of the 
broadcasters, and I think you have taken a very good approach 
on there, resolving those issues.
    So I encourage you to work with our Democratic side. I 
would like to see a bipartisan bill here. I do agree with you, 
I think we are close.
    I also want to just say last that I feel that the debt 
talks do have an impact here in the sense that this is one way 
of auctioning spectrum that can actually be a revenue raiser 
for the Federal Government to offset our deficit, and I think 
we have a responsibility to follow through.
    I yield back.
    Mr. Walden. I thank the gentleman for his comments.
    I turn now to the ranking member of the subcommittee, my 
friend, Ms. Eshoo from California.

 OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Eshoo. Thank you, Mr. Chairman, for not only having 
today's hearing, my thanks to all of the witnesses, especially 
those who had to travel long distances and endure interruptions 
in that travel, and to our respective staffs who have really 
worked very, very hard. But the work goes on. We are not done 
yet.
    Three months ago this subcommittee began a major 
undertaking; the goal: Bring forward legislation to address our 
growing need for spectrum while providing our first responders 
with a nationwide interoperable broadband network. While the 
majority's discussion draft has provisions that I don't 
support, I remain optimistic. And I want to say that again: I 
remain optimistic that we can produce a bipartisan bill. We 
feel very strongly about that on our side as well.
    To help with this effort, I joined with the full 
committee's ranking member, Mr. Waxman, to offer our preferred 
path in a discussion draft entitled the Public Safety Broadband 
and Wireless Innovation Act of 2011. The draft reflects the 
testimony heard during the subcommittee's four spectrum 
hearings, as well as the feedback of our fellow colleagues.
    From the beginning of this effort, I have expressed my 
belief that a nationwide public safety network must have a 
strong governance structure, leverage the commercial sector, 
and be built in a cost-efficient manner. Our discussion draft 
reallocates the D-block to public safety and includes a 
carefully developed, effective and efficient national 
governance mechanism with sufficient oversight and 
accountability.
    In the area of voluntary incentive auctions, we shouldn't 
be overly prescriptive, I don't believe anyway, in our 
approach. We need to ensure that a process is fair to 
broadcasters and provides the FCC flexibility to carry out an 
auction and the subsequent repacking of the TV band. This 
discussion draft accomplishes, I believe, these goals.
    To date, unlicensed spectrum has unlocked tremendous 
innovation. I see it in my congressional district every day. By 
one estimate, within the next 5 years, WiFi devices will use 
more bandwidth than wire devices. That is really extraordinary. 
And I love saying that because I really do think it is the 
American way. I mean, this is where we enjoy more than an edge. 
Our discussion draft recognizes the importance of this resource 
not just for established technology companies, but for the 
entrepreneurs that exist now and will in the future.
    We also need to look at ways to spur innovation in the 
public safety device market and afford more opportunities for 
public safety to partner with a variety of commercial service 
providers, including small carriers. Our discussion draft 
supports the development and testing of new interoperable, 
nonproprietary broadband technologies that will help drive down 
the cost of public safety devices and applications, and that is 
very, very important.
    Our draft also calls for an examination into the 
feasibility of providing interoperability across the 700 
megahertz band. In addition to supporting public safety, the 
700 megahertz band interoperability would benefit the broader 
wireless ecosystem. It also will give consumers an expanded set 
of choices for commercially available devices like smart phones 
and tablets.
    Finally, we can't forget about our Nation's 911 call 
centers. Someone said--referred to me recently as ``the 911 
queen.'' Well, I don't know about that, but I had been on it 
for a long time before it was--it became popular. There was 
very little interest on either side of the aisle in the issue, 
but, of course, the attack on our country really raised the 
issue up and put a spotlight on it.
    As a founder and current cochair of the NextGen 911 Caucus 
with Mr. Shimkus in the House, I have fought to modernize our 
911 call centers. It makes sense as we build a nationwide 
public safety network that we develop a plan to update our 
public safety answering points and emergency operation centers 
to support a Next Generation 911 system. Such a system will 
enable first responders to receive photos, videos and text 
messages that can improve the quality and speed of emergency 
response. Our draft lays the foundation for such a transition, 
providing the resources to examine the costs, the 
specifications and the legal framework. So I think we owe it to 
our Nation's first responders, to our innovators and the 
American people to come together and complete a bill.
    I want to thank each one of our witnesses again, and I look 
forward to working with the chairman, with our respective 
staffs, with members on both sides of the aisle of this 
important subcommittee to move forward with bipartisan 
legislation.
    And, Mr. Chairman, I have a request to enter into the 
record from the Bipartisan Policy Center a letter that was sent 
to Senators Rockefeller and Kay Bailey Hutchison from Tom Kean 
and Lee Hamilton, who were the Commission Chairman and Vice 
Chairman of the 9/11 Commission. So with your permission, we 
can enter that into the record.
    Thank you and I yield back.
    Mr. Walden. Without objection.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T3418.005
    
    Mr. Walden. I thank you. The gentlewoman's time has 
expired.
    I would now recognize the gentleman from Illinois Mr. 
Shimkus if he has any comments.

  OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Shimkus. I will take time, Mr. Chairman, and then I 
will yield some to Cliff, if that is all right.
    Spectrum is so much more than D-block, and I do appreciate 
your comments about it is obvious about--stating the obvious 
about the awkward. And so all I would like to add is--a couple 
of things--is I do hope that the NextGen 911 Enhancement Act 
will be a part of this as we move forward; the NextGen Public 
Safety Technology Act, which Anna and I have been working on.
    This political process is always kind of fun. You can claw 
and scratch on one day, and then you can give the good big hug 
on the next day as you work together on things that are 
important. I have been clawing and scratching a lot lately. But 
I appreciate the times when I can cross the aisle and give 
someone a hug. Anna is working real hard with me on this, and 
it makes up for some of my frailties, I guess.
    The other thing is I am for private auction of the D-block 
regionally done. My concern is that if we don't do it in that 
way, we won't have deployment. Some of the worst cases of 911 
lapses is where we don't have connectivity, where we don't have 
cellular connections, where we can't do identification 
location. And the stories that we heard when we started moving 
the stuff out about the people caught in the snowstorm in the 
mountains, calling and couldn't be found. The young kids in the 
rowboat in New York--Island Sound, that is--I am not going to 
diminish the importance of that.
    And if we truly want a bipartisan process to go forward, we 
can't have this fight between urban and rural. We just can't do 
it. And the rural areas have to be brought along, and the only 
way I see that that is done is if we have really a competitive 
atmosphere, and that we--with strong requirements so that all 
the Americans can benefit from a new system.
    With that, I will yield my time to Mr. Stearns.

 OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Mr. Stearns. I thank my colleague.
    Mr. Chairman, you and the staff, I want to compliment you 
on several provisions I particularly support in this draft 
legislation. First, I am pleased to see that the incentive 
auctions will be truly voluntary.
    Second, it is important that broadcasters can maintain 
their service areas and are not forced into VHF.
    Secondly, I am in strong support of preventing the FCC's 
ability to impose conditions on the auctions. Unencumbered 
auctions decrease in value and limit their full revenue 
potential. We simply cannot afford the expensive social policy 
the FCC will likely try to impose on these auctions if it is 
just simply given the authority.
    And finally, as the clock continues to tick on the debt 
ceiling, and we just got back from a conference on this, and 
the government searches for ways to pull itself out of debt, we 
have a bill in front of us that can raise billions of dollars 
for this country. Therefore I hope, Mr. Chairman, we can move 
this quickly.
    And I yield back.
    Mr. Shimkus. I yield back my time, Mr. Chairman.
    Mr. Walden. Does the gentleman from Ohio want to make any 
comments, Mr. Latta, in the remaining time before I go to Mr. 
Waxman?
    Mr. Latta. Well, thank you very much. I appreciate the 
gentleman for yielding.
    All I can say is I appreciate the hearing today, Mr. 
Chairman, and also how important it is, especially on the 
question of spectrum as to where we can go, especially the 
voluntary auction side. I think it is important that we can 
also bring dollars into the Treasury and help this deficit. So 
I appreciate the hearing today. Thank you.
    Mr. Walden. Thank you.
    And now I will turn to Mr. Waxman for 5 minutes.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you, Mr. Chairman, for convening this 
hearing this morning to discuss how we can quickly provide 
public safety with a nationwide interoperable broadband network 
and make more spectrum available for wireless broadband. Both 
goals are critical to our country and require Congress to act 
quickly and decisively.
    In less than 60 days, we will observe the 10th anniversary 
of the terrorist attacks on New York and Washington and the 
skies of Pennsylvania. Construction of a nationwide public 
safety broadband network remains critical unfinished business, 
and we should do everything possible to send a bill to the 
President that accomplishes this bipartisan objective.
    After several constructive hearings on spectrum policy, 
today we will consider a Republican discussion draft. I am 
pleased that we will discuss specific details about incentive 
auctions, public safety governance and Federal spectrum 
relocation, and still hope we can find common ground on several 
other issues.
    In order to highlight our areas of agreement and 
disagreement, yesterday Representative Eshoo and I released a 
discussion draft of the Public Safety Broadband and Wireless 
Innovation Act of 2011. Although many details of the bill we 
put forward differ from the Republican draft, Democrats on the 
committee hope we can develop one legislative vehicle that 
takes the best ideas from both proposals.
    Senators Rockefeller and Hutchison did a commendable job on 
a bipartisan package to empower the FCC to conduct incentive 
auctions for broadcast spectrum and create a nationwide 
broadband network for public safety. The Democratic draft 
builds upon the bipartisan work of the Senate Commerce 
Committee.
    With regard to public safety, committee Democrats believe 
we must establish a strong governance structure to manage the 
highly complex undertaking of building and managing an advanced 
wireless network. Through a nonprofit corporation streamlined 
to act quickly and efficiently, we have put in place a number 
of policies and requirements designed to ensure we reach our 
primary goal of nationwide interoperability for first 
responders. This corporation could be statutorily required to 
operate in a fiscally responsible manner and to provide the 
technical and management expertise this network will need. 
Public safety will have a strong voice, but the network will 
rely heavily on commercial know-how, national standards and 
existing infrastructure.
    The public safety community has indicated its strong 
support for the robust governance approach in the Senate bill 
and in the Democratic draft. It is on the basis of this strong 
governance model and public safety's commitment to this 
approach that I have come to support reallocation of the D-
block for public safety's use. Reallocation is the best way to 
ensure that public safety has the leverage to incentivize the 
public-private partnerships and network-sharing arrangements 
that are essential through constructing a nationwide broadband 
network. Moreover, reallocation allows us to plan for public 
safety's transition to broadband, and the Democratic draft 
requires the FCC to evaluate opportunities to gain additional 
efficiencies across all public safety spectrum, including the 
possible return of spectrum for future auction.
    Finally, reallocation is the best chance we have to pass 
legislation into law. It has bipartisan support in the House 
and the Senate. The administration is strongly supportive, and 
the entire public safety community, including mayors, Governors 
and numerous other State and local officials, are united on 
this path forward. In my view, strong governance, oversight, 
accountability and smart spectrum management provide us with a 
good solution.
    Although we have disagreements about the D-block, the 
specifics of a governance model and funding, Democrats and 
Republicans are not far apart on other details. We all agree 
that we need to leverage commercial networks, ensure that the 
public safety equipment market becomes more competitive, and 
allow State and local officials to play a significant role in 
the development of this network.
    We also found a good amount of common ground on spectrum 
policy. Both Democrats and Republicans want to enable the FCC 
to conduct voluntary incentive auctions that are fair to 
broadcasters. We want the FCC to have sufficient flexibility to 
make auctions successful, although we have slightly different 
approaches to providing that flexibility. We don't agree on the 
future of--we don't agree on the future of unlicensed spectrum 
or on limiting the FCC's ability to impose conditions on 
spectrum licenses in the future. These decisions must be made 
by the expert agency based on market conditions and other 
factors.
    I would like to thank our witnesses for being here. I look 
forward to your testimony. And thank you very much, Mr. 
Chairman.
    [The prepared statement of Mr. Waxman follows:]

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    Mr. Walden. Thank you, sir. We appreciate your comments. We 
will continue to work together on this.
    I would like to now turn to our panel of witnesses, and we 
will lead with the chief of police, San Jose Police Department, 
Mr. Christopher M. Moore, who had a wonderful transportation 
system getting him here. We appreciate you making it all the 
way through. Thank you, sir. And we welcome your testimony.

STATEMENTS OF CHRISTOPHER M. MOORE, CHIEF OF POLICE, SAN JOSE, 
 CALIFORNIA; PETER CRAMTON, PROFESSOR OF ECONOMICS, UNIVERSITY 
OF MARYLAND; HON. GORDON H. SMITH, PRESIDENT AND CEO, NATIONAL 
 ASSOCIATION OF BROADCASTERS; MICHAEL A. CALABRESE, DIRECTOR, 
   WIRELESS FUTURE PROJECT, OPEN TECHNOLOGY INITIATIVE, NEW 
   AMERICA FOUNDATION; AND CHRISTOPHER GUTTMAN-MCCABE, VICE 
  PRESIDENT, REGULATORY AFFAIRS, CTIA-THE WIRELESS ASSOCIATION

               STATEMENT OF CHRISTOPHER M. MOORE

    Mr. Moore. Good morning, and thank you, Chairman Walden and 
Ranking Member Eshoo. My name is Chris Moore. I am the chief of 
police for the City of San Jose Police Department in 
California. I am one of the representatives of the Major City 
Chiefs Association to the Public Safety Alliance, which is a 
coalition of leading public safety associations that represent 
every law enforcement, fire, EMS, emergency management agency 
and first responder organizations in the country.
    My comments today will be brief and to the point. I am here 
on behalf of the PSA and millions of first responders across 
the country to ask for your support of companion legislation 
that came out of the Senate, S. 911, the Public Safety Spectrum 
and Wireless Innovation Act of 2011, which was recently and 
overwhelmingly passed by a 21-to-4 bipartisan vote by your 
counterparts in the Senate Commerce, Science and Transportation 
Committee.
    This act does what public safety and State and local 
governments have requested Congress to sponsor and support as a 
top priority for more than 2 years. This legislation allocates 
the D-block to public safety; provides necessary funding for 
the build-out of a nationwide public safety broadband network, 
especially in rural areas; and establishes the governance to 
oversee and manage the build-out, maintenance, operation and 
upgrade of a network for decades to come. We urge the committee 
to act now as if a 9/11 or a Hurricane Katrina event were to 
have occurred just yesterday and fulfill the last 
recommendation of the 9/11 Commission by allocating the D-
block, as recently endorsed in testimony this year by the 
cochairs of the 9/11 Commission.
    The PSA is greatly encouraged by the Democratic discussion 
draft that was circulated by Congresswoman Eshoo and 
Congressman Waxman just this week, and we urge swift 
introduction and committee consideration to move this matter to 
the House floor. The PSA strongly believes that this language, 
as developed within the committee of jurisdiction, builds and 
improves upon H.R. 607, which has garnered bipartisan support 
of 43 cosponsors so far this year. Indeed, legislation to 
allocate the D-block to public safety introduced in the House 
in the 111th Congress last year garnered 80 bipartisan 
cosponsors.
    Mr. Chairman and members of the committee, the PSA 
representatives have testified before this committee as 
recently as this April and May to press for a nationwide public 
safety broadband network. We emphasize that this is a unique 
and truly one-time opportunity to change our operations of the 
past, a past highlighted by trying to, quote, make due by 
linking and patching together communication systems on thin 
slices of spectrum spread out over at least six different bands 
in order to acquire interoperability and achieve spectral 
efficiency.
    We also stressed the need for adequate capacity of a 
network with public safety control and mission-critical 
capabilities from the outset. The PSA strongly believes that 
allocation of the D-block with funding is the only proposal 
that establishes those baseline principles and needs. We need 
the upfront funding to jump-start investment and build out of 
the network, and to attract and encourage commercial interests 
and competition. We will partner with the private sector, with 
utilities and with critical infrastructure to leverage and to 
make maximum use of existing infrastructure that exists today. 
We do support a strong governance structure as proposed in the 
Senate's bipartisan bill, S. 911.
    Mr. Chairman, the majority staff discussion draft, as 
currently written, does not meet those conditions as we have 
outlined previously in both the House and in the Senate. In 
fact, if passed into law as currently written, it would leave 
the public safety worse off than it is today. Mr. Chairman, we 
cannot support that draft legislation.
    While the PSA is opposed to the majority's discussion draft 
on key points, including one, the auction of the D-block; two, 
multistate licensing; three, the governance structure; and, 
four, the lack of specified funding as the top priority of any 
auction proceeds, we do appreciate the ongoing dialogue and 
consideration of our views, experience and perspective.
    And on a personal and professional note, I would like to 
thank the staff members from both sides of the aisle, whether 
they were in the majority or in the minority, for their 
steadfast and thoughtful discussions with public safety over 
the last 2 years.
    We are committed to continuing to work with the committee 
to bring to the floor a bill in the House to achieve the final 
enactment of legislation on this critical matter this year. 
Indeed, the PSA continues to seek enactment before the 10th 
anniversary of the tragic events of 9/11.
    Over the past 2 years, numerous hearings have been held on 
public safety spectrum and a nationwide public safety broadband 
network by this committee in addition to the Homeland Security 
Committee; the Senate Homeland Security and Government Affairs 
Committee; the Senate Commerce, Science and Transportation 
Committee. Congress has asked many good questions, and we in 
public safety and State and local government have worked hard 
to provide you with answers. We are not here asking for the 
spectrum and funding to make a profit. We are not here asking 
for the spectrum and funding for some personal gain or reward. 
We are here asking for spectrum and funding in order for us to 
better serve and protect the American people. We are here to 
make sure that our first responders who do put their lives on 
the line every day have the resources they need to do their 
jobs more efficiently and effectively, armed with real-time 
data, video and other information that can only be accessed in 
the latest and best mobile broadband technology.
    I am here to let you know that the Public Safety Alliance 
will strongly oppose any legislative action that will require 
auctioning the D-block. This is not an acceptable solution and 
ignores everything we have been advocating long before 9/11. 
Auctioning the D-block will put public safety at risk and will 
considerably limit our first responders' ability to do their 
jobs.
    In conclusion, I would like to thank you for your continued 
time and commitment to finding a solution that will meet the 
communication needs of our first responders for decades to 
come. The time has come for Congress to act, and we urge that 
you pass legislation before the 10th anniversary of 9/11. And I 
will be happy to answer any questions that you have.
    [The prepared statement of Mr. Moore follows:]

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    Mr. Walden. Mr. Moore, thank you for making your position 
very clear. And we look forward to working with you. I am 
serious about that.
    We are going to go to Dr. Cramton now, professor of 
economics for the University of Maryland. We are delighted to 
have you here as well, and we look forward to your testimony.

                   STATEMENT OF PETER CRAMTON

    Mr. Cramton. Mr. Chairman and members of the committee, I 
am honored to appear before you today. My remarks are about 
spectrum policy, especially a much-needed enhancement, 
incentive auctions. Incentive auctions would allow the Federal 
Communications Commission to conduct two-sided auctions, 
auctions that simultaneously free up encumbered spectrum and 
put it to its best use.
    We are in the midst of a communications revolution. 
Spectrum is an essential input in this revolution. The success 
of the revolution hinges on making the best use of this 
essential resource. From 1994 until today, the FCC spectrum 
auctions have done a superb job of putting the spectrum to its 
best use; however, it is becoming increasingly difficult for 
the FCC to find suitable spectrum to satisfy demand.
    The best spectrum for mobile broadband has already been 
allocated, much of it many decades ago for over-the-air TV 
broadcasts. In recent decades the value of over-the-air 
broadcast TV has declined as more and more viewers receive 
their TV signals via cable and satellite.
    At the same time, there has been an explosion in growth and 
use of smart phones and tablets. These devices use the latest 
communications technology and do amazing things. These devices 
are used nearly 24/7 by my students and are fueled by spectrum. 
This is the future.
    This shift in demand away from over-the-air TV and toward 
mobile broadband has created a huge disparity in value. 
Spectrum used for mobile broadband generates much more economic 
value than spectrum used for over-the-air TV; hence the need to 
reallocate much of the TV spectrum from its current low-value 
use to the high-value use of mobile broadband. The FCC 
understands this need and has proposed incentive auctions to 
accomplish this exchange of spectrum from TV to broadband.
    There is a consensus among economists and other experts 
that incentive auctions are the best approach. Unlike the FCC's 
prior auctions, the incentive auction is a two-sided auction in 
which TV broadcasters voluntarily offer to sell some or all of 
their spectrum rights, and mobile operators bid to buy large 
blocks of spectrum that the latest technologies require. The 
FCC plays an essential role in this process, repacking the 
remaining broadcasters to free up as much spectrum as possible, 
and then clearing the market at a quantity that maximizes 
social welfare and guarantees positive revenue for the 
Treasury.
    The simple economics of the incentive auction can be 
explained with the most basic tool of economics, supply and 
demand. The supply of spectrum comes from the broadcasters' 
offers to relinquish spectrum, and the demand comes from the 
mobile operators who bid for the blocks of spectrum. Once 
offers and bids are received, the FCC can clear the market at a 
quantity that generates maximum economic value. Although this 
may appear simple, the incentive auction is complex in its 
details and requires a great deal of study by experts to get 
the important details right. The incentive auction is a new and 
essential innovation. Its development will have a positive 
transformative impact both in the United States and worldwide, 
similar to the impact of the FCC's initial spectrum auctions in 
1994.
    Let me summarize my main points. The incentive auction is 
an essential innovation that will provide broad benefits to TV 
broadcasters, mobile operators, public safety, taxpayers and, 
most importantly, the vast majority of Americans. The incentive 
auction will create jobs and stimulate long-term growth for the 
economy.
    The incentive auction is complex. Its design is best left 
to experts. The FCC has an outstanding record of innovation in 
the auction arena and requires only limited guidance from 
Congress. On the basic objectives and principles, it would be a 
mistake for Congress to prevent the FCC from adopting the best 
auction design by mandating auction details and other 
restrictions in enabling legislation. There are such mistakes 
in the draft legislation, which I note in my written testimony. 
All of these problematic mandates are easily fixed by omitting 
the auction details and keeping the focus on basic principles.
    It is important to understand that not all constraints are 
bad. For example, restrictions that promote competition in the 
auction improve both revenues and efficiency.
    Given the FCC's outstanding record in designing and 
implementing auctions, the legislation should provide the FCC 
with broad auction authority, focused on basic objectives and 
principles. To me, there are two key objectives, transparency 
and economic efficiency. What is needed is a statement of these 
objectives. Including specific details is apt to do more harm 
than good.
    I urge Congress to adopt streamlined legislation for 
incentive auctions as soon as possible. Only then can the full 
benefits of the communications revolution be realized. The time 
to act is now. Then the FCC can accelerate its work on 
designing and implementing an innovative auction approach to 
put the radio spectrum to its best use. Thank you.
    Mr. Walden. Thank you for your testimony. We appreciate 
that.
    [The prepared statement of Mr. Cramton follows:]

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    Mr. Walden. We are going to turn now to the Honorable 
Gordon Smith, president and CEO of the National Association of 
Broadcasters. Senator, we are delighted to have you back before 
the committee. We look forward to your testimony.

               STATEMENT OF HON. GORDON H. SMITH

    Mr. Smith. Thank you, Mr. Chairman, Ranking Member Eshoo, 
members of the subcommittee. My name is Gordon Smith. I am 
president and CEO of the NAB. Thank you for inviting me here 
today to discuss your draft spectrum legislation and in 
particular the voluntary incentive auction provisions.
    Mr. Chairman, let me tell you at the outset that the NAB is 
heartened that this discussion draft recognizes the need for a 
balance in raising revenues for the Treasury, in making 
spectrum available for wireless broadband, and in protecting 
television viewers and broadcasters through the process of 
voluntary incentive auctions.
    Of course, intrinsic in the word ``voluntary'' is the 
notion that you will not be penalized for not participating. 
Ensuring incentive auctions are voluntary is of paramount 
importance to the NAB. So first and foremost, let me tell you 
that broadcasters appreciate the inclusion of the concept of 
truly voluntary incentive auctions in your draft.
    While participation in an auction is voluntary, the 
subsequent repacking of broadcast stations to new channels 
following the auction is not voluntary. Based on the spectrum 
goal set by the FCC in the National Broadband Plan, a total of 
672 full-power stations, including commercial and noncommercial 
stations across the United States, would be forced onto a new 
channel. That is nearly 40 percent of all TV stations in 
America. Contrast that with 174 stations that were cleared from 
the spectrum during the DTV transition. I know my phones lit up 
in my Senate office just with that. Imagine the 672.
    Clearly this new round of repacking would result in 
significant disruption and confusion for our viewers and your 
constituents, who recently went through that DTV transition. 
For this reason we have focused on four elements that NAB 
believes must be included in any voluntary incentive auction to 
protect both television viewers and broadcasters.
    We ask that broadcasters be given the same opportunity as 
other industries to innovate with our spectrum, which means 
preventing the FCC from involuntarily moving stations from the 
U to the V band. Your legislation does that.
    We ask that legislation provide certainty to broadcasting 
and that those investing in broadcasting by requiring or 
permitting one auction so that this doesn't happen year in, 
Congress after Congress, year in and year out. Your proposal 
achieves that, Mr. Chairman.
    We ask for reimbursement for station costs associated with 
relocating broadcast stations, and your legislation does that 
as well. But we may ask your indulgence for a slight adjustment 
in the language to achieve the goal of holding harmless those 
who did not participate in the auction.
    Finally and most importantly, we ask that legislation 
preserve viewer access to over-the-air signals by replicating 
existing station service areas and covered populations. We also 
want to ensure that signals reach cable and satellite head-ins 
that rely on over-the-air delivery so that viewers continue to 
receive their broadcast channels. To this point, we believe the 
bill's language could use a little bit of enhancement, because 
as drafted, the FCC is required to make reasonable efforts to 
preserve viewer access to over-the-air.
    I underscore the importance of having access to broadcast 
channels when we see weather seasons like we are currently 
having, when tornadoes are literally ripping through 
communities. While public safety is the first responder, 
broadcasting is the first informer. And so as you help one, our 
brethren and sisters and first responders, don't hurt the first 
informers. We are partners in public safety. So we ask that. We 
thank you for that.
    And then to this point, and frankly to the professor's 
point, of highest and best use, what is the value of a soul 
when a tornado is ripping through his or her community; when 
their only access is not this, it is their television set or 
their radio? Broadcasters is the one thing that stays up and on 
the air, and which can literally be the difference of life and 
death and getting the information to the first responders. That 
is what I think highest and best use must include, not just 
purely an economic supply-and-demand calculation.
    For this reason, we prefer language that directs the FCC to 
preserve viewer access to stations to the maximum extent 
possible. I don't think that is unreasonable, given the stakes. 
Because the broadcasters have the benefit of experience in the 
repacking process used during the DTV transition, we ask that 
the final bill include a requirement that the FCC utilize the 
same protection criteria, the same protection criteria used in 
the final table of allotments for digital television service.
    Before I conclude, let me take a moment, Mr. Chairman, to 
thank Chairman Emeritus Dingell and Congressman Green for their 
work in also putting together a strong bill that protects 
viewers and broadcasters through the incentive auction process, 
as well as Ranking Members Waxman and Eshoo for their spectrum 
bill released just yesterday. We appreciate the fine work of 
all on both sides of the aisle trying to get this balance 
right. And this is a most important issue. It does involve 
economics. It involves life and death as well.
    And so I would like to introduce into the record two 
letters, one from America's 50 State broadcaster associations 
to the House leadership, a second letter from the 4 network-
affiliated associations to House leadership. Thank you again, 
Mr. Chairman.
    Mr. Walden. Without objection, they will be entered into 
the record.
    [The prepared statement of Mr. Smith follows:]

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    Mr. Walden. We turn now to Mr. Christopher Guttman-McCabe--
sorry. Oh, I guess I did. We will turn now to Mr. Michael 
Calabrese, senior research fellow, Open Technology Initiative, 
of the New America Foundation. We welcome your comments here, 
sir. And please go ahead.

               STATEMENT OF MICHAEL A. CALABRESE

    Mr. Calabrese. Good morning, Chairman Walden, Ranking 
Member Eshoo, and members of the subcommittee. My name is 
Michael Calabrese, director of the Wireless Future Project at 
the New America Foundation's Open Technology Initiative here in 
Washington. I am testifying on behalf of the Wireless 
Innovation Alliance, a coalition of both large and startup 
high-tech firms, rural, wireless ISPs, and consumer and public 
interest groups.
    Most of the debate about incentive auction authority, as we 
have heard today, has focused on protecting local broadcasters, 
promoting public safety and auctioning licenses to wireless 
carriers. But another critical public interest should be 
safeguarded as well, unlicensed use of the TV white space 
channels.
    It is essential that any incentive auction authority give 
the FCC the ability and obligation to preserve substantial 
access to unlicensed spectrum in every local TV market. Under 
the FCC order adopted unanimously in 2008, after years of 
study, WiFi-type devices are allowed to operate on an 
unlicensed basis on unused DTV channels, provided that the 
devices have GPS and periodically check an online database to 
find out what channels can be used without risking interference 
with DTV reception.
    Investment and trial deployments of a wide range of 
innovative devices and services is well under way. My testimony 
describes a half dozen successful white space trials; for 
example, a smart city deployment in Wilmington, North Carolina; 
a smart grid deployment in California's Sierra Mountains; a 
rural broadband deployment in Claudville, Virginia; a public 
safety and tribal lands deployment in northern California, and 
so on.
    While the voluntary incentive auctions in the discussion 
draft strike a reasonable balance, we have very serious 
concerns with section 104, which for the first time would 
require auctions for unlicensed spectrum. Under section 104, 
the FCC could make spectrum available for unlicensed use only 
through an auction where the highest bidders, rather than the 
expert agency, determine whether the service rules for a 
particular band in a particular area will be exclusively 
licensed or unlicensed.
    Requiring auctions for unlicensed spectrum is unstudied, 
untested, unworkable and virtually certain to ensure that no 
new unlicensed spectrum is actually allocated. It will 
effectively preclude the FCC from repacking the TV band in a 
manner that maintains access to unlicensed channels for super-
WiFi services that industry is in the process of deploying.
    If this provision had been in place before WiFi and before 
the FCC designated the 2.4 gigahertz band for unlicensed use, 
America's invention of today's multibillion-dollar WiFi 
industry would never have occurred. If this bill had been law 
then, today there would not be more than 2,000 wireless ISPs 
using unlicensed spectrum to bring broadband Internet service 
to 2 million Americans living in rural, remote and small-town 
areas. If this bill had been law, today consumers would not be 
saving roughly $15 billion per year because WiFi allows 
multiple users at home and work to share a single wired line. 
WiFi would not be offloading 20 to 30 percent of the mobile 
data traffic from smart phones and tablets, helping to ease the 
spectrum crunch. AT&T Wireless would not have 24,000 WiFi 
hotspots to help its customers get faster and free broadband 
access in public places. The three largest cable companies 
would not have combined to blanket New York City with WiFi; and 
universities, hospitals, libraries and other public spaces 
would not be hotspots, helping millions get Internet access 
cheaply, easily and without wires.
    The auction model mandated in the draft bill is also 
unworkable and seems more likely to decrease Federal revenue 
than to increase it. Putting service rules up for auction 
creates tremendous uncertainty about how much of a band will 
end up licensed or unlicensed. This undermines the revenue-
raising potential of the auctions and could lower the score 
that CBO could put on what would be an unpredictably contingent 
set of auctions.
    Unlicensed spectrum is something fundamentally different 
from licensed. A license gives a company exclusive use at high 
power and protection from interference. Unlicensed bands are 
open to anyone at very low power, with no protection from 
interference.
    Even the FCC economists who outlined the draft's proposed 
mechanism 3 years ago identified a series of problems that make 
this idea unworkable in the real world. The primary one is the 
free rider problem. Because unlicensed spectrum is a public 
good available to anyone, even the largest companies that rely 
on unlicensed have an incentive to hold back and let others pay 
the government. These noncarrier firms say they would not even 
bid. They are not in that business. They are only indirect 
beneficiaries, just as trucking companies are with respect to 
interstate highways.
    To conclude, I will just say that the U.S. economy and 
consumers will continue to benefit most from a balanced and 
complementary mix of licensed and unlicensed spectrum. 
Unlicensed technologies pioneered here in America are 
increasingly so complementary and critical to the wireless 
ecosystem that Congress can best optimize the TV band spectrum 
for broadband, for job creation and innovation by ensuring 
continued unlicensed access to substantial amounts of TV white 
space spectrum in every local market and nationwide.
    Thank you.
    Mr. Walden. Thank you for your comments.
    [The prepared statement of Mr. Calabrese follows:]

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    Mr. Walden. And we will now move to Mr. Christopher 
Guttman-McCabe, who is vice president for regulatory affairs, 
CTIA--The Wireless Association. We look forward to your 
comments.

            STATEMENT OF CHRISTOPHER GUTTMAN-MCCABE

    Mr. Guttman-McCabe. Thank you. And good morning, Mr. 
Chairman, and Ranking Member Eshoo, and members of the 
subcommittee. On behalf of CTIA, thank you for the chance to 
speak to you this morning about the discussion drafts released 
this week. CTIA believes that this process represents a 
positive step towards addressing the looming spectrum crisis 
and ensuring that America's wireless industry remains the 
world's leader in wireless broadband.
    I will not belabor the urgent need to make additional 
spectrum available. You have seen the studies and heard our 
analysis, which has been echoed by many others in the wireless 
and high-tech industries, academia and government. The 
subcommittee records show that the commercial demand for 
spectrum is real and pressing, and we are pleased that you are 
responding. We look forward to supporting you in this effort, 
which can help us maintain U.S. leadership in this critical 
industry and stimulate the sort of innovation, economic growth 
and job creation that our country so desperately needs.
    As we read the drafts, we are pleased that they begin the 
process of addressing the spectrum demand targets below 3 
gigahertz articulated in the National Broadband Plan.
    We fully support authorizing the FCC to conduct incentive 
auctions to facilitate the repurposing of bands currently used 
for broadcast television and other services. The outstanding 
propagation characteristics associated with the broadcast bands 
in particular make them ideal for licensed wireless broadband 
services, and as such would be highly valued by bidders in an 
auction.
    We also strongly support efforts to make the frequencies 
between 1755 and 1780 megahertz available for commercial use, 
and to pair that with a band of frequencies between 2155 and 
2180 megahertz. A symmetrical pairing of those bands represents 
the ideal use of this spectrum. We are concerned, however, with 
any provisions in legislation that do not require that pairing 
or that may backload the introduction of spectrum identified. 
Failure to make 1755 to 1780 available or other 3-subgigahertz 
bands available in the near term will exacerbate the spectrum 
crisis and encourage consequences that policymakers may find 
suboptimal.
    Providing for spectrum to become available at more 
predictable intervals will promote certainty, maximize the 
benefit to the government, and ensure that the U.S. keeps pace 
with our international trading partners.
    We also are concerned about the potential for NTIA to 
shared use of government spectrum. While the sharing approach 
is clearly an NTIA priority, CTIA's carrier members consider 
cleared licensed spectrum that is internationally harmonized 
and in sufficient block sizes to support mobile broadband 
applications to be the gold standard.
    As a general matter, CTIA believes strongly that auction 
valuations and, in fact, certainty for bidders will be enhanced 
by adoption of provisions that limit the ability to condition 
licenses. Flexible use, unencumbered fungible licenses will 
drive not only the greatest level of return, but also the 
greatest level of participation in the auction. The 700-
megahertz C-block experience demonstrates clearly that the 
imposition of regulatory encumbrances not only reduces 
competition at auction, but also the revenue derived from that 
auction.
    CTIA also strongly supports efforts to address 
infrastructure issues beyond spectrum. Helping to provide a 
path to building the tower and antenna infrastructure necessary 
to make use of that spectrum is extremely important.
    We also support steps to provide for cost-based fees for 
accessing easements and rights-of-way on Federal land, as well 
as a streamlined access and process to property owned by the 
Federal Government.
    Finally, we urge the subcommittee to include in any bill it 
moves on this subject additional language that makes 
improvements to the spectrum relocation process created by the 
Commercial Spectrum Enhancement Act. Adoption of the template 
included in the Spectrum Relocation Improvement Act will 
significantly improve the process of relocating government 
users.
    We believe that addressing these issues will enhance the 
ability of wireless providers to access additional spectrum, 
invest in new networks, create jobs and stimulate the economy. 
We also believe these changes will have a positive impact on 
the score associated with the legislation.
    In closing, let me reiterate a point I made to you when I 
testified last month, that making spectrum available will pay 
dividends not just for the wireless industry, but also for the 
broader American economy. Auction revenues, substantial as they 
may be, are only part of the equation. Bringing spectrum to 
market will require investment, both in infrastructure and in 
jobs, two things our economy can't get enough of at this time. 
Additionally, the more rapid deployment of high-speed wireless 
broadband services will encourage innovation and productivity 
not just in the telecom sector, but across the economy. We have 
seen this in the areas of smart grid, mobile education, 
mHealth, intelligent transportation and more.
    Thank you again for the opportunity to appear today. We 
anticipate providing specific editorial suggestions to the 
subcommittee in the coming days, and we look forward to working 
with you to move forward with this effort. I look forward to 
your questions. Thank you.
    Mr. Walden. Mr. Guttman-McCabe, thank you for being here.
    [The prepared statement of Mr. Guttman-McCabe follows:]

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    Mr. Walden. I want to thank all of our witnesses for your 
testimony. And I would just like to note based on something I 
read this morning about the hiring that is taking place since 
our draft came out to deal with the unlicensed spectrum piece 
in the lobby community, we are already creating jobs----
    Mr. Guttman-McCabe. Agreed.
    Mr. Walden [continuing]. In the private sector. Discussion 
drafts can have an effect.
    I want to start with you, Mr. Guttman-McCabe. First of all, 
I have got a series of questions, and I am really looking for a 
yes or no. And this is not a trick. Has the demand for wireless 
broadband lessened in the last year?
    Mr. Guttman-McCabe. No.
    Mr. Walden. Has the amount of spectrum available for 
commercial use increased?
    Mr. Guttman-McCabe. No.
    Mr. Walden. Has the amount of spectrum available to public 
safety decreased?
    Mr. Guttman-McCabe. No.
    Mr. Walden. Nothing has changed. Why would we deviate from 
the consensus last year that the best way to accomplish our 
public safety and spectrum goals is to auction the D-block and 
use the auction proceeds to help fund the public safety 
network? I can ask that rhetorically.
    Mr. Guttman-McCabe. Thank you.
    Mr. Walden. I request----
    Mr. Guttman-McCabe. I appreciate it, sir.
    Mr. Walden. I request unanimous consent to enter the 
following into the record, the following documents all 
endorsing the FCC's conclusion the National Broadband Plan, 
that is 24 megahertz, the DTV transition legislation already 
cleared for first responders is enough, and we should auction 
the D-block. To wit, a March 2010 FCC blog post from former 9/
11 Commission Chair Thomas Kean and Vice Chair Lee Hamilton; 
and a January 2011 editorial by former 9/11 Commissioner Slade 
Gorton. Without objection, they will be entered into the 
record.
    [The information follows:]

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    Mr. Walden. Mr. Guttman-McCabe, I want to ask you another 
question. Chief Moore referenced in his testimony the need to 
act, which we concur with. I have been chairman of this 
subcommittee for about 6 \1/2\ months now or so, and I think we 
have had four hearings, a legislative hearing. We have got 
working documents. We get it. And I am trying to do my best to 
move this forward in an open, transparent and participatory way 
so we can get it right, because it is more than just public 
safety, as you can well appreciate, we are dealing with.
    In Mr. Moore's testimony, he urges us to act as if a 9/11 
or Hurricane Katrina event had happened just yesterday and 
fulfill the last recommendation of the 9/11 Commission by 
allocating the D-block. Could you speak to what happened with 
the public safety network during 9/11 versus--and I am going to 
ask Senator Smith this, too--broadcasters during Katrina and 
the public safety network as it relates to what happened in the 
cellular network world? What worked and what didn't?
    Mr. Guttman-McCabe. Yes, thank you, Mr. Chairman.
    I think this is an area where, too often, people 
misinterpret what happened on September 11th or what happened 
in Katrina.
    On September 11th, the wireless networks processed more 
calls than they had ever done, 1,400 percent higher above their 
highest previous busy time. So they processed calls at an 
unprecedented rate.
    In Katrina--and I was in Gulfport and Biloxi the following 
day. The day after I had the ability to travel down there with 
some folks from the Federal Communications Commission. We gave 
out 40,000 handsets to first responders and others that were 
down there. So the networks were working.
    Mr. Walden. Did the public safety network stay up?
    Mr. Guttman-McCabe. To some extent yes, and to some extent 
no.
    Mr. Walden. Did your networks stay up?
    Mr. Guttman-McCabe. Our networks did stay up and were 
pieced back together. Again, that happened in Katrina, and it 
has happened since then. They are somewhat self-healing 
networks, and there is the ability for carriers to share 
spectrum and to share towers, mutual aid agreements, and those 
were in place and worked very quickly.
    Mr. Walden. So you were able to have a public-private 
partnership here to help public safety and help others in that 
event.
    Mr. Guttman-McCabe. Yes.
    Mr. Walden. Senator Smith, do you want to comment on the 
role of broadcasters, briefly?
    Mr. Smith. Clearly, the wireless broadband signal is one-
to-one. It is an important piece of the telecommunications 
world. The uniqueness of the broadcast signal is one to 
everyone in an area.
    A recent example of the power of broadcasting over 
broadband in an emergency was seen in Alabama, where, according 
to their Governor, had it not been for live television and 
radio, the death toll would not have been 250, it would have 
been many multiples of that. The first thing that went down was 
broadband. The thing that stayed constant was broadcast. The 
world of the future must include them both.
    Mr. Walden. Mr. Guttman-McCabe, didn't the network 
neutrality and public safety conditions on the C and D blocks 
in the '08 auction of the 700 meg band reduce the proceeds by 
billions of dollars and drive smaller wireless carriers out of 
the market?
    Mr. Guttman-McCabe. Absolutely, Mr. Chairman.
    Mr. Walden. And wouldn't prohibiting restrictive license 
conditions, as our staff draft does on the Republican side, be 
both good for spectrum policy and U.S. taxpayers?
    Mr. Guttman-McCabe. Yes, Mr. Chairman.
    And just a quick--the C-block license, which was 
encumbered, went for $4.7 billion; and it was 22 megahertz, 
which is a very large license. The immediately adjacent D-
block, which was unencumbered and half the size, went for $9 
billion. So a license half the size went for twice the price.
    Mr. Walden. My time has expired. I am going to turn now to 
my colleague and friend from California, the ranking member of 
the subcommittee, Ms. Eshoo, for 5 minutes.
    Ms. Eshoo. Thank you, Mr. Chairman.
    And I want to thank all of the witnesses. I think each one 
of you, whether I agree or disagree with some parts of what you 
said, really have offered excellent testimony today and are 
helping us move forward with this.
    To Chief Moore, thank you again for your service to San 
Jose, California, and the broader Bay area community. I don't 
represent the City of San Jose, but your leadership is felt 
throughout the Bay area.
    Chief, there have been some recent high-profile disputes 
involving public safety broadband communications projects, 
which you are very well aware of. One problem that resonates is 
a failing of local governance to either preclude such disputes 
from occurring in the first place or to quickly resolve 
problems that arise.
    In the Democratic draft, you are familiar with what we have 
placed in that draft relative to governance. Are you confident 
that the newly created Public Safety Broadband Corporation will 
be able to maintain national level standards for 
interoperability?
    Mr. Moore. Yes, Congresswoman. And I must say it is rare 
that you are going to hear a State, local, either public safety 
or the mayors and nationally the cities, say we want more 
governance from the Federal Government. It is very rare indeed.
    Ms. Eshoo. Yes. Exactly. Be careful what you ask for, or 
wish for.
    Mr. Moore. Given what we have experienced over the years, 
particularly with respect to interoperable communications, it 
became clear to all of us in the last 2 years that there needs 
to be some level of national presence in respect to governance 
to make sure that interoperability standards are set and are 
met before large--literally billions of dollars are spent. 
Otherwise, we are going to see a patchwork like we have seen in 
the past, and everybody is comfortable with that.
    Ms. Eshoo. Thank you.
    To Professor Cramton, thank you for your excellent, 
excellent work, all that you have done, all that you have 
published. It is really quite stunning, the work that you have 
done. So I haven't read all of it. I have read some of it, and 
I am glad that you are devoted to this in your professional 
life.
    As we all know, the wireless industry is moving toward 
using LTE for 4-G communication throughout the 700 megahertz 
band. As an expert economist--and that you are--what are the 
specific economic benefits of device interoperability across 
the spectrum--as quickly as you can.
    Mr. Cramton. So the main thing is competition. To get 
auctions to work, we need competition. And in fact that was the 
problem with the price disparities in the 700.
    Now, to get markets to work, we need competition, and that 
is a challenge in network industries where there is enormous 
fixed costs of building networks. What interoperability does is 
it fosters competition by creating a more level playing field.
    What we have seen in the 700 megahertz auction is, when the 
auction was conducted, the bidders all expected 
interoperability, because that is the way it was in all the 
prior auctions. In this auction--and so nobody thought that 
there needed to be a requirement of interoperability. It was 
just assumed that it would be there. In this auction, after the 
auction, one of the large winners, AT&T, lobbied and created a 
new band, band 17, that excludes the A-block winners. There is 
a band 12 that includes both the A-block and the D-block, and 
what happened was AT&T decided to build devices that were just 
specific to the spectrum that it won, and Verizon did the same 
thing.
    This is problematic because it basically makes the spectrum 
won by the A-block winners worthless. They can't get equipment 
because of the enormous economies of scale in the building of 
equipment. So that is the big problem.
    Ms. Eshoo. Do you think that the majority's discussion 
draft allows enough flexibility for the FCC to conduct an 
efficient incentive auction?
    Mr. Cramton. I think there are a number of clauses that 
need to be eliminated that are restrictions that get in the way 
of an efficient auction. The reality is that this is an 
extremely complicated auction and no one, not even the best 
experts, knows right at this instance how all the questions 
should be resolved.
    So it is very important for the legislation to focus on the 
broad principles and I would say only address these broad 
principles given the outstanding track record that the FCC has 
with respect to its auction program. And especially I know, on 
the incentive auctions, they have actually been working hard 
for the last couple of years, you know, getting ready for this, 
and they are actually all set to engage the experts and really 
make this work. But we can't have things stand in the way.
    Ms. Eshoo. Thank you.
    I have other questions that I would like to ask, but I am 
out of time, so I will submit them in writing. But I want to 
thank those that I didn't get to ask questions of for your 
excellent testimony.
    Mr. Walden. We will probably all have those going forward, 
depending upon our time today.
    Mr. Shimkus for five.
    Mr. Shimkus. Thank you, Mr. Chairman.
    Mr. Chairman, I want to congratulate you for putting a 
panel that all agrees--they all agree there is something they 
don't like. I was back in the back room with staff, and it is a 
great panel.
    The spectrum is a great asset. We all need to use it 
effectively. There is just obviously a divergence into what 
that is. So I applaud you all and the testimony.
    Just before I go into my question, our national debt is 
really the threat, and that is really what is encumbering all 
our discussions here in Washington right now. I mean, we are 
doing all our other work. And the reality is our budget 
consists of Medicare, Medicaid, Social Security, interest on 
the debt, and discretionary budget. And if we don't address the 
entitlement programs, regardless of what we do, they are going 
to consume all the discretionary budget. In fact, we could take 
away the discretionary budget and we are still going to have a 
debt threat in this country.
    So that is just a plain economic fact of the challenges 
that we are facing. That is kind of rolling into this debate. 
We have to understand, if we want money to go to public safety, 
if we don't control the debt, there is not going to be 
additional money.
    I am a big Fire Act grant guy. It has been great for rural 
America and my small communities. So that is why I think this 
might be part of it, if and when we get to a vote on some 
solution to this. But I do appreciate all of the panel, because 
it is very enlightening.
    I would like to ask unanimous consent, Mr. Chairman, to 
enter into the record the FCC Office of Plans and Policy 
Working Paper Number 43 on unlicensed auctions.
    Mr. Walden. Without objection.
    [The information follows:]

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    Mr. Shimkus. While I do that--my question will go to Mr. 
Guttman-McCabe--what do you think of the unlicensed provisions 
in the Republican staff draft which are based upon the document 
I just entered in the record?
    If a coalition advocating unlicensed use cannot outbid a 
single wireless carrier for a particular band or spectrum, 
doesn't that suggest the particular spectrum is more useful for 
licensed services? If the particular spectrum is better suited 
to unlicensed use, as in Mr. Calabrese's--your opening 
statement kind of addressed this--wouldn't the people who 
support that be able to pull enough capital to free that up? 
And this goes into my opening comment. The debt is the threat, 
and isn't spectrum too valuable to give away for free, 
especially in this economy?
    Mr. Guttman-McCabe. Thank you, Congressman.
    This is an extraordinarily difficult question and issue. At 
CTIA, we believe unlicensed needs to be part of the solution. 
It currently is part of the solution, and we look at it. Yet if 
I take off my CTIA hat and I put on my economist hat, which is 
what I was for half a dozen years before I went to law school, 
I recognize the conflict of societal good being auctioned on 
one hand and being given away on another hand.
    And I think that issue is further complicated when you look 
at incentive auctions and that the incentive auction and the 
prices that are brought from those auctions, from the licensed 
bidders, would be used to clear spectrum that would then be 
given to other companies. So it becomes incredibly complicated 
once you begin, from an economics, perspective to look at that.
    I think we need to at least consider what other mechanisms 
are out there, recognizing--obviously, absolutely recognizing 
the importance of unlicensed. So we are looking at the 
discussion draft from the chairman. But it is a complicated 
issue.
    Mr. Shimkus. It is. And I am pretty intrigued by it, 
because I do think you get the benefits of both. You do get the 
free use to be able to go in places where it is not there but 
at a return.
    I am going to end, because my time is fastly ending here, 
and just again highlight to my friends in public safety that 
one of the things that Congresswoman Eshoo and I are trying to 
do is understand that, as we go to new technologies, there is 
going to be a cost, and I would submit that what Anna and I are 
doing is to make sure we have the ability to help you get 
there.
    Now, where Anna and I disagree is that I think we do that 
by auctioning and getting money, with your friends behind you. 
We have had these discussions before. And that is where we 
really want to get to, is the financial considerations.
    With that, I yield back my time.
    Mr. Walden. I thank the gentleman.
    Obviously, putting this unlicensed spectrum issue in the 
bill brings it to the floor, and we can have this debate and 
discussion and find out what the best course of action is.
    I turn now to the gentleman from California, Mr. Waxman, 
for 5 minutes.
    Mr. Waxman. Thank you very much, Mr. Chairman.
    Mr. Moore, I was taken by surprise by one of the statements 
you made. It caught my attention. You said that, if passed into 
law as currently written, the Republican draft would leave 
public safety worse off than it is today. That is alarming. 
Because our primary goal is to address the difficult problem of 
making an interoperable nationwide broadband national 
communications network a reality, and the last thing any Member 
wants is to make things worse.
    Can you explain this concern in more detail? How would the 
Republican discussion draft make things worse than it is today 
for public safety?
    Mr. Moore. Certainly, Congressman. Thank you, Congressman. 
I thought I was beyond the day that I could surprise any member 
of Congress, but I appreciate that.
    It is not my intention to alarm anybody with the statement 
other than to say a couple of things.
    Number one, as the proposed majority draft reads, it talks 
about suspending any future 700 narrow band deployments. There 
are a number of jurisdictions around this country, their 
existing land mobile radio systems are end-of-life today, and 
they need to be refreshed, and they are in the process of doing 
that.
    We cannot basically stop those processes now. That would be 
the equivalent of saying to large swaths of our country, we 
can't protect you. That is not going to happen. I just can't 
see that. And I don't think that is the intent of the draft. 
So, again, without much discussion with the membership to talk 
about that, I think we would find ourselves in a difficult 
spot.
    We also do believe that auctioning the D-block will make us 
less safe. Now, current law does say that. We acknowledge that. 
But we believe definitely if we move forward and stop all 
deployments--planned deployments of 700 in the narrow band in 
the short term, it will make America less safe.
    Mr. Waxman. Do you have any specific thoughts about how the 
draft might be modified to address your concern?
    Mr. Moore. I think there are a couple of things. Obviously, 
reallocate the D-block to public safety, which would be 
extremely helpful, and we would be grateful.
    Mr. Waxman. That comment did not take me by surprise.
    Mr. Moore. But, also, the notion that the current 700 
systems that exist today and those that are in the pipeline are 
critical to keeping us safe today. And the reality is it may be 
10 years, 12 years down the line that we may be able to migrate 
some of those to broadband, but that is not today, and that is 
not in the near term.
    Mr. Waxman. Dr. Cramton, in your testimony you emphasize 
that Congress should focus on basic principles in enacting 
legislation to authorize incentive auctions. You say the 
easiest mistake Congress can make is to prevent the FCC from 
adopting the best auction design by including auction details 
and other restrictions in the enabling legislation. This is 
consistent with what we have heard from other economists that 
have testified before this subcommittee and was the central 
message in the 112 economists' letter sent to President Obama.
    How do you balance your suggestion with broadcaster 
concerns about the structure and shape of the auction? You want 
Congress to list principles, but the broadcasters want specific 
protections. Do you think there is a middle ground we can all 
agree on and do either of the discussion drafts get there?
    Mr. Cramton. Well, I hope there is a middle ground, but I 
do think that you have to be very careful in thinking about all 
these issues. There are a lot of things that interact in the 
auction design, so I do think that there are--in addition to 
the broad principles, one could introduce in the legislation 
assurances--basic features that assure the major stakeholders 
that they will be treated fairly. So that can be done.
    A lot of it are intricate details, such as one thing that 
really protects people in an auction are bid deposits to make 
the bids binding commitments. That is very important in an 
auction. That sort of detail is clearly left for--the setting 
of bid deposits is left set by the expert. However, the 
provision for these kinds of instruments to be put in place in 
the final rule is I think the sort of thing that the 
stakeholders are looking for. And that can be done. It is a 
delicate business.
    Mr. Waxman. Let me ask one of the stakeholders. Senator 
Smith, how do you respond?
    Mr. Smith. Well, Mr. Chairman, it just really is important 
to us that, as you balance the public safety component, that 
the first informers not lose their business model. What that 
means is the contours. And if the FCC is unfettered and able to 
move contours as they will, you are affecting 40 percent of the 
TV stations across this country. There will be blackouts. There 
will be people left out.
    We think if you can protect our contours, there will still 
be those who volunteer, there will be spectrum available, but 
you won't damage in a permanent way an industry that many 
Americans, a rising number of Americans but particularly 
disadvantaged Americans, economically disadvantaged Americans, 
will not be denied free over-the-air television.
    Mr. Waxman. Thank you.
    Thank you, Mr. Chairman. My time has expired.
    Mr. Walden. I thank the gentleman.
    I now recognize the gentleman from Ohio, who was here when 
the gavel fell, apparently, Mr. Latta, for five.
    I would just tell our members, too, that they anticipate 
votes on the House floor sometime to be called between 10:45 
and 11:00 and that we would not walk off the floor until 1:30, 
which makes it really unlikely we would resume this hearing. So 
to the extent we can move through the questions, that is the 
latest news.
    Mr. Latta. Well, thank you, Mr. Chairman; and again thanks 
for our panel for being with us today.
    I am a true believer in the incentive auctions, especially 
within the bill. I have a piece of legislation out there to 
auction on the spectrum.
    But I do find it interesting, especially in Senator Smith's 
opening remarks, I think everyone out there, when you have to 
say ``truly voluntary''--and I put that in quotation marks--I 
think there is some mistrust for some reason around Washington 
that things that are voluntary aren't truly voluntary. That is 
why I think it is very, very important that we make sure that 
it is truly voluntary and we don't have to put those quotation 
marks around what we want to do around this place.
    If I could, moving right along, on page 3, Mr. Cramton, of 
your testimony, you cite that there are three good features of 
the draft legislation that are worth mentioning; and you go on 
to say that the draft does not impose restrictions on which 
broadcasters can participate in the auction. Restrictions of 
this form would destroy competition in the reverse auction 
among broadcasters.
    Can you expound a bit upon how the reverse auction work 
will work under the incentive auctions provided under the bill?
    Mr. Cramton. Sure. Essentially, it is a two-sided auction, 
so we need competition on both sides. One important aspect of 
the competition is on the supply side, from the broadcasters.
    So you come to a market like Washington, D.C. There is lots 
of different over-the-air broadcasters in Washington, D.C. They 
are put a simple question: You can stay on the air as is; you 
can turn over, say, half your spectrum, share with another; or 
you can completely shut down your over-the-air business. Now, 
we need to have competition among those broadcasters in order 
to get a competitive price for the willingness to relinquish 
spectrum. Otherwise, they could exercise market power.
    We need the same thing on the demand side coming from the 
operators. This is why the competition and things like 
interoperability are really important. Because, right now, the 
industry has been moving towards a duopoly on the demand side, 
with the two dominant carriers commanding over 90 percent of 
the earnings in the industry right now. The small players, the 
regional players, and the smaller national players play a very 
important role in creating the competition that creates the 
auction revenues on the demand side.
    Now, if we have got the competition on both sides of the 
auction, what that does is creates an enormous amount of value 
for the taxpayer and for society at large. So that is the goal, 
and that is why you have to be very careful with any provisions 
that you introduce, make sure that the provision is pro-
competitive, rather than otherwise. Sometimes these things are 
subtle.
    Mr. Latta. Again, how do you think this is going to affect 
the revenue that the auction might produce? And, again, what is 
your estimate for what that might bring in?
    Mr. Cramton. Well, I can tell you that the demand is 
exploding on the demand side. So this is a few years off. It 
would take 2 years--even if you pass legislation today, it 
would take probably 2 years to line everything up and make it 
happen. By then, there is going to be much, much more demand 
than there is now as people discover the wonderful, amazing 
things that these phones can do. And as a result--and it is not 
just phones. It is tablets, everything.
    So, as a result, I am quite confident that it will command 
a very high price. That is what we are seeing in auctions 
around the world for the 4-G spectrum. I have been involved in 
many of the auctions in Europe and continue to be involved in 
those, and other countries are talking about them now as well. 
And the amounts the bidders are putting on the table, even in 
countries much, much smaller than the United States, are in 
billions.
    So I have to believe that this spectrum is going to be 
worth--if there is competition on both the supply side and the 
demand side, it is going to be worth tens of billions and 
possibly much, much more. That is very important, especially 
given the debt problems that we are facing in our economy right 
now.
    Mr. Latta. Thank you very much.
    Mr. Chairman, in the interest of time, I will yield back.
    Mr. Walden. I thank the gentleman for yielding back.
    I turn now to Ms. Matsui from California for five.
    Ms. Matsui. Thank you, Mr. Chairman; and I would also like 
to thank the witnesses for being here today.
    I strongly support preserving unlicensed spectrum for 
American innovators, and an auction I believe will put American 
innovators and American innovation at a competitive 
disadvantage. I recently introduced legislation that will 
allocate additional spectrum at 5 gigahertz to spur innovation 
and support the growing demand for Wi-Fi in this country. I 
thank the Ranking Members Waxman and Eshoo for including this 
proposal in their draft, and I look forward to working in a 
bipartisan manner on this moving forward.
    Mr. Guttman-McCabe, if the 5 gigahertz spectrum identified 
by the Republican draft were made available for auction, do you 
think there would be more than one wireless carrier bidding on 
it and how much revenue do you think auctioning this spectrum 
would generate?
    Mr. Guttman-McCabe. Congresswoman, I think when you look at 
spectrum above 5 gigahertz, our carrier licensees wouldn't 
likely participate, because it is outside the sweet spot for 
mobility. So getting it up above 3 gigahertz is something that 
puts it sort of outside the technology scope right now.
    The upside is it could be used for unlicensed, which, as I 
said earlier, is and will be part of the solution to moving 
data through our networks.
    Ms. Matsui. OK. Mr. Calabrese, what would the impact of 
American innovation be if the unlicensed spectrum were to be 
auctioned off?
    Mr. Calabrese. As I mentioned earlier, I think it would be 
really a terrible blow when you look at all the things we have 
done with Wi-Fi, which nobody expected. When this was allocated 
for unlicensed, it was known as the junk band, because it was 
just for toys and baby monitors and things where the 
transaction costs were too high to have people go and get a 
license or buy a subscription. Then Wi-Fi grew up, and now we 
have--what is rolling out now is super Wi-Fi on the TV white 
space channels.
    There is already talk--Ericsson, for example, has estimated 
that the Internet of things will be 50 billion devices by the 
end of the decade, almost all of that unlicensed. So there is 
just going to be tremendous innovation fueled that we can't 
afford to sacrifice.
    I wish Mr. Shimkus were still here, because one response I 
would have to his point--and I think it was made otherwise--
well, gee, shouldn't we collect some money from companies that 
use unlicensed spectrum in creative ways? Of course, almost 
every workplace, every home, every business is using unlicensed 
spectrum, and that would be difficult.
    But even the ones that are most innovative at using it, if 
you are going to do that, don't do it at the front end in a 
one-time auction, because--for all the reasons in my testimony, 
the free rider problem, et cetera, that is not going to work. I 
mean, if you really need money that badly, you can always put a 
device certification fee. There could be 20 cents on every chip 
or device that is certified for unlicensed. There are billions 
of them out there. But an auction is the worst idea.
    Ms. Matsui. Thank you.
    On the idea of governance, there is billions of dollars at 
stake in public funding and the safety of life and property at 
sake, and I think there is a wide agreement that governance is 
the absolute key to the success of the public safety broadband 
network. So there must be a national governance standard that 
ensures the primary goal of achieving a nationwide level of 
interoperability for the Nation's first responders who are 
exercising the fiscal responsibility and technical and 
operational expertise demanded of this national asset.
    Mr. Moore, as an initial matter, please explain why you 
believe a national governance model is key to the success of 
this network and also why you might believe that our governance 
model might be better, and it is modeled on the S. 911. And I 
will say right up front, I don't believe that the Republican 
draft provides the right type of governance for a project of 
this scope, complexity, and national importance.
    I will let you answer the question.
    Mr. Moore. Thank you, Congresswoman.
    We do believe that a national governance piece is critical 
to making sure that this is deployed on a nationwide level.
    I will say this, though, that our vision would be, from a 
public safety standpoint and from the State and local 
government, is there needs to be local control and input into 
that governance. That has got to be a key piece. Hence, the 
number of seats on that particular board needs to be there so 
that we have the requisite input.
    But the truth of the matter is when you are talking tens of 
billions of dollars and you are talking about making sure that 
standards are set on a nationwide level, you do need that 
nationwide presence, and we do believe, based on our experience 
locally, the model that is in the Democratic draft bill is what 
we would support. And the same thing, it mirrors S. 911.
    Ms. Matsui. Thank you.
    Mr. Walden. I now recognize the gentlewoman from Tennessee, 
who will be I think our last questioner, because they called 
the votes. There are 18 of them. We will go to Mrs. Blackburn.
    Mrs. Blackburn. Thank you, Mr. Chairman.
    I promise that I will give you all the opportunity to 
submit in writing any further detail in the questions, but I do 
want to get a couple of things out here.
    Mr. Guttman-McCabe, to you first. The draft doesn't call 
for any delineated timeline in these auctions except to say 
within 10 years and then within 5 years. As we go through this 
discussion draft, do you think we need more clarity, should 
there be more delineation, and how will it help the market? And 
do you think that if we were to more clearly delineate the 
schedule, would it have a positive or negative effect on the 
Treasury?
    Mr. Guttman-McCabe. Thank you, Congresswoman.
    I think the clearer you can be, the better. To the extent 
that you are recognizing and trying to derive benefits to the 
budget and scoring, we understand that. But front loading this 
rather than back loading it will be better. Having a timeframe 
laid out as to when spectrum will come to market will be 
better. It will help our carriers, who will have to spend 
billions.
    Mrs. Blackburn. Let me interrupt you there, because I know 
there may be a couple of other questions that want to come in.
    Dr. Cramton, I want to bring you in on this discussion. The 
Upton-Walden draft precludes the FCC from imposing conditions. 
Waxman-Eshoo does not. I want to hear from each of you about 
what you think conditions will do to these auctions.
    We have had all these net-neutrality discussions. Professor 
Cramton, I have to tell you, it looks like you were against it 
before you were for it, or for it before you were against it. I 
have got your July '07 and your February '11 paper, and you 
take both sides of the issue when it comes to net neutrality 
and how you think it would affect the auction. So I think a 
little bit of clarification--do you still think that net 
neutrality conditions will increase revenues received from the 
auctions? That is what you laid out in your '07 paper. So you 
have been on both sides of that issue.
    Mr. Guttman-McCabe, I want to hear from you about the 
conditions and what you think. So very briefly.
    Mr. Cramton. Very briefly, respectfully, I haven't been on 
both sides of the issue. Net neutrality, I have actually tried 
to stay away from that. In fact, the C-block in '07, the issue 
was not net neutrality. It was open access. And I was a big fan 
of open access at the time, and the bidders were big fans of 
open access at the time.
    Mrs. Blackburn. OK, let me then interrupt you and ask you 
to submit in writing some clarification. If you want to go back 
and look at these two papers and then provide us some clarity, 
I think that might help in informing the record.
    Mr. Guttman-McCabe. Dr. Cramton has mentioned numerous 
times--and I agree completely--about the need to drive 
competition in the bidding, and we fully support that. We are 
concerned that adding encumbrances will do the exact opposite.
    Dr. Cramton suggested that the bidders like the open access 
requirement. The reality is there were two bidders on that 
license. If you go immediately next door to the other license, 
there were 50, 60, 70 bidders. A bigger license with an 
encumbrance went for half the price.
    The most stark illustration is Los Angeles without the 
encumbrance--Los Angeles without the encumbrance sold for 
significantly more than the entire West Coast with the 
encumbrance, and the West Coast license was twice as big. So 
the non-encumbered license drew multiple competing bids.
    Mrs. Blackburn. Senator Smith, I just can't get let you go 
without asking you a question today. You mentioned the DTB 
chip, and I think it was last month at a hearing that one of 
your broadcasters raised a similar issue. So is NAB seeking a 
technology mandate that all mobile phones carry a mobile DTB 
chip?
    Mr. Smith. No, we are not seeking a mandate.
    Mrs. Blackburn. You are not seeking a mandate. I thank you 
for the clarification.
    I yield back.
    Mr. Walden. The gentlelady yields back her time.
    I turn now to the distinguished gentleman from Michigan, 
Mr. Dingell, for 5 minutes.
    Mr. Dingell. Mr. Chairman, you are most courteous; and I 
thank you.
    To Senator Smith, these will be yes or no questions.
    Is it your understanding that the Federal Communication 
Commission's national broadband plan recommends reallocating 
the 120 megahertz of broadcast television frequencies for 
wireless broadband access? Yes or no?
    Mr. Smith. Yes.
    Mr. Dingell. Now, again, Senator, it is also true that the 
NAB has expressed grave reservations about granting the 
Commission unfettered authority to reclaim this much spectrum 
for fear of unfair treatment to broadcasters, is that correct?
    Mr. Smith. Yes, that is correct.
    Mr. Dingell. Now, is it your understanding--well, let me 
say this. Detroit is the 10th-largest broadcast market in the 
country. It has 14 stations licensed in its DMA. Now, is it 
your understanding that if the Canadian channel reservations 
are taken into account and the FCC moves ahead with its goal of 
reallocating the 120 megahertz of broadcast spectrum, there 
will be no channels available for any of Detroit's 14 stations? 
Yes or no?
    Mr. Smith. Yes.
    Mr. Dingell. Now, Senator, so you are telling me that, 
absent stringent protection for broadcasters and explicit 
limitations on the FCC to conduct incentive auctions, my people 
in Detroit won't be able to get free over-the-air broadcasting?
    Mr. Smith. Not just your people, Congressman, on the 
northern tier but also those members on the southern tier, 
similar treaties with Mexico.
    Mr. Dingell. Every border city has the potential of having 
that problem.
    Mr. Smith. Of having no broadcast television.
    Mr. Dingell. And that would also potentially include things 
like Cuba?
    Mr. Smith. Absolutely.
    Mr. Dingell. Now, it is also true that American DMAs along 
the Canadian and Mexican border will suffer similar reductions. 
We have already addressed that, and you agreed.
    Now, I have asked the FCC for all of these answers to the 
questions I have raised and haven't gotten a satisfactory 
answer. Absent compelling national security related concern, 
have you heard of a Federal agency not answering a 
congressional request for information? Yes or no.
    Mr. Smith. Congressman, in 12 years in the U.S. Senate, 
they always answered; and the House of Representatives is an 
equal body to the United States Senate.
    Mr. Dingell. I am going to try and see that they are 
pounded about the head and shoulders until they come forward 
with these answers.
    Now, do you think my skepticism about granting the 
Commission limitless authority to conduct incentive actions is 
justifiable?
    Mr. Smith. Well, we are for incentive auctions. We believe 
there are reasonable protections to preserve broadcast as we 
promote broadband----
    Mr. Dingell. Remember, my time is running.
    Mr. Smith. If we don't do that, America will regret; and 
your phones will light up as few things do when you affect 
people's TVs.
    Mr. Dingell. This is a question about NAB support. Does the 
NAB support explicitly prohibiting the FCC from involuntarily 
reclaiming spectrum from broadcasters as well as from revoking 
their licenses or otherwise penalizing them for not taking part 
in the auctions? Yes or no.
    Mr. Smith. We support prohibiting that kind of action.
    Mr. Dingell. Now, Senator, furthermore, does NAB believe 
that FCC's incentive auction authority should be structured 
with clear limitations on its ability to repack and co-locate 
signals as well as an explicit mandate to protect broadcast 
contours? Yes or no.
    Mr. Smith. Yes.
    Mr. Dingell. Now, Senator, does NAB believe that 
broadcasters, both directly and indirectly affected by 
incentive auctions, should be fully compensated for their 
expenses relative to such auctions?
    Mr. Smith. Yes, sir.
    Mr. Dingell. Now, these questions to Chief Moore.
    Mr., I have got to get a yes or no out of you, because I 
have 51 seconds.
    Now, I have a simple question for you with respect to 
public safety. You have had many years of experience protecting 
and serving the public. Is relocating the D-block free of 
charge to the public safety the best way to ensure our 
country's first responders can do their jobs most effectively 
and save lives?
    Mr. Moore. Yes.
    Mr. Dingell. Thank you.
    Mr. Chairman, I have 25 seconds to yield back.
    Mr. Walden. Thank you. Nobody has mastered that better than 
you.
    I have a number of things to enter into the record. Before 
I do that, though, we will have questions from other committee 
members who were otherwise detained in other committees. We 
would really appreciate a very rapid turnaround, because we 
actually value your response as we go through this process. So, 
to the extent we make questions available--and I know Mr. Bass 
had some--we would like a quick turn.
    We thank you for your testimony, by the way, and your 
answers to our questions.
    I will enter into the record unanimous consent statements 
from the High Tech Spectrum Coalition, which represents the 
major high-tech companies; the National Association of 
Broadcasters; CTIA-The Wireless Association; Verizon and AT&T 
statements lauding the majority's discussion draft. We always 
like to put those in the record. To enter into the record 
letters from Tech America, the National Association of 
Manufacturers, the Information Technology Industry Council and 
the Telecommunications Industry Association, as well as quotes 
from the FCC filings of Qualcomm, Motorola, and LG opposing a 
mandate on the manufacture of 700 megahertz wireless devices, 
and an FCC working paper from June 2010 that finds 10 megahertz 
provides more than the regional required capacity for day-to-
day communications for public safety.
    Without objection.
    [The information follows:]

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    Mr. Walden. Actually, let's go into the work session now, 
and we will move on through.
    We appreciate all your testimony and comments. We will 
continue to work on these drafts in a quest to find a 
bipartisan solution for our public safety friends and for all 
Americans.
    With that, we are adjourned.
    [Whereupon, at 10:53 a.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

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