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



 
            KEEPING THE NEW BROADBAND SPECTRUM LAW 
                        ON TRACK
=======================================================================

                                HEARING

                               BEFORE THE

             SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                           DECEMBER 12, 2012

                               __________

                           Serial No. 112-184



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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         TAMMY BALDWIN, Wisconsin
CHARLES F. BASS, New Hampshire       MIKE ROSS, Arkansas
PHIL GINGREY, Georgia                JIM MATHESON, Utah
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington   DORIS O. MATSUI, California
GREGG HARPER, Mississippi            DONNA M. CHRISTENSEN, Virgin 
LEONARD LANCE, New Jersey            Islands
BILL CASSIDY, Louisiana              KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky              JOHN P. SARBANES, Maryland
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 (ex 
ADAM KINZINGER, Illinois                 officio)
JOE BARTON, Texas                    HENRY A. WAXMAN, California (ex 
FRED UPTON, Michigan (ex officio)        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. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     6
Hon. Lee Terry, a Representative in Congress from the State of 
  Nebraska, opening statement....................................    20
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................    20
Hon. Robert E. Latta, a Representative in Congress from the State 
  of Ohio, opening statement.....................................    21
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, opening statement..........................    21
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................    22
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................   138

                               Witnesses

Julius Genachowski, Chairman, Federal Communications Commission..    23
    Prepared statement...........................................    26
    Answers to submitted questions...............................   139
Robert M. McDowell, Commissioner, Federal Communications 
  Commission.....................................................    31
    Prepared statement...........................................    33
    Answers to submitted questions...............................   151
Mignon Clyburn, Commissioner, Federal Communications Commission..    58
    Prepared statement...........................................    60
    Answers to submitted questions...............................   158
Jessica Rosenworcel, Commissioner, Federal Communications 
  Commission.....................................................    62
    Prepared statement...........................................    64
    Answers to submitted questions...............................   162
Ajit Pai, Commissioner, Federal Communications Commission........    69
    Prepared statement...........................................    71
    Answers to submitted questions...............................   166

                           Submitted Material

Letter, dated December 10, 2012, from Broadcom, et al., to Mr. 
  Walden and Ms. Eshoo, submitted by Ms. Eshoo...................     7
Letter, dated February 13, 2012, from 3-dB Netowrks, Inc., et 
  al., to Senators and Representatives, submitted by Ms. Eshoo...    13
Letter, dated December 11, 2012, from Ms. Eshoo and Hon. Darrell 
  Issa to Julius Genachowski, Chairman, Federal Communications 
  Commission, submitted by Ms. Eshoo.............................    17
Letter, dated December 12, 2012, from Preston Padden, Executive 
  Director, Expanding Opportunities for Broadcasters Coalition, 
  to Mr. Walden, submitted by Mr. Walden.........................    77
Letter, dated December 11, 2012, from Grant E. Seiffert, 
  President, Telecommunications Industry Association, to Mr. 
  Walden, submitted by Mr. Walden................................    80
Letter, dated December 11, 2012, from High Tech Spectrum 
  Coalition to committee and subcommittee leadership, submitted 
  by Mr. Walden..................................................    82
Slide presentation, submitted by Mr. Walden......................    85
Letter, dated December 11, 2012, from Atlantic Tele-Network, et 
  al., to committee and subcommittee leadership, submitted by Mr. 
  Doyle..........................................................   112
Cisco Blog entry, dated October 20, 2011, by Mary Brown, 
  submitted by Mr. Latta.........................................   119


            KEEPING THE NEW BROADBAND SPECTRUM LAW ON TRACK

                              ----------                              


                      WEDNESDAY, DECEMBER 12, 2012

                  House of Representatives,
     Subcommittee on Communications and Technology,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:05 a.m., in 
room 2123, Rayburn House Office Building, Hon. Greg Walden 
(chairman of the subcommittee) presiding.
    Members present: Representatives Walden, Terry, Stearns, 
Shimkus, Rogers, Blackburn, Bilbray, Bass, Gingrey, Scalise, 
Latta, Guthrie, Kinzinger, Barton, Eshoo, Markey, Doyle, 
Matsui, Barrow, Christensen, Pallone, Rush, Dingell, and Waxman 
(ex officio).
    Staff present: Ray Baum, Senior Policy Advisor/Director of 
Coalitions; Mike Bloomquist, General Counsel; Sean Bonyun, 
Communications Director; Matt Bravo, Professional Staff Member; 
Andy Duberstein, Deputy Press Secretary; Neil Fried, Chief 
Counsel, Communications and Technology; Debbee Keller, Press 
Secretary; David Redl, Counsel, Communications and Technology; 
Charlotte Savercool, Executive Assistant; Lyn Walker, 
Coordinator, Admin/Human Resources; Tom Wilbur, Digital Media 
Advisor; Roger Sherman, Democratic Chief Counsel; Shawn Chang, 
Democratic Senior Counsel; David Strickland, Democratic FCC 
Detailee; Margaret McCarthy, Democratic Professional Staff 
Member; and Kara van Stralen, Democratic Special Assistant.

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

    Mr. Walden. I would like to call to order the Subcommittee 
on Communications and Technology for our hearing on ``Keeping 
the New Broadband Spectrum Law on Track.''
    I want to thank everyone for being here today.
    And before I begin, I would like to start the hearing off, 
this subcommittee hearing, recognizing five hardworking members 
of our subcommittee who will be departing the United States 
Congress, including our colleagues Cliff Stearns, Mary Bono 
Mack, Brian Bilbray, Charlie Bass, and Ed Towns. We certainly 
appreciate the service that they have rendered to the people of 
the United States, to this full and our subcommittee, and the 
work they have done. And we appreciate both their service, and 
we wish them well in the next chapter of their lives.
    We will also miss Phil Gingrey's presence in our 
subcommittee's hearings. Now, he won't be going far.
    Phil, we wish you well in your new role as vice chair of 
the Environment and Economy Subcommittee.
    Meanwhile, we will have some new members joining our full 
committee and subcommittee, including Billy Long, a member of 
the Missouri Professional Auctioneers' Hall of Fame. So, 
Commissioners, as you write your rules for these auctions, I 
humbly volunteer Billy to be your auctioneer.
    Look, we are here today to check on the progress at the 
Federal Communications Commission at following the law and 
implementing the incentive auction legislation Congress passed 
last year.
    Not only does this new law hold the potential to unleash 
new technology and create hundreds of thousands of American 
jobs, but it also is the source to fund the build-out of the 
interoperable broadband public safety network. That is an 
important process for our police and firefighters. It is 
important that we get this done. It was one of the remaining 
items of the 9/11 Commission that lingered for session after 
session after session until our subcommittee and our full 
committee finally got this across the line.
    While I am not about to micromanage how the FCC operates 
your auction, I do expect the FCC will follow the law, 
including maximizing the proceeds from the auction. Not only 
does our leadership of the wireless world hinge on the agency's 
efforts, so, too, does the fate of the public safety broadband 
network. Making this a successful auction is a goal I know each 
and every one of us shares.
    The U.S. has long led the world in spectrum auctions, with 
an auction model based on the elegant simplicity of one-course 
concept. Markets, not the whims of regulators, are best-suited 
to ensure that spectrum is put to productive and innovative 
use. I know from some of your testimony you have pointed out, I 
think, especially some of our newer Commissioners, the success 
the FCC has had over the years at doing good auctions.
    However, we have also learned of overly prescriptive 
auction rules can lead to less than successful auction results. 
The FCC so encumbered the D block auction of the lower 700 meg 
band that a 10 megahertz license for the use of prime broadband 
spectrum failed to garner more than a few token bids, and those 
were well below the true value of that very important spectrum. 
So the FCC must avoid overly prescriptive auction rules and, 
instead, rely on market mechanisms that have a proven record of 
success.
    Remember, the revenue generated, which was used in part to 
help pay for the middle-class tax cut and extension of 
unemployment benefits, will also be used to help pay for the 
interoperable public safety broadband network under FirstNet 
and to fund the Next Gen 911 service and to invest in public 
safety research and development. A broadcast incentive auction 
that fails to raise the revenue needed for these projects or 
that unnecessarily gives away billions in cleared spectrum will 
be considered a failure.
    In particular, I would like a commitment that the 
Commissioners will honor the language of the act that requires 
guard bands to be, and I quote, ``no larger than is technically 
reasonable to prevent harmful interference between license 
services outside the guard bands.'' That is a direct quote out 
of the statute.
    As we discussed in last month's receiver performance 
hearing, guard bands, although sometimes necessary to prevent 
interference between neighboring services, are a suboptimal use 
of spectrum. Their size should be minimized. Yet the 
Commission's NPRM contemplates two guard bands of at least 6 
megahertz and contemplates expanding them to as much as 10 
megahertz. I want to see the engineering analysis that 
justifies such fat guard bands.
    Is 6 megahertz the minimum size needed? Could the 
Commission use channel 37 as a guard band between mobile 
broadband and broadcasting to reduce the need for additional 
dedicated guard bands? Could the FCC reduce the need for guard 
bands by improving receiver performance? These are just a few 
of the unanswered and, in some cases, unasked questions from 
the Commission's NPRM.
    Finally, let me make it clear, I support the use of 
unlicensed spectrum to foster innovation and provide much-
needed offload for congested broadband networks. That is why 
our bill that is now law expanded the amount of unlicensed 
spectrum by identifying an additional 195 megahertz in the 5 
gig band, frequencies ideal for this kind of use. It also 
codifies the use of white spaces.
    What I cannot support is the unnecessary expansion of 
unlicensed spectrum in other bands that are actually needed for 
license services, especially at the expense of funding for 
public safety.
    So let me be clear: Every megahertz of broadcast television 
spectrum that the FCC doesn't auction means less revenue to 
fund prerogatives already determined by this committee and this 
Congress, including prerogatives like FirstNet, Next Gen 911, 
and wireless research and development.
    Thanks for joining us today. I Look forward to hearing your 
remarks and that of my colleagues.
    Now I would like to recognize my friend from California, 
Ms. Eshoo, for an opening statement.
    [The prepared statement of Mr. Walden follows:]
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    OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Eshoo. Thank you, Mr. Chairman. And good morning to you 
and to the Chairman of the FCC and the Commissioners. Welcome. 
It is wonderful to have you here.
    Mr. Chairman, I would like to begin by requesting that the 
December 10th letter signed by more than 370 companies and 
organizations who care about the future of unlicensed spectrum 
be placed in the hearing record. This letter and a February 
13th letter describe the importance of unlicensed technologies 
to innovation, job creation, and public safety.
    And I would also like to request that a bipartisan letter I 
sent to the FCC Chairman yesterday with Chairman Darryl Issa be 
included in the record. The letter demonstrates the significant 
unlicensed developments that have taken place just in the last 
9 months since the spectrum bill was signed into law.
    So I ask for unanimous consent to place both of these in 
the record.
    Mr. Walden. Without objection.
    [The letters follow:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Eshoo. Thank you.
    Mr. Chairman, ensuring that the FCC successfully implements 
the voluntary incentive auction, a mechanism that this 
subcommittee established, holds great potential to produce new 
jobs and to free up more spectrum at a time in which demand for 
wireless broadband continues to soar. The economic importance 
of this auction I don't think can be understated. Last month, a 
new study from the GSMA and Deloitte concluded that the 
doubling of mobile data use results in a 0.5 percentage point 
increase in GDP per capita growth.
    As the FCC Chairman stated in adopting the proposed 
incentive auction rules, the Commission must engage in a 
process that is transparent, fact-based, data-driven, and draws 
on the leading experts in both engineering and economics. While 
I have confidence in the Commission's ability to carry out its 
process in such a manner, there are three key areas which I 
think deserve additional focus.
    The first is the importance of constructing a band plan 
that maximizes the enormous economic benefits of both licensed 
and unlicensed spectrum. The proposed rulemaking adopted on 
September 28th of this year, consistent with congressional 
intent, recognizes that nationwide guard bands needed for 
interference protection can simultaneously provide unlicensed 
access, ensuring that every megahertz of spectrum is used 
efficiently. Simply put, nowhere in the act does it require the 
FCC to auction guard bands.
    And as the title of today's hearing reflects, this 
subcommittee has a responsibility to keep the new broadband 
spectrum law on track. That is the title of this hearing. Not 
to go off track, but to remain on track. Attempts to rewrite 
the law through the rulemaking process should be rejected by 
the Commission and will only serve to delay the release of new 
spectrum.
    Second, Congress crafted the spectrum law to ensure that 
the FCC, by rulemaking, can adopt rules enhancing competition, 
consumer choice, and innovation. With the potential to free up 
as much as 120 megahertz of beach-front spectrum, wireless 
carriers of all sizes, both regional and national, must have an 
opportunity to participate in the auction process. Promoting a 
competitive landscape can be furthered through the completion 
of the Commission's interoperability proceeding as well as a 
revision of the Commission's spectrum screen, the process used 
to determine how much spectrum anyone carrier can hold in a 
given market.
    Finally, the Commission must be proactive, I believe, in 
its approach to educating broadcasters. Without voluntary 
broadcaster participation, there will be no new spectrum to 
repurpose. The FCC's Learning Everything About Reverse-Auctions 
Now, the LEARN program, is an important step in this process.
    And I encourage the Commission to engage in individual 
outreach that ensures that broadcasters fully understand the 
benefits of participation. Ultimately, this is going to have to 
be a collaborative process that brings together broadcasters, 
wireless carriers, and technology companies for the purpose of 
revolutionizing the mobile broadband marketplace.
    I thank Chairman Genachowski and every member of the 
Commission for your tireless efforts to ensure a successful 
auction, the first in the history of our country that is 
voluntary, and to each Commissioner for being here today to 
share your perspectives.
    And I yield back, Mr. Chairman.
    Mr. Walden. The gentlelady yields back the balance of her 
time.
    The chairman recognizes the gentleman from Nebraska, Mr. 
Terry.

   OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEBRASKA

    Mr. Terry. Thank you, Mr. Chairman.
    And for this Congress, this I expect to be my last official 
business as your vice chair. I want to thank you for a fun and 
good year. But even though I may lack that title on this 
subcommittee, it won't change my enthusiasm and activity on 
this committee in the 113th.
    This incentive auction, if it is successful--and I expect 
it will--will accomplish a number of goals that will benefit 
consumers. As the Commission drills down to a set of final 
rules, I have confidence that it can balance the concerns of 
this stakeholders.
    In doing so, I want to be sure that the intent of the 
Spectrum Act is respected. And in doing so, I want to be sure 
that this means that the Commission must raise the revenue 
necessary to pay for the FirstNet public safety network; it 
means that the guard bands must be no longer than technically 
reasonable to avoid interference. It also means that all 
bidders must be able to follow and participate in the forward 
auction. Finally, a faithful interpretation of the Spectrum Act 
requires the Commission to ensure that the auction spectrum is 
not encumbered with value-sapping restrictions on use or 
alienability.
    I look forward to working with the Commission and my 
colleagues on the subcommittee in the coming months to make 
sure that this opportunity is not wasted and that we, along 
with the FCC, get it right.
    At this time, I will yield to the gentleman from Texas, Mr. 
Barton.

   OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Barton. Thank you, Mr. Terry.
    I want to compliment the chairman, who is not here, for the 
new seats up here on the dais. They are very comfortable. I 
guess it is intentional that the Commissioners still are in the 
uncomfortable seats. I am not sure.
    I appreciate the subcommittee holding this hearing.
    The Digital Television Transition and Public Safety Act of 
2005 was passed when I was chairman. That created 84 megahertz 
of spectrum to be auctioned. Since then, we have also had the 
Middle Class Tax Relief and Jobs Creation Act of 2012, which 
requires that 65 megahertz of this spectrum be auctioned by 
2015.
    When it is my turn to ask questions to the Commission, I 
will have two issues: One is what happens to the low-power 
television stations in the major metropolitan markets who don't 
have Class A licenses. They are very concerned that they may 
lose their license and be left out in the cold. And, secondly, 
I am very puzzled about this three-way simultaneous auction. I 
really don't understand how that is going to work, and I hope 
one of the Commissioners can explain that to me.
    With that, Mr. Chairman, I yield back.
    Mr. Walden. The Chair now recognizes Mr. Latta.

OPENING STATEMENT OF HON. ROBERT E. LATTA, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF OHIO

    Mr. Latta. Well, thank you, Mr. Chairman. And, also, I 
appreciate the FCC Commissioners for being here at the 
committee with us today.
    The Spectrum Act was a landmark legislation by authorizing 
volunteer incentive auctions. Everyone knows that the success 
of the auction is critical for deployment of a public safety 
network, for bringing spectrum to a competitive marketplace for 
mobile broadband, and the continued vitality of our Nation's 
broadcasters.
    This is truly an issue of global competitiveness. In fact, 
a recent study by Deloitte using Cisco data revealed a doubling 
of mobile data use leads to an increase of 0.5 percentage 
points in GDP per capita growth rates. And while the incentive 
auction is a key component to our Nation's spectrum policy, we 
must remember that it is only one component. The administration 
needs to work with Congress to look at ways to clear Federal 
spectrum, particularly the 1775 to 1780 megahertz band.
    Once again, Mr. Chairman and Commissioners, we thank you 
for being here today, and we appreciate your transparency and 
openness as the incentive auction proposal is developed. We 
look forward to hearing your testimony.
    And, Mr. Chairman, I yield back. Thank you.
    Mr. Walden. The gentlelady from Tennessee, Ms. Blackburn.

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF TENNESSEE

    Mrs. Blackburn. Thank you.
    And I want to welcome our Commissioners. We are so pleased 
you are here for your Christmas visit.
    And, Chairman Walden, I thank you for holding the hearing.
    The spectrum auctions have been authorized, and they should 
maximize the amount of spectrum that is available for licensed 
commercial mobile use and maximize revenues to the Treasury. 
Everywhere we go, all of our innovators to the broadband are 
saying, Let's maximize this, let's get these auctions out 
there. And the voluntary auctions will be easier if the 
Commission is faithful to the statute that Congress passed.
    Commissioner Pai, we are delighted that you recognized that 
in your testimony. So we thank you for that.
    We know that it is going to be necessary to get the 
spectrum out there if we are going to achieve our shared goals: 
mitigating our Nation's spectrum crunch; improving public 
safety; generating billions in revenue to help pay down this 
massive debt that we are facing in this country; creating good-
paying, sustainable, long-term jobs. And we need to maximize 
participation among all interested parties.
    So we welcome you. I am looking forward to the hearing.
    And I yield back.
    Mr. Walden. The Chair recognizes the gentleman from 
California, 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 very much, Mr. Chairman, for holding 
this important hearing on the FCC's implementation of spectrum 
legislation that Congress passed with strong bipartisan 
support. And I am grateful for the chairman and all of the 
members of the Commission's work in this with regard.
    The Public Safety and Spectrum Act implemented one of the 
last remaining recommendations from the 9/11 Commission and 
created a nationwide interoperable public safety broadband 
network for first responders. It also provided new authority to 
the FCC to conduct the incentive auctions, with the purpose of 
alleviating the spectrum crunch fueled by the ever-growing 
demands for mobile broadband services and providing a 
downpayment for the public safety network. Overall, the new law 
will help drive our national economic growth while keeping the 
American people safe through state-of-the-art communications 
infrastructure for public safety.
    The act was the result of months of bicameral,bipartisan 
negotiations that included many elements of compromise. The 
Federal Communications Commission is now grappling with several 
of these areas, and I would like to highlight two in 
particular.
    The first is unlicensed spectrum. Unlicensed spectrum has 
been an incredible economic success story. Innovative services 
like Wi-Fi and Bluetooth are now ubiquitous parts of our 
communications system. They came about because of the use of 
unlicensed spectrum.
    The law advances unlicensed use in several ways: It allows 
the FCC to use the existing white spaces in the broadcast band 
for unlicensed use; it gives the FCC authority to reorganize 
these existing white spaces to maximize their value; and 
perhaps most important, it allows the FCC to create guard bands 
in the repurposed broadcast television spectrum that may be 
used for new unlicensed services like Super Wi-Fi. This is 
smart spectrum policy that recognizes the increasingly 
interdependent nature of licensed and unlicensed operations.
    The guard bands will both enhance the value of the spectrum 
to be auctioned by protecting it from interference and create a 
nationwide band of prime spectrum that can be used for new 
innovations in unlicensed use. That is why I am pleased that 
the FCC's proposed rules are faithful to congressional intent 
to promote innovation in unlicensed use.
    Second, the law preserves the FCC's ability to use auction 
rules to promote competition in the wireless industry, while 
ensuring no single carrier is unfairly excluded from the 
auction process. As the steward of the public's airwaves, the 
FCC must have the authority to write auction rules that aim to 
avoid the concentration of spectrum in the hands of just a 
small group of companies.
    The act strikes the proper balance in recognizing that 
while every carrier should be eligible to participate in some 
fashion in a system of competitive bidding, the FCC can 
continue to promote competition through its spectrum policies. 
To implement this part of the law, the FCC is appropriately 
seeking comment on whether to establish spectrum aggregation 
limits or other rules to achieve these aims.
    The conferrees on the Public Safety and Spectrum Act spent 
significant time debating and ultimately rejecting other 
proposals on unlicensed and bidder eligibility. No conferree's 
position was accepted outright, and our carefully crafted 
compromise is what became law. So I am troubled by attempts by 
some to relitigate issues that were resolved earlier this year 
when the bill passed Congress with widespread support. After-
the-fact spin that unfairly twists the language of the law 
deserves little weight by the Commission or the courts.
    My judgment is that the FCC is off to a good start in 
proposing incentive auction rules. I commended Chairman 
Genachowski and his colleagues on the Commission for these 
efforts. And I look forward to hearing all of your testimony 
today.
    And I have 30 seconds if anybody wants it. Otherwise, I 
will yield it back so we can hear from our witnesses.
    Mr. Walden. The gentleman yields back the balance of his 
time.
    And with that, we will proceed to hear the testimony of our 
witness. And we will start with the Chairman of the Federal 
Communications Commission, Mr. Julius Genachowski.
    We welcome you back before our subcommittee, Mr. Chairman, 
and we look forward to your statement and commend you on all 
the work your commission is doing. Please proceed.

      STATEMENTS OF JULIUS GENACHOWSKI, CHAIRMAN, FEDERAL 
 COMMUNICATIONS COMMISSION; ROBERT M. MCDOWELL, COMMISSIONER, 
     FEDERAL COMMUNICATIONS COMMISSION; MIGNON L. CLYBURN, 
   COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; JESSICA 
 ROSENWORCEL, COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; 
   AJIT PAI, COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION

                STATEMENT OF JULIUS GENACHOWSKI

    Mr. Genachowski. Thank you, Chairman Walden, Ranking Member 
Eshoo, members of the committee.
    Mr. Walden. We seem to have a spectrum problem here.
    Mr. Genachowski. There we go.
    Mr. Walden. There we go.
    Mr. Genachowski. I think it is unlicensed.
    It is a pleasure to be here, and thank you for the many 
opportunities both to testify here and to work with all members 
of the committee outside of the hearing process on work in this 
very important area.
    I do want to take a minute to thank Congressman Terry and 
Congressman Doyle for coming to the FCC last week when we 
adopted our Low Power FM Order, implementing a bipartisan act 
of Congress. It was a very special day for the Commission, the 
Commission staff, and I thank both of you for joining us.
    This past week, Commissioner McDowell and I were part of 
the U.S. delegation to the WCIT in Dubai, where we worked 
together to defend a free and open Internet. I would note that 
members of the committee staff on a bipartisan basis were 
there, as well, and on a bipartisan basis were fighting for 
Internet freedom and openness.
    The situation in Dubai right now is fluid. People are 
literally meeting right now. We have a strong American 
delegation on the ground led by Ambassador Kramer and including 
representatives from across government and the private sector. 
As I said, the situation is fluid. The issues are important. 
And I think we all understand that this will not be the last 
conference at which these important issues arise. And fighting 
for Internet freedom and openness globally will be something 
that we will all be working on together for quite some time.
    In the U.S., the broadband sector is strong, and the U.S. 
has regained global leadership in mobile communications. We 
have more 4G LTE subscribers than the rest of the world 
combined, and we are setting the pace globally on innovation in 
mobile software, apps, and devices.
    This leadership means that we face a particularly acute 
challenge to meet exploding mobile demand, the ``spectrum 
crunch,'' and that we must use all policy levers at our 
disposal to address it. That is why a few months ago at the 
Commission we freed up 30 megahertz of WCS spectrum for 
broadband. It is why yesterday we unanimously adopted an order 
freeing up 40 megahertz of underutilized satellite spectrum for 
land-based mobile broadband, and a proposal setting the stage 
for an auction of an additional 10 megahertz, the H block, in 
2013. It is why later today I expect my colleagues and I to 
approve a proposal to make 100 megahertz of spectrum in the 3.5 
gigahertz band available for broadband.
    And, of course, Congress recognized the importance of 
innovative policy solutions to the spectrum crunch in 
authorizing the Commission to conduct incentive auctions. As a 
result of this important legislation, landmark legislation, the 
U.S. will be the first country in the world to conduct 
incentive auctions.
    Of course, our obligation is to implement the legislation 
in accordance with the statute. With our vote on a notice of 
proposed rulemaking in September, the Commission launched 
formal implementation of the new law. Implementation is on 
track.
    Key goals and principles include maximizing the overall 
amount of spectrum freed up, including by maximizing 
broadcaster opportunities for participation in the auction; 
enabling the continued role of a healthy broadcast industry; 
generating very substantial revenue, including providing 
funding for FirstNet; driving private investment and innovation 
and ongoing U.S. leadership in mobile; focusing on the 
engineering and the economics; engaging with all stakeholders 
in a transparent process; and doing everything we can to make a 
complex, multipart process as simple as possible.
    In my written testimony, I outline the significant steps 
taken since enactment of the statute to ensure success. The new 
incentive auction concept poses a long list of new challenges, 
but we are focused together on smart solutions.
    For example, our proposed wireless band plan for 600 
megahertz consists of 5-megahertz building blocks to allow for 
the greatest amount of flexibility and efficient optimization 
for the new mobile data world. Specifically, we are 
anticipating for the first time the possibility that we might 
have more spectrum for downlinks than uplinks, which in a data 
world could make sense as compared to the symmetrical uplinks 
and downlinks in a voice world.
    In addition, the notice proposes to free up a significant 
amount of unlicensed spectrum for Wi-Fi-like uses and other 
innovations. Both licensed and unlicensed spectrum have 
contributed to U.S. leadership in mobile. Like auctioned 
licensed spectrum, unlicensed spectrum has a powerful record of 
driving innovation, investment, and economic growth--hundreds 
of billions of dollars of value creation for our economy and 
consumers.
    Our proposal sets out a balanced approach designed to drive 
investment innovation for years to come and drive continued 
U.S. leadership.
    We are also engaging broadcasters in a constructive 
dialogue to meet statutory directives concerning repacking.
    We look forward to comments on all of these proposals as 
well as ways to implement the post-auction transition with 
minimal consumer disruption and within the timetable set by the 
law.
    To make clear, as we all know, the implementation is now in 
the notice stage. We put out a concrete proposal designed to 
generate concrete and efficient response from stakeholders. We 
will be looking very carefully at the responses that we get, 
deciding issues on a record and consistent with the statute.
    With that, thank you again for the opportunity to testify, 
and I look forward to answering your questions.
    Mr. Walden. Thank you, Chairman.
    [The prepared statement of Mr. Genachowski follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Walden. And just for the record, thank you for thanking 
my colleagues for coming down to the FCC. As a licensee of the 
FCC in the broadcast world for 22 years, I made sure to do 
everything possible to make sure I never had to go before the 
FCC in person, and so I am glad they went.
    We will go to Commissioner McDowell now for your testimony.

                STATEMENT OF ROBERT M. MCDOWELL

    Mr. McDowell. Thank you, Mr. Chairman and Ranking Member 
Eshoo and all members of the subcommittee. It is terrific to be 
back here today. Thank you for inviting us.
    I share your goals of putting more spectrum into the hands 
of American consumers while raising funds for the Treasury and 
a nationwide broadband public safety network.
    It is important for all of us remember today that the FCC 
is at the earliest stages of developing rules to implement 
Congress's will regarding incentive auctions--auctions that 
will literally be the most complex in world history. Initial 
comments are not even due until next month. We will have to 
cull through a plethora of ideas and new questions we did not 
contemplate when we launched the rulemaking last September. And 
so, consequently, it would be premature for me to offer a final 
opinion on where the Commission should go with new auction 
rules until it is time for us to vote on them.
    Nonetheless, being the only Commissioner before you today 
who is also a veteran of two of the largest spectrum auctions 
in American history, as well as the digital television 
transition--seems just like yesterday--I have learned a lot 
through trial and error, sometimes more error than anything 
else. In our conversation today, I hope I can help illuminate a 
path forward based on past successes and failures.
    My entire testimony could be boiled down to one sentence: 
The FCC should approach these auctions with simplicity, 
humility, and regulatory restraint. But with almost 4 minutes 
left, what the heck, I will go on further.
    Through intelligently designed band plans and auction and 
service rules, we could provide opportunities for all 
stakeholders and potential new entrants to successfully 
participate in the auctions. Similarly, we should avoid 
micromanaging the wireless market through unnecessary rules 
that would deter bidders and reduce auction revenue. The goal 
of maximizing revenue is especially important here due to the 
congressional mandate that part of the auction proceeds fund 
the construction of the new nationwide public safety network.
    Furthermore, we should keep in mind that technology 
advances constantly, and what may seem impossible to achieve 
today may be routine tomorrow. So let's not underestimate 
market innovation, or, worse, let's not inadvertently preempt 
it.
    Beyond the spectrum auctions, American policymakers should 
continue their vigilance against encroachments upon Internet 
freedom, especially internationally. Chairman Genachowski, as 
he mentioned, and I worked together with the rest of the U.S. 
delegation in Dubai last week, and members of your committee 
staff, to prevent the International Telecommunication Union 
from expanding its reach into the Internet's complex ecosystem.
    And as the chairman mentioned, right now is a crucial time. 
Literally, as we sit here, it is nighttime in Dubai. And it is 
at a crucial intersection, and the next 12 to 24 hours will 
determine the fate of things. But if we are lucky enough to 
have Internet freedom escape the WCIT this year, we have to 
remember there is a much more fundamental negotiation in the 
year 2016. And there is a big meeting in May that lays the 
foundation for that. So we should all keep that in mind.
    But I would like to thank this committee for its unanimous 
and bipartisan resolution opposing even the smallest of 
international encroachments on Internet freedom.
    In the meantime, I hope we could all share a New Year's 
resolution to close the Title II docket at the FCC. Now, my 
hopes may not be realized, I realize, but ending this 
proceeding would send a strong signal around the globe that the 
U.S. opposes subjecting the Internet to late-19th-century 
industrial policy.
    Instead of new regulation in this space, we should revive a 
concept that I proposed nearly 5 years ago, and that is to use 
the tried and true multi-stakeholder model to resolve alleged 
anticompetitive conduct that would threaten the open Internet. 
Supported by the backstop of existing antitrust and consumer 
protection laws, the multi-stakeholder model could spotlight 
market failures and cure them more quickly and probably more 
effectively than antiquated telephone laws. If this concept is 
good enough for us to preach abroad, shouldn't we also practice 
it at home?
    Thank you, and I look forward to your questions, with 46 
seconds left on the clock.
    Mr. Walden. We will make note of that. Thank you.
    [The prepared statement of Mr. McDowell follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Walden. Now we will go to Honorable Commissioner 
Clyburn.
    Thank you for being here today. We appreciate all you do at 
the Commission. Look forward to your testimony.

                 STATEMENT OF MIGNON L. CLYBURN

    Ms. Clyburn. Thank you, Chairman Walden, Ranking Member 
Eshoo, and distinguished representatives. Good morning. Thank 
you for the opportunity to discuss the FCC's efforts in 
implementing the historic legislation you passed earlier this 
year.
    I respectfully request that my full statement be admitted 
in the record of this proceeding.
    Mr. Walden. Without objection.
    Ms. Clyburn. Over the past few years, consumer demand for 
wireless services has increased by startling rates. These 
realities require that the Nation put in place targeted yet 
nimble legislative and regulatory policies in order to keep 
pace.
    It is sometimes hard to believe this, but when I first 
started at the Commission in the summer of 2009, tablet devices 
had not even been introduced to the U.S. consumer. And now, 
according to the most recent data for this year, 22 percent of 
American adults own such a device.
    When you consider these statistics, together with the fact 
that tablets consume 121 times more spectrum than ordinary 
cellphones, then you realize that two elements of spectrum 
management have become critical policy priorities: First, we 
must find quicker ways to repurpose spectrum for commercial 
mobile services, and, second, we must promote more efficient 
uses of spectrum.
    Congress understood this when it passed the JOBS Act of 
2012. The plain language of the statute makes clear that 
through a voluntary incentive auction we have the authority to 
find a quicker tool to reallocate spectrum.
    Congress directed that the incentive auction of broadcast 
television spectrum consist of three major features: a reverse 
auction, a repacking of the broadcast TV band, and a forward 
auction. For those broadcast TV licensees who want to continue 
to use their spectrum to provide services, the Commission must 
make all reasonable efforts to preserve their coverage area and 
populations served.
    I am pleased to report that the Commission has been moving 
quickly to implement these statutory directives. Just 2 months 
after enactment, a unanimous three-member commission released 
an order that put forth some basic ground rules for the 
channel-sharing aspects of the incentive auctions.
    This past September, the Commission at full complement 
unanimously adopted a notice of proposed rulemaking on the full 
range of procedural and technical rules that it could adopt. 
That notice proposes a band plan with 6 megahertz guard bands 
that meet the statutory requirement that they are no larger 
than technically reasonable to prevent harmful interference 
between licensed services. It seeks comment on the proposal.
    I believe it was important for the notice to propose a band 
plan with an appropriate balance of licensed and unlicensed 
spectrum. Section 6407 of the act correctly authorizes the 
Commission to permit the use of such guard bands for unlicensed 
use.
    Unlicensed spectrum has played a critical role in helping 
the wireless industry use its valuable resource more 
efficiently. Commercial wireless carriers are increasingly 
using unlicensed Wi-Fi services to offload their smartphone 
traffic, resulting in wireless carriers not having to construct 
an estimated 130,000 cell sites at a savings of more than $25 
billion each year.
    The unlicensed spectrum proposals in the notice would also 
encourage development of wireless services that can make 
effective use of unused spectrum or white spaces in the 
broadcast TV band.
    It is also clear that continued innovation in the 
unlicensed service industry is important to our national 
economy. As Representatives Eshoo and Issa pointed out, it is 
estimated that unlicensed spectrum generates between $16 
billion and $37 billion each year for the U.S. economy.
    The incentive auction notice also appropriately seeks 
comment on ways the Commission could design the incentive 
auction to accomplish all of the funding goals of the act, 
including funds for a national first responder network.
    Thank you all for allowing me to make these opening 
remarks. I look forward to any questions you may have.
    Mr. Walden. Commissioner Clyburn, thank you for your 
testimony.
    [The prepared statement of Ms. Clyburn follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Walden. And now we will move to Commissioner 
Rosenworcel.
    Thank you for being here today. We look forward to your 
comments, as well.

                STATEMENT OF JESSICA ROSENWORCEL

    Ms. Rosenworcel. Good morning, Chairman Walden, Ranking 
Member Eshoo, and members of the subcommittee. It is an honor 
to appear before you with my colleagues to discuss our progress 
in implementing the incentive auction provisions of the Middle 
Class Tax Relief and Job Creation Act.
    The Commission embarked this past September on the complex 
but critical task of conducting wireless incentive auctions. We 
must get them right because if we get them right, we will 
facilitate the voluntary return of spectrum from commercial 
licensees and promote its efficient reuse. If we get them 
right, we will ease congestion on our airwaves and expedite the 
development of new wireless services and applications. And if 
we get them right, we will drive digital-age innovation, spur 
job creation, and grow the wireless economy.
    But before we get there, it is useful to consider what has 
come before. For nearly 2 decades, the Commission's path-
breaking spectrum auctions have led the world. The agency has 
held more than 80 auctions, it has issued more than 36,000 
licenses, and it has raised more than $50 billion for the 
United States Treasury. In short, the Commission's auctions 
have been a model for governments and commercial wireless 
providers across the globe.
    We are now again poised to be the world's pioneer with 
incentive auctions. For my part, I believe that there are four 
principles that should guide us: simplicity, fairness, balance, 
and public safety.
    Simplicity is key. Incentive auctions are undeniably 
complicated, but at every structural juncture, a bias toward 
simplicity for participants is crucial. Simplicity will allow 
the market to work and yield the most favorable participation.
    Fairness is essential. Fairness demands that we consider 
how to accomplish repacking by minimizing unnecessary 
broadcaster disruption and maximizing the ability of the public 
to continue to receive free over-the-air television. At the 
same time, we ask that broadcasters make a fair assessment of 
the opportunities this auction provides. By offering incentives 
to share channels and incentives to relocate from the UHF to 
VHF band, this auction can mean new resources for broadcasters 
to develop new programming and deploy new services.
    Balance is necessary. None of the three legs of the 
incentive auction--the reverse action, the repacking, or the 
forward auction--can stand on its own. For instance, the 
interference rules we consider will not only impact broadcast 
services but also how much spectrum will be available for 
auction, which in turn will impact the revenues raised. We must 
also pay attention to the balance between licensed and 
unlicensed spectrum. The former provides reliability and 
interference protection; the latter provides low barriers to 
entry and promotes the efficient use of limited resources. Good 
spectrum policy requires both.
    Finally, public safety is fundamental. Congress designated 
auction revenues to support the first nationwide interoperable 
wireless broadband public safety network. The recent storms in 
the Northeast have provided a stark reminder of the importance 
of communications in a disaster. The success of these auctions 
requires delivering on our promise to America's first 
responders.
    Even with incentive auctions on course, the demand for our 
airwaves will continue to grow. To meet this demand, efficiency 
is critical. At the FCC, efficiency means getting all of our 
auctions done on a clear timeline. For industry, efficiency 
means squeezing more out of the spectrum already allocated for 
commercial use. Now is the time to invest in technologies--
geographic, temporal, and cognitive--that multiply the capacity 
of our airwaves.
    Finally, for the Federal Government, efficiency means 
finding new approaches that facilitate repurposing of spectrum 
better than our old three-step process of clearing, relocating, 
and auctioning. To this end, I believe that it is time to 
develop a series of incentives to serve as the catalyst for 
freeing more Federal spectrum for commercial use. What if we 
were to financially reward Federal authorities for efficient 
use of their spectrum? If we want to convert more airwaves to 
commercial use, I believe it is time to work with our 
government partners so they can realize value from using 
spectrum efficiently instead of only seeing loss from its 
reallocation.
    It is an exciting time in communications. Incentive 
auctions present real challenges, but their smart execution can 
yield great opportunities.
    Thank you for your time. I would be happy to answer any 
questions you might have.
    Mr. Walden. Thank you, Commissioner. We appreciate your 
testimony.
    [The prepared statement of Ms. Rosenworcel follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Walden. We will go now to the final Commissioner, 
Commissioner Pai.
    Thank you for being with us today. Look forward to your 
testimony, sir.

                     STATEMENT OF AJIT PAI

    Mr. Pai. Thank you. Chairman Walden, Ranking Member Eshoo, 
members of the subcommittee, it is a privilege to appear before 
you today.
    The Spectrum Act originated in the efforts of this 
subcommittee and was the result of bipartisan leadership, hard 
work, and compromise by you and many other dedicated Members of 
Congress.
    Given the pressing need to make more spectrum available for 
mobile broadband, the FCC must act promptly to implement the 
act. Accordingly, this past summer, I called for the FCC to 
commence the incentive auction rulemaking process in the fall. 
Chairman Genachowski launched a timely proceeding in September, 
and I thank him for that.
    I thank him, as well, for his recent announcement of the 
formation of a Technology Transitions Policy Task Force, which 
will address crucial issues that we will encounter as we 
undergo the IP transition.
    As the Commission moves forward in the incentive auction 
rulemaking process, I believe that four principles should 
animate our work:
    First, we must be faithful to the statute. It is our job to 
implement this legislation, not to rewrite it to conform to our 
own policy preferences.
    Second, we must be fair to all stakeholders. This is 
especially important because the incentive auction will fail 
unless both broadcasters and wireless carriers choose to 
participate.
    Third, we must keep our rules as simple as possible. The 
auction will be complicated enough as it is.
    Fourth and finally, we need to complete this proceeding 
within a reasonable time frame. I believe that we should set a 
deadline for concluding these auctions no later than June 30th 
of 2014.
    Fidelity to these four principles will result in a 
successful broadcast incentive auction.
    That said, I do have some concerns with the direction of 
our rulemaking proceeding. Most notably, September's notice of 
proposed rulemaking appears to envision an auction that will 
yield no net revenues. That would mean no money for the First 
Responder Network Authority to build out a nationwide 
interoperable public safety broadband network. That would mean 
no money for State and local first responders. That would mean 
no money for public safety research. That would mean no money 
for deficit reduction. And that would mean no money for Next 
Generation 911 implementation, even though Spectrum Act 
specifically mentions each of these items.
    Most of the problem, in my view, stems from the structure 
of the proposed auction. The only closing conditions set forth 
in the NPRM is that the revenues from the forward auction cover 
the costs of the reverse auction. This is essentially like 
ending a traditional auction as soon as the reserve price is 
met.
    Another part of the problem derives from limits the FCC 
might place on auction participation. For example, if we start 
picking and choosing who may participate in the forward 
auction, that won't be good for anybody. By contrast, 
maximizing participation in the auction will maximize our net 
revenues. And as we set up the auction, I hope we take to heart 
the guidance that we receive from commenters and, importantly, 
from Congress.
    Aside from the broadcast incentive auction, the Spectrum 
Act sets several additional targets for getting more spectrum 
to market. For example, I expect in the near future that we 
will commence a rulemaking proceeding on making available 
almost 200 megahertz of spectrum for unlicensed use in the 5 
gigahertz band.
    This is a legal obligation under the Spectrum Act, to be 
sure, but I am particularly excited about it because it is 
smart policy. The standard for next-generation Wi-Fi, 802.11ac, 
already has been developed, and it requires large, contiguous 
swaths of spectrum for high-capacity, high-speed data 
transfers. The 5 gigahertz spectrum identified in the Spectrum 
Act is well-suited for taking advantage of this innovative 
standard.
    The Spectrum Act also directs the FCC to auction off the 
2155 to 2180 megahertz band, which is adjacent to AWS-1. The 
spectrum ideally would be paired with another 25-megahertz 
block adjacent to AWS-1, the 1755 to 1780 bands. These bands 
already are internationally harmonized for commercial use, 
which means a deployment will be swifter and cheaper than other 
options.
    If we auction off the spectrum within the next 2 years, it 
could raise billions of dollars. With productive collaboration 
among the FCC, the NTIA, commercial users, and Federal users, 
we can achieve the twin goals of efficient commercial use and 
effective Federal use.
    In closing, the Spectrum Act gave the FCC some very 
challenging tasks, but if we accomplish them, our Nation's 
commercial and public safety communications capabilities will 
improve dramatically.
    Chairman Walden, Ranking Member Eshoo, and members of the 
subcommittee, I thank you once again for holding this important 
hearing. I look forward to listening to your views, answering 
your questions, and continuing to work with you in the weeks, 
months, and years ahead to implement this landmark legislation.
    Mr. Walden. Commissioner, thank you for your testimony.
    [The prepared statement of Mr. Pai follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Walden. Thanks to all of you for coming today to 
testify before our subcommittee.
    I would like to put in the record three different letters: 
one from the Expanding Opportunities for Broadcasters Coalition 
announcing a coalition of more than 25 broadcasters at this 
early date who are interested in selling this spectrum in major 
markets, a letter from the Telecommunications Industry 
Association supporting efforts to maximize licensed spectrum 
for mobile broadband, and a letter from the High Tech Spectrum 
Coalition supporting swift implementation of the spectrum law.
    Without objection, they will be in the record.
    [The letters follow:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Walden. Commissioners, obviously we have a lot to cover 
today, and so I have, at least first up, a yes-or-no question. 
I want to start with Commissioner Pai.
    Do you believe the Commission should be ensuring that the 
auction produces the $7 billion for the public safety network?
    Mr. Pai. Mr. Chairman, I do believe that the Commission 
should focus on maximizing revenue to fund the public safety 
network.
    Mr. Walden. Commissioner Rosenworcel?
    Ms. Rosenworcel. Yes, absolutely. We need to deliver on our 
promise to our Nation's first responders.
    Mr. Walden. Commissioner Clyburn?
    Ms. Clyburn. Absolutely, it should.
    Mr. Walden. Commissioner McDowell?
    Mr. McDowell. Yes.
    Mr. Walden. Chairman Genachowski?
    Mr. Genachowski. Yes.
    Mr. Walden. Thank you.
    Now I would like to put a slide up here and draw everyone's 
attention to it and ask unanimous consent to include it in the 
record.
    [The information follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Walden. As the chart they are about to put up will show 
you, the FCC may be forgoing as much as $19 billion, 
potentially, with its guard band and unlicensed proposal. I 
believe you all have copies of this before you.
    Commissioner Pai, before the FCC nets a single penny for 
public safety, it has to pay broadcasters that relinquish 
spectrum and reimburse stations it relocates. We can't know in 
advance how much that will cost, nor do we know how much 
spectrum broadcasters will relinquish or how much that spectrum 
will sell for.
    In light of these unknowns, are you comfortable forgoing 
even a single dollar of potential revenue?
    Mr. Pai. I am not, Mr. Chairman. And that is precisely one 
of the reasons why, in my separate statement on September 28th 
when we adopted the notice of proposed rulemaking, I expressed 
my concern that the closing condition did not appear to 
envision a circumstance in which the auction would yield net 
revenues.
    That is why I proposed asking questions; for example, 
should we go beyond the contemplated structure of the auction, 
which at this point, as I understand it, seems to say that the 
forward auction will close once there is sufficient revenues to 
pay bidders in the reverse auction, to pay for reimbursable 
costs under the Spectrum Act, and to pay for the administrative 
costs of administering the auction.
    So I share that concern. And I believe that the closing 
condition that we ultimately do adopt should be structured in 
such a way to maximize net revenue, precisely for this reason 
that you identify.
    Mr. Walden. For those who may not be able to see the slide 
up there, what it shows is the spectrum that is available for 
auction in blue. That doesn't mean it is all going to be 
auctioned or that there are going to be that many stations that 
come forward and give up their licenses. But that, in theory, 
is what could be available. And then in red is channel 37. And 
then yellow is the remainder, and green is guard band.
    Now, obviously, you are going to need some guard bands. 
And, obviously, some of that won't be auctionable and all of 
that. But I want to put in perspective that even at a 
conservative dollar per megahertz pop, the FCC's plan could 
forgo over $7 billion gross. And that would be enough, if it 
were net, to fully fund FirstNet.
    These are big numbers we are talking about. These are 
programs that the Congress has already said need to be funded 
through this auction. And we have also allocated--some of the 
other net revenues from the proposed auction have already been 
spent to extend the middle-class tax cut and to extend 
unemployment benefits. Paying for all of that was part of the 
big compromise that got this into law.
    My concern is that if we take spectrum off the table from 
auction right off the top, there won't be the revenues, 
potentially, to pay for the things we have already committed 
to, and it ends up going out there in the unlicensed world.
    Commissioner McDowell?
    Mr. McDowell. Real quick, Mr. Chairman. Actually, looking 
at this chart, just for right now, the assumptions actually 
could be very generous. So you have here about 55 megahertz, 
the assumption that the broadcasters will actually be able to 
yield. I am a little skeptical that they will actually be able 
to yield that much for that auction. And I hope I am wrong. I 
will be the happiest person on Earth if I am wrong about this. 
But I am skeptical that it will be that much.
    So this is the variable portion, the how much can be 
auctioned. The fixed portion is already here. As you said, 
there is a minimum amount of 12 megahertz for guard bands, and 
then you have the 6 for the channel 37, and then the remainder. 
So this is the fixed portion.
    And so I wanted just to point that out, that that is a 
guaranteed amount that wouldn't be auctioned. What will be 
auctioned is not guaranteed. We don't know; there are a lot of 
assumptions there.
    Then, lastly, at a dollar per megahertz pop, in the 700 
megahertz auction of 2008 the A and the B blocks, which were 
the least encumbered, went for about $2.70 per megahertz pop, 
in some cases.
    Mr. Walden. So this could be worth two to three times what 
we are showing.
    Mr. McDowell. Exactly.
    Mr. Walden. So it could be a figure of $14 billion or----
    Mr. McDowell. Fourteen, 16, something like that.
    Mr. Walden. Now we are talking a lot of money.
    Mr. McDowell. Even in Washington.
    Mr. Walden. Even in Washington. And I think that is the 
issue here. And I know we are having a debate about how much 
should be available for unlicensed. I know there is other 
unlicensed at the 5-gig level and others that are being put 
forward. And I know we have some disagreement within our 
subcommittee about what the statute says or doesn't say. And we 
will get to that a little later, I think.
    I will recognize the gentlewoman from California, Ms. 
Eshoo, for 5 minutes.
    Ms. Eshoo. Thank you, Mr. Chairman. I hope that we will 
have another round because there really are a lot of questions 
that need to be asked.
    First of all, I am troubled by some of the claims that the 
Public Safety and Spectrum Act is all about revenue-raising. 
The last time I checked, this is the Energy and Commerce 
Committee, not the Budget Committee. Having said that, I think 
that we did a good job to bring about a balance, to bring about 
dollars that would fund the public safety network, that we 
would produce dollars for deficit reduction.
    But, again, this is the Energy and Commerce Committee. In 
Section 309 of the Communications Act, it explicitly prohibits 
the FCC from basing its auction rules predominantly on the 
revenue that would be generated. And during the bipartisan 
negotiations on this bill, a compromise was reached to allow 
unlicensed services to operate in the guard bands that would be 
created as a part of the band plan which would not be 
auctioned. The CBO looked at the proposal that became law and 
concluded that the guard band concept does not decrease the 
revenue.
    So I don't know where all of this is coming from. I think 
it is kind of interesting. But it seems to me that, again, the 
hearing today is ``Keeping the New Broadband Spectrum Law on 
Track.''
    Now, I want to start with the chairman.
    Mr. Chairman, the Commission, I know, is currently--this is 
a little off to something else, but I am still very curious 
about it because I think it is so important. The Commission is 
currently undergoing a review of its media ownership rules. And 
while I recognize that no agreement has been reached within the 
agency, I would like to know what is being done to respond to 
the Third Circuit's instructions to address ownership and the 
viewpoint of diversity.
    If you could just be brief, because I have a whole bunch of 
questions and I have got----
    Mr. Genachowski. Just briefly, diversity remains a core 
obligation of the Commission, something that we care about 
deeply and have been focused on.
    We have overhauled our data collection on broadcast 
ownership so that we finally are getting accurate information 
about minority ownership. We have a major study under way right 
now looking at the issues that are required in this area in 
order to support legal action. And we have requested funding in 
2013 for additional studies to do the work that we need to do 
over time.
    As you know, the quadrennial reviews that we have to 
undergo--the one we are looking at now is a 2010 review that 
started in 2009--they continue on an ongoing basis. It is time 
to get the one before us done. But, of course, we will then 
move on to the next one and continue to look at diversity as a 
central objective of the Commission.
    Ms. Eshoo. Well, I think on this whole subject matter of 
media and consolidation that there should be an underlying 
principle that in a democracy that there be as many voices to 
the many as possible. I mean, this goes to the heart of 
democracy. This is not just something to fiddle around with, 
and so I just wanted to put that out there.
    Now, to the Chairman again, some have argued that the FCC's 
proposal on unlicensed represents an unlawful give away. How do 
you respond to that?
    Mr. Genachowski. Well, one, I think as you said, the 
statute clearly gives the Commission the authority to do 
unlicensed in guard bands, and I would add one point to the one 
you made before, which is that any economic value analysis of 
spectrum methods I would think would have to look at the 
hundreds of billions of economic value and related tax revenue 
that have come from innovations on unlicensed platforms. So 
when the FCC authorized unlicensed use for the first time, no 
one predicted Wi-Fi.
    Ms. Eshoo. No.
    Mr. Genachowski. It was a new platform for innovation that 
together with licensed spectrum has now made us the global 
leader. When I talk to my counterparts overseas, they are very 
focused on the opportunities of mobile, they are looking at 
next generation unlicensed, and I think if we don't lean into 
this we run the risk of falling behind other countries, seeing 
innovations happen overseas and not here. Of course, we will 
operate within the confines of the statute, which I know that 
both sides of the aisle very carefully constructed.
    Ms. Eshoo. Thank you. To Commissioner Clyburn, on the issue 
of bidder eligibility, do you believe that consumers would be 
harmed if the incentive auctions freed up the spectrum that was 
only acquired by the two largest wireless companies?
    Ms. Clyburn. I believe that the FCC should keep in mind as 
we craft these rules what one of the core missions of this 
agency is, which is competition, and I believe that we should, 
again, craft these rules to ensure that the framework and the 
environment would promote such, promote competition. It is good 
for innovation, it is good for the investment, and so it has 
got to be, we have got to look at it in a broad framework but 
never forgetting our mandate to provide, to stimulate 
competition.
    Ms. Eshoo. Thank you. And to Commissioner Rosenworcel, it 
is wonderful to see you and hear your testimony. We have heard 
the suggestion today that auction rules that promote 
competition could result in lower auction revenues, but isn't 
it also true that allowing one or two firms to effectively shut 
out other competing bids could result in less revenue?
    Ms. Rosenworcel. I think that that is possibly true, but I 
think fundamentally we need to hold these auctions in a way 
where there are opportunities for everyone. That will include 
incumbents and new entrants, and ultimately we need to make 
sure that the revenues we raise are sufficient to support the 
first responder network authority.
    Ms. Eshoo. So two bookends, money and real competition. 
Terrific.
    I yield back.
    Mr. Walden. The gentlelady's time has expired. The chairman 
will recognize the vice chairman of the subcommittee, Mr. Terry 
of Nebraska, for 5 minutes.
    Mr. Terry. Thank you. We will go with the Chairman on this 
one. I think we all believe the auction should happen as soon 
as possible but of course getting the rules correct, but 
broadcasters have expressed concern about the folks who will 
lose a signal if broadcast contours change from repacking.
    What is the Commission doing to address this concern, 
number one? Is there a further NPR, notice of proposed 
rulemaking, that will delay the process too much and is there 
an alternative approach to addressing this issue?
    Mr. Genachowski. Well, in the statute Congress addressed 
this issue and laid out guidelines that the Commission has to 
follow in repacking. Those issues were teed up in the notice of 
proposed rulemaking. We expect comments on that and be in a 
position to make a decision. Meanwhile, we are engaging in 
direct dialogue through workshops and webinars and other ways 
to engage directly with broadcasters, both broadcasters who 
like the one Chairman Walden mentioned who are looking at 
participating and also the ones who aren't and are therefore 
focused on repacking.
    Mr. Terry. Appreciate that. Now, following up on the 
gentlelady from California's theme, I am going to move to 
Commissioners McDowell and Clyburn on this one.
    Many commenters have argued that there should be no 
spectrum cap. Do you think the current spectrum screen with the 
safe harbor of one-third of the total spectrum in the local 
market is sufficient to protect consumers and create more 
competition? McDowell first.
    Mr. McDowell. I do, and I expressed my concern when we 
launched our spectrum aggregation NPRM about reverting back to 
the days of the hard spectrum cap. It might be under a 
different name or have a different way of approaching it, but 
spectrum is a lot like real estate, and so you have to look at 
each transaction on its own unique case-by-case 
characteristics, and what was considered, what were considered 
apples and oranges in terms of different frequencies a few 
years ago today is no longer the case. LTE is being built out 
above two gigahertz as well as below one gigahertz, for 
instance, and so the same services are being built in 
frequencies that just a few years ago were thought to be very 
different in their propagation characteristics, as it is called 
in the business. So I think we need to be very careful about 
where that proceeding could go.
    Ms. Clyburn. And one of the things that I keep in mind, and 
I go back to the competitive landscape which is optimal for us, 
and we need to keep that in front of our mind as we craft 
policies. Also in terms of the spectral aggregation currently, 
we have not looked at that proceeding. There has been no reform 
or no adjustments since 2003. So I think the time is right for 
us to look at the policies, current policies. There have been a 
lot of changes in the environment and also, again, keep in 
front of mind what our goal is to have a competitive landscape 
and the benefits of that, and so all of the--I have an open 
mind as it relates to this, and I think that is healthy.
    Mr. Terry. So you think that the screen may not be 
conducive as much as you would like for competition, and so we 
need to look at that again?
    Ms. Clyburn. A lot has changed since 2003 since that last 
review.
    Mr. Terry. And then our new Commissioners, Rosenworcel, 
what would you think, and then Mr. Pai.
    Ms. Rosenworcel. Arguably our existing spectrum screen has 
a certain lack of clarity to it, so I think it is a good thing 
that the agency has opened up a proceeding to talk about that. 
At the same time, technology evolves, and we are finding that 
spectrum in the two gigahertz range, for instance, is now 
viable for mobile broadband use, so I do have some concern that 
if we put rigid requirements in place, they may not respect the 
way that technology evolves.
    Mr. Pai. Congressman, I agree with my colleagues. In 
particular I agree with Congressman Clyburn that the time is 
right to revisit this framework in light of some of the 
deficiencies identified when we kicked off this notice of 
proposed rulemaking, notably, number one, our current approach 
understates competition in the market because it takes out of 
the spectrum equation certain spectrum that, as my colleagues 
McDowell and Rosenworcel pointed out, are in fact used for 4G 
service, like the broadband radio service, the educational 
broadband service. Number two, our current approach also 
creates needless uncertainty because parties, since this is a 
case-by-case basis, if they don't know ex ante how the 
Commission is going to approach their particular spectrum 
holdings. So for those two reasons I think the time is right to 
revisit the screen, mindful of the fact that we need to 
preserve what is right, and in my current view the current 
screen does a good job of that.
    Mr. Walden. The gentleman's time has expired. The Chair 
recognizes the gentleman from California, Mr. Waxman, for 5 
minutes.
    Mr. Waxman. Thank you, Mr. Chairman. We had our differences 
on this committee and with the Senate, and we finally reached a 
compromise, and we settled by agreeing to allow the FCC to 
utilize guard bands that might allow both unlicensed and 
licensed uses to flourish. We understood this to be a good 
compromise that showed unlicensed and licensed uses did not 
have to be mutually exclusive. Unfortunately, some are now 
suggesting that the FCC's proposal to create the guard bands 
contemplated in the legislation is an unlawful giveaway.
    Chairman Genachowski, do you think we have to decide 
between the licensed or unlicensed model? Is there an 
opportunity to create a band plan that includes both?
    Mr. Genachowski. No, I don't think we have to make that 
decision. And, yes, there is the opportunity to create a 
balanced band plan that uses both licensed and unlicensed and 
maximizes the economic value created for the country.
    Mr. Waxman. Some have expressed concern about guard bands 
that are too big or not technically reasonable. How will the 
FCC determine the appropriate size for any guard bands?
    Mr. Genachowski. Well, on a record, based on the 
engineering and input that we get, we made a proposal that is 
based on our expert staff, our engineers and the work that they 
did, which we believe in the first instance is technically 
reasonable, and we will consider all the comments that come in.
    Mr. Waxman. Why do you think that start-ups, innovators, 
technology companies, many of which populate Miss Eshoo's 
district and my district, care so much about unlicensed 
spectrum? I have heard from the cable industry that it is 
critical spectrum located in the television bands be made 
available for unlicensed use.
    Mr. Genachowski. Because it is an extraordinary platform 
for innovation. It has been proven to be that. When it was 
first done 20, 30 years ago it was a theory. Now we know, and 
we have a choice now, do we expand on this good idea or do we 
let other countries do it before us? The innovation will go to 
whichever country builds the most robust licensed and 
unlicensed spectrum infrastructure.
    Mr. Waxman. And how do you explain the cable industry 
support that what you are trying to do with regard to making 
sure there is an unlicensed spectrum available in the broadcast 
band?
    Mr. Genachowski. Well, they, too, have been innovating in 
the area, taking, looking at unlicensed and using it to provide 
alternative broadband access to consumers. Innovation can come 
from tiny start-ups in Silicon Valley or larger companies. We 
want to maximize all innovation.
    Mr. Waxman. You gave a speech several months ago at Wharton 
in which you suggested there is a war on Wi-Fi. What did you 
mean by that?
    Mr. Genachowski. Well, I think I asked why anyone would 
want to launch a war on Wi-Fi, and it is really the reasons 
that we are talking about. This has been such a productive, 
beneficial policy innovation for the country. My view is that 
we should lean into it consistent with the statute and 
anticipate that American innovators will take advantage of new 
platforms for innovation and invent things that we can't even 
imagine now.
    Mr. Waxman. Thank you for that clarification. This is an 
important provision. It was very important to people on this 
committee, and the compromise I thought was a good one to allow 
this kind of innovation to be able to go forward.
    Commissioner Rosenworcel, how will the adoption of Next 
Generation 911 benefit American citizens and first responders, 
and do you believe this is an important component of the FCC's 
public safety mission?
    Ms. Rosenworcel. Yes. I think the first----
    Mr. Waxman. Your mic.
    Ms. Rosenworcel. Yes. I think the first duty of the public 
servant is the public safety, but that is not just my opinion, 
it is the law, it is right there in the first sentence of the 
Communications Act. Next Generation 911 is going to improve all 
of our safety. In the future we will have a world where every 
call into our 911 centers may be accompanied by videos, 
photographs, and your medical records. It can make us all 
safer.
    But the challenge is getting from here to there, and that 
is going to take three things. First, it is going to take 
technical standards. The FCC is at work on that with our public 
safety colleagues. Second, it is going to take a lot of 
coordination. The agency will need to work with the more than 
6,000 public safety answering points around this country as 
well as carriers to produce that kind of outcome. And, finally, 
it is going to take funding, and to that end I would note that 
in the Middle Class Tax Relief and Job Creation Act as a result 
of the work of this committee, there is up to $115 million in 
grant funds available for Next Generation 911. That is a 
terrific resource, and it is my hope that the public safety 
answering points from around this country will benefit from 
that.
    Mr. Waxman. Thank you. And Commissioner Clyburn, if I could 
squeeze in a question to you, you have been an advocate for 
wireless consumers and the importance of competition. As more 
Americans, especially economically vulnerable populations, rely 
exclusively on wireless service, do you believe consumers will 
benefit if the FCC exercises authority to promote wireless 
competition in the upcoming incentive auctions?
    Ms. Clyburn. Absolutely. Competition, when the markets are 
healthy and robust, there are more opportunities, you know more 
options, and that is good, especially for lower income 
consumers. There is not a one-size-fits-all, I don't take a 
one-size-fits-all from a regulatory standpoint, and I believe 
that I should help promote that in the market, in the 
competitive market standing in that framework.
    Mr. Waxman. Thank you very much. Thank you, Mr. Chairman.
    Mr. Walden. The gentleman's time has expired. The Chair 
will recognize the gentleman from Illinois, Mr. Shimkus, for 5 
minutes.
    Mr. Shimkus. Thank you, Mr. Chairman, and welcome to the 
Commissioners. First let me mention how pleased I am that we 
are working collaboratively with the industry on the text 911 
issue. You know, that is what kids use today. They move way 
quicker than we do, and if the reports that I am reading are 
true, then I like what is going on, and that is what we would 
hope, that we would be working with regulators and the industry 
to resolve an identifiable need, so kudos, congratulations, and 
I would say keep it up.
    Obviously the goal of this was to do two things. One was to 
have spectrum available and also try to help fund this, and 
that is kind of where this debate is going, and being part of 
kind of what Anna said, you know, it is keeping the new 
broadband spectrum law on track and kind of like an oversight 
hearing, and a lot of us are asking questions that pertain to 
that.
    I was also--Chairman, I was appreciating this because when 
we talk about the guard bands it just raises the historical 
aspect of LightSquared, and for me I had great hopes that 
LightSquared would provide Wi-Fi to rural small town America, 
but--and I like GPS, we all use it, but I think they 
cybersquatted on spectrum that wasn't there. There was no band, 
there was nothing there to protect the spillover, and we lost 
this great opportunity for rural America to really have high 
speed Internet access, and so I think that is part of this 
debate of how much is too much, where is the band, so we don't 
have encroachment but we also get full compensation. Is that 
kind of the debate that we are having you think? Chairman?
    Mr. Genachowski. Well, I think the discussion about how to 
get this exciting new opportunity right is the one that we are 
having. The incentive auction law was a landmark piece of 
legislation. It involved a lot of people, and the obligation is 
now on us consistent with the statute to get the balance right 
and to do something that drives U.S. leadership in mobile, that 
raises very substantial revenues for the Treasury, and that 
drives private investment and innovation, including through 
things like unlicensed which the statute anticipated in guard 
band.
    Mr. Shimkus. Well, and part of the legislation was to make 
sure we had the funds available also to deploy, and because 
part of that debate was, you know, some people are saying, 
well, if there is not enough money, we will just go back to 
Congress and they will give us more, and we are just not in 
that world today. We are expecting it to come through this 
process.
    Mr. Genachowski. There is one piece here that I look 
forward to working with the committee on, which was the channel 
37 piece on this chart. I think we share your interest in 
freeing that up for auction, and as we looked at it in our 
notice process, we saw a much higher amount of actual use than 
we would like, and the congressional authorization for the 
amount to clear that spectrum at 300 million we believe at this 
stage won't be enough, and this is an area where I do think we 
can work together on a bipartisan basis, perhaps clear channel 
37, and I hope that is an area that we can follow up together 
because it is a way to get more licensed spectrum up for 
auction and also move forward on unlicensed. Look forward to 
working with you on that.
    Mr. Shimkus. Well, that would be an interesting process 
because of the full deployment in that channel and what it 
does. It is almost like moving military spectrum.
    Mr. Genachowski. That is why we haven't proposed auctioning 
it. Other things on this chart really aren't reversible 
decisions if that is true.
    Mr. Shimkus. Right. So let me end with a question to 
Commissioner Rosenworcel and Commissioner Pai. There has always 
been a large debate, we have never really moved on it, on just 
restructuring, reorganizing it, you are relatively new. Having 
observed the process in the short amount of time you have been 
there, what are your thoughts about how we can really move the 
Commission from the copper wire era to today and what would 
restructuring look like?
    I have a minute left, so if you could kind of split that 
time, that would be helpful.
    Ms. Rosenworcel. Well, I think in part you are referring to 
the task force that the chairman just put in place, which I 
think is a very good idea.
    Mr. Shimkus. Your ideas.
    Ms. Rosenworcel. All right. So I will say that years ago we 
used to all exist with a wire line, copper line into our 
houses. The networks we use today are far more diverse. One-
third of our households only have wireless phones. We have 
probably about 30- to 40,000 VoIP lines out there.
    Mr. Shimkus. So how do we reform the Commission? I mean, I 
am trying--we know that. I mean, so how do we reform the 
Commission?
    Ms. Rosenworcel. Well, I think part of reforming the 
Commission is understanding the communications networks that 
are actually out there today and making sure that the 
Commission's structure reflects those networks, and so we do 
have concerns about how we look at this as a matter of silos 
today, where we treat cable differently than we treat 
traditional wire line architecture, different than we might 
treat wireless or broadband, and harmonizing across those 
platforms to reflect the way we use networks today would be a 
good idea.
    Mr. Shimkus. Chairman, 30 seconds for Mr. Pai without 
objection.
    Mr. Pai. Just to add to my colleague's answer, I think 
there are two basic questions as we undergo the IP transition 
that we need to be mindful of. Number one, what role, if any, 
should the economic regulation of the copper era have in a 
world of IP? In my view it should have relatively little to the 
extent that those types of regulations no longer make sense in 
a competitive all-IP world where we have convergence across 
different platforms. Then there is the question of are there 
any particular social goals that we should try to achieve in 
the all-IP world that we think are important? For example, when 
somebody calls 911, should it matter whether they are calling 
on a land line telephone, on a wireless phone or on a VoIP 
application? So those two basic questions, the economic and the 
social goals of regulation in the IP world, are going to be 
central challenges for the Commission, and that is part of the 
reason why I am glad that the Chairman announced the task force 
which I first called for in July because I think this really is 
the biggest challenge that we face at the FCC, how do we 
approach the all-IP world.
    Mr. Walden. The gentleman's time has expired. We now 
recognize the chairman emeritus of the committee, the honorable 
gentleman from Michigan, Mr. Dingell, for 5 minutes.
    Mr. Dingell. Thank you, Mr. Chairman. My commendations for 
this hearing. We need to do what we are doing, and I commend 
you for that. These questions will be yes or no. First to 
Chairman Genachowski.
    Mr. Chairman, section 6403(b) of the Spectrum Act requires 
the Commission to coordinate with Canada and Mexico when 
authorizing the reassignment and reallocation of broadcast 
frequencies. Is that correct?
    Mr. Genachowski. Yes.
    Mr. Dingell. Mr. Chairman, I would note that similar such 
coordination took place for the DTV transition and that it took 
a very long time. Is that correct?
    Mr. Genachowski. Yes.
    Mr. Dingell. Mr. Chairman, will the Commission commit to 
negotiating new arrangements with the State Department, Canada, 
and Mexico as mentioned in paragraph 34 of the Commission's 
notice of proposed rulemaking before repacking broadcast 
frequencies? Yes or no?
    Mr. Genachowski. I am not sure of that provision, but we 
are committed to working with Canada and Mexico.
    Mr. Dingell. Is that a yes or no?
    Mr. Genachowski. I would have to look at that provision to 
give an accurate answer.
    Mr. Dingell. The law requires you to do it.
    Mr. Genachowski. We will comply with the law.
    Mr. Dingell. I hope so. Mr. Chairman, section 6403(b)(2) of 
the Spectrum Act requires the Commission to, quote, make all 
reasonable efforts to preserve as of the date of the enactment 
of this act the coverage area and population served of each 
broadcast licensee as determined using the methodology 
described in OET Bulletin 69 of the Office of Engineering and 
Technology. Does the Commission intend to define explicitly 
what such reasonable efforts will constitute? Yes or no.
    Mr. Genachowski. Yes, as part of our decision.
    Mr. Dingell. Mr. Chairman, does the Commission expect to 
have defined such reasonable efforts? Yes or no.
    Mr. Genachowski. Yes, as part of our decision.
    Mr. Dingell. Mr. Chairman, paragraph 49 of the NPRM states, 
quote, the allotment optimization model may have limited or no 
applicability to this proceeding. The Commission states in 
paragraph 50 that, quote, it expects interested parties will 
have an opportunity for meaningful comment on all specific 
repacking methodologies it is considering before it makes a 
decision, close quote.
    Does the Commission publicly commit to sharing with the 
public the repacking methodology it adopts as well as the 
variables and other inputs it may use to predict repacking 
results? Yes or no.
    Mr. Genachowski. Yes.
    Mr. Dingell. That is a big question. I had a hard time 
getting it out. I am sure you added your share of difficulty to 
it, Mr. Chairman.
    Mr. Chairman, I note the Commission has had a proceeding 
pending on its spectrum screen since September of this year. 
Does the Commission intend to complete this proceeding before 
releasing rules for the voluntary incentive auction authorized 
by the Spectrum Act? Yes or no.
    Mr. Genachowski. Yes, that is our plan.
    Mr. Dingell. Mr. Chairman, on a related note, does the 
Commission intend to use its authority under section 309(j) of 
the Communications Act to ensure broad participation in the 
voluntary incentive auction authorized by the Spectrum Act? Yes 
or no.
    Mr. Genachowski. Yes.
    Mr. Dingell. Mr. Chairman, the Commission released a 
technical paper by the staff in 2010 which concludes that an 
additional 275 megahertz of licensed spectrum will need to be 
cleared in order to meet rising consumer demand for mobile 
broadband. Does the Commission believe that it can achieve that 
goal? Yes or no.
    Mr. Genachowski. Yes.
    Mr. Dingell. Mr. Chairman, other than incentive auctions, 
how does the committee intend to meet that goal?
    Mr. Genachowski. Well, by freeing up spectrum through 
removing regulatory barriers, like we did just yesterday and 
also a few weeks ago with WCS, by recovering more spectrum from 
the government through spectrum sharing approaches, through 
clearing and reallocating government spectrum, and through 
unlicensed spectrum.
    Mr. Dingell. Mr. Chairman, thank you.
    We in the border States are very much concerned about what 
could or will happen to us in this process, losing service, 
seeing stations go dark, seeing additional confusion and 
conflict with our neighbors to the north and south. I hope you 
will keep that in mind as you go forward.
    Mr. Chairman, I ask your kindness in just one thing, and 
that is to commend Commissioner Clyburn for her work on prison 
calling petitions before the Commission. I appreciate the 
progress the Commission has made on these petitions and 
encourage the Commission to resolve these matters as 
expeditiously as possible.
    Mr. Chairman, members of the Commission, thank you for your 
courtesy to the committee today.
    Mr. Terry [presiding]. Thank you, Mr. Dingell. Mr. Barton, 
you are recognized.
    Mr. Barton. Thank you, Mr. Chairman. I am tempted to yield 
back to Mr. Dingell just to let him continue asking his yes or 
no questions. Sooner or later he will get to one that they 
can't answer.
    But Chairman Dingell did ask a question that I am going to 
put a little bit different slant on. He referred to that part 
of the H.R. 3630, the new law, that the Commission in making 
these reassignment or reallocations shall make every effort, 
every reasonable effort to preserve the existing population and 
coverage area for each broadcast licensee.
    Over on the next page, on page 72, subparagraph 5, with 
regard to low power television usage, it says nothing in the 
subsection shall be construed to alter the spectrum usage 
rights of low power television stations, yet in the FCC 
PowerPoint presentation in response to the question can low 
power television participate in a reverse auction, the answer 
to that is no. I understand that part of it. It says low power 
television services have only secondary interference protection 
and must make way for full power and class A TV stations 
assigned to new channels. I understand that. But then they go 
on to say that they have to promote--they may be required to go 
to a different technology, MVPD systems, and/or the Internet.
    I can't speak for the entire committee obviously or even 
the subcommittee, but I can speak for myself, who has been a 
member of the subcommittee and who supported the enactment. I 
didn't envision that we would have the end result that a low 
power television station would simply end up off the air, and 
so I would like to ask the Chairman and the other Commissioners 
if, in fact, you are willing to commit that low power 
television stations that have acted in good faith, they 
understand that they may have to move or be repacked, but I 
personally believe it is not fair at all that the end result is 
that a low power television station that has been a good 
licensee ends up totally off the air.
    Mr. Genachowski. Well, these are questions that we asked in 
our notice. Congress did not change the status of the low power 
stations, and so they remain secondary services. Many, as you 
point out, provide valuable programming in their communities. 
Our job is a hard one, which is how do we free--maximize the 
spectrum that we free up, generate revenue for the Treasury and 
for FirstNet and also address the issues you are raising, which 
are the number of LPTV stations around the country that are 
providing valuable programming. It is a difficult question 
which we have not answered yet. We look forward to working with 
you and getting very robust input from stakeholders as part of 
our process.
    Mr. Barton. But can we agree, and again the low power 
television stations understand that they are secondary, they 
understand under current law that they provide service only if 
it doesn't interfere and that as the full power stations and 
the class A stations operate they have to work around them. 
They understand that they don't have the right to participate 
in this auction. The one thing that they are not willing to 
agree to is that they can be just kicked out of business, 
kicked off the air, and that is that.
    Can we agree as a committee and as the Commission that we 
are going to take steps to make sure that if a low power 
station has operated in good faith and complied with its 
existing license that we will make an effort to keep them on 
the air? Not necessarily on the same channel and the same, but 
at least in the same market.
    Mr. Genachowski. We will work with the LPTV community. We 
have an obligation, as has come up a number of times, to act 
within the statute. Certainly keeping LPTV stations on the air 
where we can is something that makes sense, but I think at this 
point we haven't made a proposal on this. We have an obligation 
to listen to the record, act consistent with the statute, and 
we will continue to work with you and the other members of the 
committee and the LPTV community to ultimately reach the goals 
of the statute, some of which, as you point out, are in tension 
with each other.
    Mr. Barton. Can I ask the newest Commissioner, Mr. Pai, do 
you believe that the current reverse auction, forward auction 
simultaneous system that has been outlined is really workable?
    Mr. Pai. It is certainly a novel construction which is 
necessary since the entire incentive auction process presents 
questions; a first impression, as Congresswoman Eshoo pointed 
out in her opening statement. I think the simultaneous auction 
has the advantage, as the NPRM points out, of certainty in real 
time as to what spectrum will be available, but there are 
obviously some complications. Participants in the reverse 
auction aren't necessarily well versed in auction processes, 
and they might not know, you know, exactly what the nature of 
the auction is going to hold for them. On the forward side, the 
bidders might not know what spectrum they are bidding on which 
inhibits, obviously, their ability to form a coherent strategy.
    So there are going to be some challenges there, and I am 
hopeful that in the NPRM process that commenters will give us a 
wide range of perspectives that will allow us to understand 
whether the simultaneous approach is the best one.
    Mr. Barton. Well, I would encourage the Commission and the 
staff and the members of this committee to keep an open mind on 
this because we have conflicting goals. We want to maximize 
revenue for deficit reduction, we want to maximize reallocation 
of spectrum for new uses, and we want to preserve the rights of 
the existing licensees that don't wish to participate in the 
auction. When you put that all together, it is very difficult 
to come up with a system that actually makes sense, and I would 
hope you all keep an open mind on how to do that.
    With that, Mr. Chairman, I would yield back.
    Mr. Terry. Thank you, Mr. Barton. The Chair recognizes the 
gentleman from Massachusetts, Mr. Markey, for his 5 minutes.
    Mr. Markey. Thank you, Mr. Chairman, very much.
    Mr. Chairman, could you help us to frame this tension that 
exists under existing law? That is, that what we are trying to 
do is to make new spectrum available for the wireless 
revolution while at the same time ensuring that broadcasters 
are protected, that they only have to act voluntarily, but that 
there is proper protection against interference. So what is the 
process that you have established that telescopes the time 
frame to ensure that that issue is resolved and done so in a 
way that meets all the technical requirements but forces the 
parties who sometimes have a stake in just, you know, waiting 
until eternity to finally just get to the point where they 
accept the reality of the technology?
    Mr. Genachowski. Two points briefly. One, on the time 
frame, this is why we moved so quickly to start the NPRM. We 
have announced that we intend to hold an auction in 2014, and 
we will drive this step by step to a conclusion.
    The second point, on the framing, what many people don't 
realize is that in many major markets, most major markets in 
the U.S. today there are many more over-the-air TV licensees 
than people realize. In New York, where I am from, the number 
is 28. And there were, there was a large allocation of these 
licenses before cable and satellite, and what we are doing now, 
and this is I think the innovation of incentive auctions, is to 
say, how can we use market mechanisms to reallocate some of 
that spectrum to mobile broadband in a win-win way? And that is 
what we are doing. That is why there will be broadcasters who 
remain in markets like New York and others that are healthy, 
indeed stronger, but there is also tremendous opportunity to 
free up spectrum to generate revenue and to promote innovation.
    Mr. Markey. When we moved over the 200 megahertz out of 
this committee in 1993, we had a two-star general sit here and 
say you just can't do it, it is just absolutely technologically 
impossible to do. So, again, do you have a process that is 
totally fair to the broadcasters and to the wireless industry 
that is in place? Have you had them in your office 
simultaneously with their engineers to talk about the issues so 
that you can hear and your experts can hear the differences 
which they have?
    Mr. Genachowski. That is exactly what we are doing. Through 
the notice and comment process, also through the workshops, 
also through direct engagement with our engineers, that is what 
I have said to both industries, which is get your engineers 
working because we will resolve these largely as engineering 
issues consistent with the economic and innovation goals of the 
statute.
    Mr. Markey. Do you ever have a meeting yourself with the 
engineers in the room, with the other, you know, from all 
industries just sitting there with your engineers hearing the 
disagreements?
    Mr. Genachowski. I very much enjoy meeting with engineers 
and business executives, and I won't express an opinion on what 
is fun to meet with.
    Mr. Markey. OK. No, I appreciate that. Let me just say last 
year The Economist magazine predicted, this is hyperbolically I 
think, The Economist predicted that the expected economic 
benefits of unlicensed spectrum alongside finding a crack in 
the code for curing cancer would be amongst the most 
significant developments expected in 2012. Do you agree with 
that?
    Mr. Genachowski. Yes, I do. I don't know about the 2012 
piece, so I would have to think about that, but as I said 
before, the Wi-Fi was not an expected innovation from 
unlicensed policy when it was first done, and I think there is 
every reason now to expect that we will get unexpected 
innovations in the future from a new platform for innovation.
    Mr. Markey. And we had a hearing in this committee just a 
couple of weeks ago where one of the FCC's top engineers 
testified that advances in technology are not likely to obviate 
the need for guard bands anytime soon.
    Do you believe that the FCC should put licensed spectrum at 
risk for interference by reducing the size of the guard bands?
    Mr. Genachowski. Until we can change the law of physics and 
eliminate the possibility of interference, we are going to have 
to have guard bands.
    Mr. Markey. And so, again, is there a process that gives 
people deadlines in terms of resolving these technical issues? 
Because we are congressional experts, which is an oxymoron 
compared to real experts, and when you put engineers in a room, 
we have to just remain silent and listen. So that is, to us, it 
seems to me, the real question, how timely are the deadlines 
given here to resolve these issues because I think it is almost 
like a homework assignment, you know. You have got a deadline, 
you have got to get that answer, and then we will find a tie 
breaker to make a judgment as to who is right and who is wrong, 
and I don't know what exactly the timelines are here, but it 
just seems to me that the economic benefits are so 
overwhelming, while the risks actually to the broadcasting 
industry could be great, but to resolve it in a way that 
benefits the American people and these industries.
    Mr. Genachowski. So that is a fair question. If I could 
answer it briefly. Comments in response to our notice are due, 
I believe, in January, with replies due shortly after that. At 
my level, the Commissioner level, and the staff level, we have 
been encouraging all the industries to give us their best 
engineering and to do the hard work to put us in a position. 
From there, as we have in past proceedings, we will move 
forward in exactly the direction that you are suggesting, which 
is getting engineers together from the different industries and 
sitting there until we get answers and we will have a 
timetable, and we will drive it to conclusion. It won't be the 
first time we have done that.
    Mr. Markey. Yes, because just as an engineering final exam, 
it is win-win for broadcasters and for wireless. That is just 
one of the exams scheduled, to make sure that we just resolve 
it in a timely fashion.
    Thank you, Mr. Chairman.
    Mr. Terry. Thank you, Mr. Markey. At this time the Chair 
will recognize the gentlelady from Tennessee, Ms. Blackburn.
    Mrs. Blackburn. Thank you, Mr. Chairman. Commissioner 
McDowell referenced the Title II proceedings in light of the 
WCIT conference in Dubai. So Chairman Genachowski, why is that 
title, Title II still open?
    Mr. Genachowski. Well, it is common to have notices of 
inquiry stay open where there is public interest and 
commenting, as there have been here. We don't see any 
uncertainty being created by that proceeding. The sector is 
actually quite strong, investment and innovation are going up. 
To the extent there is any uncertainty, it is coming from the 
Verizon litigation. As I have done before, I would call on 
Verizon to withdraw its litigation. That would increase 
certainty and allow us all to move forward.
    Mrs. Blackburn. Well, have you had any discussions with the 
other Commissioners? Chairman, Commissioner McDowell, do you 
want to weigh in on that?
    Mr. McDowell. Real quick, I would respectfully disagree 
with what the Chairman just said. Actually when I speak with 
Wall Street analysts, that is one of the first questions I get 
is what is the future of that Title II docket. At the time that 
it was first floated in the summer of 2010 there was an 
incredible amount of anxiety expressed from the investment 
community over that docket. It frequently comes up in 
conversations that I have with our international counterparts 
and diplomats internationally. So I think it does create 
uncertainty, and the litigation against the order regarding the 
regulation of Internet network management actually I don't 
think is creating the uncertainty. The uncertainty was started 
by the FCC in this space. There was no evidence of any market 
failure for the FCC to address at all to begin with.
    Mrs. Blackburn. I had an entrepreneur tell me this week 
that they are distressed that so many Federal agencies are 
trying to solve problems that don't exist, and I think there is 
a problem with that.
    Mr. Chairman, have you had discussions about a 
reclassification of broadband services via Title II if the FCC 
loses the DC Circuit and loses the case?
    Mr. Genachowski. No. We are focused on a framework that is 
in place, that is working, that is driving private investment 
and innovation across the ecosystem. I think if we can preserve 
what we have right now it will continue to be a win for the 
country.
    Mrs. Blackburn. Well, do you feel like you have the 
authority to reclassify broadband services under Title II and 
subject them to Title II regulations?
    Mr. Genachowski. Our general counsel at the FCC has said 
consistently that we do have that authority.
    Mrs. Blackburn. OK. When do you plan to close that title?
    Mr. Genachowski. We don't have plans to close it. It has 
been a forum for public input and participation. And as I said, 
we are seeing a sector that is very strong and growing and 
leading the world.
    Mrs. Blackburn. So you plan to just leave it open as long 
as you want to?
    Mr. Genachowski. It is a forum for the public to comment, 
and they have done so, and I expect they will continue to do 
so.
    Mrs. Blackburn. Yes, sir, I think you are going to hear a 
lot of public comments. I think people are going to be weighing 
in readily with you on these issues, and I think the 
uncertainty that is generated around some of the activity does 
not serve our innovative community well, and I hope that we can 
provide some certainty.
    The task force and, Commissioner Pai, I appreciated that 
you mentioned that, and I know that you are looking forward to 
working on that task force. So, Mr. Chairman, is the task force 
going to be focused on modernizing an obsolete regulatory 
framework so that we can finally rationalize this new 
marketplace of converged services and hasten the IP transition 
to next generation networks or do you intend to use it to put 
legacy regulations on new technology? So where are you planning 
to head with that?
    Mr. Genachowski. Our goal really since I arrived in 2009 
was to focus on unleashing the opportunities of broadband and 
addressing all of the policy issues associated with that. We 
did that through the Universal Service Fund reform and creation 
of the Connect America Fund, the Disabilities Act 
implementation, et cetera. We will continue as we have been 
doing to drive the rollout of digital networks, digital IP 
networks. It is very exciting for the country, and we need to 
see continued private investment in that. We also need to make 
sure that in the world, in this transition consumers are 
protected.
    Mrs. Blackburn. Let me interrupt there just a second. Do 
you think it is necessary for you to drive it or do you think 
that the free market drives it?
    Mr. Genachowski. I think the free market is driving 
tremendous investment. I think we create a climate for 
investment, and we have to make sure that any rules we have in 
place that shouldn't be there get taken away, and things we 
need to protect----
    Mrs. Blackburn. Can I submit a list?
    Mr. Genachowski [continuing]. Consumers, public safety, and 
competition, are in place.
    Mrs. Blackburn. Commissioner Pai, 5 seconds.
    Mr. Pai. I will try to be very brief. I would just support 
the Chairman in his formation of the task force, look forward 
to working with him, the Commission staff on making sure that 
we have a regulatory framework that incentivizes, not 
penalizes, investment in next generation networks.
    Mrs. Blackburn. Well done. I will yield back. Mr. Chairman, 
I have one question that I am going to submit for the record.
    Mr. Terry. Thank you. The Chair now recognizes the 
gentleman from Pittsburgh, Mr. Doyle.
    Mr. Doyle. Thank you, Mr. Chairman, and I want to welcome 
the Commissioners back to our committee room and tell you that 
it was good to see all of you last week in your committee room.
    Mr. Chairman, just very briefly, because this is a little 
off topic, but I have to ask, can you give us any update on 
special access?
    Mr. Genachowski. Sure, it won't be the first time that you 
asked that question and we have had a chance to talk about it. 
As you know, we have been working as a commission on what we 
have announced would be the next step, a data collection order. 
I don't know if this has been announced, but I can tell you now 
that order has been voted, and as soon as it is finalized it 
will be issued, and we will be moving forward in the special 
access area in the ways that we have announced.
    Mr. Doyle. Excellent. And what is the timing? So that all 
Commissioners have voted?
    Mr. Genachowski. Yes, it has all been voted and the staff 
is finalizing the process to release it.
    Mr. Doyle. Very good. OK, thank you very much.
    Mr. Chairman, I want to ask you about the Commission's work 
on designing the forward auction process with regards to the 
eligibility of competitive wireless carriers to bid for a 
license. I think it is very important that we ensure a 
competitive wireless marketplace, and that requires all 
carriers to have a sufficient amount of spectrum to be able to 
offer comparative quality of service. That means being able to 
deploy 4G LTE service in a reasonable time frame and being able 
to avoid frequent dropped calls. So for every carrier, the 
ability to secure spectrum licenses means the ability to stay 
competitive with other providers. So I think it is important, 
Mr. Chairman, for the FCC to be able to give all potential 
participants a fair shot at the bidding process. I would like 
to see more carriers have LTE capability and more robust 
coverage. That means the FCC has to design auctions in a way 
that will maximize the competitive benefits of this resource.
    Mr. Chairman, I do want to enter into the record before I 
go further a letter from the Competitive Carriers Association 
addressing the issue of bidder eligibility because I think it 
does a good job in laying out the concerns these carriers have 
with being able to participate in the auction. So I would like 
that entered in the record.
    Mr. Terry. Hearing no objection, so ordered.
    [The letter follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Doyle. Thank you.
    There should be no confusion on this point. The legislation 
passed by Congress gives the FCC flexibility to design auctions 
in a way that allows everyone to participate, including smaller 
carriers. I want to urge all of the Commissioners to take 
advantage of the tools at your disposal to protect competition.
    So, Mr. Chairman, let me ask you, is this an issue to which 
you will give close consideration?
    Mr. Genachowski. Yes. And I agree with the way you 
characterized it.
    Mr. Doyle. Thank you. Mr. Chairman, I want to ask you a 
little bit about media ownership, too. You might remember I 
brought up this issue at a previous hearing, and I continue to 
be very concerned about moving forward with relaxing cross 
ownership rules again before we complete an FCC analysis on the 
impact such a rule would have on changes in female and minority 
ownership. Mr. Chairman, the FCC's incentive auction NPRM 
envisions that television stations could engage in channel 
sharing in order to free up spectrum for reallocation. Have you 
considered the impact of this proposal on media ownership and 
diversity in light of the ownership order that you are 
currently circulating?
    Mr. Genachowski. We do think that the incentive auction 
process will provide new opportunities for minority owners to 
continue providing service in a difficult marketplace, by 
receiving money for sharing channels or by potentially 
receiving money for moving from UHF to VHF, so we see the 
incentive auctions as a net plus for minority ownership, and we 
are working and will continue to work with the community to 
work through those issues.
    Mr. Doyle. Yes, I think some are just concerned that we 
understand what these impacts are before we move forward 
because the concern is sometimes after a ruling is made and you 
continue to study these issues, it is very hard to get the 
genie back into the bottle, so to speak. So I would just urge 
you and the Commissioners to take a closer look at the impact 
of these auctions in light of your media ownership review, and 
I thank you for the work that you are doing.
    Mr. Chairman, with that I will yield back my time.
    Mr. Terry. Thank you, Mr. Doyle. At this time recognize the 
gentleman from Louisiana, Mr. Scalise.
    Mr. Scalise. Thank you, Mr. Vice Chairman, and appreciate 
the hearing and especially the five Commissioners for being 
here with us. I want to start by looking at the Congressional 
Budget Office estimate on the spectrum auction. If you look at 
the NPRM, the estimates are that it would raise about $25 
billion from the broadcast incentive auctions, and I just want 
to get your take on what you think can be achieved. If you look 
at the CBO report, does that match with where you think you 
will be? I will start with the Chairman, get your take on that.
    Mr. Genachowski. Well, both CBO and OMB have looked at the 
proposal, they scored it, and certainly it is not in our 
expertise to revise that scoring. We are certainly focused on 
running an auction that generates very substantial revenue for 
FirstNet and beyond. One of the key factors in that will be 
broadcaster participation, and that is why we are all working 
together with the industry and with others, why we are happy to 
see the group formed that we heard about at the beginning of 
the hearing from Chairman Walden of broadcasters who are saying 
you know what, this makes sense, and we want to work 
proactively with the Commission to design rules that encourages 
our participation because that is the best way to free up the 
most amount of spectrum.
    Mr. Scalise. Commissioner McDowell?
    Mr. McDowell. I am a little bit more cautious. I hesitate 
to use the word ``pessimistic.'' And I hope that I am proven 
wrong as to how much that will actually raise. As was pointed 
out earlier in this pie chart, it has the 55 megahertz actually 
being auctioned. You have to keep in mind that in the markets 
where we need spectrum the most, these are the largest cities, 
that is where we are the most spectrum constrained for mobile 
broadband. That is also where broadcasting is the most 
profitable because there are more eyeballs condensed, you know, 
compacted into a small area, like, let's say, New York City 
where there are 28 TV stations. So in order to yield 60 
megahertz, let's say, at 6 megahertz per TV station, that is 10 
TV stations or licensees that would have to go dark or channel 
share in a New York City, for instance. That is more than a 
third. That is a lot. I hope that is the case. I hope it 
actually happens, but I am not convinced yet that it will.
    So I think we need to be more cautious and sort of fiscally 
conservative with some of the assumptions that went into the 
CBO or the OMB estimates.
    Mr. Scalise. If I could just emphasize because, you know, 
there are some components of the bill for public safety, other 
expenditures, but another part of that legislation was to 
provide some revenue to pay down the national debt. $15 billion 
is right now estimated to be raised that would go towards 
paying down the debt. So as you are conducting the auction, 
clearly we want to free up more spectrum, and that is going to 
create jobs, it is going to allow us to do a lot more things 
that we can't do today, but it also allows us an opportunity to 
have some real money to start paying down the debt. So I would 
like to emphasize that as well.
    I want to talk about the Dubai hearings, and I know you 
touched on it, both Chairman Genachowski, Commissioner 
McDowell, I want to thank you all for both representing the 
United States in those talks, and we are going to be following 
it, and I was glad that we passed the legislation out of the 
House, now the Senate and House have both spoken very loudly in 
a bipartisan and unanimous way that we oppose any attempt by 
the United Nations to take over parts of the Internet, and we 
want to see it continue to be an open and free model with a 
multi stakeholder approach. I think, Commissioner McDowell, you 
touched on this some in your opening. Do you see some hypocrisy 
where Title II is open here in the United States and yet we are 
in Dubai telling them not to use this outdated approach to 
trying to grab more pieces of the Internet internationally, but 
here in the United States there still seems to be this open 
ended question with Title II open that that maybe sends a mixed 
signal. I wonder if either of you would like to touch on that.
    Mr. McDowell. Excellent question, and I will try to be 
diplomatic with the response because we are at a crucial time 
in these diplomatic negotiations. The answer is both yes and 
no. Yes in that we say internationally we want to keep 
government out of the space, that the multi stakeholder model 
is the way to resolve conflicts, and it has worked very well 
for consumers ultimately. No in that one of the messages being 
put forth is that each nation has the sovereign right to 
determine what its Internet policy should be, and there should 
not be an international regulatory overlay. So there is a 
distinction between an international regulatory overlay and a 
domestic policy overlay. I happen to think it is more 
intellectually honest and consistent to say that government 
should stay out of the space altogether as much as possible, 
and we should therefore close things like the Title II docket.
    Mr. Scalise. Chairman Genachowski.
    Mr. Genachowski. In both cases the goals and the actions 
are designed to preserve Internet freedom and openness, to 
preserve the Internet as we know it, and to ensure that no 
gatekeepers, public or private, interfere with Internet freedom 
so that we have the innovation and free speech that we have 
seen from the Internet for the last 20 years continue for the 
next 20 years and beyond.
    Mr. Scalise. Thank you for your time and answers, and I 
yield back the balance.
    Mr. Walden. The gentleman's time has expired.
    The Chair now recognizes the gentlelady from California, 
Ms. Matsui.
    Ms. Matsui. Thank you, Mr. Chairman. I want to thank you 
very much for holding this hearing today.
    And I want to thank the Commission for being here today. 
And, well, as you know, you are going to be arguably 
undertaking probably the most complex spectrum auction in 
history, and I think you all know it needs to be transparent. 
And I believe Congress must work closely with the Commission to 
ensure the auction's success.
    Mr. Chairman, the Middle Class Tax Relief and Job Creation 
Act directed the FCC to auction up to 120 megahertz of 
additional spectrum to be reallocated from mobile broadband 
services for the broadcast incentive auction. If we don't see 
strong participation from the broadcasters during the incentive 
auction process that reaches Congress' goals, does FCC have a 
fallback plan?
    Mr. Genachowski. Well, our focus is on implementing the 
statute. It is a very good idea to provide a mechanism to 
reallocate spectrum from existing commercial to broadband. I 
say that not only because Congress passed it, but because we 
originated it in our national broadband plan in 2010.
    I think ``caution'' is a good byword here. But we are 
seeing more and more reason to be optimistic, including the 
formation of the group of Chairman Walden mentioned before. And 
my hope and expectation is that we will see a successful 
process. Certainly, we are on optimizing all of our work to 
make the process simple, understandable, and allow broadcasters 
to be in a position with a--can make an economically rational 
decision.
    Ms. Matsui. OK. In case, just in case it does not work out 
quite the way you feel it should work out, do you have a next 
step at all? I mean, where do you look for the next tranche of 
spectrum? I am sure you are looking at this not just in a 
linear way. That is not the way everyone operates here. You are 
thinking about other opportunities here.
    So where do you see the next tranche of spectrum coming 
from after the upcoming incentive auction? Are you looking at 
the 1755 to 1850 band?
    Mr. Genachowski. Yes. It is a great question. And we don't 
see these as mutually exclusive at all. And so 1755, the 3.5-
gigahertz item that we will vote on later today, which is 100 
megahertz that we are very excited about, 40 megahertz of 
spectrum that the Commission voted on last night to free up in 
the satellite band, 30 megahertz of WCS, we see other 
opportunities for government spectrum. So this is a very high 
priority; as a commission, we all agree on it. And whatever 
happens with incentive auctions, we will continue to move 
forward relentlessly on all of the other opportunities and 
policies.
    On the incentive auction piece, I expect it will work. 
Congress will continue to be interested. I think what Congress 
has done in the law is to say, this is a band where we expect 
to see a significant amount of spectrum freed up for mobile 
broadband.
    Ms. Matsui. Right.
    Mr. Genachowski. This is how we would like to see it work. 
And I expect that the broadcast industry will get that message.
    Ms. Matsui. OK. Commission Rosenworcel, you know, spectrum 
is going to be a big part of the budget debates in the coming 
years. So we will need to generate new revenues for the 
Treasury. As stakeholders continue their efforts for a long-
term spectrum solution, do you see any opportunities for a 
meaningful amount of revenues that can be generated, at least 
probably in the short term, from sharing opportunities? What 
are your ideas on ways to generate revenues from sharing and 
ways to incentivize agencies to relocate?
    Ms. Rosenworcel. With respect to spectrum, I think demand 
is only going to continue to grow. So we are going to need to 
have an all-of-the-above approach. That will include things 
like sharing. And as you are probably aware, with the 1755 
band, we are trying to identify if that is viable for sharing 
with the 2155 megahertz band that we need to auction within the 
next 3 years.
    With respect to existing Federal users, I believe that 
agencies are mission-focused. They use their spectrum in 
service of their missions, but they lack today incentives to 
use that spectrum efficiently. I think it is time that we 
infuse those missions with rewards for using their spectrum 
efficiently. And if we do that, we are highly likely to be able 
to call more spectrum back from Federal users over time and 
repurpose it for commercial use.
    Ms. Matsui. So in working with some of the agencies and 
talking with them, I think they understand that. But this idea 
of relocating en masse is something they can't do. Not in a 
short term, anyway.
    So as we move forward, I think we need to be very creative 
about how we incentivize the agencies to move forward in a way 
that is timely by trying to figure out more incentivizing ways 
to do this and also incentivize the sharing as maybe an interim 
step as moving forward. And I think what I am saying is what we 
need to do is have a long-term process with certain benchmarks 
along the way so there is a sense that we are moving forward.
    So anyway, I thank you very much for everything you are 
doing, and I yield back my time.
    Mr. Walden. The gentlelady yields back the balance of her 
time.
    The Chair recognizes is incoming vice-chair of the 
Subcommittee on Communications and Technology, the gentleman 
from Ohio, Mr. Latta.
    Mr. Latta. Thank you very much, Mr. Chairman, and thank you 
very much for conducting the hearing today, and again to all 
the Commissioners for appearing before us today.
    I have an explanation from Cisco, ``Why Spectrum of 5 
Gigahertz is Better for Unlicensed Use Than Even the White 
Spaces.''
    I would request unanimous consent to submit it for the 
record.
    Mr. Walden. Without objection.
    [The information follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Latta. Thank you very much, Mr. Chairman.
    Commissioner Pai, the statute identifies an additional 195 
megahertz of spectrum above 5 gigahertz for unlicensed use. In 
light of that, does it make sense to jeopardize the auction and 
the public safety network by pulling out for unlicensed use the 
broadcast incentive spectrum ideally suited for licensed 
wireless broadband?
    Mr. Pai. Thank you for the question, Congressman.
    As I stated in my testimony, I am very bullish about 
unlicensed use in the 5 gigahertz band for the reasons that I 
expect are identified in the letter you just submitted for the 
record. I have spoken with Cisco and other players in the 
industry who have worked on and helped develop Super Wi-Fi 
technologies that would be compatible with the 5 gigahertz 
band, 802.11ac standard, which I mentioned earlier.
    But the basic reason I am bullish about 5 gigahertz in 
particular is this: If you think about what the ideal use for 
unlicensed is, it is fast speeds for data transmission within a 
relatively small area, such as a home or an office. Five 
gigahertz is perfect for that because you can, as the Spectrum 
Act envisions, dedicate gigantic channels that would be 160, 
even larger megahertz, for the sole purpose of transmitting 
data.
    And, additionally, not an engineer--much to my parents' 
chagrin--but what I have been informed is that the propagation 
characteristics of 5 gigahertz waves are such they don't travel 
through walls, they don't travel very far. So you don't have 
the risk of interference that you might have lower in the band.
    So if you have, you know, gigabit wireless throughput, 
thanks for 5 gigahertz, that is a tremendous opportunity that I 
think we should take advantage of.
    So I am pleased that the Spectrum Act requires the 
Commission to commence the rulemaking process on 5 gigahertz by 
February, because I think that this is an area, consistent with 
the Chairman's call for greater innovation and investment in 
unlicensed, where we could really see some bang for relatively 
little bucks.
    Mr. Latta. Thank you.
    Commissioner McDowell, the administration has talked a lot 
about the need to bring additional spectrum to the market for 
commercial use. In your view, has their behavior matched the 
rhetoric and how important is the secondary market in dealing 
with the spectrum crunch?
    Mr. McDowell. I think there are two issues, actually. One 
would be spectrum sharing in the Federal spectrum space, and 
the other would be secondary markets.
    So to answer a your secondary markets question first, I 
think we could do better to ensure a freer and faster flow of 
spectrum in those markets to make sure that spectrum flows to 
its highest and best use in as unencumbered a way as possible.
    Secondly, I would love to see the executive branch, Federal 
users spectrum, actually do a better job of offering up 
spectrum for auction rather than sharing. Sharing can be very 
beneficial, as we have just discussed; unlicensed use, that is 
a form of sharing. But there is no substitute for exclusive-use 
licenses.
    I think Congress can have a role here in maybe trying to 
provide Federal users of spectrum an incentive to get off their 
spectrum. It is an opaque process right now. The law says that 
if it costs more to move them off their spectrum than it would 
raise at auction that you can't move them. So let's do what we 
can to get them off that spectrum and try some carrots.
    Mr. Latta. Thank you.
    Chairman Genachowski, in the NPRM it talks about a 
geographic area. It says, ``items available for bid.'' And when 
I was reading through this and kind of going back, what Mr. 
Dingell was also talking about because, you know, where we are 
located from northwest Ohio, and of course growing up as a kid, 
we got Canadian television stations in our area, and vice versa 
for Canadians.
    What is the definition and how would you define that 
geographic area because you say the multiple blocks of spectrum 
available in a geographic area? What is a geographic area?
    Mr. Genachowski. I think that is a question that we teed up 
for comment and input in our public proceeding.
    If I could say one thing on the border issues, these are 
very important issues that come up every time there is any 
transition in spectrum, whether it is commercial or public 
safety, and we have very good processes in place both with 
Canada and Mexico to negotiate through these issues. And in 
decades of work, our countries have solved every one of them. 
And so I fully expect that that will happen here and that we 
will address the border issues in a way that doesn't interfere 
with the incentive auction.
    Mr. Latta. Thank you very much, Mr. Chairman, and I yield 
back.
    Mr. Walden. The gentleman yields back the balance of his 
time.
    The chairman recognizes the gentleman from New Jersey, I 
believe is next, Mr. Pallone.
    Mr. Pallone. Thank you, Chairman Walden.
    Let me quickly say that I encourage the FCC to keep on 
track with implementation of this spectrum law, but not to 
overlook important details that will ensure a successful 
auction for all stakeholders.
    However, today, I am interested in discussing the recent 
superstorm Sandy. Its devastation has greatly impacted my 
district and many other districts in New Jersey and New York. 
An examination of the communications performance and 
reliability in the wake of Sandy is of great importance. And 
that is why my Democratic colleagues sent a letter to you, 
Chairman Walden, requesting a hearing following the storm. It 
seems that communication services failed to perform as needed 
during and after the storm, power outages and floods disrupted 
many types of communications, including wireless, TV, 
telephone, and Internet services. According to the FCC, the 
storm knocked out a quarter of the cell towers in an area 
spreading across 10 States, leaving millions of cell phone 
users unable to make calls.
    I had three questions I wanted to ask Chairman Genachowski. 
And first, what are you doing to ensure the reliability of the 
communication networks during and after natural disasters? And, 
more specifically, what efforts are underway at the FCC to 
identify and highlight best practices and, where necessary, to 
address potential vulnerabilities in our communications 
infrastructure?
    All that in a minute or two.
    Mr. Genachowski. Let me try to cover a little bit of 
ground. Obviously, the devastation in New Jersey and that 
region was tremendous. And I want to note that our 24/7 
operations center at the FCC played in this disaster as it had 
in others a very important role in the recovery efforts. In New 
Jersey in particular, we were engaged with the New Jersey 
Broadcaster Association in efforts to get fuel to cell towers 
as quickly as possible, working with State and local 
authorities in New Jersey, as well as FEMA.
    We did receive your letter. And, in fact, as you might 
know, we have announced field hearings that we will be starting 
in January. That continues an effort that has been underway at 
the Commission to ensure, working with State and local 
authorities, the resilience and reliability of our 
communications networks.
    These disasters show that communications devices, mobile 
communications devices, are interwoven in our lives. They are 
how we communicate with our families, with emergency services 
providers, our businesses. And we need to constantly look at 
these issues, make sure we have in place systems, including 
best practices, that give us a reliable communications network. 
And we have to take seriously the interconnection between our 
communications grid and our power grid which have their own 
issues----
    Mr. Pallone. Right.
    Mr. Genachowski [continuing]. And address what we need to 
do to make sure the communications networks stay up.
    Mr. Pallone. Let me move on because I want to ask two more 
things.
    But if those field hearings haven't been scheduled, if 
there is some way to coordinate it with our schedule in the 
House, because it would be nice to be able to be there, if that 
is possible.
    Mr. Genachowski. We will work with you on that.
    Mr. Pallone. Large numbers of people, as you know, because 
they didn't have power, turned to the radio and other 
broadcasting. You mentioned the broadcasters. Audiences were up 
247 percent Monmouth County, 195 percent in Middlesex. These 
are part of my district.
    How are you working with the broadcasters to ensure that 
they continue to play an important and robust role in 
information sharing during natural disasters like Sandy?
    Mr. Genachowski. I agree with your point. And we saw both 
TV and radio continue to play a important role in disasters at 
the same time as we see mobile and new Internet, social media 
play important roles. I agree with Craig Fugate, our FEMA head, 
that these multiple platforms together can help improve our 
public safety profile all around.
    The broadcasters, one of the things that we do during 
crises like these is make sure that when they have tower or 
other issues affected by the storm, we immediately do what we 
need so that they can stay on the air. And during this 
disaster, we granted a number of what are called STAs, 
essentially Special Temporary Authorizations, to make sure 
broadcasters can stay on the air. This is a hard thing for 
broadcasters to do, and others.
    And I just want to take a moment to note that the 
broadcasting industry, the mobile industry, the cable industry, 
in the worst parts of the storm, each of those sectors had 
people on the ground, at risk to their own personal safety----
    Mr. Pallone. That is true.
    Mr. Genachowski [continuing]. To get networks up and get 
them back up.
    Mr. Pallone. Let me just ask you lastly about Wi-Fi. When 
many citizens in the States lost access to wireless and 
Internet, I understand that Wi-Fi hotspots were offered for 
free in public areas during and after the storm and became an 
alternative for Internet access.
    Does this highlight the approach you discussed today about 
the need for a balanced spectrum policy that includes 
unlicensed uses like Wi-Fi?
    Mr. Genachowski. Yes.
    Mr. Pallone. You have 2 seconds for that.
    Mr. Genachowski. Yes.
    Mr. Pallone. All right. Thanks so much.
    Thank you, Mr. Chairman.
    Mr. Walden. Were you able to get the questions in you 
needed?
    Mr. Pallone. Yes. ``Yes'' was fine for the last one. Thank 
you.
    Mr. Walden. All right, thank you. We will look forward, 
Chairman, to the results of your hearings out there as well. I 
think the committee, obviously, on both sides, very concerned 
about response in a disaster situation. And as we have talked 
after the nationwide EAS test, which you initiated for the 
first time didn't quite come out as we would all hope. These 
things matter a lot. So thank you.
    We will go now to the gentleman from California, Mr. 
Bilbray, for questions.
    Mr. Bilbray. Thank you, Mr. Chairman. And Mr. Chairman, I 
would like to follow up on the questions from the gentleman 
from Michigan, Mr. Dingell.
    You know, Mr. Chairman, the conversation with Mr. Dingell 
has got me kind of concerned. I don't know what part of the 
country you hail from.
    Mr. Genachowski. I was born in Boston, grew up in New York.
    Mr. Bilbray. All right. Can you imagine what the response 
would be from the people in Boston or New York or Washington, 
DC, if they tried to make a phone call and someone in a foreign 
language, or in English, notifies them that France--you know, 
the Paris cell phone company has confiscated your call and that 
if you want to make this call you need to call this number and 
get a license--basically get an account with them.
    That is the kind of response that people along our 
international borders get, and have in the past.
    Can you imagine my constituents or my brother says to me, 
``When I am a part of the United States, why is a foreign 
corporation confiscating my calls?''
    So I am very concerned when, first of all, when Mr. Dingell 
brought this issue up, it didn't seem to be on your radar, 
quote, unquote.
    And I am also concerned when you state that we have a 
history of great cooperation with our neighbors to the north 
and the south.
    I want to make sure today that you are all aware this is an 
issue that you need to address. And the people along the 
fronteras, both north and south, are just a much a part of the 
United States and have as much right to access to 
telecommunications as somebody in New York, Boston or DC. And 
should not have to accept the fact that, well, you are on the 
border so you just accept the fact foreign companies can 
confiscate your calls.
    So that said, and I think I made it clear, what 
conversations are you having today with the United States of 
Mexico and Canada?
    Mr. Genachowski. Well, I would like to follow up with you 
on the issues you are mentioning and learn more.
    With respect to the incentive auction transition and border 
issues that will come up with broadcasters who may have to move 
to stations where they are concerned, and I understand these 
concerns with the potential for interference, we have begun the 
process at the staff level with both Mexico and Canada to work 
those issues out. These are similar to issues that have been 
worked out in public safety bands and in other bands. But I 
look forward to working with you and make sure we fully 
understand your concerns.
    Mr. Bilbray. I mean, it is an essential issue. My hometown, 
at least half of the city cannot make cell phone calls at 
certain times because of foreign interference. And then we 
finally worked that out with some deals.
    But how close are we to resolve these issues, though?
    Mr. Genachowski. I would say we are at the beginning of the 
process with respect to incentive auctions in Canada and 
Mexico.
    Mr. Bilbray. What incentive is there for Canada and Mexico 
to cooperate with us on this issue?
    Mr. Genachowski. Ultimately, they seek to put in place 
spectrum-related services in their countries that have 
counterbalancing effects on people who live on the U.S. side. 
And so it is in both countries' interests in order to maximize 
their own services to reach accommodations at the borders. It 
is true for both commercial and public safety. It is sometimes 
a bumpy process, and I certainly wouldn't want to overstate how 
easy it is to get through--these issues resolved. But I do know 
over the last 4 years while I have been chairman, we have 
resolved some very complex issues and then our expectation is 
we will be able to do that here and we will work very hard to 
do so.
    Mr. Bilbray. OK. Let me say for the record, because 
everybody's talking about what--you know, the situation with 
Sandy.
    First of all, somebody who had family that lived through 
Katrina, and I was in there after Katrina and in California 
that lived through the fires in San Diego, the reverse 911 and 
the cell phone capabilities worked extraordinarily well in San 
Diego. That technology was a lifesaver and worked well.
    The fact is that those of us that were hit by Hurricane 
Katrina found that it was much more probable that when your 
electricity gave out that your cell phone worked enough to be 
able to call and say you were out of power. And I know it for a 
fact that transformers were replaced. And it was because of 
that public/private partnership that we had during those 
disasters, both in San Diego and down in the Gulf that that 
ability to have that public/private was absolutely essential.
    So I just got to tell you, with everything, the problems we 
pointed out, the fact is that it was much more probable after 
Katrina that you had phone services than if you had power 
services.
    And so those who want to talk about the old hard line 
technology as being dependable, it definitely was not more 
dependable than the new technology we had. So with all problems 
they talk about Sandy, I will just tell you as somebody who 
lived through two disasters, the system worked well.
    My concern still is on you. The people along the borders of 
the United States put up with a lot because of where they live. 
They darn well shouldn't have to put up with foreign 
corporations or foreign governments confiscating their 
communication system. And you, all of you, have as much 
responsibility to make sure that does not happen again and make 
sure they have equal assess to their technology or their 
government and their system as somebody who lives in Kansas.
    And with that, I yield back, Mr. Chairman.
    Mr. Walden. Gentleman yields back.
    And I appreciate the Chairman's willingness to continue to 
work with our colleague from California in the future.
    Now I recognize the gentlelady from the Virgin Islands, Dr. 
Christensen, for 5 minutes.
    Mrs. Christensen. Thank you, Mr. Chairman. And thank you to 
the Commissioners for being here this morning.
    I guess a lot of my questions have been at least in part 
answered. We talked about the importance of the radio and 
television broadcasters during Sandy. And as a person who comes 
from an area that is prone to hurricanes, those are important 
to us. And we also--Congressman Pallone talked about the 
importance of Wi-Fi, and we know that the cable companies were 
able to use Wi-Fi and provide services so that families could 
communicate during Sandy and communicate with emergency 
services.
    So some of you have already indicated your commitment to 
this, but I just wanted to assure from each of you that you are 
committed to promulgating rules that will promote the use of 
unlicensed technology in the guard bands.
    I think you answered it, Commissioner Pai, in your last 
question, that each of you are committed to promulgate rules 
that will promote the use of unlicensed technologies in the 
guard band?
    Mr. Genachowski. Is that--that was our proposal. And we are 
now seeking comment. And we have laid out the Commission 
proposal, which is to do that.
    Mrs. Christensen. OK.
    And, again, on the issue of diversity, which at least two 
questions were asked regarding this already. But a continuing 
concern to the Tri-Caucus is the need for more women and 
minorities in ownership positions in media companies.
    Are you concerned at all, Chairman Genachowski and maybe 
Commissioner Clyburn, that the television stations most likely 
to offer to return their spectrum in a voluntary incentive 
auction might also be stations that offer unique and more often 
the more ethnically diverse programming?
    Mr. Genachowski. I am concerned in general about diversity. 
It is a fundamental obligation of the Commission. I do think 
that the incentive auction provides new economic opportunities 
for minority broadcasters, for language broadcasters, et 
cetera, because in a difficult market it creates opportunities 
to receive additional capital for spectrum sharing or for 
moving from UHF to VHF. And we certainly heard from members of 
the minority community that they are interested in learning 
more about those possibilities, because this could be win-win 
for minority broadcasters.
    Mrs. Christensen. Commissioner Clyburn.
    Ms. Clyburn. As you know, the existing ecosystem as it 
relates to diversity, particularly with people of color and 
women, it is almost nonexistent. I mean, we are talking about 
single-digit ownership engagement. So that always has been, 
even before I got sworn in, has always been an interest of mine 
and a concern of mine.
    As it relates to this current pathway, as it relates to 
incentive auctions, one of the things that I say all the time, 
and I am very monotone and repetitive about it, is this is a 
voluntary engagement. And because of that, even though the 
numbers could be few, they do have an opportunity to 
participate in this framework. I am hopeful that it will take 
advantage of and consider any and all opportunities, including 
sharing, so existing programming cannot or will not be lost.
    Mrs. Christensen. And perhaps the Tri-Caucus could be 
helpful in providing information and opportunities or 
encouraging some of our stations to participate.
    Ms. Clyburn. Absolutely. And as it relates to employment, 
too, this office has been engaged with a lot of principals and 
a lot of people in the ecosystem. And I look forward to working 
with you on those issues.
    Mrs. Christensen. Thanks, and Commissioner Rosenworcel, 
just a follow-up to Ms. Matsui's question, were there specific 
incentives that you had in mind for--I serve on the task force. 
So we were discussing these with some of the government 
agencies, how they can reallocate, give up some of their 
spectrum. Did you have some specific ideas about incentives?
    Ms. Rosenworcel. Yes. For starters, though, I want to say 
that the task force that the subcommittee has set up on Federal 
spectrum is a terrific idea. I appreciate that it is 
bipartisan.
    The wireless revolution is here to stay. The demands on our 
airwaves are only going to continue to grow. As far as 
incentives for Federal users, I think we need to create them so 
that they can be efficient and they are inspired to return 
spectrum so that we can auction it off for commercial uses. 
That could include financial rewards associated with the 
revenues from its subsequent auction for commercial use, it 
could also include structural rewards in the budget and 
appropriations process. And, finally, I think that these ideas 
are consistent with the idea of synthetic currency, which was 
proposed by the President's Council of Advisers of Science and 
Technology in their recent report on Federal spectrum use.
    Mrs. Christensen. Thank you.
    And I guess my last question to the Chairman, Commissioner 
Pai suggested June 30th, 2013, as a deadline for the auction. 
Is that a reasonable or an achievable date?
    Mr. Genachowski. I think, I stand to be corrected I think 
it was 2014.
    Mrs. Christensen. 2014. Sorry. Yes.
    Mr. Genachowski. So 2014 is I think when we are targeting. 
I think we will know more about what would maximize the 
benefits of the auction as the comments come in. But we are 
certainly on a path to conduct the auction in 2014.
    Mrs. Christensen. Thank you, Mr. Chairman.
    Mr. Walden. The gentlelady yields back the balance of her 
time. The Chair recognizes the gentleman from Kentucky, Mr. 
Guthrie, for 5 minutes.
    Mr. Guthrie. Thank you very much. I really appreciate the 
Commissioners for being here today. I appreciate your taking 
your time to be here.
    A couple of questions, three questions. One for the 
Chairman first.
    In the statute, the language ``all reasonable efforts,'' 
the language is in there designed to preserve the contour of a 
current television signal.
    Could you tell me what that phrase means to you, and will 
that phrase be interpreted to mean no more than a certain 
amount of interference will be tolerated and, if so, how much 
will that be?
    Mr. Genachowski. Well, I think that is the kind of question 
where we have an obligation to run the process we are running, 
hear from stakeholders and get input on the precise definition. 
The statue is clear ``reasonable efforts on population and 
coverage,'' and our obligation is to comply with the statute.
    Mr. Guthrie. So you don't have any personal interpretation 
of that?
    Mr. Genachowski. No. No. We laid out, I believe, some 
thoughts in the notice of proposed rulemaking, but we will work 
very closely with stakeholders on giving content to the 
Congressional directive.
    Mr. Guthrie. All right, thanks.
    Commissioner Pai, I was on the working group for government 
spectrum, and Congresswoman Matsui and I led that effort, and 
we took a deep dive into it. And one thing that we were looking 
around is the issue of shared spectrum. So in the PCAST report, 
the 2012 PCAST report suggested that we should move away from 
licensing and towards a greater reliance on spectrum sharing.
    And my question for you is, are you aware of any commercial 
available product that is available today for use if we move 
towards a system of sharing? And to the extent that 
infrastructure and devices are not currently built around the 
concept of sharing, what might the challenging tradeoffs be?
    Mr. Pai. It is a great question and I think I am not 
personally aware at this point. But one of the things I do have 
concerns about with the sharing is it is a largely untested, 
untried endeavor that requires coordination among potentially 
hundreds of Federal users. One of the fears, as I pointed out 
in my testimony, is that while larger players and on the 
commercial side may be up for the challenge of doing that kind 
of coordination, some of the smaller players might not.
    I think--I am not opposed to innovative sharing strategies, 
as I said, again, in the testimony, that geographic sharing, 
for example by creating exclusion zones, can allow us to reuse 
the spectrum in places where Federal users aren't using it. But 
I think, by and large, our focus really should be on clearing. 
I think an unencumbered right to spectrum creates a maximum 
incentive for a user on the commercial side to develop it and 
to deploy it in an efficient manner to the benefit of 
consumers. And so one of the things that I think we really need 
to prioritize is not just sharing writ large or even sharing as 
an interim measure, but clearing as the gold standard for our 
approach to Federal spectrum in particular.
    Mr. Guthrie. Thank you.
    Then for Commissioner McDowell, also from the work of the 
working government spectrum working group, the GAO recently 
reported that total percentages of the most highly valued 
spectrum exclusively or predominantly used by Federal 
government is as high at 57 percent. And given Federal 
agencies' budgets, many of these systems are not up to date and 
thus operate inefficiently.
    And would you discuss whether or not some of these Federal 
uses could be served by commercial mobile private providers and 
how could Federal spectrum holdings be operated more 
efficiently? So could commercial also take some use of this 
Federal--of government use and then how would it be more 
efficient?
    Mr. McDowell. Excellent question. And this is something I 
have been talking about for years, actually, is the potential 
for off-the-shelf private sector solutions, including with a 
nationwide public safety network. I think that is going to have 
to be a must. Seven billion isn't going to cover it, as the 
statute calls for. You are going to have to have off-the-shelf, 
private sector technologies to help there.
    But we don't know how efficiently the Federal Government is 
using spectrum. I think we can safely assume, however, that it 
is not using it terribly efficiently. And that is why I think 
Congress really needs to step in here to try to make that whole 
world less opaque and more transparent respecting classified 
spectrum and all the rest, but to make it more transparent and 
also to give Federal spectrum users an incentive to relinquish 
their spectrum for exclusive use licenses through auction as 
Mr.--as Commissioner Pai just eloquently pointed out. That does 
provide the best incentive for build-out and use of these 
frequencies.
    Mr. Guthrie. While I have got a few--a half of minute, I 
guess, basically, the question for Commissioner Pai, anybody 
else want to respond to what was basically to commercial 
available products that sharing will work or the likelihood of 
it happening, it working.
    Mr. Genachowski. I would just point out that it is in the 
interest of both the commercial sector and the military to 
develop incentives to get more commercial technology into 
military use. The reason is, there is a growing gap between the 
price and functionality of military communications equipment 
and commercial. There always has been. It is getting larger 
because of the tremendous innovation on the commercial side.
    I have had a chance over the last few months to speak 
directly with senior officials in our military services. And I 
believe that there is real work going on to think about how to 
take advantage of commercial innovation on the military side 
more quickly, providing better communications to our troops at 
lower cost.
    Mr. Guthrie. Thank you very much.
    I yield back, Mr. Chairman.
    Mr. Walden. The gentleman yields back the balance of his 
time.
    The Chair recognizes the gentleman from Illinois, Mr. Rush.
    Mr. Rush. Thank you, Mr. Chairman. And to the 
Commissioners, happy holiday. And I welcome you here to this 
hearing.
    You five Commissioners are some of the--are five of the 
most important people in our Nation. You five Commissioners 
oversee networks, industry, mediums that inform our democracy 
and that are essential to protecting our freedom. You oversee 
industry, the sectors that make up more than a fifth of our GDP 
and employ tens of millions of our Nation's workforce.
    However, I have been on this committee for about 17 years. 
And for those--each of those 17 years, I have seen a litany or 
many, many Commissioners come before us to discuss minority 
ownership. And we seem to get more and more platitudes, less 
promises, but absolutely no performance. And I am getting 
pretty fed up with this continuum of excuses that seem to come 
forth from the Commission itself. I think it is high time now 
for you to get serious about this issue of media ownership.
    As a matter of fact, there has been--and I am going to ask 
you the question. And you each can answer this with a yes or no 
answer. Is it acceptable to each of you that there are only 28 
full-power TV broadcasters owned by minorities in this country? 
Yes or no.
    Mr. Genachowski. No, that is not acceptable.
    Mr. McDowell. No.
    Ms. Clyburn. No.
    Ms. Rosenworcel. No.
    Mr. Pai. No.
    Mr. Rush. Does the Commission know, for example, how many 
minority employees are in the broadcasting or new media 
industries? Do you know the answer to that question?
    Mr. Genachowski. I don't know the number off the top of my 
head.
    Mr. McDowell. No.
    Ms. Clyburn. I don't have that information.
    Ms. Rosenworcel. No, I don't have that information right 
now.
    Mr. Rush. I am also glad that you all postponed your 
rulemaking on media or media ownership because you did not know 
the impact of the proposed rules on minority ownership and 
audiences. And so that leads me to another question that I 
have.
    What besides a new tax certificate policy could increase 
diverse ownership of special licenses?
    Let me just give you some figures.
    In the 17 years that FCC had the minority tax certificate 
policy, that policy produced 364 tax certificates and over 200 
million transactions, totaling more than $1 billion in value. 
That represented about two-thirds of all minority-owned 
stations. When the policy, the tax certificate policy, began 
minorities owned about 40 of the 8,500 broadcast stations. Over 
its lifetime, the policy, the tax certificate policy, helped 
raise that number to 333 stations; 290 radio stations, 43 TV 
stations. It also yielded 31 cable systems. Currently, there 
are no minority-owned cable systems that are operating today.
    And my question to you is, what do you believe, other than 
a new tax certificate policy, could increase diverse ownership 
of broadcast licenses, given the history of the tax certificate 
program, which was ended by the Republican Congress in 1995?
    Mr. Genachowski. A few points, if I could. I agree with you 
on tax certificates and encourage the ongoing consideration of 
that. I will mention several areas of potential. One is the Low 
Power FM order that we adopted last month, which will create 
new opportunities for minority and other broadcasters to get 
into the business at lower levels of capital. And so for new 
entrants from the minority community, I think that is an 
important opportunity.
    A second is the work that we have been doing under the 
leadership of Tom Reed in our Office of Communication Business 
Opportunities to try to bring together capital and minority 
women, other small business entrepreneurs. Very good work, and 
I thank Tom Reed for that work.
    And the third that I would point to is the Open Internet 
Order, which keeps the Internet and content media on the 
Internet available for anyone around the country to develop the 
business and reach an audience. And we are seeing minority 
entrepreneurs take advantage of that platform, create online 
content businesses, and then use that as a way to move to 
traditional media platforms.
    Mr. Walden. I know the gentleman's time has expired, but go 
ahead.
    Mr. McDowell. With the Chair's indulgence, if I could add 
to that. Five years ago this month, December 27th, the 
Commission voted out its historic Diversity Order. There were 
13 items adopted; six were turned back by the Federal appeals 
court in Philadelphia, the Third Circuit, seven still remain.
    I have been a long time, ardent supporter of the tax 
certificate program, but there is more that can be done. 
Incubator programs, incentives in general to make it easier to 
convey stations from non-minority owners to minority owners. We 
also need policies that promote more access to capital. This is 
really what is at the root of all this. That is where the tax 
certificate program is so helpful. So whatever policies we 
could find, whatever we want to call them, that promotes access 
to capital for minorities and disadvantaged businesses.
    Ms. Clyburn. Number one, of course, is access--may I?
    Mr. Walden. Yes.
    Ms. Clyburn. Thanks. Number one of course, as my colleague 
stated, is access to capital.
    But number two, in terms of the FCC's jurisdiction, at this 
time we do not have sufficient data in order to have a 
judicially upheld standard of framework, to meet that framework 
in order to move forward in any narrowly tailored approach. So 
the studies, fully funded studies to that end could help.
    Mr. Walden. If you want to be quick, then we have to get to 
Mr. Stearns.
    Mr. Pai. Very quickly, Congressman, two ideas that don't 
depend on congressional action. One idea is an idea that I have 
endorsed with the Minority Media and Telecommunications 
Council, and that is increasing access to capital by allowing 
more foreign investment in U.S. broadcast holding companies. 
Currently, broadcasting is the only niche the communication 
industry where the FCC maintains a 25 percent cap, which 
inadvertently limits the amount of capital that U.S. 
broadcasters, minority broadcasters in particular, can get.
    Secondly, I endorsed in September the--what I call an AM 
radio revitalization initiative. Minority broadcasters in 
particular are disproportionately in the AM band. And it is 
between 21 years since we have revisited our rules at the FCC. 
So one of the things I would like to do is revitalize the band 
by trying to figure out whether there are any of rules which, 
inadvertently or not, stand in the way of greater minority 
ownership on the radio side.
    Thank you, Mr. Chairman, for your indulgence.
    Mr. Walden. I know my ranking member wants to make a quick 
comment. Then we will go to Mr. Stearns.
    Ms. Eshoo. It is my understanding that, Mr. Chairman, that 
you haven't allocated the funds for this study.
    Mr. Genachowski. For--well, there is a study ongoing.
    Ms. Eshoo. To meet that standard.
    Mr. Genachowski. There is a study ongoing for which we have 
allocated substantial funds. That is ongoing. And we have 
requests for funds in our 2013 budget that would allow us to 
move forward with the next round of studies.
    Ms. Eshoo. Is it enough money to complete it?
    Mr. Genachowski. I think the amount we have requested for 
2013 is enough money to complete it, yes.
    Ms. Eshoo. Thank you.
    Mr. Walden. Well, having given almost twice as much time as 
anybody else, we will now move on to Mr. Sterns to wrap up our 
hearing.
    Mr. Stearns. Thank you, Mr. Chairman. Mr. Chairman, this is 
a very good hearing.
    Chairman Genachowski, just a question. When we passed the 
bill in February with this middle class tax cut, I think as I 
recollect the figure was, we were going to try and give back or 
auction off, make about 26 billion. Is that the figure you 
remember?
    Mr. Genachowski. I think the CBO score was roughly that.
    Mr. Stearns. Roughly that. Based upon what you see now and 
your effort so far, do you think that is feasible we will get 
that kind of money back?
    Mr. Genachowski. Well, I actually shared Commissioner 
McDowell's characterization before, which was that we should be 
cautious. But certainly maximizing, generating a very 
substantial amount of revenue to at least cover First Net and 
beyond is an important part of our implementation of the 
statute.
    Mr. Stearns. In your notice of proposed rulemaking, I think 
there was a--there is some question I think in the industry by 
some segments that they are worried about the--when you go to 
different geographic locations there is not enough specific 
information so that the repacking process is clear. And I guess 
to minimize the extensive task of repacking for the 
broadcasters, I guess, have you done an analysis across the 
board on some geographic locations where that spectrum could be 
more broad and less narrow, something like that? Does that make 
sense?
    Mr. Genachowski. Congress, in the law, it instructed the 
FCC or had some language on how to calculate that. Reference to 
OET Circular No. 69. So we are now working with the 
congressional language. This is part of our proceeding. And to 
the point Congressman Markey made before, rolling up our 
sleeves with the engineers in the broadcast industry and the 
mobile industry to maximize the opportunity.
    Mr. Stearns. So you say it is a formula that you are using?
    Mr. Genachowski. We haven't decided how we will do it. Our 
job now is to implement the provision of the statute that sets 
some guidance for the methodology for repacking.
    Mr. Stearns. Should part of that be part of the notice of 
proposed rulemaking so that they could understand what you are 
doing, or is this just going to be after the notice is over?
    Mr. Genachowski. The notice addresses this issue, and this 
will be an ongoing process involving engineers at the 
industries and at the FCC to maximize the ability to free up 
spectrum.
    Mr. Stearns. Commissioner McDowell, what percent of the 
spectrum usable for mobility is controlled by the Federal 
Government?
    Mr. McDowell. I have seen estimates at about 60 percent. 
That may vary.
    Mr. Stearns. Is it a concern that other countries seem to 
be able to clear spectrum for commercial use while we don't 
seem to be making the same progress?
    Mr. McDowell. First of all, I think the U.S. as always been 
a world leader in spectrum. But we do have to have serious 
concerns about our competitors abroad, yes.
    Mr. Stearns. I think--is this a question of leadership for 
us to be more expeditious, perhaps like folks overseas, or is 
this just a failure of why we are not as equipped as they are? 
Do you think there is any reason why we can't be? Or you just 
think----
    Mr. McDowell. So many thanks to Congress for passing the 
Digital TV Act of 2005, and that opened the door to the last 
major spectrum auction we had, which was almost 5 years ago, in 
2008. That actually helped us leapfrog other nations. But in 
the past 4, 5 years, we haven't had any major auctions, and we 
need to get on to that.
    Mr. Stearns. That is what I hear when I talk to other 
countries, that they seem to be ahead of us. And so we just 
wonder whether it is our leadership here or it is whether--what 
can we do?
    Let me move on here. Commissioner Pai, the July 2012 PCAST 
report suggests that the new Federal spectrum architecture is 
that the norm for spectrum use should be sharing, not 
exclusivity. Comparing the track records for sharing and 
exclusivity, which approach has driven more investment in our 
wireless networks?
    Mr. Pai. I think, Congressman, without question, it has 
been the latter approach, clearing exclusivity----
    Mr. Stearns. Exclusive is much more.
    Mr. Pai. Correct.
    Mr. Stearns. Right. And with that in mind, it is worth more 
all the time?
    Mr. Pai. I agree. And that is why I think it should be our 
priority when it comes to spectrum policy in the Federal 
spectrum area.
    Mr. Stearns. OK. Mr. Genachowski, several of the major 
wireless providers have joined efforts to work with the 
Department of Defense on the testing of several of the systems 
identified in the NTIA's 2012 report. It appears it is costly, 
time consuming to relocate, and the DOD seems to be not 
cooperating and negotiating well with them.
    I guess the question is, have you followed this at all? 
What is your status or----
    Mr. Genachowski. Yes. You are asking about the 1755 band?
    Mr. Stearns. Yes.
    Mr. Genachowski. Yes. This is an area, there is a 
tremendous opportunity to move forward with testing around 
different bases. My understanding is that the DOD and the 
wireless industry are in what I hope will be the final stages 
of negotiating the details of the arrangement. I think it is 
good for all the parties to hear that there is bipartisan 
desire to move this process quickly so that we can test the 
ideas and free up spectrum in that band and do it in time to 
pair it with the other spectrum that Congress has required us 
to auction by, I believe, 2015.
    Mr. Stearns. We were just told about a month ago things 
seem to have come to a grinding halt. Are you familiar with 
that?
    Mr. Genachowski. My understanding is that it is not moving 
as quickly as we would all like. It has not halted and that 
there is negotiations back and forth. Again, I think it is 
helpful for everyone to know that there is strong desire in 
Congress to see this done.
    Mr. Stearns. Thank you, Mr. Chairman.
    Mr. McDowell. Mr. Chairman, I would like to thank 
Congressman Sterns for his service, and we are going to miss 
you.
    Mr. Stearns. Thank you.
    Mr. Rush. Mr. Chairman?
    Mr. Walden. Just a second. Just saying we all concur with 
that statement. He has done a terrific job in this committee 
for many years, in this subcommittee, and his leadership is 
greatly appreciated, and we are going to miss you.
    Mr. Stearns. Thank you, Mr. Chairman.
    Mr. Walden. Mr. Rush has asked to be able to ask another 
question or two. And I have yielded.
    Mr. Rush. Thank you, Mr. Chairman. Thank you so much for 
your consideration.
    I want to say to Cliff, it has been a pleasure sitting with 
you on this committee. We have not agreed on anything yet, but 
it has still been a wonderful, wonderful pleasure serving with 
you.
    Mr. Stearns. If the gentleman would yield.
    I think we had a privacy bill that we were working on 
together and a data security for a while when you were the 
chairman of the Commerce, Consumer Protection and Trade.
    Mr. Rush. There was some agreement, not too much.
    Mr. Walden. I will try and intercede.
    Congressman Sterns, would you agree that Mr. Rush should 
have another minute to ask another question?
    Mr. Stearns. Yes.
    Mr. Rush. Fine gentleman.
    Mr. Walden. Mr. Rush for another minute or so.
    Mr. Rush. One issue that doesn't get much attention, and I 
want to thank Commissioner Clyburn for her excellent work, is 
the exorbitant prison phone rates. As a matter of fact, it has 
taken this Commission 9 years and some months to rule on the 
right petition. That petition would cap prison phone rates at 
reasonable levels. It shouldn't cost more to make a cell phone 
call to Singapore than it is to receive a long distance call 
from a loved one in prison.
    Does the Commission intend to issue a notice at the next 
Commission meeting to move forward with the right proceeding?
    Mr. Genachowski. Thank you for that question. That 
proposal, I believe, is on circulation and is being actively 
considered by the Commission and hopefully will be resolved 
soon.
    Mr. Rush. Yes or no?
    Mr. Genachowski. It is a yes, as quickly as possible.
    Mr. Rush. Thank you. Thank you, Mr. Chairman.
    Mr. Walden. Thank the gentleman.
    Mr. Rush. Yield back.
    Mr. Walden. I am happy to accommodate his additional 
request.
    I think that concludes our opportunity today. We appreciate 
the work of the Commission, and your testimony helps guide us 
in our understanding how the law it is being implemented. The 
record will be open for 10 days for additional questions from 
our members who maybe didn't get a chance to offer them or 
think of a few others after the hearing. So we appreciate again 
your work, look forward to continuing the dialogue as we go 
forward to create jobs and innovation in America across all the 
spectrum and all the bands. Thank you.
    The committee now stands adjourned.
    [Whereupon, at 12:50 p.m., the subcommittee was adjourned.]
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