[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


                     NEXT STEPS FOR SPECTRUM POLICY

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

                                 HEARING

                               BEFORE THE

             SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                        THURSDAY, MARCH 26, 2015

                               __________

                           Serial No. 114-28
                           
                           
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			COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
GREG WALDEN, Oregon                  GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILL JOHNSON, Missouri               JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                     Massachusetts
RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota
             Subcommittee on Communications and Technology

                          GREG WALDEN, Oregon
                                 Chairman
ROBERT E. LATTA, Ohio                ANNA G. ESHOO, California
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois               MICHAEL F. DOYLE, Pennsylvania
MARSHA BLACKBURN, Tennessee          PETER WELCH, Vermont
STEVE SCALISE, Louisiana             JOHN A. YARMUTH, Kentucky
LEONARD LANCE, New Jersey            YVETTE D. CLARKE, New York
BRETT GUTHRIE, Kentucky              DAVID LOEBSACK, Iowa
PETE OLSON, Texas                    BOBBY L. RUSH, Illinois
MIKE POMPEO, Kansas                  DIANA DeGETTE, Colorado
ADAM KINZINGER, Illinois             G.K. BUTTERFIELD, North Carolina
GUS M. BILIRAKIS, Florida            DORIS O. MATSUI, California
BILL JOHNSON, Missouri               JERRY McNERNEY, California
BILLY LONG, Missouri                 BEN RAY LUJAN, New Mexico
RENEE L. ELLMERS, North Carolina     FRANK PALLONE, Jr., New Jersey (ex 
CHRIS COLLINS, New York                  officio)
KEVIN CRAMER, North Dakota
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     1
    Prepared statement...........................................     3
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     4
Hon. Doris O. Matsui, a Representative in Congress from the State 
  of California, opening statement...............................     5
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................    39

                               Witnesses

Roger Sherman, Chief, Wireless Telecommunications Bureau, Federal 
  Communications Commission......................................     7
    Prepared statement...........................................    10
    Answers to submitted questions...............................    53
Gary Epstein, Chair, Incentive Auction Task Force, Federal 
  Communications Commission......................................     7
    Prepared statement...........................................    10
    Answers to submitted questions...............................    53
Julius Knapp, Chief, Office of Engineering And Technology, 
  Federal Communications Commission..............................     7
    Prepared statement...........................................    10
    Answers to submitted questions...............................    53
John Leibovitz, Deputy Bureau Chief, Wireless Telecommunications 
  Bureau, Federal Communications Commission......................     7
    Prepared statement...........................................    10
    Answers to submitted questions...............................    53

                           Submitted Material

Article entitled, ``FTC's Hot Mess of a Database May Not Bode 
  Well for Future Airwaves Sharing,'' Re/code, March 17, 2015, 
  submitted by Mr. Long..........................................    40
Statement of National Association of Black Owned Broadcasters, 
  submitted by Mr. Walden........................................    47
AWS-3 Auction Results, submitted by Ms. Eshoo....................    49

 
                     NEXT STEPS FOR SPECTRUM POLICY

                              ----------                              


                        THURSDAY, MARCH 26, 2015

                  House of Representatives,
     Subcommittee on Communications and Technology,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:16 a.m., in 
room 2322 of the Rayburn House Office Building, Hon. Greg 
Walden (chairman of the subcommittee) presiding.
    Members present: Representatives Walden, Latta, Shimkus, 
Lance, Guthrie, Olson, Pompeo, Bilirakis, Johnson, Long, 
Collins, Cramer, Eshoo, Yarmuth, Clarke, Loebsack, Rush, 
Butterfield, Matsui, and McNerney.
    Staff present: Ray Baum, Senior Policy Advisor for 
Communications and Technology; Andy Duberstein, Deputy Press 
Secretary; Gene Fullano, Detailee, Telecom; Kelsey Guyselman, 
Counsel, Telecom; Grace Koh, Counsel, Telecom; David Redl, 
Counsel, Telecom; Charlotte Savercool, Legislative Clerk; David 
Goldman, Democratic Chief Counsel, Communications and 
Technology; Margaret McCarthy, Democratic Senior Professional 
Staff Member; and Ryan Skukowski, Democratic Policy Analyst.

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

    Mr. Walden. We are going to go ahead and call to order the 
subcommittee on Communications and Technology, and welcome our 
Members and our witnesses here today. Since this is a go-away 
day and we have votes coming up in about an hour or so, we are 
going to go ahead and get started.
    There is no question that mobile technology is one of the 
key components of the economy of both today and of the future. 
Americans have wholeheartedly embraced the role of mobile in 
their lives. In fact, there are more wireless devices in the 
country than there are people in the country. Mobile is even 
more critical in developing nations for whom mobile is the 
first national network for connectivity. Time and again, as the 
country that pioneered spectrum auctions once, and is the 
process of doing it again, the world looks to the United States 
to lead spectrum policy and answer the challenge of meeting 
spectrum demand. We must continue to rise to that challenge.
    Demand for connectivity will only continue to grow as the 
Internet of Things becomes a ubiquitous part of our daily 
lives. People rely on spectrum to stay connected to friends and 
family, conduct business, engage with the government, and 
access resources for things like healthcare and education.
    This committee has long been a leader in freeing up 
spectrum for commercial and unlicensed use to meet demand and 
feed the innovation that has been the hallmark of U.S. spectrum 
policy. In just the last few Congresses we have brought forth 
bipartisan legislation to authorize a first-of-its-kind 
broadcast television incentive auction, formed working groups 
that Ms. Matsui and Mr. Guthrie co-chaired that we organized to 
look at how do we modernize the federal spectrum, how do we 
work together to ensure that this vital national resource is 
put the most efficient and effective use. By the way, going 
into that legislation, the Congressional Budget Office said it 
would never happen, and they gave us a zero score, or something 
like that. And after the fine work of you all at the FCC and 
the people who actually arrived with checkbooks, I think the 
net is somewhere around $41 billion, paying fully for the 
interoperable system for public safety, as well as 911 enhanced 
process, and paying down debt. And that is just the first part 
of the auction with AWS-3.
    Now, as we go forward, we need to make sure that there 
continues to be good cooperation and understanding about all 
the parties as we go into the broadcast incentive auction. I 
know our broadcasters were involved in this auction with some 
of the spectrum they had with the Defense Department and other 
federal agencies, so it was more than just the Federal 
Government, and I commend the broadcasters for their 
involvement. But the model can hopefully be recreated in other 
spectrum bands through the Federal Spectrum Incentive Act. This 
was introduced, by the way, by Congressman Guthrie and 
Congresswoman Matsui, as the broadcast incentive auction is 
doing for broadcasters, this legislation would allow 
participating government agencies to receive a portion of the 
proceeds from the auction of spectrum assigned to it. That 
makes sense. It incentivizes agencies to take a hard look at 
the modern spectrum needs and consider alternatives, free up 
even more spectrum for commercial or unlicensed use.
    Now, in the past, there has been a great deal of focus on 
so-called beachfront spectrum, the spectrum with the best 
propagation characteristics for commercial mobile use. Some of 
this will be auctioned off in the upcoming incentive auction of 
the 600 megahertz band currently used for UHF broadcasting. But 
these types of opportunities are going to be even more scarce 
in the future and it means we have to start looking outside of 
the traditionally desirable spectrum bands. There is only so 
much spectrum out there, so we need to work together with what 
we have and that means expanding use into the spectrum 
frontiers.
    The FCC began a proceeding last fall to examine the use of 
frequencies above 24 gigahertz. To put that in perspective, 
most commercial use happens below 6 gigahertz, and most mobile 
use is in the 3 gigahertz level. Development of technologies 
that can utilize higher frequencies to meet current and future 
needs could be a real game-changer. I look forward to hearing 
more about the FCC's work in the space from our witnesses.
    So how do we achieve these goals and ensure that America 
remains a leader in wireless technology, development and 
deployment of mobile innovations? It will require a great deal 
of working together to leverage industry and engineering know-
how, government authority, and agency implementation. To 
achieve this, both Congress and the FCC must be flexible and 
forward-looking stewards of our public spectrum asset.
    So I look forward to hearing from our witnesses today. And 
with that, I will turn over the remaining time to my vice 
chair, Mr. Latta.
    [The prepared statement of Mr. Walden follows:]

                 Prepared statement of Hon. Greg Walden

    There's no question that mobile technology is one of the 
key components of the economy of both today and of the future. 
Americans have wholeheartedly embraced the role of mobile in 
their lives-in fact, there are more wireless devices in this 
country than people--and mobile is even more critical in 
developing nations for whom mobile is the first national 
network for connectivity. Time and again, as the country that 
pioneered spectrum auctions once, and is the process of doing 
it again, the world looks to the United States to lead spectrum 
policy and answer the challenge of meeting spectrum demand. We 
must continue to rise to that challenge.
    Demand for connectivity will only continue to grow as the 
``Internet of Things'' becomes a ubiquitous part of our daily 
lives. People rely on spectrum to stay connected to friends and 
family, conduct business, engage with government, and access 
resources for things like healthcare and education.
    This committee has long been a leader in freeing up 
spectrum for commercial and unlicensed use to meet demand and 
feed the innovation that has been the hallmark of U.S. spectrum 
policy. In just the past few congresses we have brought forth 
legislation to authorize a first-of-its-kind broadcast TV 
incentive auction legislation, formed working groups focused on 
modernizing federal spectrum, and worked together to ensure 
that this vital national resource is put the most efficient and 
effective use.
    The most recent example of this committee's spectrum 
leadership came just a few months ago with the successful 
auction of 65 MHz of AWS-3 spectrum for more than $44 billion. 
This is particularly significant not only because this single 
auction raised enough to fully fund FirstNet, but perhaps more 
strangely, because some said that this auction would never 
happen. The spectrum auctioned was occupied by the U.S. 
Department of Defense and other federal agencies, but thanks to 
bipartisan leadership of this committee and cooperation between 
industry and government, we were able to bring more spectrum to 
market to meet demand without adversely impacting government 
operations. This success is a terrific example of what can be 
achieved when we work together.
    This model can hopefully be recreated in other spectrum 
bands through the Federal Spectrum Incentive Act. Introduced by 
Mr. Guthrie and Ms. Matsui, as the broadcast incentive auction 
is doing for broadcasters, this legislation would allow 
participating government agencies to receive a portion of the 
proceeds from the auction of spectrum assigned to it. By 
incentivizing agencies to take a hard look at their modern 
spectrum needs and consider alternatives, we can free up even 
more spectrum for commercial or unlicensed use.
    In the past, there has been a great deal of focus on so-
called ``beachfront'' spectrum-the spectrum with the best 
propagation characteristics for commercial mobile use. Some of 
this will be auctioned off in the upcoming incentive auction of 
the 600 MHz band currently used for UHF broadcasting. But these 
types of opportunities are going to be even more scarce in the 
future and it means we're going to have to start looking 
outside of the traditionally desirable spectrum bands. There's 
only so much spectrum out there, so we need to work with what 
we have and that means expanding use into the ``spectrum 
frontiers.'' The FCC began a proceeding last fall to examine 
the use of frequencies above 24 GHz--to put that in 
perspective, most commercial use happens below 6 GHz, and most 
mobile use is below 3 GHz. Development of technologies that can 
utilize higher frequencies to meet current and future needs 
could be a real game-changer. I look forward to hearing more 
about the FCC's work in the space from our witnesses.
    So how do we achieve these goals and ensure that America 
remains a leader in wireless technology, and development and 
deployment of mobile innovations? It will require a great deal 
of working together to leverage industry and engineering know-
how, government authority, and agency implementation. To 
achieve this, both Congress and the FCC must be flexible and 
forward-looking stewards of our public spectrum asset. I look 
forward to hearing from our witnesses how the commission is 
working to ensure a successful incentive auction, as well as 
their hard work to ensure we can meet spectrum demand in the 
future.

    Mr. Latta. Well, thanks, Mr. Chairman, for yielding. And 
thank you for our witnesses for being here with us today.
    The demand for wireless spectrum capacity is growing daily, 
as technologically advanced devices and products are 
increasingly using unlicensed spectrum instead of cellular 
networks to connect to the Internet. There is no doubt that 
spectrum has become an integral part of our everyday lives, and 
contributes greatly to economic growth and innovation. It is 
vital that the capacity of our Nation's airways is able to 
accommodate advanced mobile innovation, therefore, we must 
examine all ways to expand access to spectrum. That is why I 
introduced H.R. 821, the Wi-Fi Innovation Act, which would 
examine ways to maximize the use of spectrum in the upper 5 
gigahertz band, without creating harmful interference with 
incumbent users. My bill also recognizes that unlicensed 
spectrum is a critical component of promoting continued 
economic development, increased connectivity, and greater 
productivity.
    Mr. Chairman, I look forward to hearing from today's 
witnesses, and I thank you for yielding. And I yield back.
    Mr. Walden. Mr. Latta, we appreciate your participation and 
your comments.
    We will turn now to Ms. Eshoo from California for an 
opening statement.

 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 all 
of our witnesses. It is wonderful to see you. Roger, is this 
the first time you have ever testified? It is.
    Mr. Walden. Oh, boy.
    Ms. Eshoo. Isn't that great? Yes. Well, we miss you, but we 
are proud of you.
    $41.3 billion. How would you like to have that in your 
checking account? That is a lot of money. It is really 
unprecedented in terms--that it was raised from the AWS-3 
auction. It is a huge win, and I think that it is instructive 
to all of us in the value of spectrum. Spectrum is gold. Some 
is 18 karat, some is 24 karat, there are different levels of 
gold, but it is still gold. And we know that these funds are 
going to be used to reduce the deficit by some $20 billion. I 
don't know what other committee is producing that, but everyone 
here should pat themselves on the back. It is going to pay for 
the build-out of the first ever nationwide interoperable public 
safety network. That was the only recommendation of the 9/11 
Commission that the Congress had not made good on, and it is 
going to upgrade our 911 call centers across the country to 
support next-generation technology. So this is, I think anyone 
that takes a look at this would say this is a success story.
    Now, less than 2 years ago, Chairman Walden and I began 
regular meetings with NTIA, with the FCC, with the DoD, to 
ensure that our efforts to relocate or share spectrum held by 
federal agencies really stayed on track. And those were 
important informal meetings as well as hearings, but it really 
paid off. Many thought that the DoD wouldn't cooperate, but 
thanks in part, I think, to this bipartisan process and their 
cooperation that we established in June of 2013, 65 megahertz 
of spectrum will be brought to market to support America's 
insatiable appetite for wireless broadband. But our work is far 
from complete, because our goal is to free-up 500 megahertz of 
spectrum, and ensure that every American has access to 4G high-
speed wireless broadband.
    According to Cisco's latest forecast, global mobile data 
traffic will increase nearly tenfold over the next 4 years. 
That is a lot; increasing tenfold over the next 4 years, 
reaching an estimated 24.3 X-bits per month by 2019. So as a 
finite resource, we have to think big in our approach to 
spectrum management.
    I think a 21st century spectrum policy should recognize the 
following. The complimentary benefits of both licensed and 
unlicensed spectrum. The need for competitive safeguards to 
prevent excessive concentration of spectrum, particularly 
within the prime beachfront bands below 1 gigahertz. And the 
need to utilize new sharing technologies to enhance efficiency 
and better manage spectrum.
    The upcoming incentive auction can achieve, I think, each 
of these policy goals, while generously compensating 
broadcasters who voluntarily chose to participate. And I salute 
the broadcasters for cooperating. I want this to work very well 
for them because when it does, it is going to compliment the 
rest of the system. Similarly, freeing up additional unlicensed 
spectrum in the 5 gigahertz band will unlock immense economic 
value in our country, promote access to broadband, and expand 
the digital sandbox used by innovators and entrepreneurs.
    So it is a pleasure for me to welcome all of you here, the 
experts, and as I said before I began my opening statement, to 
see our former Chief Democratic Counsel, Roger Sherman, you are 
a great source of pride to us, Roger. So I look forward to your 
testimony and the conversation that we are going to have, and 
the input that you will give to us.
    And with that, I yield back.
    Mr. Walden. Gentlelady yields back.
    Anyone on the Republican side want to make an opening 
comment, or should we move on to our witnesses? OK.
    We will go to Ms. Matsui now, using Mr. Pallone's time as 
the senior Member on their side.

OPENING STATEMENT OF HON. DORIS O. MATSUI, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Matsui. Thank you, Mr. Chairman, for yielding me time. 
And I also would like to welcome Roger Sherman. It is great to 
see you.
    The future of American innovation would be fueled by 
spectrum, and more and more spectrum. Never has this been more 
evident than the record-breaking AWS-3 auction which generated 
nearly $42 billion. That is more than four times the reserve 
price that the FCC put on the sale, and more than double the 
previous record of $18.9 billion set in the 2008 wireless 
auction.
    The planning for the AWS-3 auction did not happen 
overnight. There were many skeptics who doubted this auction 
would ever occur. But as a result of years of bipartisan 
congressional collaboration with the Department of Defense, the 
FCC and the NTIA, along with our Nation's broadcasters, the 
final product of the AWS-3 auction was truly historic for the 
wireless market and for consumers. The major investments put 
forth all provides us with fresh evidence of the increasing 
consumer demand for Internet access by smartphones, tablets and 
devices. Spectrum has become one of the lynchpins in our 
economy. 4G speeds will soon become 5G speeds. New cars rely on 
spectrum to improve driver safety. Wi-Fi hotspots are popping 
up across the country. Innovative healthcare devices are being 
introduced utilizing spectrum to monitor blood pressure, oxygen 
levels, and activity levels. Technologies that allow consumers 
to control home energy consumption from mobile devices also 
rely on spectrum.
    To more efficiently utilize our Nation's airwaves, America 
needs a national spectrum plan, one that would require a 
healthy mix of licensed and unlicensed spectrum bands. To that 
end, Congress must look for creative ways to produce more 
spectrum and create a pipeline for spectrum reallocation or 
sharing. That is why today I join Congressman Guthrie in 
introducing legislation that would create the first ever 
incentive auction for federal agencies, and for once, offer 
revenue to federal spectrum users in exchange for federal 
spectrum. It is a game-changer.
    I thank Chairman Walden and Ranking Member Eshoo for 
cosponsoring this bill. I also welcome the Senate Companion 
Bill also introduced today by Senators Ed Markey and Deb 
Fischer.
    Moving forward, I also believe that unlicensed spectrum 
should be part of our spectrum plan. It is important for the 
FCC to develop a testing process on the upper 5 gigahertz band 
this year. It is time for the FCC to bring together in one room 
engineers from both the auto and technology sectors to see if 
they can coexist without interference in the 5 gigahertz band. 
That was the underlying principle of the bipartisan law passed 
in 2012.
    I look forward to continuing to work in a bipartisan manner 
on spectrum issues. It is one of the key issues for our 
economy.
    I would now like to yield the balance of my time to the 
gentlelady from New York, Ms. Clarke.
    Ms. Clarke. I thank the gentlelady from California.
    Chairman Walden and Ranking Member Eshoo, thanks for 
convening this hearing. Thank you once again to Congresswoman 
Matsui for yielding time.
    For years, we have been discussing the Nation's spectrum 
crunch, and it is good to see the progress in this area, 
particularly as consumers are increasingly becoming dependent 
on their mobile devices. The world is going wireless, needless 
to say. Most of us couldn't even imagine going through the day 
without our mobile devices. But it is more than having our 
phones in our pockets. Our kids are using connected textbooks, 
our cars are equipped with fourth-generation wireless 
technology, our doctors treat us faster, at lower cost, by 
using wireless equipment, and everyone expects to watch what 
they want, when they want to, where they want it, and with 
whatever wireless devices they have handy.
    Americans are clearly more engaged in the wireless 
ecosystem, and we need to ensure that our Nation has the 
capacity to accommodate current and future wireless needs. But 
all of this innovation does not happen alone. Our hunger for 
all things mobile is driving our insatiable demand for the 
airwaves that feed our devices. These airwaves are the 
invisible infrastructure that is all around us. It powers the 
devices and services we use every day. That is why Congress 
charged the FCC with managing this scarce public resource on 
our behalf, and that is why we directed the FCC to conduct 
spectrum auctions that make more spectrum available for 
wireless carriers, and to supercharge the Nation's supply of 
spectrum of Wi-Fi.
    The FCC has taken the ball and ran with it. Earlier this 
year, the agency completed the most successful auction in 
history. It raised over $41 billion for public safety and 
wireless, and made a significant slice of the airwaves 
available for mobile broadband. The FCC also gearing--is also 
gearing up for the broadcast incentive auction next year, but 
if we want the United States to continue to lead the world in 
wireless, there is a lot more to be done.
    I look forward to the hearing from--to hearing from our 
expert panelists today about what is next in the spectrum 
pipeline, and I yield back.
    Mr. Walden. Gentlelady yields back. We appreciate her 
comments.
    And now we will go to our witnesses. We want to thank each 
of you for being here, not only before our committee but also 
the work you do not far away at the FCC. So thanks for being 
here.
    And we will start out with Mr. Roger Sherman, he is the 
Chief of the Wireless Telecommunications Bureau of the Federal 
Communications Commission. Mr. Sherman, we are delighted to 
have you back here. I have 23 yes-or-no questions Mr. Dingell 
submitted, but go ahead with your testimony.

STATEMENT OF ROGER SHERMAN, CHIEF, WIRELESS TELECOMMUNICATIONS 
BUREAU, FEDERAL COMMUNICATIONS COMMISSION; ACCOMPANIED BY GARY 
     EPSTEIN, CHAIR, INCENTIVE AUCTION TASK FORCE, FEDERAL 
   COMMUNICATIONS COMMISSION; JULIUS KNAPP, CHIEF, OFFICE OF 
ENGINEERING AND TECHNOLOGY, FEDERAL COMMUNICATIONS COMMISSION; 
       AND JOHN LEIBOVITZ, DEPUTY BUREAU CHIEF, WIRELESS 
  TELECOMMUNICATIONS BUREAU, FEDERAL COMMUNICATIONS COMMISSION

    Mr. Sherman. Thank you. Good morning, Chairman Walden, 
Ranking Member Eshoo, and members of the subcommittee. We 
appreciate the opportunity to discuss next steps for spectrum 
policy, and welcome your interest in this topic.
    At the table with me today are three experts well known to 
this committee; Julie Knapp, the Chief of the Office of 
Engineering and Technology; Gary Epstein, the Chair of the 
Incentive Auction Task Force; and John Leibovitz, the Deputy 
Chief of the Wireless Bureau, and Special Advisor to the 
Chairman for Spectrum Policy.
    We know that time is limited and you are probably anxious 
to ask questions, so I won't reiterate our testimony, but 
instead briefly highlight three basic points. First, the demand 
for spectrum continues to grow exponentially, and as a nation, 
we need to maintain our collective focus on this resource to 
continue to be the world leader in wireless. There is no debate 
that wireless is an engine of economic growth and progress in 
the United States, and there is no debate that spectrum fuels 
this engine.
    As Chairman Walden and Chairman Wheeler pointed out in a 
recent op-ed upon the close of Auction 97, there is direct 
linkage between spectrum, jobs and economic growth, not to 
mention innovation, competition and consumer choice. You can be 
sure FCC staff is focused on making licensed and unlicensed 
spectrum available for mobile broadband to meet consumer and 
business demands. This has certainly been a key area of focus 
for Chairman Wheeler and all of the commissioners.
    Second, we are actively bringing more spectrum online. 
Since Chairman Wheeler's arrival at the FCC, we have auctioned 
the 10 megahertz H block, and 65 megahertz of AWS-3 spectrum. 
We have also made other spectrum newly available and useable 
for wireless broadband and unlicensed uses. Of course, we are 
working towards the incentive auction early next year.
    A couple of quick observations about AWS-3, many points 
that you have already raised in your statements. AWS-3 was a 
team effort, and it is well known that it was a success in 
large part due to the important work of NTIA, DoD, and other 
Federal agencies. What is less well known, at least outside the 
Rayburn Building, is that full engagement of the Energy and 
Commerce Committee was a critical element of this success. 
Members of this subcommittee in particular took a personal 
interest in the success of this effort, and did everything 
possible to bring along other stakeholders with interest in 
this spectrum. These collective efforts yielded a great result. 
More spectrum is available for wireless broadband, federal 
agency transitions are paid for, and a number of congressional 
priorities have received critical funding, including the 
nationwide broadband public safety network, public safety 
research, next generation 911 implementation, and more than $20 
billion for federal deficit reduction. As you are well aware, 
these priorities came directly from legislation authored by 
this subcommittee.
    Third, and finally, the FCC is continuing to think hard and 
creatively about how to ensure a continuing supply of spectrum 
is in the pipeline. We all know how long it takes to ready 
spectrum for auction, or otherwise make it available for 
commercial use. The agency intends to use the tools Congress 
has provided towards this end. We will also continue to working 
closely with this committee and our federal partners going 
forward. Along these lines, I am pleased to report that 
tomorrow Chairman Wheeler plans to circulate with the 
commissioners draft final rules to create a new service in the 
3.5 gigahertz band, the Citizens Broadband Radio Service. This 
is an exciting opportunity to use new innovative technologies 
and policies to leverage 150 megahertz for wireless broadband. 
We have also initiated a proceeding aptly titled Spectrum 
Frontiers. This Notice of Inquiry examines spectrum high up on 
the spectrum chart, the bands above 24 gigahertz. This 
proceeding will help us understand better the future of 
wireless services, and hopefully create a regulatory 
environment in which new innovative technologies can flourish 
for the benefit of consumers.
    On behalf of my colleagues here today and at the FCC, we 
thank the subcommittee for the opportunity to testify, and 
stand ready to answer your questions. Thank you.
    [The prepared statement of Mr. Sherman follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Walden. Mr. Sherman, thank you for your testimony. We 
thank the other witnesses for being here today for the 
committee.
    Mr. Sherman is the only one presenting testimony today, so 
we will go right into our questions and then he told me he is 
more like the point guard, he will hand it off to the other 
experts on the panel as well, but feel free to ask him 
questions too.
    So we will start with--please, lots of questions, Mr. 
Sherman. We will start with Mr. Epstein.
    The FCC's budget requests include $2.4 million to engage an 
administrator to manage the broadband relocation fund. Is that 
engagement going to be awarded through competitive bidding, and 
if not, why, and is this a one-time request or do you think 
additional funding will be necessary? I have a couple of other 
follow-up questions, but----
    Mr. Epstein. Well, thank you, Mr. Chairman.
    Mr. Walden. And, yes, turn on that mic. There you go.
    Mr. Epstein. Yes. Thank you very much, Mr. Chairman, for 
the opportunity to testify today. The broadcast administrator 
is going to be a crucial part of the transition post-auction, 
and yes, we do anticipate it as being a fair and open compete, 
and we do anticipate that it will be a one-time-only request.
    Mr. Walden. All right. And where will those funds come 
from, the $2.4 million estimated cost?
    Mr. Epstein. I am not an expert in the budget aspects of 
things. My anticipation is it will come out of auction 
proceeds, but I will confirm that with our Office of Managing 
Director.
    Mr. Walden. OK. And the commission has engaged 
clearinghouses before to manage cost sharing in the clearing of 
spectrum bands. Do you know how much it costs those entities to 
manage a clearinghouse?
    Mr. Epstein. Mr. Chairman, I don't have those numbers.
    Mr. Walden. Yes, if other members on the panel have answers 
to any of these questions our Members have, please feel free to 
speak up.
    Voice. We will get that back to you.
    Mr. Walden. All right.
    Mr. Epstein. We will get that information back to you.
    Mr. Walden. Perfect. OK. And, Mr. Knapp, welcome, by the 
way. We are always delighted to have you in the room, and 
helping us on the technical side of these issues. And so I want 
to talk about performance requirements for receivers. Do you 
think that a sort of one-size-fits-all rule setting performance 
requirements for receivers or defining the interference 
environment will solve the problems across many different types 
of radio devices, and if not, how would you tailor an 
appropriate framework?
    Mr. Knapp. Thanks, Mr. Chairman. We have had our 
technological advisory council look at this issue. One of the 
things that came out of that is a proposed new approach for 
dealing with receivers. It is based on something called 
interference harm threshold.
    Mr. Walden. Yes.
    Mr. Knapp. Rather than setting standards for receivers, 
which as we got into it, found that a one-size-fits-all would 
be really difficult----
    Mr. Walden. Right.
    Mr. Knapp [continuing]. To come up with. In fact, I was at 
a conference earlier this week where I heard another idea that 
is coming out of a multi-stakeholder group that is a variation 
on that, which talks about more of a generic mask. So the 
receiver issue continues to come up. We are still working with 
the industry on approaches that we can take to this without 
moving quickly to mandatory standards.
    Mr. Walden. All right. I will go to this next question. Mr. 
Knapp and Mr. Sherman, the proposed use of heightened receiver 
performance standards as a solution to interference problems 
has long been of interest to our subcommittee, as you all know. 
However, we recognize requiring more stringent standards for 
receivers can result in over-engineering and higher consumer 
prices, which I think is what you are alluding to there. So how 
do we balance this? Is there a way to improve receiver 
performance without concurrent increase in price or device 
size? And then I still have people asking me about, you know, 
spectrum is limited, are there ways to maximize use, and that 
leads to a discussion about FM chips in cell phones and all of 
that. So, Mr. Knapp, do you want to address that?
    Mr. Knapp. So the problem is a lot easier to deal with when 
introducing new services. In the spectrum that Roger referred 
to, the proceeding on Citizens Broadband Radio Service, one of 
the things that we are looking to a multi-stakeholder group to 
do is to try to address the receiver issues at the start. That 
is how we are trying to approach this. It is difficult to do 
something about receivers that are already out there, but we 
think----
    Mr. Walden. I think we learned that with LightSquared and 
GPS and all of that, right?
    Mr. Knapp. Right. Absolutely.
    Mr. Walden. Mr. Sherman?
    Mr. Sherman. On the question about FM chips thatyou----
    Mr. Walden. Right.
    Mr. Sherman [continuing]. Asked earlier, I think Chairman 
Wheeler spoke about that last week at one of his hearings.
    Mr. Walden. I heard he was on the Hill.
    Mr. Sherman. I think he indicated that he thinks the market 
seems to be working, and if consumers want their FM chips, they 
can let their carriers know, and that the market should solve 
that problem. I probably don't have anything to add to that.
    Mr. Walden. All right. Those are the only questions I have, 
so I will yield back the balance of my time.
    And I will turn now to my friend from California, Ms. 
Eshoo.
    Ms. Eshoo. Thank you, Mr. Chairman.
    I am going to go as quickly as I can because I have a lot 
of questions, and I doubt I will get them all in, but the ones 
that I don't, we will submit them to you in writing for a 
response.
    To Roger, I think, very well that it has been a long-held 
belief of mine that the upcoming incentive auction rules really 
have to be sufficient to prevent excessive concentration of 
spectrum among the Nation's largest wireless providers. Now, 
today, approximately 73 percent of the highly desirable 
spectrum below 1 gigahertz is held by two companies in the 
country. Is it the commission's view that wireless carriers who 
lack substantial low frequency spectrum are at a competitive 
disadvantage?
    Mr. Sherman. Thanks for the question, Ms. Eshoo. I think 
the commission has been wrestling with this issue for the last 
several years in various competition reports.
    Ms. Eshoo. Yes. It is a sticky wicket, yes.
    Mr. Sherman. And last year----
    Ms. Eshoo. Yes.
    Mr. Sherman [continuing]. About a year ago, when it adopted 
the incentive auction order, it also adopted a companion order 
of mobile spectrum holdings in which it recognized that a 
complimentary mix of spectrum, including low band spectrum, 
because of its special properties, was critical to competition. 
And it took steps in that order to recognize the unique 
characteristics of low band, which as you know, is better for 
rural coverage because it propagates over further distances----
    Ms. Eshoo. Yes.
    Mr. Sherman [continuing]. And it also is great for urban 
areas where it can go through buildings and walls. So the 
commission took action in that item to recognize the special 
qualities of low band, and in transactions it gives special 
deference to the amount of low band spectrum being transferred. 
And then importantly, in the incentive auction, it established 
what we call a market-based reserve, which is a real balancing 
act to try to make sure that nobody can get all of it----
    Ms. Eshoo. Yes.
    Mr. Sherman [continuing]. And make sure it is available to 
the smaller providers, because as you mentioned, it is 
disproportionately held by a couple of large carriers. Not 
suggesting those carriers did anything wrong, it is just a 
historic fact.
    Ms. Eshoo. No, they didn't, but the whole issue is that we 
have competition in our country.
    Mr. Sherman. Right. Right.
    Ms. Eshoo. We have free markets, but competition is one of 
the essential ingredients in our national economy. Thank you.
    Mr. Knapp, it is great to see you. I have fought very hard 
for unlicensed in the TV white spaces, which is why I was 
concerned to hear that the FCC recently received a petition to 
suspend the TV white spaces database. Can you explain to the 
committee exactly what is going on with this, and if you are 
aware of any instances of interference as a result of the 
database problems raised by the NAB?
    Mr. Knapp. Sure. These are databases that were set up 
through private providers where only fixed users, the people 
who do things like wireless broadband and provide service to 
businesses, can register their locations and some related 
information into the databases. We are aware there are some 
anomalies in the databases, and we have been working with the 
database providers and the other stakeholders to take care of 
any housekeeping that needs to be done, as well as continuing 
to work with the broadcasters to correct any problems that we 
find. But we have not----
    Ms. Eshoo. What is the upshot of it though? Is this going 
to be settled, is it going to be left hanging in limbo, what is 
going to happen to the TV white spaces?
    Mr. Knapp. So I am confident that this can be easily 
corrected.
    Ms. Eshoo. That is great.
    Mr. Knapp. It is things like missing phone numbers.
    Ms. Eshoo. I like the word easily. OK, good. Moving on.
    Both to Mr. Leibovitz and to Mr. Knapp, the prospect of 5G 
technology is very exciting. It is very exciting for consumers. 
I think for everyone on the committee, we understand what 
superfast speeds will bring about for people in our country, 
and that is the cause of excitement. It is my understanding 
that the commission is currently examining which bands of 
spectrum would best be suited for 5G services. When can 
consumers expect to see 5G deployed in our country?
    Mr. Leibovitz. Thank you, Congresswoman, and thanks for the 
invitation to speak today.
    Ms. Eshoo. Yes.
    Mr. Leibovitz. 5G is a topic of growing interest in the 
wireless industry.
    Ms. Eshoo. Yes.
    Mr. Leibovitz. As I think Members know here, in the U.S. 
our policy is not to earmark spectrum for certain technologies. 
We have a strong policy of technology neutrality and we intend 
to continue that.
    Ms. Eshoo. And I think that is a sound policy.
    Mr. Leibovitz. At the same time, we recognize that some of 
the new technologies that are coming down the pipe have the 
potential to use very wide channels, and use spectrum that 
otherwise is previously thought unusable for terrestrial 
service. We put out the NOI last fall on spectrum frontiers 
which teed-up a number of different bands above 24 gigahertz 
for both licensed and unlicensed 5G-type service. There are 
also incumbents in those bands. Some of those bands that we 
have to think about protecting their users, satellite users and 
others, but the technology itself is not really ready yet, it 
is still in the lab. I think most people anticipate that these 
technologies would happen in the 2020-plus time frame. If you 
look at the history of wireless, the schedules sometimes tend 
to slip a little bit. We want America to be the first country 
to have it, and the place where the technology gets developed 
and thrives.
    Ms. Eshoo. Speed it up.
    Mr. Leibovitz. Is that my testimony, or are you----
    Ms. Eshoo. No, your testimony is over. My time is up.
    Mr. Walden. Gentlelady's time has expired. We have to move 
now to the gentleman from Ohio, Mr. Latta.
    Mr. Latta. Thank you very much, Mr. Chairman. Again, 
gentlemen, thanks very much for being here today to testify.
    Mr. Knapp, if I could just start questioning with you. The 
FCC has done very good work in facilitating compromise 
solutions so that the 5.1 gigahertz band can be shared to the 
benefit of Wi-Fi consumers. We now need more such compromise 
solutions to enable efficient use of the 5.9 gigahertz band to 
keep up with consumer Wi-Fi demand. Wi-Fi can share the band 
with future intelligent transportation systems if those systems 
are ever deployed. What is your timeline do you think for 
allowing Wi-Fi operations in this band?
    Mr. Knapp. We brought together the stakeholders for the two 
bands that are in play. One is a band of 120 megahertz that is 
used primarily by the Department of Defense. We have set up a 
working group with Department of Defense, NTIA, NASA, and 
industry stakeholders. There have been studies done on the 
required protections. We are not quite there on the ability of 
the equipment to meet what the requirements would be. So we are 
still working on that. Once we get to a point where we have a 
solution, there will need to be prototype devices from industry 
to be tested to make sure it works.
    So it is a little bit hard to give you a firm timeline. I 
can tell you that we are trying to accelerate this as fast as 
we can.
    Mr. Latta. Let me ask, when did the working groups first 
form----
    Mr. Knapp. So most of the work had been going on 
internationally. So that has been going on actually probably a 
year and a half, 2 years. We reached a point where it was clear 
we were not going to be able to have everything necessary in 
place to succeed internationally, so we created the work group, 
I think we started late last summer, and then we picked up the 
pace with meetings once a month earlier this year.
    Mr. Latta. So you are meeting with the working groups about 
every month that you are working----
    Mr. Knapp. Every month.
    Mr. Latta. OK.
    Mr. Knapp. We created a technical subgroup that is meeting 
in between. So we have all the players there trying to find an 
answer here.
    Mr. Latta. OK. Let me ask also, given the tremendous 
advance in the wireless technology over the last decade, should 
the commission review its DSRC spectrum designation to 
determine in the public interest if there are other more 
advanced vehicle-to-vehicle safety technologies using services 
like the LTE advance 5G or Wi-Fi?
    Mr. Knapp. So this is the other portion of the spectrum, 75 
megahertz, that we have been looking at. There, the technology 
is very similar to Wi-Fi, and so the IEEE, which is basically 
the developer of both the Wi-Fi standard and the DSRC standard, 
put together a tiger team to try to find a solution. They are 
nearing the completion of a report. There are a couple of 
proposals on the table to be looked at, plus we have been 
meeting separately with the NTIA and Department of 
Transportation, and one of the things I think that we have 
agreed we need to look at is the broader scope of 
communications for vehicles beyond just the DSRC.
    Mr. Latta. Thank you.
    Mr. Leibovitz, if I could ask you quickly, how can we move 
forward and ensure shared use of the upper 5 gigahertz band, 
and would it be beneficial for the FCC to hold routine meetings 
with the committee in order to accomplish the goal?
    Mr. Leibovitz. So I would like to yield to Mr. Knapp on 
that question.
    Mr. Latta. OK, that is fine, if you want to do that. He is 
on the hot seat then.
    Mr. Knapp. We would be more than happy to meet if you would 
like and keep you apprised of the progress.
    Mr. Latta. Yes, we would appreciate that.
    Mr. Sherman, as stated in your joint testimony, in 2010, 
the FCC analyzed spectrum demands and determined that the 300 
megahertz would be needed by 2015. It is now 2015, and as you 
have outlined, the FCC has released 145 megahertz of spectrum 
for wireless broadband use.
    What is the plan for our Nation to meet the skyrocketing 
consumer demand for wireless services?
    Mr. Sherman. Thanks for the question, Mr. Latta. I think he 
announcement about the 3.5 gigahertz item that is being 
circulated will make progress, but I would defer to my 
colleague, John Leibovitz, because he has been working on this 
plan for several years, and he probably can give you more up-
to-date information.
    Mr. Latta. Thank you.
    Mr. Leibovitz. Yes, so the National Broadband Plan, which 
of course, was authorized and directed by Congress, which came 
out in 2010, talked about 2 goals. One was 300 megahertz for 
mobile use in 5 years, and then 500 megahertz within 10 years. 
Towards the first goal, as you mentioned, we have succeeded in 
getting close to 150 megahertz out already, which if you look 
at the history of spectrum release, is very fast actually. The 
3.5 gigahertz item, which looks to be voted in the April 
meeting, would add another 100 megahertz of new spectrum. And 
then, of course, we have the incentive auction coming in early 
2016. So it might not exactly be in the 5-year time frame, but 
it is pretty close, that we actually have a roadmap to get to 
the 300 megahertz.
    Beyond that, we would be looking at other bands. We have 
talked about some of them today for both unlicensed and 
licensed broadband use, which would take the Nation to 500 
megahertz.
    Mr. Latta. Thank you.
    Mr. Chairman, my time has expired, and I yield back.
    Mr. Walden. And we will now turn to the gentleman from 
Kentucky, Mr. Yarmuth, for 5 minutes.
    Mr. Yarmuth. Thank you very much, Mr. Chairman. Thanks to 
the witnesses for being here today.
    I know there are some stakeholders who think the FCC should 
focus exclusively on allowing opportunities for licensed 
spectrum. And, Mr. Sherman, I think in your testimony you 
referenced the commission's commitment to both licensed and 
unlicensed, which I think is a good idea. Could you explain why 
it is important to allow the opportunities for unlicensed 
spectrum?
    Mr. Sherman. Sure, I would be happy to. And I would ask if 
my colleagues, Julie Knapp or John Leibovitz, have anything to 
add, but I think the agency recognizes that in this 
environment, licensed spectrum and unlicensed spectrum are 
complementary and support each other in a lot of ways. 
Consumers use both and consumers want both, and there are 
benefits to licensed users and licensees by having unlicensed, 
and vice-versa. Congress recognized this in the Middle Class 
Tax Relief and Job Creation Act by allowing for unlicensed uses 
in the 600 megahertz. So I think everybody is very comfortable 
with the symbiotic relationship between licensed and 
unlicensed.
    I would ask if Julie or John have anything to add.
    Mr. Knapp. No, I completely agree with what Roger said, and 
we are working hard on both fronts to provide spectrum and 
opportunities for growth of both licenses and unlicensed 
services.
    Mr. Yarmuth. I know that unlicensed spectrum is really 
important for innovation and for small business and so forth. 
How do some of the larger wireless carriers use unlicensed?
    Mr. Sherman. Well, I think the most obvious way is 
unlicensed--a lot of people in their everyday use of their 
smartphones will be on a licensed network, so to speak, as they 
travel from their office to their house. When they get into 
their house, a lot of times their phone will transfer onto a 
Wi-Fi network within the residence, and they will be using data 
on an unlicensed Wi-Fi network.
    Mr. Yarmuth. OK.
    Mr. Knapp. Yes, I would just add that certainly, Wi-Fi gets 
all the attention, but in those same devices are Bluetooth to 
connect to your headphones and the Near Field Communications 
for the automatic payment that is emerging. All that is 
unlicensed.
    Mr. Yarmuth. OK. Thank you for that.
    And one of my kind of personal obsessions now is how we 
make policy in real time with as fast as the world is changing, 
and certainly, in this area, that kind of dilemma is certainly 
relevant. You talked about research on 5G and so forth, is 
there anything going on out there, research and so forth, that 
actually scares you, and might be so disruptive that the world 
as you know it, and we know it, will change?
    Mr. Sherman. Well, if you are talking about research, I 
should probably defer to the engineer.
    Mr. Yarmuth. For instance, I read something a few weeks ago 
where somebody has invented a way to transmit electricity 
through sound waves to appliances, and I think that, if it is 
scalable and if it actually works, that is a disruptive 
technology because then we have to say, well, should we really 
be investing trillions of dollars in the grid if we are going 
to have another way to transmit electricity. I was just curious 
whether in your specific area there are things that promise 
that kind of disruption. I mean it is fine if you say no.
    Mr. Leibovitz. I would just add, I would just say that I 
think this is a big policy challenge that we always face about 
how do you prepare for the next disruptive technology. I think 
it is instructive and reinforces the policy of technology 
neutrality, of flexibility, as much as possible so that we 
don't, as much as possible that we don't lock certain types of 
uses categorically into the rules, we allow lots of different 
applications to thrive. Our 3.5 gigahertz proceeding actually 
is an attempt to try to push the boundary of flexibility even 
farther. So in some ways it is a hybrid between licensed and 
unlicensed uses, and I think there is a lot more we can do 
looking forward to 5G and so forth.
    Mr. Yarmuth. Yes. I have no other questions. I yield back, 
Mr. Chairman. Thank you.
    Mr. Walden. Gentleman yields back.
    And we now turn to the gentleman from New Jersey, Mr. 
Lance.
    Mr. Lance. Thank you very much. Good morning to you all.
    The incentive auction will be the first time the FCC 
auctions a band plan that is not set in advance of the auction, 
using a new auction mechanism, ascending clock, that includes a 
separate round to assign licenses after the main auction is 
over. It will also include a spectrum reserve triggered when 
bidding reaches a certain level, impaired licenses and 
something called intra-round bidding. As I understand it, all 
of this new, even for those wireless carriers who have 
participated in traditional auctions.
    To the panel in general, and perhaps to Mr. Epstein and Mr. 
Leibovitz, what steps will you take to help prepare carriers 
for bidding in this first of its kind auction? For example, 
will there be multiple mock auctions and seminars?
    Mr. Epstein. Thank you very much, Congressman. You are 
absolutely right. Outreach is extremely important in this 
auction on both sides of it; both the reverse auction side and 
on the forward auction side.
    On the reverse auction side, broadcasters are really not 
used to bidding in an auction, and especially in a new auction, 
a voluntary auction like this. And so I can go into detail 
later, but we have taken many new steps to encourage and to 
inform broadcasters.
    On the forward auction side are--wireless providers are 
more familiar with auctions, they are expert, but you are 
exactly right, there are several new features of this auction. 
We have been working with them on a daily and on a weekly basis 
to help formulate the appropriate policy, and we will have 
outreach and we will have mock auctions as part of the planning 
to go forward before the auction.
    Mr. Lance. Thank you. Would others like to address the 
issue?
    Voice. No, thank you.
    Mr. Lance. Thank you. The FCC's incentive auction public 
notice proposes to sell both impaired and unimpaired licenses. 
As I understand it, a license is impaired when a carrier cannot 
serve the entire geographic market due to interference from 
television broadcasts. Before bidding on a license, carriers 
will need to know the extent to which licenses are impaired, 
meaning which parts of their license area they may not serve or 
may be subject to interference.
    What kind of information will carriers have prior to 
bidding regarding the geographic areas that may be impaired?
    Mr. Epstein. This concept of impairment, Congressman, comes 
from the fact that the commission made the policy decision that 
it really doesn't want to go to what is called the least common 
denominator. And, you know, if we can't get a reasonable amount 
of spectrum in certain congested areas, we don't want the whole 
country to have that limited amount of spectrum. And what that 
means is, as you said, you are exactly right, we may have 
broadcasters in that particular band which will mean that 
hopefully in some limited areas, bordering congested areas, 
that certain blocks in the auction will be subject to 
interference.
    What we have said in the public notice that you have talked 
about, and what the commission will decide in the summer when 
it resolves that, is the amount of detail, what we have talked 
to the carriers about, is very specific detail so that they 
will know exactly what they are bidding on in the forward 
auction, almost on a 2 by 2 sale level.
    Mr. Lance. Thank you. Anyone else on the panel like to 
comment?
    Thank you very much, Mr. Chairman. I yield back the balance 
of my time.
    Mr. Walden. Gentleman yields back the balance of his time.
    Now turn to the gentleman from Iowa for 5 minutes.
    Mr. Loebsack. I was not expecting to speak this soon. Thank 
you, Mr. Chair.
    I want to be pretty brief just because some of the things 
that I wanted to ask about have already been covered, but I 
would like to just--and I may be repeating, and that is fine, 
but refer to the unlicensed issue, and this is to any of the 
witnesses. Some stakeholders argue that the FCC should focus 
exclusively on maximizing opportunities for licensed spectrum. 
I believe, however, that the FCC should pursue a balanced 
spectrum policy that includes more spectrum for both licensed 
and unlicensed. I know unlicensed spectrum has lower barriers 
to entry which can help startups, I think that was mentioned 
already, and small businesses get access to this platform for 
innovation. How do larger wireless carriers use unlicensed 
spectrum? And that is really for anybody here.
    Mr. Sherman. Well, I think we would agree that there is a 
symbiotic relationship between licensed and unlicensed 
spectrum, and they are not mutually exclusive; you can have 
both. And I think the Congress has recognized that, and the FCC 
strives to implement a policy that recognizes that.
    I mentioned earlier the example of offloading data usage 
onto an unlicensed network to ease capacity, and there are 
other new innovations that are coming down that use both 
licensed and unlicensed technology, and seamlessly between 
unlicensed and licensed services.
    I don't know if John or Julie have anything to add.
    Mr. Knapp. Yes, I mentioned some before, and I think most 
people appreciate where we had the arguments years ago about 
should be one or the other or more, that the two win when there 
is spectrum for both.
    I mentioned a couple of things before, even on the medical 
front, we have got glucose monitors that use unlicensed 
spectrum, or lightly licensed spectrum, to collect data. They 
feed it to the wireless device, and then the information can go 
back to the doctor, so there are things that are being 
accomplished and innovations that are occurring because we have 
both, and we need to continue to provide for both.
    Mr. Loebsack. Thank you. Anyone else? OK. Just one--go 
ahead.
    Mr. Sherman. I just wanted to add one other thing. We often 
look at it also, consumers don't really care if it is licensed 
or unlicensed----
    Mr. Loebsack. Right.
    Mr. Sherman [continuing]. They just want their device to 
work and the services----
    Mr. Loebsack. Right.
    Mr. Sherman [continuing]. To perform. So I think at the end 
of the day, consumers are going to want services in both the 
required to make things robust.
    Mr. Loebsack. And I think that is the bottom line for us 
here in Congress too. We have to make sure that that access is 
there.
    Mr. Sherman, paying for a broadband connection, including 
wireless broadband, can be a major challenge obviously for many 
of my constituents, many of the folks here on the dais today, 
and competition in the wireless industry is critical, no doubt, 
if we are going to help low-income Americans get connected. And 
I have a particular concern about rural America, I have to say, 
not just because I represent a lot of rural areas, but a lot of 
folks on this committee now who have that particular concern as 
well.
    How does access to spectrum impact the level of competition 
in the wireless industry, because competition, hopefully, would 
lead to, you know, lower prices or at least more competitive 
prices, and providing the same kind of access as well. And so 
if you could speak specifically to the rural areas, I think 
that would be important for a lot of us here.
    Mr. Sherman. Thanks for that question. It is also very 
important to the Commission on a bipartisan basis. And there 
are a number of policies that the Commission has adopted over 
time to incent rural deployment and build out. We need to do 
more but there are a lot of things already in place.
    One thing that is critical is low band spectrum, which we 
talked briefly about before.
    Mr. Loebsack. You mentioned that earlier. Can you elaborate 
on that a little bit?
    Mr. Sherman. The low band spectrum, because of its 
propagation characteristics----
    Mr. Loebsack. Yes.
    Mr. Sherman [continuing]. Is really well suited for rural 
areas. It goes farther with less infrastructure----
    Mr. Loebsack. Yes.
    Mr. Sherman [continuing]. So that it costs less and can 
serve those areas where people live longer distances apart. Or 
in congested cities oftentimes you can have multiple sites 
attached to buildings and serve lots of densely populated 
areas, but rural areas you have bigger distances, so low band 
spectrum is particularly well suited. We want to make sure that 
there is lots of low band spectrum in rural areas with lots of 
providers having options, so rural consumers have the same 
benefit of competition that----
    Mr. Loebsack. Right.
    Mr. Sherman [continuing]. That urban consumers have. We 
also have incentives for building out--we have build-out 
requirements. There are, right now in looking at small business 
preferences and incentives in an open NPRM, the question of 
rural build-out incentives is also keyed up and the commission 
is very sensitive to those issues.
    But I think in everything we do with competition policy, 
rural is a big part of it.
    Mr. Loebsack. It is. And again, I cited a lot of examples 
where it is just really hard for folks in a rural area to--
because there isn't that much competition. And in the end, they 
end up paying a lot of money and they are not getting as good a 
service often as is the case in urban areas. So how we can 
incentivize that is the question.
    Mr. Sherman. Well, one other thing I should mention in the 
incentive option, one thing the commission did is it changed 
the standard license size to what is called a PEA----
    Mr. Loebsack. Yes.
    Mr. Sherman [continuing]. And it was a compromise amongst 
various stakeholders, but it allows smaller providers to have 
access to a smaller license area, which might not be as 
expensive as a large, nationwide or regional license----
    Mr. Loebsack. OK.
    Mr. Sherman [continuing]. And a lot of the small rural 
providers that we talked with and engaged in that proceeding 
were really pleased that the commission came up with a way that 
they can get into the auction----
    Mr. Loebsack. Thank you.
    Mr. Sherman [continuing]. At a reasonable basis.
    Mr. Loebsack. Thank you.
    Mr. Chair, I see my time has expired. I yield back.
    Mr. Walden. The gentleman yields back. And I just concur 
with what he said about the rural areas. I have a town, 
Mitchell, Oregon, 130 people in 2010, now to 129. The local 
city had to pay to put in a payphone because there is no cell 
coverage, and you have a highway going by, and people have a 
problem, break down, knock on somebody's door. We still have 
these areas, like Mitchell, Oregon, that need coverage.
    Ms. Eshoo. Would you just yield for a moment----
    Mr. Walden. Yes, sure.
    Ms. Eshoo [continuing]. Mr. Chairman?
    Mr. Walden. I don't know whose time I am on.
    Ms. Eshoo. Yes, I--sure. You have the best time. It is the 
chairman's time. But it is great spectrum, yes.
    Mr. Walden. Yes.
    Ms. Eshoo. On this issue of rural, in the last Congress, I 
had counted how many members of the Energy and Commerce 
Committee represented rural areas, and a combined from both 
sides of the aisle there were 18 members. So, the rural 
representation could take over this entire committee. I don't 
know how many----
    Mr. Walden. We just haven't told you we have them.
    Ms. Eshoo [continuing]. I haven't counted. I haven't 
counted for this Congress, but this issue is sweeping in terms 
of--and it has excellent representation here. So it is very 
important to highlight it.
    Mr. Walden. Yes.
    Ms. Eshoo. Thank you.
    Mr. Walden. Yes, actually in this county, there is one 
person for every 9 miles of power line. So it is hard to find 
the economic--anyway.
    We will go now to Mr. Guthrie, who helped lead our 
bipartisan task force on this issue. Thanks for your 
leadership, you and the rest of the Members did a terrific job. 
So please go ahead.
    Mr. Guthrie. Thank you, and I appreciate that, and I think 
people who have heard this will get tired of hearing me say 
this but it is true that now that we are having these spectrum 
meetings, it is interesting when you get into public service, 
things you get involved in you never thought about. I have said 
I didn't walk around Kentucky going, ``send me to Washington 
and I will deliver you spectrum,'' but that is something that 
people want and expect, and so it is really good that we are 
here doing this. And so I would just kind of make a statement 
for a few minutes and then ask a couple of questions. But I 
would like to thank all you guys for testifying. It is very 
important. And I also want to mention my appreciation for 
working with Doris Matsui and for all of her efforts working 
with me on the spectrum issues, as co-chairs of the 
Congressional Spectrum Caucus, it was a bipartisan effort and 
worked well together. And, in fact, today we have reintroduced 
together the Federal Spectrum Incentives Act, a bill that would 
provide financial incentives to encourage government agencies 
to relocate from their existing spectrum bands in order to free 
up additional spectrum for other uses. And I look forward to 
working with all of you to move this forward.
    As we have already discussed at length today, spectrum is 
an important limited resource, and by encouraging federal 
agencies to make additional spectrum available, we can invest 
in innovation and ensure spectrum is available to meet the 
demands of our critical emergency needs and commercial uses. 
And this bill received strong bipartisan support last Congress, 
and I look forward to working at the same again this time.
    And just what my friend from Iowa, Mr. Loebsack, just said, 
I was going to mention that we also want to recognize the 
commission's work to create rules for the upcoming incentive 
auction that does use the partial economic areas for geographic 
support in Kentucky. I am one of those 18. I have a couple of 
good-sized cities, but I do have a lot of rural area, and it 
will aid my constituents and it will aid better participation 
in the auction, so we appreciate that.
    I just have a couple of questions with the couple of 
minutes I have left. Mr. Epstein, for you, I have heard 
concerns that the $1.7 billion relocation fund for broadcaster 
expenses may be inadequate for the true cost of relocating 
stations. What is your opinion on this, and assuming that it 
could be inadequate, what are potential solutions?
    Mr. Epstein. Yes, we too, Congressman, are concerned about 
both the amount and the process, so we commissioned an expert 
report called the Widelity Report, that was out there, and they 
came back with the conclusion that it was challenging but 
feasible to do so if we were careful and took certain steps. So 
we have no reason to believe that the $1.75 billion which 
Congress set forth will be insufficient to be able to do the 
relocation, but we are working with the NAB, with broadcasters, 
with the industry generally, and we are also taking certain 
other steps such as building into the software ways to minimize 
relocation costs. And that includes, you know, minimizing the 
number of stations that have to change channels, or taking 
special account of those stations which have really expensive 
relocations new--and minimizing those. So we look forward to 
working with the industry and with everybody else, but at this 
point we have no reason to believe the $1.75 billion won't be 
sufficient.
    Mr. Guthrie. Yes, it was just pointed out to me, I said 
$1.75 million. We couldn't do it for that, could we?
    Mr. Epstein. Billion.
    Mr. Guthrie. If we could do it for that, we could use the 
money for the deficit----
    Mr. Epstein. Yes, sir.
    Mr. Guthrie [continuing]. Couldn't we? And I will ask Mr. 
Sherman, we are talking about referring spectrum through 
broadcasting, trying to free the bill to free spectrum through 
government spectrum, but outside of the crunch for procurement 
of more spectrum, is FCC doing to encourage more spectrum, 
and--don't create spectrum, better use of spectrum, maybe 
sharing, efficiencies, those types of things? I have about a 
minute left, if you could elaborate on what you guys are doing 
to create more spectrum than what we have----
    Mr. Sherman. I----
    Mr. Guthrie [continuing]. Or more availability.
    Mr. Sherman. I can initially respond, but then will ask 
John to elaborate. But I think all of the above is what the FCC 
is doing. Unlicensed, licensed, sharing, exclusive use, we are 
exploring everything because we have to be as efficient as 
possible. And I know John has spent a lot of time working on 
that.
    Mr. Leibovitz. Yes, I will come back to the theme of 
flexibility. Obviously, the unlicensed spectrum is the ultimate 
in flexibility, and sharing and unlicensed spectrum today is 
where most of the spectrum sharing happens, and people don't 
even realize it, Wi-Fi is intensive sharing with Bluetooth and 
other technologies. We have secondary market rules which allow 
people to transfer spectrum to others. They can essentially 
sell the rights so the market can work, which is really 
important. And then we are looking at ways to push the rules to 
even be more flexible. I mentioned the 3.5 gigahertz item in 
some ways will encourage not only sharing between commercial 
and federal users, but also among different types of commercial 
users so that, for example, maybe in the future some very large 
industries, including some that are well known by the 
committee, energy, and so forth, will have access to a 150 
megahertz band that they can use for LTE to do lots of smart 
grid, deployments, other types of things.
    Mr. Guthrie. Thank you. My time has expired. Thank you, Mr. 
Chairman.
    Mr. Walden. Thank the gentleman for his good work and good 
questions.
    We will now turn to the gentleman from California, Mr. 
McNerney, for 5 minutes.
    Mr. McNerney. Thank you, Mr. Chairman. And I thank the 
witnesses.
    Mr. Leibovitz, is there any language in the current 
regulations that discuss how new technologies in the unlicensed 
spectrum should interact so that existing technologies are not 
unfairly hampered?
    Mr. Leibovitz. I think Mr. Knapp is probably the----
    Mr. McNerney. OK, sure.
    Mr. Leibovitz [continuing]. Best person to answer that.
    Mr. Knapp. So the way unlicensed works is the devices, they 
all have a little label on them that says they are not 
protected against interference, but obviously they are serving 
a wide public good. So when new technologies--the beauty of it 
is it allows flexibility for cutting-edge technologies to be 
introduced, but we also try to keep an eye on that so there is 
not something that disrupts all of the good applications----
    Mr. McNerney. Yes.
    Mr. Knapp [continuing]. That are out there now.
    Mr. McNerney. So that was kind of vague. I mean----
    Mr. Knapp. Yes.
    Mr. McNerney [continuing]. When we expect some new 
technologies to come in, can't they be disruptive to existing 
technology like Wi-Fi?
    Mr. Knapp. What we try to do, because there is freedom 
there, is just keep an eye on what is going on. There is not a 
specific benchmark like in the licensed service where there is 
protection. And most of those technologies are built to be 
robust and operate in a shared environment.
    Mr. McNerney. Yes, I am little worried though that some of 
the new technology can come in and be very dominant, like the 
LightSquared problem.
    Mr. Knapp. Yes, I think we are always keeping an eye on 
what is coming in the way of new technologies and those bands, 
and we have been encouraging the industries, because they 
normally sort out the details of the sharing, to work those 
things out before a new technology is introduced that is 
disruptive.
    Mr. McNerney. OK. I am not sure who to ask this question, 
but is there any portion of the spectrum that will be reserved 
for small bidders in future auctions? Mr. Sherman?
    Mr. Sherman. Well, I think the question is about the 
ability of small bidders in future auctions?
    Mr. McNerney. Right.
    Mr. Sherman. The way the FCC has approached that in the 
last few years is through something called our competitive 
bidding rules where we have small business discounts, and that 
is an issue that is currently open before the commission, 
evaluating whether the current rules make sense or we should 
update them. And there are some proposals in the record to 
update the rules to allow small bidders to get a more realistic 
opportunity to bid for a spectrum, which is pretty expensive. 
So that is an active proceeding that the commissioners are all 
engaged in.
    Mr. McNerney. OK. I don't understand exactly what is going 
on with the incentive auction. What are the current holders of 
the 600 megahertz band and how are they going to be treated in 
an auction?
    Mr. Epstein. Well, most generally, the current holders of 
the 600 megahertz band are UHF broadcast television stations, 
and the act that Congress passed was an innovative act, a way 
to look at spectrum in a different way, and what we are charged 
with by this subcommittee and the Congress and the commission 
with doing is having a workable back-to-back auction, and by 
that I mean is a reverse auction where the broadcasters will 
voluntarily submit their spectrum for compensation for a share 
of the proceeds that we will get in the forward auction from 
the wireless providers. And that is the challenge that Congress 
has put before us.
    There are other present users of the 600 megahertz band 
such as wireless microphones and unlicensed, and as part of our 
overall planning, we have to make transition and other plans 
for them. So it is a complex of items which is part of the 
Spectrum Act which we are charged with implementing.
    Mr. McNerney. OK, thank you.
    Mr. Chairman, I yield back.
    Mr. Walden. Gentleman yields back.
    Chair now recognizes, let us see, Mr. Pompeo has left, the 
gentleman from Ohio, Mr. Johnson, for 5 minutes.
    Mr. Johnson. Well, thank you very much, Mr. Chairman.
    Mr. Epstein, given the success of AWS-3 and the feedback 
that you have received, do you feel that you have a better idea 
of how much spectrum might be reallocated as a result of the 
incentive auction?
    Mr. Epstein. Congressman, I think we are more optimistic, 
we are comfortable. The success of the AWS-3 auction may not be 
directly transferrable or relatable, but it is an optimistic 
and good thing, and we are noticing it not by any kind of 
administrative decision that the commission makes, but by the 
increased interest of the broadcasters in participating.
    Mr. Johnson. Sure.
    Mr. Epstein. We have a very strong broadcaster outreach 
program, and we are seeing a lot of interest.
    Mr. Johnson. Maybe this has already been asked, and if it 
has just say so and we will move on. How did you come up, or 
how are you coming up with the calculations on how much 
spectrum is to be auctioned?
    Mr. Epstein. It is really a market-based decision that 
Congress put before us. We don't have a predetermination. We 
have put out a bunch of sample band plans, but the challenge of 
this auction and the new innovative thing that Congress put 
before the commission is it is market-based. So we will know 
how much spectrum when the broadcasters show up.
    Mr. Johnson. OK. Can you be specific about maybe some of 
the lessons learned from AWS-3 that can be applied to this 
upcoming incentive auction? Mr. Epstein, that is for you.
    Mr. Epstein. OK. One of the lessons is that, as Roger 
noted, we have an ongoing proceeding about entities that are 
considered small businesses, and we are looking at that issue. 
We have to see whether there are any lessons learned, and the 
Wireless Bureau and the commission has said that that will be 
resolved prior to the start of the incentive auction. We are 
looking at some of the financial results, and seeing whether 
any of the metrics we have in the incentive auction should be 
tweaked and modified. And I am sure there are other lessons 
that we will look at and we will learn from that very 
successful auction.
    Mr. Johnson. So is it safe to say that your experience with 
AWS-3 informs the agency's actions as you move forward with 
this major undertaking?
    Mr. Epstein. Yes, sir, to some extent, yes, it does.
    Mr. Johnson. OK. Mr. Sherman and Mr. Knapp, what industry 
initiatives have you encountered that effectively attempt to 
use spectrum more efficiently and with less impact on adjacent 
users? Mr. Sherman, you can go first.
    Mr. Sherman. I am not aware of specific industry 
initiatives. I know that industry is always working to be more 
efficient and do more with less, and are constantly changing 
out equipment and building more facilities to be more efficient 
with their spectrum use, but I would defer to Julie's expertise 
on how it happens technically.
    Mr. Johnson. Mr. Knapp?
    Mr. Knapp. Thanks, Roger. As I sit here thinking about it, 
we are seeing innovation as a result of flexible rules on 
multiple fronts. On the unlicensed front, one of the things 
that doesn't get much attention is that there is spectrum that 
we have opened up, way up, at 60 gigahertz. You are going to 
see what I think is a result of an industry developed standard, 
new unlicensed equipment that will be called Wi-Gig. So it is 
trying to use spectrum more efficiently. In the existing 
unlicensed bands, all of the development in the standards that 
have gone from the slower standards to the more faster and 
improved products you are seeing on the shelf has been a 
progression of industry initiatives. And on the licensed front, 
as we are sitting here just talking about the success of an 
auction that has occurred, we are just moving through 4G, and 
we are already talking about 5G. And so I think across industry 
and on all fronts you are seeing lots of innovation and trying 
to use spectrum more efficiently for new services and products.
    Mr. Johnson. Yes, as a 30-year IT professional myself, one 
of the questions that continues to go around in my head is that 
with current technology there is only so much spectrum. I am 
wondering what the industry is doing to explore the unknown. 
How do we create more spectrum? What is the next big advance in 
technology that will get us there? Anybody?
    Mr. Leibovitz. I will take that. So, I think there are two 
big trends to keep an eye on. One is the densification of the 
network. So using a spectrum with smaller and smaller cells, 
both on the license and unlicensed sides of the equation, so 
that the spectrum gets reused more effectively. And the other 
is, as Julie mentioned, looking at higher spectrum bands and 
using new technologies which I think mainly have to do with 
smart antennas to focus energy using those higher-up bands in 
ways that were not practical beforehand. And that we are 
looking at technologies that can produce 10 gigabit speeds in 
the lab by using very wide channels, of course, shorter 
distance. So there are some really exciting things happening, 
and that is really the subject of the 5G----
    Mr. Johnson. We could have some great conversations over 
dinner but I have run out of time.
    Mr. Chairman, I yield back.
    Mr. Walden. Thank the gentleman for his questions and 
comments.
    We will now go to the gentlelady from New York, Ms. Clarke. 
Thank you for being here and for your participation.
    Ms. Clarke. Thank you very much, Mr. Chairman. And I thank 
the ranking member and our panelists as well.
    Mr. Sherman, I wanted to ask, what is the plan to ensure 
that broadcasters adequately participate in the auction, and 
what incentives are the FCC offering to increase their 
engagement? Much of the incentive auction's success is based on 
broadcaster participation so that they will in turn provide the 
demand for the auction's next stage.
    Can you give us some insights there?
    Mr. Sherman. Sure, I can tell you that we do have a plan, 
and we are in the process of implementing it. And Gary Epstein 
is leading that effort and I think he can walk you through a 
number of the steps the commission is taking.
    Mr. Epstein. Yes. Thank you very much, Congresswoman. Your 
point is absolutely the most crucial one. We won't have an 
auction unless we have broadcaster participation. And so we 
have done what we usually do which is meet with broadcasters 
and have Webinars and seminars, but we have taken two special 
extra steps, and we intend to take more.
    One of those steps is, in response to requests from 
broadcasters, we have released 2 broadcaster information 
packages, made them available to every licensee in the country, 
and they contain both business information and estimated 
pricing information. And that, combined with the AWS-3 auction 
figures, has piqued a lot of interest by broadcasters.
    And the second major effort we have undertaken is we are 
going around the country on broadcaster information trips, OK, 
and visiting, both in general sessions and in private sessions, 
we are getting out of Washington, we are visiting 50 cities, we 
are going around the country and meeting with broadcasters in 
order to inform them so that they can make decisions on whether 
to participate.
    Ms. Clarke. Have you begun receiving any feedback as of 
yet? I am concerned about averting any unintended consequences 
to smaller, perhaps rural broadcasters, and maintaining an 
inclusive and diverse broadcast ownership and offerings that 
perhaps repackaging and channel shifting that is being proposed 
may inadvertently create some consternation out there. What 
kind of feedback are you getting?
    Mr. Epstein. Congresswoman, an excellent point. We have 
gotten a lot of positive feedback from a lot of stations who 
are interested in participating in the auction and in allowing 
the commission to reclaim their spectrum, and that is from 
small broadcasters and large broadcasters alike, but with some 
other broadcasters like the broadcasters you are talking about, 
there are other options to participate in the auction, such as 
channel sharing and going from U to V, which Congress has as an 
option in the statute. So what we have done is we have 
emphasized those alternatives with these other broadcasters. 
They can get proceeds from the auction, but continue the 
broadcast even after the action is over.
    Ms. Clarke. That is good news. Can you share with us how 
the FCC proposes to engage in repacking and channel shifting, 
and ensure that consumers are adequately informed about the 
impacts?
    Mr. Epstein. We have learned lessons from the digital 
transition, and if you look at the report and order that the 
commission adopted in May, there is a whole section on consumer 
outreach. And so we have delegated to part of the commission, 
the CGB part, the consumer governmental part, with the 
responsibility to come up with an overall comprehensive plan to 
engage with consumers and make sure that people do not lose 
service.
    Ms. Clarke. Well, on that very point of consumer outreach, 
that will be necessary to minimize confusion and disruption of 
the stations after they are repacked. Is there any discussion 
currently at the FCC about how to work that out logistically?
    Mr. Epstein. Yes, there is. OK, there is planning going on. 
There is a specific obligation in the commission's report and 
order for--at the appropriate time for the commission to come 
up with a specific plan. And we are at the beginning stages of 
that because the auction is a year away. I don't want to go 
beyond that, but it is an important part of our outreach 
efforts.
    Ms. Clarke. Very well. Thank you very much, Mr. Chairman, 
and I yield back.
    Mr. Walden. Good questions. I thank the gentlelady.
    We will now go to the gentleman from Missouri, Mr. Long, 
for 5 minutes.
    Mr. Long. Thank you, Mr. Chairman. I thank you all for 
being here today.
    Mr. Knapp, I have a story here that appeared in the 
publication Re/code on March the 17th, and I would like to have 
that added to the record. And----
    Mr. Walden. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. Long. Thank you, Mr. Chairman. The first couple of 
paragraphs, he is among dozens--let us see, John Doe of 123 
Jump Street has some explaining to do. He is among dozens of 
questionable characters in a Federal Government database that 
is supposed to keep unlicensed Wi-Fi devices from knocking 
broadcast TV signals off the air. There are actually four John 
Does in the system, along with six entries for Sue Q. Public of 
Any Town, USA, and two from John Q. Public of the ever-popular 
location None/None. Even a quick look at the database suggests 
there is something not quite right. Is there really a company 
called Acme at 1600 Amphitheater Parkway, an address more 
generally associated with Google, and does Lin Su really own 59 
unregistered--or, excuse me, registered, unlicensed Wi-Fi 
devices, or have actual owners simply copied that name from the 
installer's guide of the devices that they bought? Is it 
possible to go to the white space databases and enter fake 
addresses?
    Mr. Knapp. So I think what we did is we went through the 
databases. We did find the four John Does. It appears to us 
that these may have been for testing purposes when this was 
rolled out. There are some things, these databases are cutting-
edge, and I think from anything, there are some things that you 
can improve upon, and one of them maybe is the authentication 
of the individuals that we can work on with the database 
providers. But out of roughly 550 records, we only found four 
John Does and one John Q. Public, and they are easily taken 
out.
    Mr. Long. OK, so Lin Su----
    Mr. Knapp. Lin Su is with Acme Company.
    Mr. Long. Or Sun--excuse me, Lin Sun.
    Mr. Knapp. Yes, he is an employee of a company that makes 
these products, and so it would not be unreasonable for them to 
be testing them at their location.
    Mr. Long. What is the effect of entering a fake address?
    Mr. Knapp. So bear in mind that the way the database works, 
the device can't operate because it has to get the available 
channels from the database. The database was a tool to just 
help us locate a source of interference if it occurred. Even if 
the information wasn't right, we could still find the 
interference and take enforcement action if we needed to.
    Mr. Long. Well, is requiring GPSs for fixed white space 
devices, would that fix it?
    Mr. Knapp. So the things that were referred to were things 
like a phone number wasn't right, or there was an incomplete e-
mail address. So these weren't incorrect locations, so just 
having the GPS location alone is not going to address some of 
these other issues. But we are working with the database 
providers to make sure that you can't enter in something that 
is just erroneous.
    Mr. Walden. Would the gentleman yield?
    Mr. Long. Yes.
    Mr. Walden. How will closing so many field offices help 
deal with interference issues in a timely manner?
    Mr. Knapp. So the restructuring of the field offices that 
is being contemplated, at the same time we would be looking at 
alternative ways that we could more effectively get out and 
locate and diagnose the interference cases. There are tools 
that are available now to actually have sensors in place and do 
the outreach, and I think we are also looking at things like 
tiger teams that we could send out when we had an interference 
case. So we are mindful of that in that exercise as well. And, 
of course, it is pending with the commissioners.
    Mr. Walden. Thank you. I yield back to Mr. Long.
    Mr. Long. And I yield back also, Mr. Chairman.
    Mr. Walden. Gentleman yields back.
    We will now go to Mr. Rush, it appears is next. We are glad 
you are here and----
    Mr. Rush. Good morning.
    Mr. Walden [continuing]. Please go ahead.
    Mr. Rush. Thank you, Mr. Chairman. And I certainly want to 
welcome the witnesses.
    I must be quite frank, I sit here as an angry, black 
American male. We are all aware of the scarcity of spectrum, 
and we just witnessed a successful AWS-3 auction where again 
the millionaires were able to buy up valuable so-called 
beachfront property. And soon we will be witnessing another 
auction, the broadcast incentive auction where it seems as 
though, unless something drastically changes, we will have a--
the same outcome.
    I have been on this committee for 22 years, and 20 years I 
have sat on this subcommittee. I was a part of the subcommittee 
that worked on legislation to grant the FCC its competitive 
bidding authority back in 1993. I was here, I was present, 
sitting in these very same seats. And all the major auctions, 
going all the way back to the C block auction, H block auction, 
the AWS-3, and seem to be ill-designed to enable small and 
minority businesses to bid and to win.
    The question still looms large for the FCC. In light of the 
abysmal failures of these last three auctions, to be fair and 
equitable to minority and small businesses, what can you say to 
us this very morning that can assure us that this next auction 
will give us an opportunity for small and minority bidders to 
fair better and to have different and better outcomes? Again, 
in my opinion, where some might say these auctions have been 
successful, success is in the eye of the beholder, and from my 
vantage point, my eyes, my constituents, they are an abysmal 
failure. Reassure me please if you can.
    Mr. Chairman, with that, I think that we ought to really 
have some hearing in the future on the status of these auctions 
as it relates to the minority and small business bidding 
process isn't fair and equitable, some time in the near future.
    With that, I will ask--Mr. Epstein, maybe you can answer 
the question that I have.
    Mr. Sherman. Thanks for that question, Mr. Rush. This is a 
priority for the Commission, and last year the Commission 
issued a Notice of Proposed Rulemaking to focus on the issue of 
empowering small businesses, including businesses owned by 
women and minority groups. The Notice of Proposed Rulemaking 
recognizes that the wireless industry has changed dramatically 
since the rules were last updated, and that our current rules 
may not work anymore to get people into the business. And so 
what it proposed, through a number of specific proposals, was 
allowing more flexibility and maybe looking at updating 
business models to reflect the reality that 95 percent of 
wireless consumers are served by four carriers. In such a 
capital-intensive business, how do you allow small entities to 
get into the market, and how do you allow them to acquire 
spectrum? That has been teed-up.
    In the interim, we had AWS-3 which also raised a number of 
questions about the designated entity program and bidding 
practices. So just this week, Chairman Wheeler circulated with 
the other commissioners a public notice asking a number of 
additional questions about this issue; how do we promote and 
empower small businesses while preserving the integrity of the 
auction process. And it is open, and once that is voted on by 
the commissioners, there will be an additional comment period. 
And it is something that we are going to wrap up before the 
incentive auctions start. So there are proposals on the table. 
There is a vigorous debate in the record by various 
stakeholders.
    One of the things that was in the Notice of Proposed 
Rulemaking was a proposal that has been put forth by a number 
of groups that have been active in the designated entity space. 
I think it was MMTC that had a proposal about the attributable 
material relationship rule, and one of the proposals was to 
change the way we apply that so that a small company that might 
have a business relationship with a big company isn't 
automatically excluded.
    These are complicated issues, and we need to make sure we 
do them in a way that doesn't allow for gaming of the system, 
but all of these topics are on the table.
    Mr. Walden. Gentleman's time has expired.
    Mr. Rush. Thank you, Mr. Chairman.
    Mr. Walden. Thank the gentleman.
    We will go now to the gentleman from North Dakota, Mr. 
Cramer.
    Mr. Cramer. Thank you, Mr. Chairman. I thank the witnesses.
    I am just going to throw it out for discussion because I 
have to admit, you might have to bring it down a level or two 
for me to really grasp this. But I come from one of these rural 
places, yes. You can make it 19 now if you--I don't know we 
lost, but anyway it is--North Dakota is very rural, right, and 
so my small market, broadcasters have expressed, of course, 
this concern about the repacking cost. And we have talked about 
whether $1.7 billion is inadequate and whether you need more, 
and where it would come from, and that has been fascinating, 
but my question more is a step even further back, and that is 
if a small market TV broadcaster, for example, in Fargo 
declines to participate, can we be assured that they then won't 
have to also then participate later in the repacking? In other 
words, hear conflicting messages about that, so somebody really 
smart explain to me how either we avoid that, or secondly, what 
do we do to mitigate it?
    Mr. Epstein. Well, I won't claim to be real smart, I will 
defer to Julie on that.
    Mr. Cramer. I have set the bar very low, just so you know.
    Mr. Epstein. But let me start and Julie can pick up.
    Mr. Cramer. Sure.
    Mr. Epstein. What we are seeking to do in this auction is 
to have a near nationwide contiguous band of spectrum, and that 
is the key, so that when you have your cellphone and you move 
from Fargo to New York, to New Jersey, or anywhere else, it 
works.
    Mr. Cramer. Yes.
    Mr. Epstein. And so two things have to happen. One, we have 
to get volunteers, stations to participate in the auction, 
especially in crowded areas, but in some smaller markets too. 
And then everywhere, if we cleared down from channel 51, and a 
station even in a rural market is at channel 47 or channel 46, 
we won't get that contiguous band of spectrum unless we repack 
them----
    Mr. Cramer. Yes.
    Mr. Epstein [continuing]. Even though we may have room to 
do that. And what Congress did--what you did in the act is you 
said, yes, we have the authority to repack it, but we have to 
repay your expenses.
    Mr. Cramer. Yes.
    Mr. Epstein. And that is just from an overview standpoint 
why somebody in a smaller market would have to move. So we have 
this contiguous band of spectrum for the wireless providers in 
the forward auction.
    Mr. Cramer. Thank you for that very nice clarification.
    Then that does bring up the rest of the questions that we 
have already tried to sort of ask, and that is how much is 
enough, and if it is not enough, how do we do it differently, 
but I suspect we are going to continue discover that through 
this process. But thank you for that 101 for the guy from North 
Dakota.
    With that, I yield back, Mr. Chairman.
    Mr. Walden. Thank the gentleman.
    And we will now go to Mr. Butterfield for questions.
    Mr. Butterfield. Thank you very much, Mr. Chairman. Looks 
like we are getting very close to votes and so I am going to 
forego some of the formalities that I normally would go through 
in the early part of my remarks, and get right to the meat of 
the point that I want to make.
    Let me just begin by associating myself with the remarks 
made by my good friend, Mr. Rush, from Illinois. I agree with 
him completely. I am the chairman of the Congressional Black 
Caucus, and the CBC takes the position that Mr. Rush just 
articulated a few moments ago.
    One of our top priorities in the CBC is to increase 
representation of African-Americans at all levels of corporate 
America. That includes the Boards of Directors, that includes 
executive leadership, the workforce, vendors, contractors, and 
even community reimbursement. And so the CBC will not only be 
focused on increasing diversity in general, but we are focused 
on African-American representation in particular. So this is 
not only about spectrum, this is about corporate diversity as 
well.
    And so it is in this context that I want to ask, I guess 
Mr. Epstein, the following question about diversity and 
specifically how it relates to the companies who come before 
the commission for a variety of matters, including those who 
seek to acquire spectrum. As chair of the CBC, and as a member 
of this committee now for 22 years, one of my priorities is to 
encourage companies to have both leadership and rank and file 
employees who better represent the makeup of their communities 
and their customers and our country. However, when you look 
closer at many of the entities that come before your 
commission, they do not have a very good diversity profile. 
That is just a fact, they do not have a good diversity profile 
in either the internal or external operations. And so I am 
wondering, how do you and other members of the panel today 
think we can better address the lack of diversity in the 
companies that are competing for spectrum?
    Mr. Epstein. OK. Well, let me start. My specialty and what 
I do 24/7 is the incentive auction, and to focus on your 
questions and Congressman Rush's questions, it is the 
proceeding--the general proceeding that Roger Sherman talked 
about, OK, where we are looking very seriously about generally, 
in auctions throughout the commission, and specifically, with 
respect to the incentive auction, how do we do exactly what you 
are talking about. How do we increase diversity? We have done 
things like have smaller geographic areas, and we are looking 
at the bidding issues which Roger talked about, but 
specifically with the incentive auction, those are some of the 
initiatives that we are undertaking.
    Mr. Butterfield. But you do acknowledge the lack of 
diversity.
    Mr. Epstein. We acknowledge the need for small business and 
diversity. This Commission does, yes.
    Mr. Butterfield. Yes, all right. All right.
    In the interest of time, Mr. Chairman, I am going to ask 
unanimous consent to enter into the record a letter regarding 
the FCC's designated entity program, and the letter was written 
to you and Ranking Member Eshoo----
    Mr. Walden. Yes.
    Mr. Butterfield [continuing]. On March 25 by the National 
Association of Black Owned Broadcasters. I ask to put it in the 
record.
    Mr. Walden. I have read the letter. Without objection, it 
will be entered into the record, sir.
    [The information appears at the conclusion of the hearing.]
    Mr. Butterfield. Thank you. I yield back.
    Mr. Walden. And I appreciate the gentleman.
    And will now move on to Mr. Shimkus of the great State of 
Illinois.
    Mr. Shimkus. Yes, thank you, Mr. Chairman. It is great to 
have you all here, and we are getting close to getting out of 
town. So, Roger, welcome back. It is good to see you.
    And the points raised by my two colleagues, Mr. Butterfield 
and Mr. Rush, just brings me to, a lot of us extolled the 
success of the AS-3 auction, everybody being pleased. 
Obviously, we find out not everyone is pleased, and that there 
are bidding rules in this process. Has the FCC done an after-
action review on to do a lessons learned, and can you say 
everyone is pleased? You know, in an auction, I think there are 
disappointed people, right, if they don't win the auction, but 
are there--does anyone storm away angry, that they felt that 
the bidding rules may not have been adequately exercised?
    Mr. Sherman. Well, the way the process works, after the 
auction we always do an after-auction review of things, and in 
fact, as the auction was ongoing I mentioned this proceeding 
that we were asking for comments on updating the competitive 
bidding rules. We were watching the auction develop, and we 
thought there might be some lessons learned, so we, on our own 
motion, delayed the comment period 3 times to make sure people 
had a chance to bring in lessons that is all public from 
bidding activity, that they may want to enter into the record. 
And I mentioned Chairman Wheeler circulated something earlier 
this week asking additional questions about that specific 
issue. There are 2 tracks. That is 1 track, the sort of 
forward-looking rulemaking, and what changes or tweaks we might 
consider in response to what happened in the auction to empower 
small business and make sure nobody is getting an unfair 
advantage through the rules through technicalities. I am not 
saying that occurred, but those were the questions.
    The other track is to evaluate the applications from the 
winning bidders. And a number of the winning bidders applied 
for a designated entity credit, and the Commission has a 
longstanding process whereby we evaluate those requests. We put 
them out basically for comment and for people who might object 
to weigh-in and file a petition to deny. We haven't--I am not 
aware of any petitions to deny being filed yet, although we 
have not completed our review where we put them out for public 
comment. We are doing that, but it is a very time-intensive 
process because these applications are complicated, and we want 
to make sure we are being very thorough.
    Mr. Shimkus. Yes, because this broad--the whole--now moving 
into the broadcast debate with the next round, it is kind of 
different. It is almost regional, the old UHF, now the 600 
megahertz, and then how do you cobble that together, which 
raises issues of package bidding and other ways to try to put 
together something that makes sense to different entities. So I 
think an after action review on the success or that issue will 
help us as we move forward. I just find it very interesting. A 
lot of new members on the committee. I have always said, you 
all have heard me say, the great thing about this subcommittee 
is really technology moves faster than we can regulate. And 
then you all have to be involved in trying to mitigate the 
interference issues or some of the complexities, but this is 
probably the greatest example of free and open market 
competition, and the ability for great minds to do great 
things, and--that I have experienced I think in any other area. 
So I enjoyed that.
    And final question, really directed to Roger again, is 
these, the fragmented management process between the FCC and 
the NTIA on spectrum. Is there any talk about how we get that 
all cobbled together where, when we have hearings, we are 
dealing with 1 and maybe not 2, and the different processes?
    Mr. Sherman. Well, I will make an observation, and then I 
would defer to John and Julie who spend a lot of time with the 
agencies and NTIA, but in my experience since I have been at 
the Commission, the relationship with NTIA is great, and there 
is a lot of collaboration and coordination going on, everybody 
moving towards the same goal. I know John and Juli have been 
engaged for years, and everybody sort of has their 
responsibilities under the respective statutes, but I think it 
is all working towards getting more spectrum out there.
    I don't know if John or Julie have anything to add to that.
    Mr. Knapp. No, just ditto to everything that Roger said. We 
know that our responsibilities overlap, and that we have to 
work together for the good of the country, and that is what we 
try to do.
    Mr. Shimkus. There is no--or issues that--duplication 
that--in this process?
    Mr. Knapp. I don't think so much duplication because 
they've got different systems that they are overseeing, 
military, justice, et cetera. What we try to do through a lot 
of good work, both formally and informally, is break down the 
barriers.
    Mr. Walden. All right.
    Mr. Shimkus. Great.
    Mr. Walden. Gentleman's time has expired.
    Apparently, we have had votes on, I am sorry, I didn't 
realize we were to that point. There are 6 minutes left, but I 
will be happy to go to----
    Mr. Collins. Yes.
    Mr. Walden [continuing]. Mr. Collins.
    Mr. Collins. Mr. Chairman, I appreciate that. Mine may only 
take 30 seconds. It is for Mr. Epstein.
    I represent Buffalo and then the Rochester area. Our 
broadcasters, many of the Canadians, are getting our signal. 
And in spending 24/7 on the spectrum, I hope that includes some 
time on border coordination. And I just wondered where do we 
stand on border coordination specifically between the U.S. and 
Canada, and when do we anticipate an agreement being reached?
    Mr. Epstein. We have been working on this for a couple of 
years. It is really important that we do this. We have been 
working with Industry Canada, we have had meetings almost 
weekly with them. We were most pleased by about 4 months ago 
they put out a band plan which was analogous to our band plan, 
and we are hopefully getting reasonably close. They have just 
got comments in what they call a consultation, which is like 
our rulemaking, where it is to our mutual benefit to reach 
agreement----
    Ms. Eshoo. Yes.
    Mr. Epstein [continuing]. Because we will get spectrum on 
both sides of the border and coordination. And we are hoping 
well before the auction, within a matter of months, we will be 
able to reach--that is our goal.
    Ms. Eshoo. Yes.
    Mr. Epstein. Can't promise it will happen because it is a 
sovereign country----
    Ms. Eshoo. Right.
    Mr. Epstein [continuing]. But that is our goal.
    Ms. Eshoo. Would the gentleman yield just for a moment?
    Mr. Collins. Yes, certainly.
    Ms. Eshoo. One of the questions that I didn't get to ask 
was what you just raised, and it was an issue that Mr. Dingell 
raised over and over again. So we will get a written response 
and I will share that with you----
    Mr. Collins. Yes, we appreciate that.
    Ms. Eshoo [continuing]. When we get it. Thank you.
    Mr. Collins. I mean as bad as the Buffalo Bills are, the 
Canadians still watch our team play.
    Mr. Walden. Wow. You may want to revise and extend those 
remarks.
    We will go now to Mrs. Ellmers for final questions.
    Mrs. Ellmers. Thank you, Mr. Chairman. Thank you to our 
panel. And I apologize for coming in late, so if the questions 
I ask have already been answered, if you can just indulge me.
    Mr. Knapp, the commission looks at the 3.5 gigahertz and 
the 600 megahertz unlicensed bands. Will the commission be 
placing any new restrictions on unlicensed users?
    Mr. Knapp. I don't think so in terms of placing new 
restrictions, it is just we will develop a framework that will 
include the technical standards to make sure that everything 
works together without interfering.
    Mrs. Ellmers. OK. Thank you, Mr. Knapp.
    Mr. Leibovitz, the subcommittee has heard time and time 
again about the value of innovation and experimentation within 
the unlicensed technologies. We have all been concerned that 
the mantra innovation without permission be applied to improve 
all aspects of connectivity. Is the commission planning to 
prohibit the use of LTE-U in any unlicensed bands?
    Mr. Leibovitz. The answer is no at this time. We are 
working with the parties and trying to ensure that people talk 
to each other so that the technical----
    Ms. Ellmers. Yes.
    Mr. Leibovitz [continuing]. Issues don't become something 
that needs any involvement from the Government.
    Mrs. Ellmers. Great. Well, thank you. My work is done, and 
I yield back the remainder of my time.
    Mr. Walden. Appreciate that.
    I recognize the gentlelady from California.
    Ms. Eshoo. Thank you, Mr. Chairman. Thank you to the panel. 
Mr. Chairman, I would like unanimous consent to place this in 
the record. I asked the question about competition, and these 
are the results of who did what AWS-3 auction. Thank you.
    Mr. Walden. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. Walden. That will be entered into the record.
    And with that, I thank the witnesses for being here today, 
and the good work you do at the FCC. We appreciate it.
    And we are adjourned.
    [Whereupon, at 11:54 a.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                 Prepared statement of Hon. Fred Upton

    Today the future of spectrum use and availability takes 
center stage--an issue that this subcommittee has rightly spent 
significant time considering. With the rise of mobile devices 
and the Internet of Things, American consumers' appetite for 
spectrum will only continue to grow. Some of the most important 
and successful work this committee has accomplished has 
centered on spectrum. We have examined many ways to make 
spectrum available and ensure that both federal users and 
commercial licensees are using it efficiently and effectively.
    We've passed legislation that gives the FCC the tools it 
needs to conduct auctions and help meet the growing demand for 
low-band spectrum. We've also asked the FCC to report back on 
opportunities and challenges in other bands, particularly the 5 
gigahertz (GHz) band. We look forward to hearing how work has 
progressed on finding solutions that allow for the expansion of 
unlicensed use in that band, without harming the blossoming 
Intelligent Transportation System technologies that will make 
driving safer.
    The incentive auction legislation was achieved through 
bipartisan collaboration with the input of industry, engineers, 
and so many others. It's been more than three years since the 
Middle Class Tax Relief and Job Creation Act was passed and the 
FCC has made good progress in the implementation of the 
legislation. This first of its kind auction will undoubtedly 
spur innovation, create jobs, and enable new technologies. If 
the recent AWS-3 auction is any indication of the level of 
success we'll see in the incentive auction--this will surely be 
a job well done. But there are still hurdles to be addressed 
before the auction can move forward, including border 
coordination. Representing a state that borders Canada, I am 
concerned that a failure to adequately solve cross-border 
coordination issues will mean less spectrum cleared for auction 
and reallocated for commercial use, and potentially impair the 
ability of folks in Michigan to receive broadcast signals over-
the-air. As we ask broadcasters to make major decisions about 
the future of their stations, we need to be sure that we have 
answers for their valid questions about interference, signal 
protection, and their potential new station location.
    Spectrum is a vital resource for the future of our economy 
and sound policy will ensure the continued leadership of the 
United States in the mobile space. As the committee responsible 
for this sector, it's essential that we continue to keep an eye 
on the status of the spectrum in the pipeline and what is being 
done to make it available for consumer use. If we do our jobs 
right, the future for consumers, jobs, and our economy is very 
bright.
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