[Senate Hearing 114-169]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-169

                           OF SPECTRUM POLICY



                               BEFORE THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE


                             FIRST SESSION


                             JULY 29, 2015


    Printed for the use of the Committee on Commerce, Science, and 
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                             FIRST SESSION

                   JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi         BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
MARCO RUBIO, Florida                 CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas                      RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska                BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas                  EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska                 CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin               TOM UDALL, New Mexico
DEAN HELLER, Nevada                  JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado               GARY PETERS, Michigan
                    David Schwietert, Staff Director
                   Nick Rossi, Deputy Staff Director
                    Rebecca Seidel, General Counsel
                 Jason Van Beek, Deputy General Counsel
                 Kim Lipsky, Democratic Staff Director
              Chris Day, Democratic Deputy Staff Director
       Clint Odom, Democratic General Counsel and Policy Director
                            C O N T E N T S

Hearing held on July 29, 2015....................................     1
Statement of Senator Thune.......................................     1
Statement of Senator Schatz......................................     3
Statement of Senator Nelson......................................    60
Statement of Senator Booker......................................    64
Statement of Senator Daines......................................    65
Statement of Senator Peters......................................    69
Statement of Senator Heller......................................    71
Statement of Senator Markey......................................    73
Statement of Senator Gardner.....................................    75
Statement of Senator Johnson.....................................    76
Statement of Senator Wicker......................................    77
Statement of Senator Udall.......................................    79


Hon. Jessica Rosenworcel, Commissioner, Federal Communications 
  Commission.....................................................     4
    Prepared statement...........................................     6
Hon. Meredith Attwell Baker, President and CEO, CTIA--The 
  Wireless Association..........................................     7
    Prepared statement...........................................     9
Blair Levin, Former Executive Director, National Broadband Plan..    37
    Prepared statement...........................................    38
J. Pierre de Vries, Co-Director of the Spectrum Policy 
  Initiative, and Senior Adjunct Fellow, Silicon Flatirons Center 
  For Law, Technology and Entrepreneurship, University of 
  Colorado at Boulder............................................    45
    Prepared statement...........................................    47
Thomas M. Lenard, Ph.D., President and Senior Fellow, Technology 
  Policy Institute...............................................    55
    Prepared statement...........................................    57


Letter dated July 28, 2015 to Hon. John Thune and Hon. Bill 
  Nelson from David F. Melcher, President and CEO, Aerospace 
  Industries Association.........................................    83
Letter dated July 29, 2015 to Hon. John Thune and Hon. Bill 
  Nelson from Steven K. Berry, President and CEO, Competitive 
  Carriers Association...........................................    86
Response to written questions submitted to Hon. Jessica 
  Rosenworcel by:
    Hon. John Thune..............................................    88
    Hon. Roger F. Wicker.........................................    89
    Hon. Steve Daines............................................    90
    Hon. Amy Klobuchar...........................................    92
    Hon. Brian Schatz............................................    92
Response to written questions submitted to Hon. Meredith Attwell 
  Baker by:
    Hon. John Thune..............................................    93
    Hon. Kelly Ayotte............................................    94
    Hon. Ron Johnson.............................................    95
    Hon. Dean Heller.............................................    96
    Hon. Cory Gardner............................................    96
    Hon. Steve Daines............................................    96
    Hon. Amy Klobuchar...........................................    98
Response to written question submitted by Hon. John Thune to:
    J. Pierre de Vries...........................................   100
    Thomas M. Lenard, Ph.D.......................................   100

                           OF SPECTRUM POLICY


                        WEDNESDAY, JULY 29, 2015

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:48 a.m., in 
room SR-253, Russell Senate Office Building, Hon. John Thune, 
Chairman of the Committee, presiding.
    Present: Senators Thune [presiding], Johnson, Daines, 
Wicker, Heller, Gardner, Nelson, Markey, Udall, Peters, Schatz, 
and Booker.


    The Chairman. This hearing will come to order.
    My apologies to our panel. We had, as you know, some votes 
come up, which often times happens around here, and so that 
pushed us back a little bit. But thanks for your patience, and 
thank you all for being here today.
    We convene today to discuss what Congress and the Federal 
Government should be doing to ensure that the United States 
remains at the forefront of the mobile revolution. Today's 
hearing will be the first in a series to examine the policies 
related to spectrum and wireless broadband. The Senate has a 
real opportunity over the next several months to pass 
meaningful wireless broadband and spectrum reform legislation, 
and it is my hope that the Committee will use these hearings to 
inform our work on developing such a bill.
    By now, everyone is familiar with the immense power of 
wireless technologies. From keeping us connected while on the 
go, to powering the growing Internet of Things, wireless 
devices and services have become commonplace in the everyday 
lives of most Americans.
    Here in the United States, we also have the benefit of 
being the global leader in wireless innovation and investment, 
particularly in 4G mobile broadband. But this committee and 
Congress as a whole cannot take these developments for granted. 
Europe and Asia look at our 4G success with envy and are 
working hard to leapfrog the United States and take the lead in 
the next generation of wireless, known as 5G. And while the 
last two decades of wireless policy have largely been a 
success, we cannot be complacent and think that yesterday's 
laws are a perfect fit for the future.
    After the record-setting AWS-3 auction earlier this year 
and on the eve of a spectrum auction that may be even more 
important, now is the perfect time for this committee to start 
thinking about what is next for American spectrum policy.
    Speaking of the upcoming incentive auction, we just saw the 
FCC this month delay one of its key rulemakings for that 
auction. It is my hope this doesn't end up being a serious 
setback, because I would very much like to see the incentive 
auction happen next year as planned.
    While I am sure many of my colleagues would agree, today's 
hearing is not focused on the near-term actions of the 
Commission. Instead, we need to be looking further into the 
future. Our nation's airwaves are only going to get more 
crowded as the Internet of Things brings tens of billions of 
wireless devices online. We need more wireless capacity, more 
wireless efficiency, and more wireless innovation.
    To do this, the Government will need to be more 
conscientious about how it manages and uses its own spectrum, 
while also proactively breaking down barriers to private-sector 
    As I see it, there are three areas where the Committee 
should focus its legislative attention.
    First, we need to improve how the Federal Government, which 
is the largest spectrum holder in the country, manages and 
utilizes its own airwaves. Federal agencies already share some 
of their spectrum with the private sector, but much more needs 
to be done to encourage them to relinquish or share additional 
    This does not need to be an antagonistic effort. With a 
challenging fiscal environment, many agencies may see 
opportunity in opening up their bands to the public in exchange 
for new wireless systems that are more efficient and less 
costly to maintain.
    Like the private sector, Federal agencies' wireless needs 
grow each year. But by aligning incentives and utilizing newer 
technologies, we may be able to find win-win solutions that 
benefit everyone.
    The second area we need to focus on is identifying specific 
bands that can be opened up for private use, both licensed and 
unlicensed. While creating the right spectrum management 
incentives for the Federal Government will help, history shows 
that Congress is often the most effective facilitator in 
bringing more wireless bands to the marketplace.
    Additionally, finding spectrum to be auctioned can help 
bring in revenue for the U.S. Treasury that can then be used to 
pay down our Nation's fiscal deficit or fund other critical 
    Perhaps more important than those revenues is the impact 
that freeing up more spectrum will have on our economy. More 
private-sector spectrum has historically led to more jobs and 
more economic growth. Just yesterday, former Democratic FCC 
Chairman Julius Genachowski and former Republican FCC 
Commissioner Rob McDowell wrote a compelling op-ed in The Wall 
Street Journal that suggests 750,000 new jobs could be created 
by deploying more mobile broadband.
    Last, we need to examine ways to reduce the cost of 
deploying wireless broadband services. Freeing up more spectrum 
is one way to do that, but there may well be other legal and 
regulatory barriers that make it more expensive to bring new 
services to the public. In particular, we ought to look at the 
rules governing the deployment of private-sector wireless 
facilities on Federal lands and buildings.
    Helping to get government at every level out of the way of 
wireless deployment will only accelerate how soon Americans 
will benefit from 5G, from the Internet of Things, and the next 
exciting wireless development that will enhance people's lives.
    I look forward to hearing from today's panel of experts. 
Among them, they have a wealth of experience in spectrum 
policy, and I expect they will all have interesting and 
thought-provoking ideas for the Committee to consider.
    I now turn to our Ranking Member. Senator Nelson I think 
will be here later on, but, Senator Schatz, an opening 

                    U.S. SENATOR FROM HAWAII

    Senator Schatz. Thank you, Mr. Chairman.
    And thank you to the witnesses for being here today.
    We spend a lot of time focused in Washington on areas of 
disagreement, but spectrum policy is one area where there is a 
real opportunity for bipartisan consensus.
    As we will hear from our witnesses today and as we can 
confirm from our own experience as consumers, wireless and 
mobile data use is increasing exponentially. That means that 
the demand for the Nation's finite spectrum resources is 
greater than ever.
    So we have to work together on a spectrum pipeline for the 
future. We need to develop an aggressive plan to make different 
types of spectrum available. It is the right thing to do for 
consumers, the Government, and the private-sector economy.
    We share common goals for this pipeline. First, we need to 
ensure that the Government agencies, like DOD, FAA, and DOT and 
others, can fulfill their mission. Second, we want to make sure 
that consumers have access to new competitive services and that 
our national spectrum policy empowers entrepreneurs to 
innovate. Finally, we have to provide the right incentives for 
service providers to deploy state-of-the-art wireless networks.
    As part of setting up this spectrum pipeline, Congress will 
need to grapple with many issues. For one, we have to think 
about how we properly account for competing commercial and 
government needs for spectrum and create a path to repurpose 
Federal spectrum effectively.
    I think there is merit in the idea of providing incentives 
for Federal agencies to make spectrum available for commercial 
uses--something many of our witnesses will discuss today. We 
also need to be creative about ways to speed up the process to 
more spectrum availability.
    Most importantly, Congress will need to think about how to 
balance the need for licensed and unlicensed spectrum. Startups 
and entrepreneurs are all counting on the availability of 
licensed and unlicensed spectrum to launch their next 
innovation. Whether they are working from a coffee shop, a 
garage, or borrowed space, the next companies need us to get 
this right.
    Ensuring the availability of more licensed spectrum is 
essential because it provides companies the certainty they need 
for investment. Unlicensed spectrum, though, is also critical. 
Not only has unlicensed spectrum become an essential part of 
the Nation's wireless infrastructure through offloading of 
traffic from licensed spectrum, but it also provides the 
foundation for permissionless innovation.
    Unlicensed spectrum lets innovators deliver millions of new 
products, such as hotspots, connected medical equipment or 
industrial systems, RFID tags, wearables, and more.
    In fact, one driver of spectrum-hungry innovations is the 
growing Internet of Things, a development that Senators Booker, 
Fischer, Ayotte, and I have been working on. Experts project 
that within the next decade the Internet of Things will 
encompass billions of connected devices, nearly all of which 
will rely on unlicensed spectrum to work. And that is going to 
put a lot of pressure on the spectrum that we have available 
    Thank you, Chairman Thune and Ranking Member Nelson, for 
initiating this discussion. And I know we will continue not 
just today but throughout the fall on these important issues.
    The Chairman. Thank you, Senator Schatz.
    We will proceed to our panel. And I want to welcome them 
all here today.
    We have with us Commissioner Jessica Rosenworcel of the 
Federal Communications Commission. Ms. Meredith Attwell Baker. 
Ms. Baker is the President and CEO of CTIA--The Wireless 
Association. Mr. Blair Levin. Mr. Levin is the former 
Executive Director of the FCC's National Broadband Plan. Dr. 
Pierre de Vries. Dr. de Vries is the Co-Director of the 
Spectrum Policy Initiative with the Silicon Flatirons Center at 
the University of Colorado School of Law. And Dr. Thomas 
Lenard. Dr. Lenard is the President and Senior Fellow at the 
Technology Policy Institute.
    Thank you all so much for being here today.
    We will proceed, starting on my left and your right, with 
Commissioner Rosenworcel.
    Welcome to the Committee.


    Ms. Rosenworcel. Thank you.
    Good morning, Senator Thune and members of the Committee. 
Thank you for having me here.
    Few of us go anywhere today without mobile devices in our 
palms, pockets, or purses, but as commonplace as wireless 
service feels right now, the truth is we are only getting 
started. Because, over the next 5 years, worldwide demand for 
mobile service is expected to grow by 10 times. And as the 
Internet of Things emerges, wireless functionality will become 
a part of nearly everything we do.
    But the airwaves that are responsible for our modern 
wireless economy are finite, so we need to use what we have 
more efficiently. That means we need to rethink how we allocate 
our airwaves and, in particular, the airwaves used by the 
Federal Government.
    Today, Federal authorities have substantial spectrum 
assignments, and that makes sense because critical missions 
throughout the Government depend on wireless service. Federal 
systems that rely on spectrum help protect us from attack, 
manage our air traffic, enhance our crop productivity, and 
monitor our water supplies.
    Now, traditionally, when commercial demands on spectrum 
rise, we go to these Federal authorities and we put on the 
pressure. We urge, coax, and cajole them, in an effort to free 
old government airwaves for new private-sector use. If they 
agree, we clear government users out of a portion of their 
airwaves, relocate them, and eventually auction the cleared 
spectrum for new commercial use.
    With the tremendous demands on our airwaves today, we could 
go this route again, just as we have in the past. But it is a 
creaky system. It is not reliable, and it takes too long. In 
short, it is not the steady spectrum pipeline the modern mobile 
economy needs.
    So the future of spectrum policy requires incentives. We 
need a Federal spectrum policy that is based on carrots and not 
sticks. If we want a robust and reliable spectrum pipeline, we 
need to make sure that Federal authorities see gain, and not 
just loss, when their airwaves are reallocated for new mobile 
broadband use.
    We could begin by expanding incentive auctions to Federal 
spectrum users, modeled on the upcoming incentive auctions in 
the 600-megahertz band. Now, this is a complex undertaking 
because agencies do not operate in a market environment, and 
they are subject to annual budget allocations. But, 
nonetheless, we should explore it, with discrete spectrum bands 
or agencies.
    We could also update the Spectrum Relocation Fund so that 
it provides incentives for more government sharing by rewarding 
Federal users when they share their spectrum with agencies that 
are being relocated.
    While we are at it, we should review laws that create 
perverse incentives, like the Miscellaneous Receipts Act. If we 
make changes to this law, we could permit winning auction 
bidders to negotiate directly with Federal authorities 
remaining in the band and then help meet their wireless needs. 
This could speed the repurposing of our airwaves and also help 
update Federal systems that are past their prime.
    Next, the future of spectrum policy requires looking at 
millimeter wave spectrum. Today, the bulk of our wireless 
networks are built on spectrum below 3 gigahertz. But, in the 
future, we need to bust through this ceiling and look high--
really high. We need to look at spectrum all the way up to 24 
gigahertz and maybe even as high as 90 gigahertz. Because if we 
combine wide channels from these stratospheric frequencies with 
dense networks of small cells, we are going to be able to 
overcome propagation challenges and deliver wireless service at 
faster speeds than ever before.
    This approach is likely to be a major force in the next 
generation of wireless services, known as 5G. And the time to 
explore greater use of this spectrum is right now.
    Finally, the future of spectrum policy requires not just 
more licensed spectrum but also more unlicensed spectrum. In 
short, we need more Wi-Fi. Unlicensed spectrum, like Wi-Fi, 
democratizes Internet access, it encourages permissionless 
innovation, and it contributes as much as $140 billion to the 
U.S. economy annually.
    But, historically, the legislative process has overlooked 
the value of unlicensed spectrum because it gets low marks in 
the scoring process. But this accounting misses the mark, 
because the broader benefits of unlicensed spectrum and Wi-Fi 
to our economy are so great. So in any legislative effort that 
is upcoming that increases licensed spectrum in our pipeline, 
we also need a cut for unlicensed. We could call it the Wi-Fi 
    Thank you. I look forward to any questions you might have.
    [The prepared statement of Ms. Rosenworcel follows:]

     Prepared Statement of Hon. Jessica Rosenworcel, Commissioner, 
                   Federal Communications Commission
    Good morning, Chairman Thune, Ranking Member Nelson, and members of 
the Committee. Thank you for the opportunity to appear before you today 
and talk about the future of spectrum policy.
    Few of us go anywhere today without mobile devices in our palms, 
pockets, or purses. But as commonplace as wireless service may feel in 
our lives now, the truth is we are just getting started. Over the next 
five years, world-wide demand for mobile service is expected to grow by 
10 times. As the Internet of Things emerges, wireless functionality 
will become a part of nearly everything we do.
    Back in the here and now, all of this wireless demand has 
consequences for a scarce resource: spectrum. The airwaves around us 
that are responsible for our modern wireless economy are finite. The 
iron laws of physics being what they are, we are simply not making 
more. So the challenge is to use the spectrum we have more efficiently.
    There are many things we can and should do to be more efficient 
with this scarce resource--from improving network technology to 
improving network topology. But we also need to rethink how we allocate 
our airwaves--and in particular the airwaves used by the Federal 
Government. So that is where I want to begin.
    Today, Federal authorities have substantial spectrum assignments. 
This makes sense because critical missions throughout the government 
are dependent on wireless services. Federal systems that rely on 
spectrum help protect us from attack, like early missile warning 
systems. They help manage our air traffic, enhance our crop 
productivity, and monitor our water supplies.
    Traditionally, when commercial spectrum demands rise, we go to 
these Federal authorities and put on the pressure. We urge, coax, and 
cajole them in an effort to free old government airwaves for new 
private sector use. If they agree, we clear government users out of a 
portion of their airwaves, relocate them, and eventually auction the 
cleared spectrum for commercial use.
    With the tremendous demands on our airwaves today we could do this 
again, just as we have in the past. But it's a creaky system. It's not 
reliable. It's not consistent. It takes too long. In short, it's not 
the steady spectrum pipeline the modern mobile economy needs.
    The future of spectrum policy requires incentives. We need a 
Federal spectrum policy that is based on carrots, not sticks. If we 
want a robust and reliable spectrum pipeline, we need to make sure that 
Federal authorities see gain--and not just loss--when their airwaves 
are reallocated for new mobile broadband use. To do this, we need to 
develop a series of incentives to serve as the catalyst for freeing 
more spectrum for commercial markets.
    We could begin by expanding incentive auctions to Federal spectrum 
users. These auctions would be modeled on the broadcast spectrum 
incentive auctions that are planned for the 600 MHz band. Participating 
Federal authorities would receive a cut of the revenue from the 
commercial auction of the airwaves they clear--and could use these 
funds to support relocation as well as initiatives lost to 
sequestration. This is a complex undertaking, because agencies do not 
operate in a market environment and are subject to annual budget 
allocations, but we should explore it--with discrete spectrum bands or 
    We could also update the Spectrum Relocation Fund. Today the 
Spectrum Relocation Fund assists Federal authorities with relocating 
their wireless functions when their spectrum is being repurposed for 
commercial use. But this fund could also provide incentives for more 
government sharing by rewarding Federal users when they share their 
spectrum with agencies that are being relocated.
    While we are at it, we should review laws that create perverse 
incentives. Consider the Miscellaneous Receipts Act. This law can 
prevent negotiations between Federal agencies and winning bidders in 
wireless auctions. But if we make changes, we could auction imperfect 
rights and permit winning bidders to negotiate directly with Federal 
authorities remaining in the band to help meet their wireless needs. 
This could speed repurposing of our airwaves and also provide 
commercial carriers with incentives to help update Federal systems that 
are past their prime.
    Finally, we should develop a spectrum currency with assistance of 
the Office of Management and Budget. With a uniform system of valuation 
for Federal spectrum assignments, we can explore further incentives for 
efficiency and better understand the opportunity cost of Federal use.
    The future of spectrum policy requires looking at millimeter wave 
spectrum. Today, the bulk of our wireless networks are built on 
spectrum below 3 GHz. But in the future, we need to bust through this 
ceiling and look high--really, really high. We need to look at spectrum 
all the way up to 24 GHz and perhaps as far as 90 GHz. If we combine 
wide channels from these stratospheric frequencies with dense networks 
of small cells we can overcome propagation challenges and deliver 
wireless service at faster speeds than ever before. This approach is 
likely to be a major force in the next generation of wireless services, 
known as 5G. The race to 5G is on and our counterparts in Europe and 
Asia are already making way. We may have led the world in 4G, but 
laurels are not good resting places. So the time to explore greater use 
of this spectrum is right now.
    The future of spectrum policy requires not just more licensed 
spectrum--but also more unlicensed spectrum. In short, we need more Wi-
Fi. Unlicensed spectrum, like Wi-Fi, democratizes Internet access, 
encourages permissionless innovation, and contributes $140 billion in 
economic activity annually. But historically the legislative process 
has overlooked the value of unlicensed spectrum because it gets low 
marks in the scoring process at the Congressional Budget Office. But 
this accounting misses the mark--because the broader benefits of 
unlicensed spectrum to the economy are so great. So in any legislative 
effort to increase the licensed spectrum pipeline, we need a cut for 
unlicensed--call it the Wi-Fi dividend.
    In sum, if we combine more incentives to facilitate the repurposing 
of Federal Government spectrum for new commercial use with more 
exploration of the possibilities of millimeter wave spectrum and more 
opportunities for Wi-Fi--we can build a spectrum pipeline that is 
robust, reliable, and a potent force in our economic future.
    Thank you. I look forward to answering any questions you may have.

    The Chairman. Thank you, Commissioner Rosenworcel.
    We will move now to Ms. Baker.


    Ms. Baker. Chairman Thune, Ranking Member Nelson, and 
members of the Committee, thank you for your leadership in 
developing a forward-looking spectrum policy, one of the key 
inputs into our country's economy.
    I have worked on spectrum issues at NTIA, as an FCC 
commissioner, and today I am lucky enough to represent the 
wireless industry, the most dynamic industry in the nation, at 
    The global stakes for spectrum policy have never been 
greater. Countries around the world have seen what our wireless 
leadership has meant for jobs, for economic growth, and for 
innovation. We need a national recommitment to continue to lead 
the world in wireless. I am confident we will. I am encouraged 
by the dynamic thought leaders you have brought this morning 
here and your bipartisan engagement on this issue. For our 
part, the wireless industry is dedicated to investing billions 
more in the wireless future.
    We forget now, but we were behind other nations in 3G. 
Today, the United States is the global leader in 4G. We are 
home to one-third of the world's 4G devices. Ninety-eight 
percent of Americans have access to 4G, thanks to $150 billion 
of industry investment over just the past 5 years.
    This 4G foundation supports innovation up and down the 
mobile ecosystem, licensed and unlicensed. More than 9 out of 
10 smartphones across the globe run a U.S. operating system. 
The same U.S. predominance is true for mobile apps. U.S. 
companies account for 91 percent of global downloads.
    Our wireless leadership has a substantial impact on our 
economy--over $400 billion annually. The true impact is far 
larger, because wireless is now more than just a service. 
Wireless is the platform for innovation in the 21st century. 
Mobile is no longer just voice and text. It is health, 
education, and connected everything, from cars to appliances. 
The Internet of Things will be driven by wireless.
    Amazingly, mobile already represents more than half of all 
Internet traffic. And, as the platform of choice for 
millennials, that figure will only grow. In the next 5 years, 
wireless data volumes will increase six-fold.
    Mr. Chairman, if South Dakota grew at the same rate, it 
would be roughly the same size as Minnesota or Colorado by the 
decade's end.
    Ms. Baker. We can meet almost half of that growth through 
billions in wireless infrastructure and technological 
improvements. We commit today to do that. But for the rest, we 
need more licensed spectrum.
    Five years ago, under the leadership of my fellow panelist 
Blair Levin, the FCC formed a 10 year spectrum plan. The FCC 
identified a 300-megahertz target for licensed spectrum by 
2015. They relied on data predictions, and those predictions 
have proved remarkably accurate, to within one-fifth of 1 
    Thanks to this committee's leadership, the administration, 
the FCC, and Commissioner Rosenworcel, we have reallocated 135 
megahertz toward that target. The successful AWS-3 auction 
earlier this year was the key. The remaining deficit 
underscores just how hard reallocation can be, as well as the 
critical importance of the upcoming broadcast auction to meet 
consumers' mobile data needs.
    And after the broadcast auction, we don't know what is 
next. The pipeline will be empty, and we, the United States, do 
not have a plan. As a nation, we need a new long-term spectrum 
plan to accommodate future growth. Spectrum reallocations take 
an average of 13 years. We need to jump-start our efforts today 
if we are to keep up globally. I believe, working together, we 
can shrink the timing we need to reallocate.
    Using the FCC's own formula, we need to increase our 
nation's supply of licensed spectrum by 350 megahertz by the 
end of the decade. We are hard at work identifying potential 
bands. Reallocating licensed spectrum requires a significant 
commitment from all stakeholders. But that is why we lead the 
world in wireless. Time and again, it has been proven to be 
worth the effort.
    As we develop a new pipeline, we also need to ensure our 
military and government agencies have adequate spectrum and 
technologies to support mission-critical services. We also need 
to explore complementary use of spectrum-sharing, unlicensed, 
as well as high-band spectrum, because the rest of the world is 
not standing on the sidelines. Countries around the globe have 
plans to leapfrog us in 5G--Korea in 2018 and Japan in 2020.
    Fortunately, a cross-section of this committee has already 
taken a leadership role on spectrum. Members have introduced 
key legislative proposals that would unlock more spectrum, 
improve Federal agency incentives, and facilitate rural 4G 
deployment. We now have our new 350-megahertz goal, and we are 
ready to work with each of you to develop a new 10-year 
spectrum plan to advance America's wireless future.
    Thank you for the opportunity to be part of today's 
    [The prepared statement of Ms. Baker follows:]

   Prepared Statement of Meredith Attwell Baker, President and CEO, 
                    CTIA--The Wireless Association
    Chairman Thune, Ranking Member Nelson, and members of the 
Committee, thank you for inviting me to share CTIA's perspective on the 
future of spectrum policy. We appreciate your leadership on developing 
a forward-looking approach to one of the key inputs into America's 
long-term global competitiveness.
    Today's topic is of critical importance to the health of America's 
wireless industry, and our entire economy. It is something we all have 
a vested interest in getting right. So as the Committee considers 
what's next in spectrum policy, I hope CTIA can help inform your work.
The United States is the Global Leader in 4G Mobility
    I am proud to report that the United States is the global leader in 
4G wireless. This has not always been the case. We were markedly behind 
Europe and others in the deployment of 3G technologies only a decade 
ago. But with a combination of sound spectrum policy, a light-touch 
approach to regulation, and pro-investment tax policy, America now 
    Today, despite having only 5 percent of all wireless connections in 
the world, the United States has 33 percent of 4G LTE connections. 98 
percent of Americans have access to 4G LTE networks, and, even more 
impressively, over 93 percent of Americans can choose from three or 
more mobile broadband options.
    Vibrant market competition has driven the widespread adoption of 4G 
solutions. You likely choose between 4 national carriers--as well as 
regional operators and resellers--offering you unparalleled choice in 
wireless solutions. This has led directly to differentiation and new 
service offerings. It has also supported over $150 billion in private 
capital in the past five years alone to bring 4G capabilities to 
American consumers. That investment was greater than that of the truck, 
rail, and air transportation industries, and it means that every year, 
wireless networks get faster and better, devices have more capabilities 
and features, and the Internet of Things around us gets more and more 
advanced. Speeds are increasing, prices are decreasing, and usage is 
    That 4G foundation helps support innovation and investment up and 
down the mobile ecosystem. Indeed, our global lead is pervasive. Over 9 
out of 10 smartphones across the world run an operating system 
developed by a U.S. company. The same U.S. predominance is true for 
mobile apps, as 91 percent of mobile app downloads come from U.S. 
companies. We are also leaders in leveraging unlicensed spectrum to 
benefit U.S. consumers.
Spectrum Is a Powerful Economic and Social Catalyst
    Our global 4G lead has a direct and substantial impact on consumers 
and our economy. We recently released a Brattle Group study that 
provides a powerful reminder of what's at stake in spectrum policy, 
finding that licensed spectrum in the hands of wireless carriers 
generates over $400 billion in economic activity every year.\1\ That's 
a powerful figure. But it doesn't tell the whole story, which is that 
for every dollar spent on licensed wireless services, $2.32 is spent 
throughout the broader economy. When combined with the additional $62 
billion that unlicensed spectrum contributes,\2\ it's clear that 
wireless services and technologies are an economic powerhouse.
    \1\ Coleman Bazelon and Guila McHenry, ``Mobile Broadband Spectrum: 
A Vital Resource for the U.S. Economy'' (May 2015). See http://
    \2\ ``Unlicensed Spectrum and the American Economy: Quantifying the 
Market Size and Diversity of Unlicensed Devices,'' (June 2014). See 
    The Brattle Group also found that licensed wireless is a tremendous 
job creator. In 2013, wireless supported over 1.3 million jobs in this 
country. With every hundred people employed in the wireless industry, 
another 650 people find jobs. And wireless jobs are good paying jobs, 
paying 45 percent higher than the national average.
    Just as importantly, licensed spectrum enables network operators to 
boost speeds and capacity, device manufacturers to develop new 
products, and app and content creators to craft new offerings. It fuels 
new investment, innovation and American leadership, reinforcing why 
spectrum policy is central to our future economic policy.
    The wireless industry's full contribution to the economy far 
eclipses the $400 billion figure. Because wireless is more than just a 
service. Wireless is the platform, the basic building block, for 
innovation in the 21st century--in the commercial space as well as the 
government space.
    Mobile is no longer just voice and text, but also video, health, 
retail, education, energy and connected everything--from cars and 
appliances to healthcare devices and drones. The Internet of Things is 
driven by mobility and spectrum. Right now, the connected car market is 
growing ten times faster than the traditional automobile market. By 
2020, an incredible 97 percent of all vehicles shipped in the United 
States will be able to connect to the Internet. In four years, 1.8 
billion connected home devices, smart appliances, home security 
systems, and energy equipment, will ship, 12 times what shipped just 
last year. In the same time period, the market for mHealth will nearly 
top $50 billion, up from $2 billion in 2012. Our connected future and 
the economic and social benefits that flow from it ride on wireless 
networks. These networks depend on investment and innovation.
    Mobility is also the communications platform of millennials--for 87 
percent of millennials, their phone never leaves their side. Over 45 
percent of American households do not have a wireline telephone today, 
and the reliance on mobility is highest among the young, low-income, 
and minority communities across the Nation. Mobile is the next 
generation's tool for empowerment and entrepreneurship, and the mobile 
device is increasingly the gateway to employment, health, and education 
A Bridge to 5G: Meeting Skyrocketing Consumer Demand for Mobile 
    Not surprisingly, mobile broadband continues to grow at record 
levels as consumers embrace mobility more and more each year. Mobile 
data traffic grew over 35-fold from 2009 to 2014, and today, more than 
half of Internet traffic is mobile. The average user consumed 450 
megabits a month in 2012. Today, 1.8 gigabits a month. That's just 3G/
4G and other licensed data, not unlicensed. Now envision a future where 
3G/4G data averages 6, 8, or 10 gigabits a month.
    That future is closer than many think and just wait until the 
remaining third of Americans start using smartphones, and 4G networks 
and uses become more sophisticated. These growth projections can be a 
little daunting, just like they were in 2010 when we last had a 
conversation about the spectrum deficit. In 2014, more than 500 
petabytes (that's 500 followed by 15 zeros, the equivalent of 500 
million gigabytes) of traffic flowed across wireless networks each 
month. In 2019, mobile data traffic is projected to be six times that 
amount. But we won't have six times the spectrum, no matter what we do.
    To meet the rapidly evolving needs of U.S. consumers, there is 
significant amount of work and investment to be done by the mobile 
industry. Work we stand ready to do.
    First, the wireless industry will continue to invest tens of 
billions of dollars in our Nation's infrastructure, which means more 
jobs and opportunity across the country as the wireless industry 
deploys thousands of new cell sites and small cells to densify and 
extend our networks that already support approximately 300,000 sites.
    We also will roll out new 4G LTE functionalities. We tend to speak 
about wireless generations as singular events like the jump from 3G to 
4G or 4G to 5G. The reality is that today's LTE networks are far better 
than the ones initially deployed just five years ago. And we are 
committed to continuing to improve those networks year in and year out. 
We will aggregate spectrum bands into wider channels, introduce the 
ability to broadcast video content, better leverage unlicensed 
spectrum, and roll out device-to-device solutions. We will see HD 
Voice, VoLTE, LTE Broadcast, and remarkable new apps and offerings that 
leverage these new opportunities.
    We will use existing spectrum resources more efficiently. Beyond 
rolling out these substantially more efficient 4G technologies, 
carriers are re-farming existing mobile bands from voice to data. 
Verizon is refarming its 1900 MHz PCS spectrum and AT&T is actively 
refarming Leap's spectrum. T-Mobile has already refarmed MetroPCS' CDMA 
spectrum for 4G and shut down that legacy network this summer.
    And lastly, we need to start a conversation about what the United 
States needs to support next-generation or 5G networks. We need to work 
together to identify the use cases, spectrum needs, and economic 
opportunity presented by 5G, as well as the investment and research 
needed for us to retain a global lead. In the interim, the most 
important steps we can take are to solidify our first mover advantage 
in 4G. Our ability to leverage 5G will be enhanced by making our 4G 
foundation as strong and dynamic as possible.
A Renewed Focus on Spectrum
    While industry can--and will--take steps on its own to address the 
challenge of a six-fold increase in wireless data, infrastructure 
investment and engineering enhancements alone cannot meet the future 
wireless demand. These industry-driven efforts will address 
approximately 40 percent of the expected growth volumes, but they do 
not obviate the need for more spectrum.
    As smartphone penetration continues and the Internet of Things and 
our connected life take off, wireless will need hundreds of megahertz 
of additional licensed spectrum. All of our connected life aspirations 
will ultimately succeed or fail based on our underlying mobile 
    In 2010, with no spectrum in the pipeline, the Federal Government 
called for 300 MHz of new licensed spectrum by 2015, and 500 MHz of 
total spectrum by 2020. Those targets were established based on 
projections of mobile data growth that were dismissed at the time as 
unrealistic. In fact, the FCC and the National Broadband Plan estimates 
were remarkably accurate. In 2010, the FCC's growth estimates forecast 
mobile data traffic of 562 petabytes per month in 2014. The actual 
amount last year? 563 petabytes per month. The FCC was off by one-fifth 
of one percent.\3\
    \3\ Thomas Swanabori and Robert Roche, ``Mobile Data Demand: Growth 
Forecasts Met--Significant Growth Projections Continue to Drive the 
Need for More Spectrum (June 2015). See http://www.ctia.org/docs/
    The Administration has committed significant resources to 
identifying additional spectrum for mobile broadband, and successfully 
re-allocated 135 MHz towards the 300 MHz goal. The successful AWS-3 
auction earlier this year was the largest step to date, and this 
remaining deficit underscores the critical importance of the upcoming 
broadcast incentive auction.
    The practical reality is that five years ago, the Administration 
formed a ten-year spectrum plan. While we're making progress toward the 
Administration's target, we have much more to do to prepare for the 
exponential growth that's coming. As a country, we have no plan beyond 
2020 to accommodate mobile growth, and the closer we get, the more 
daunting the timeline looks. Existing systems need to be relocated or 
retuned, and that alone takes years and billions of dollars. History is 
our guide: the average time to reallocate spectrum is 13 years.\4\ You 
could raise a teenager in the time it took to bring the 700 MHz band 
from identification to use. The AWS-3 process seemed to go quickly, but 
only if you forget that we were talking about access to that band for 
more than a decade before the 2012 Spectrum Act jumpstarted the process 
by scheduling the 2155-2180 MHz band for auction. Because spectrum 
policy is a long game, we need to start planning today to meet future 
consumer needs.
    \4\ Thomas Swanabori and Robert Roche, ``From Proposal to 
Deployment: The History of Spectrum Allocation Timelines,'' (July 
2015). See http://www.ctia.org/docs/default-source/default-document-
    The backbone of our national spectrum policy should remain licensed 
and exclusive use spectrum. It is our collective commitment to licensed 
spectrum that has made the United States the global leader in 4G. 
Auctions in 2006 and 2008 paved the way to our current winning 
position. And it is that commitment to licensed spectrum that has given 
carriers the confidence and certainty necessary to invest billions in 
spectrum and infrastructure.
    We also feel strongly that the military and government agencies 
need adequate spectrum to support mission critical services, and 
mobility is just as central to Federal users' future as it is to 
commercial subscribers. We believe working collaboratively we can find 
win-win solutions to allow more efficient use of all spectrum and help 
support important government spectrum initiatives.
    CTIA also absolutely supports making additional unlicensed spectrum 
available. The availability of unlicensed spectrum offers carriers a 
key tool for off-loading traffic and we know it is imperative to open 
additional bands to unlicensed use. We also are excited by the promise 
of incorporating LTE technology into unlicensed bands for a more 
efficient and robust experience for all users, while co-existing with 
other unlicensed technologies.
    We support experimentation with new spectrum sharing regimes as 
well. We appreciate that new technologies may allow for more flexible 
sharing arrangements than the historic geographic and temporal sharing 
techniques that have long served as staples of spectrum management. And 
we should, as a country, explore these new tools. To that end, we 
support the FCC's efforts at 3.5 GHz and hope they will prove 
    As a country, however, the U.S. cannot settle too quickly into 
sharing regimes that rely on nascent or untested technologies or on an 
as yet undefined but likely complex government role. I have yet to meet 
a carrier CEO or CTO who believes we are ready to make that transition 
and until these approaches have been tested and scaled at commercially 
significant volumes, we cannot ask carriers to depend upon undefined or 
limited access to the spectrum they need to serve millions of users 
every day.
Refueling the Spectrum Pipeline
    America needs a renewed discussion about where the next bands of 
airwaves will come from to ensure our future connected life is 
realized. Because after next year's broadcast incentive auction, we 
don't know what's next. We--the United States--do not have a plan.
    Just last month, CTIA released a second Brattle paper, Substantial 
Licensed Spectrum Deficit (2015-2019): Updating the FCC's Mobile Data 
Demand Projections (see attachment), to evaluate how much additional 
spectrum needs to be allocated for commercial use if we are to keep 
abreast of demand projections. Using the same formula and approach the 
Commission used to formulate the National Broadband Plan in 2010 and 
taking into account technical efficiencies and infrastructure 
investment, Brattle estimates that we need to increase our existing 
supply of licensed spectrum by over 350 MHz by the end of this decade.
    Having seen this process from all sides--as acting head of NTIA, as 
an FCC commissioner, and now in my capacity at CTIA--I recognize that 
meeting the goal we have set will not be easy. But our global 
leadership depends on beginning this process. Countries around the 
world are looking to the next generation of mobile--5G--not merely as a 
wireless technology, but as a key input for economic growth. We must do 
the same or we risk losing what today is a competitive advantage for 
our economy. Getting this right should be a national economic 
    We are committed to working with Congress and the Administration to 
identify future bands to meet the new 350 MHz target. We disagree that 
we should abandon the licensed spectrum model because it is too 
difficult to clear additional bands. We heard many of those same 
objections in the process that led to the recent AWS-3 auction. Just 
five years ago, industry was told that the 1755-1780 MHz band supported 
too many government assets to allow its reallocation any time soon, and 
even if it could be made available, reallocation would take too long 
and cost so much as to be impractical. The Congressional Budget Office 
did not think reallocation of the band was possible. Just two years 
ago, it was unclear whether the FCC would move forward with an AWS-3 
auction. But with Congress' leadership, Administration focus and an 
unprecedented amount of collaboration, not only did it turn out that 
the auction was possible, it turned out to be the most financially 
successful auction the FCC has ever conducted, fully funding FirstNet 
and providing billions of dollars for deficit reduction. Yes, making 
additional licensed spectrum available is hard--but it's worth it.
    Fortunately, there is already a broad cross-section of this 
Committee that has taken a leadership role on spectrum. Bills like the 
Wireless Innovation Act (S. 1618), the Federal Spectrum Incentive Act 
(S. 887), the Rural Spectrum Accessibility Act (S. 417), and the Wi-Fi 
Innovation Act (S. 424) demonstrate the broad and bi-partisan interest 
in advancing America's wireless future. We support these efforts to 
unlock more licensed and unlicensed spectrum, improve Federal agency 
incentives, foster greater long-term spectrum planning, and facilitate 
rural 4G deployment.
    We are ready to engage and look forward to working with each of you 
to help America's wireless industry maintain its position as the 
world's leader. Thank you for the opportunity to be a part of today's 

    The Chairman. Thank you, Ms. Baker.
    And we will turn now to Mr. Levin. And I apologize for 
pronouncing that wrongly the first time.
    Mr. Levin. Quite alright.
    The Chairman. That is a member mistake, not staff, just so 
you know.

                         BROADBAND PLAN

    Mr. Levin. Thank you very much, Chairman Thune and members 
of the Committee.
    I am a nonresident fellow at the Brookings Institute, but 
today I am speaking solely in a personal capacity, reflecting 
on lessons learned directing the National Broadband Plan.
    Two lessons are at the heart of this hearing: spectrum 
demand continues to explode, and it takes a significant time to 
repurpose spectrum from existing to future uses.
    The plan set ambitious goals. Fortunately, I think the 
Government has been meeting them. But we cannot, however, rest 
on our laurels, and we must look to the future.
    Government faces two critical tasks: allocating and 
repurposing spectrum. On the allocation question, the 
Government is on the right track, allocating spectrum to a 
diversified portfolio of licensed, unlicensed, and shared 
spectrum, but we do not want a spectrum monoculture.
    But we can't allocate what we have not repurposed. So I 
will focus on repurposing spectrum.
    There are four approaches to the task. First, assume the 
original allocation represents a form of Edenic perfection. 
Second, allow licensees to freely sell to the highest bidder. 
Third, have the Government exercise its power to repurpose any 
band. And, fourth, adopt tools that use market signals and 
mechanisms to repurpose.
    For reasons detailed in my written testimony, the plan 
focused on the fourth, resulting in, among others, the 
recommendation that Congress authorize the FCC to conduct 
incentive auctions.
    But the plan was not the originator of the incentive 
auction. Public policy is not a solo performance; it is a relay 
race. We took the baton from earlier thought pieces by the FCC 
staff and others, put them in the context of a plan, handed the 
baton back to this committee, including my co-panelist, 
Commissioner Rosenworcel, who was working with you all. You, in 
turn, handed the baton to the FCC, who, thanks to what I think 
is great staff work and leadership from Chairman Wheeler, has 
positioned us for an auction next year.
    And herein lies a critical lesson. While repurposing 
spectrum takes time, the past few years, particularly with AWS-
3 and incentive auction, proves we can shrink the time it has 
taken in the past. The question is whether we take the steps 
necessary to do so.
    But most important involve repurposing government spectrum. 
I believe embedding more market signals into the decision 
process for spectrum use is the right place to start.
    Some have proposed applying the incentive auction structure 
to government spectrum. I applaud the spirit and am delighted 
that the plan's proposal was subject to the sincerest form of 
flattery. Nonetheless, I have concerns that differences between 
private and public actors are such that a government incentive 
auction may not succeed.
    As detailed in my written testimony, these concerns 
include: government spectrum has multiple users; while all 
transactions have a potential for a principal agency problem, 
the problem is much worse in government; the budget process 
creates a snapback option; government service over-indexes for 
risk and under-indexes for reward; and it will be difficult to 
thread the very small needle between providing enough money to 
incent repurposing spectrum and too much so that either the 
amount or the use does not cause a political backlash.
    I am not saying the option should be taken off the table, 
but I urge further study of all options. And, again, as 
detailed in my written testimony, I think more promising 
options include: administrative pricing; further amendments to 
the Commercial Spectrum Enhancement Act--and I would note that 
such amendments would be in the spirit of a letter a number of 
you signed on August 28 to OMB; third, providing incentives for 
private-sector bounty hunters; and, fourth, a GSA for spectrum.
    None of these ideas are exclusive. Each has trade-offs. 
Nonetheless, all should be on the menu of options you consider.
    In addition, Congress should understand the emerging hybrid 
relationship of broadband networks. The more robust wireline 
networks, the more Wi-Fi offload can relieve pressure on scarce 
spectrum assets. The goal is not spectrum abundance so much as 
bandwidth capacity abundance. I hope you will hold a hearing 
exploring, as the House did last week, a wireline deployment 
    In closing, I would like to thank the Congress for 
directing the writing of the National Broadband Plan. It was a 
rare and wonderful gift to work with a dedicated and talented 
group of Americans on behalf of all Americans and on a short-
term basis with a mandate to think long-term.
    I urge you to consider using a similar short-focused 
analysis that quickly leads to a plan for making sure we have 
the spectrum we all agree we need for bandwidth abundance and 
leadership in the 21st-century information economy.
    Thank you very much.
    [The prepared statement of Mr. Levin follows:]

     Prepared Statement of Blair Levin, Former Executive Director, 
                        National Broadband Plan
    Thank you Chairman Thune, Ranking Member Nelson and members of the 
Committee for the opportunity to speak with you today about issues 
related to our Nation's long-term spectrum policy.
    I am Blair Levin, a non-resident Fellow at the Brookings Institute 
Metropolitan Policy Program. Today, I am speaking solely in my personal 
capacity, reflecting on lessons I learned as Chief of Staff for FCC 
Chairman Reed Hundt (1993-1997), as a Wall Street analyst following the 
telecommunications and media sectors (2001-2008), and directing the 
writing of the National Broadband Plan (2009-2010.)
    Two lessons from the Plan are at the heart of today's hearings: the 
growing demand for spectrum and the significant time it takes to 
repurpose spectrum from existing to future uses. This hearing will 
reveal different points of view on several topics but I am sure we all 
agree the failure to adopt policies that repurpose spectrum efficiently 
will have negative consequences on our economy and society. With the 
``Apps Economy'' already responsible for over a half million jobs \1\ 
and new markets like the Internet of Things soon to create trillion 
dollar market opportunities,\2\ the Chairman of the Council of Economic 
Advisors and the Chief Technology Officer were no doubt correct to 
observe in the Wall Street Journal that avoiding a spectrum crunch by 
``making more spectrum available (is) one of the most critical 
infrastructure projects of the 21st century.'' \3\
    \1\ http://files.ctia.org/pdf/The_Geography_of_the_App_Economy.pdf
    \2\ http://www.mckinsey.com/insights/business_technology/
    \3\ http://www.wsj.com/articles/jason-furman-and-megan-smith-how-
    Early in the process of developing the Plan, we decided to include 
a chapter on spectrum. The connection between spectrum and broadband 
may today seem obvious but at the time this was actually a novel 
decision. We recognized that broadband use was migrating to mobile. At 
the same time, there was almost no new spectrum in the pipeline 
suitable for mobile use. We noted that the process of revisiting or 
revising spectrum allocations historically had taken 6 to 13 years.\4\ 
The essence of many of our spectrum recommendations was to speed up 
that process, trying a number of new approaches to align stakeholder 
incentives and reduce friction to spectrum repurposing.
    \4\ Exhibit 5-C: Time Historically Required To Reallocate Spectrum 
at http://www.broad
    We established the ambitious (but now-familiar) goal of repurposing 
300 megahertz between 225 and 3700 MHz for mobile use in five years and 
500 megahertz for broadband use in ten years.\5\ In connection with the 
five-year goal we released a spectrum demand study.\6\ Some suggested 
we were exaggerating the need. It now appears that we were close, but 
if anything, underestimated the need.\7\ Our quantitative goals, and 
the supporting analysis, helped to clarify the public interest in 
spectrum repurposing at a time when there, frankly, had not been much 
interest in planning for the future.
    \5\ Recommendation 5.8: The FCC should make 500 megahertz newly 
available for broadband use within the next 10 years, of which 300 
megahertz between 225 MHz and 3.7 GHz should be made newly available 
for mobile use within five years. The President, of course, made a 
similar 10-year commitment. See https://www.whitehouse.gov/the-press-
    \6\ https://transition.fcc.gov/national-broadband-plan/mobile-
    \7\ http://www.ctia.org/docs/default-source/default-document-
library/bazelon_mchenry_spectrum-deficit_2015-06-23.pdf. Further, it 
could well be, given needs that we cannot accurately assess, such as 
the Internet of Things, connected cars, drones, and business 
applications for high-resolution two way video, among others, that even 
today's estimates will be too low.
    I am pleased to say that the government has been quite successful 
in tracking the spectrum goals established in the plan. Five years 
later, we have, according to NTIA, repurposed 245 megahertz.\8\ I think 
it is not unreasonable to expect, given considerable broadcaster 
interest in the incentive auction, that that repurposing metric may be 
above 300 megahertz when that auction concludes, about six years after 
the publication of the Plan.\9\
    \8\ http://www.ntia.doc.gov/blog/2015/nearly-halfway-meeting-
    \9\ It is, admittedly, a year late. But only one year late, given 
the history and magnitude of the problem is not too shabby. It 
demonstrates what is possible when there is a focused effort. See 
footnote 16, below.
    Nevertheless, we cannot rest on our laurels and must always look to 
the future. We still have not gotten all the way to 500 megahertz, but 
I understand work continues on several fronts including the 5 GHz 
unlicensed band, which may move us toward this benchmark. Looking even 
farther into the future, I think we need to move beyond simple 
megahertz targets and focus more on the underlying economic and 
bureaucratic incentives that will lead to ``self-healing'' policies 
where spectrum supply can, over time, evolve to match ever-changing 
technological demands.
    To this end, the government has two critical tasks: allocating 
spectrum and repurposing spectrum. On the allocation question, I 
believe the government is on the right track in allocating spectrum to 
a diversified portfolio of licensed, unlicensed and shared uses.\10\ We 
also need to preserve room for growing numbers of sensors, radars, 
RFIDs, beacons, and other technologies--miniaturized to fit inside your 
phone, car, and other devices--that will come to define the Internet of 
Things. The last two decades have taught us that we don't want a 
spectrum monoculture.
    \10\ The President's Council of Advisors on Science and Technology 
made an enormous contribution to our understanding on the opportunities 
for sharing in its 2012 report, offering insights far beyond what we 
were able to do with the Plan in 2010. https://www.whitehouse.gov/
pcast_spectrum_report_final_july_20_2012.pdf. Further, the President 
has also followed up on that report with a second spectrum related 
executive memorandum. https://www.whitehouse.gov/the-press-office/2013/
    I also believe we cannot assume that future network architecture 
will be the same as today's architecture and the only recourse to 
future demand is to ``pour on more spectrum.'' Spectrum is too precious 
a resource not to be used in ever more intensive and creative ways. The 
generational march of technology (from 3G to 4G and, soon, 5G) is only 
part of this story. Inevitably, our networks will have to migrate 
toward greater and greater density (i.e., small cells), more productive 
re-use (i.e., sharing), and new and different deployment models (i.e., 
software defined networks).\11\ The Commission's recent 3.5 GHz rules 
provide an important nudge toward this kind of innovation, which could 
yield capacity gains many times greater than the mere addition of a new 
spectrum band.
    \11\ Chairman Wheeler discussed some of the implications of 
software defined networking in a recent speech at Brookings. https://
    But, we can't allocate what we have not freed up. As we have 
basically already allocated all spectrum, I will focus my comments on 
the other principal task going forward--repurposing spectrum.
    Approaches to Repurposing. When we arrived to work on the Plan, for 
the first time since before I served as Chief of Staff nearly two 
decades earlier, there was no spectrum designated for auction. In light 
of the evidence in the demand studies, the Plan team focused on 
repurposing. The team immediately recognized there were four ways to 
approach the task:

   Status Quo. Assume the original allocation represented some 
        form of Edenic perfection. Given changing markets and 
        technology, this was obviously the wrong policy.\12\
    \12\ While wrong, the assumption that a past allocation creates 
permanent rights is at the root of a number of policy arguments.

   Liberalization. Allow all licensees to freely sell any 
        spectrum to the highest bidder. In the case of highly 
        fragmented bands (such as the TV bands), for reasons summarized 
        in what is referred to as the ``Letter from 112 Economists,'' 
        that approach entails enormous risks and costs.\13\ In other 
        bands (e.g., AWS-4), this approach could be a viable option.
    \13\ http://www.politico.com/static/

   Command-and-Control. Have the FCC exercise its power as the 
        licensor to repurpose a band anytime it believes reallocation 
        is needed. This approach, which can work in discrete areas, 
        represented the then-current approach. It also has many 
        problems, including the time caused by litigation and other 
        problems inherent in the command-and-control approach.\14\
    \14\ Since Ronald Coase's seminal paper in 1959, there has been a 
general view moving away from command-and-control and towards more 
flexible use. See, for example, the Federal Communications Commission 
Spectrum Policy Task Force, Report of the Spectrum Efficiency Working 
Group, November 15, 2002.

   Market-Mechanisms. Develop tools that use market signals and 
        mechanisms to move spectrum to higher and better uses. This had 
        numerous problems, including lack of legal authority and prior 
        examples. Nonetheless it appeared more promising than the 
        others, so we focused our efforts on that opportunity.

    That work ultimately resulted in, among other recommendations, 
Recommendation 5.4 of the Plan, that Congress should authorize the FCC 
to conduct incentive auctions. Congress did so in the 2012.\15\
    \15\ http://www.gpo.gov/fdsys/pkg/PLAW-112publ96/pdf/PLAW-
112publ96.pdf. See Title VI, Subtitle D.
    But I want to be clear that the Plan was not the originator of the 
incentive auction. It came from various ideas developed by Commission 
Staff, such as Evan Kwerel and John Williams \16\, and various papers, 
particularly one specifically about broadcast spectrum authored for the 
Brookings Institute by University of Colorado Law School Dean Phillip 
Weiser,\17\ that proposed versions of an incentive auction to repurpose 
    \16\ http://wireless.fcc.gov/auctions/conferences/combin2003/
    \17\ http://www.brookings.edu//media/research/files/papers/2008/7/
    Policy progress is never a solo performance; it's always a relay 
race. As we focused on market mechanisms, we were fortunate to be able 
to take the baton from those earlier thought pieces, race through our 
lap, and then hand the baton off to the Congress and the members and 
staff of this Committee, including Commissioner Rosenworcel, who was 
then serving as Staff for then Committee Chair Senator Rockefeller, who 
led in crafting legislation by which Congress in turn handed the baton 
back to the FCC who, thanks to great staff work and tremendous 
leadership of Chairman Tom Wheeler, has put our country in the position 
being able to hold an auction early next year. It is has been a 
complicated and difficult task and they are getting a lot right. In 
particular, I should commend them for keeping to three big priorities: 
maximizing for the return of licensed spectrum, accommodating 
unlicensed use on a non-interfering basis, and understanding that we 
need to hold the auction as soon as possible. Delay imposes large costs 
on the economy.\18\
    \18\ As Doug Brake of the Information Technology and Innovation 
Foundation has written, ``Spectrum is a peculiar resource, if it can 
even be called a resource at all.25 It is infinitely renewable, 
divisible in 6 to 8 dimensions, 26 and unused spectrum is wasted 
opportunity that can never be recaptured.'' http://www2.itif.org/2015-
37826419. In that light, every day of delay in repurposing spectrum is 
an economic drag on our economy.
    Herein lies a critical lesson for this Committee about time. CTIA 
just released a study about the time it takes to repurpose spectrum. I 
could quibble with some of the factual assessments \19\ in the study, 
but most important, I agree with its bottom line, there is ``reason for 
optimism that we can work collaboratively to shrink that timeline.''
    \19\ For example, while it is not wrong to write that the AWS-3 
spectrum process began in 2002, the focused efforts began after 
Congress demanded an auction in its 2012 legislation. The 15 years to 
deployment suggested in the study is, in my book, more accurately 
described as 5 years of work. Similarly, in AWS-4, the concentrated 
work began in 2010, not 2002. I also slightly disagree with the 
assertion in the study that after ``the broadcast incentive auction, 
the traditional licensed pipeline is empty.'' There are still some 
proceedings pending through which the FCC can facilitate making more 
licensed spectrum available to carriers, though admittedly, the number 
of such proceedings is small.
    My optimism is based on history, which shows that when government 
decides to repurpose spectrum, it can do so in a reasonably quick 
manner. Yes, there are some negative stories but during some of the 
periods of more than a decade cited in the study, it was the government 
itself that, frankly, was not moving quickly. On the other hand, as 
demonstrated with such efforts as AWS-3 and the incentive auction relay 
team, a focused, targeted effort can repurpose spectrum in a timely 
manner. After all, it took 35 years from Ronald Coase's proposal \20\ 
for the FCC to hold an auction. In contrast, it will take only 8 to 
move from Dean Weiser's paper to an actual auction. And it only took 
two years from the Congressional mandate for an AWS auction to the 
actual auction.
    \20\ 1959. The Federal Communications Commission. Journal of Law 
and Economics 2:1-40.
    While on the second anniversary of the Plan, I was pessimistic 
about our spectrum prospects,\21\ I have to say that the last few years 
has been a good-news story. As discussed above, the government, on a 
bi-partisan basis, involving the good work of both the executive and 
legislative branches, has acted to repurpose significant amounts of 
spectrum. The question is whether the good news continues or it stops.
    \21\ http://broadbandandsocialjustice.org/2012/03/when-an-roi-500-
    Repurposing Government Spectrum. For the good news to continue, we 
have to find ways to more effectively repurpose government spectrum. As 
discussed above, I start from the premise that embedding more market 
signals into the decision process for spectrum use is the right place 
to start.
    Potential Concerns with a Government Incentive Auction. One way to 
do so would be to simply take the incentive auction design and apply it 
to government spectrum. This has in fact been proposed by a number of 
    \22\ http://www.markey.senate.gov/imo/media/doc/2015-03-26-
    I applaud the spirit and purpose of such proposals. I obviously 
agree with the principle of incentives and am delighted that the Plan's 
proposal is subject to the sincerest form of flattery. Nonetheless, I 
have to note a number of concerns that such a plan will not produce the 
results we all seek. Briefly, I think such a plan faces the following 

  1.  Government spectrum has multiple users. In the broadcast 
        incentive auction, a single licensee controls the decision of 
        whether or not to participate.\23\ With government spectrum, 
        there are generally multiple users, creating additional 
        transaction costs, holdout problems and other difficulties in 
        determining who will receive the incentive payment, which also 
        diminishes the motivating power of the incentives.
    \23\ Of course, the success of the broadcast incentive auction 
depends on a sufficient amount of broadcasters per market deciding to 
sell at a price that buyers are willing to pay. But the decision to 
participate is done at the individual licensee level, which is not 
analogous to the situation with spectrum used by the Federal 

  2.  While all transactions have the potential for a principal-agency 
        problem, the problem is much worse for government actors than 
        private sector actors. Many decisions throughout the economy 
        involve what is known as the ``principal-agent problem'', in 
        which the agent, acting on behalf of the principal but with 
        different motives and significantly more information, may not 
        act in the principal's best interest.

      To some extent, I saw this when I first started discussing the 
        incentive auction with broadcasters. Economic theory would have 
        suggested nothing but support for creating option value for the 
        firm owners in an asset that otherwise could not be monetized. 
        Instead I got significant pushback from some who expressed 
        concerns about the impact on their jobs. That opposition has 
        been quieted, to some extent, by the FCC's wise decision to 
        make public the potential economic opportunity for the 
    \24\ http://wireless.fcc.gov/incentiveauctions/learn-program/docs/

      The principal-agent problem is significantly more problematic in 
        a government setting. This is not a criticism of any government 
        employees who I deeply respect. It is simply to acknowledge 
        that the impact of market signals and financial incentives on 
        the decisions of broadcast licensees as to whether to 
        participate in an auction will be substantially greater than on 
        Federal Government employees who will neither see the same 
        signals or benefit financially.\25\
    \25\ For a contrary view, that Federal employees will be 
appropriately motivated by the opportunity to retain financial assets 
from the sale of government property, see http://www.brookings.edu//

  3.  The budget process creates a snap back option. In addition to the 
        principal-agent problem, the incentive for government officials 
        to recommend their agencies participate would be diminished 
        further by the understandable fear that any gain in one year 
        with auction proceeds would be offset with congressional budget 
        cuts in subsequent years.

  4.  The asymmetry of government service risk/reward. I have done two 
        stints in the Federal Government but have spent most of my 
        professional career in the private sector. In every institution 
        in which I have worked, different employees have a different 
        view of their risk/reward ratio for any particular decision. In 
        the aggregate, however, in my experience, government employees 
        are far more concerned about the risk of a wrong decision than 
        the rewards for the right one. This is not surprising and it is 
        also not bad.\26\ In the context of this proposed auction 
        however, we should understand that agency decision makers are 
        likely to over-index for the risk of not having the spectrum 
        they need to perform critical functions and under-index the 
        reward for repurposing spectrum.
    \26\ Consider, for example, how many hearings Congress has held to 
examine allegations of problems caused by the actions of government 
employees relative to how many hearings it has held to praise 
government employees. Given the oversight responsibility, the ratio is 
appropriate. But we have to understand the impact on employees in their 

  5.  It will be difficult to thread the needle between providing 
        enough money to incent repurposing of spectrum and too much so 
        that either the amount or the use does not cause a political 
        backlash. In the broadcast incentive auction, broadcasters will 
        effectively be competing to determine the clearing price and 
        therefore, market forces will set the price for their licenses. 
        For a government incentive auction, proponents have suggested 
        that the price paid to existing agency users will be set as a 
        percentage of the wireless action proceeds. If the percentage 
        is too low, the agencies will not sell.\27\ If it is set too 
        high, some agencies will receive what the public perceives as a 
        windfall and both the money and the subsequent use of the money 
        is likely to be heavily scrutinized by the public, dampening 
        any agency's enthusiasm for participating in a future auction. 
        That is, in the wake of the broadcast incentive auction, the 
        public is unlikely to notice or complain how the selling 
        broadcasters use the dividends of their capital asset 
        restructuring. That will not be true for Federal employees 
        using what some will characterize as a windfall outside the 
        normal budget process, so the process of repurposing government 
        spectrum, over time, may not be sustainable.\28\
    \27\ The proposed legislation sets the fee at 1 percent, not 
because an economic analysis determined that was the right price but 
rather based on budget rules. See. Page 40 of ``Making Waves: 
Alternative Paths to Flexible Spectrum Use. http://
Waves.pdf. It strikes me that 1 percent is too low but of course, no 
one has any idea.
    \28\ This is similar to the issue of setting the right incentives 
for Designated Entities (DEs) in auctions. If the incentives are not 
sufficient, no DEs participate. If the incentives are too rich, there 
is a political backlash. Overtime, the cycle of one followed by the 
other makes it difficult for the FCC to design a sustainable, 
successful program.

  6.  Creating property rights for individual agencies may create 
        perverse hoarding incentives. If the Congress were to announce 
        the possibility of different agencies benefitting at some ill-
        defined time in the future by returning spectrum, that could 
        lead to a spectrum gold rush within Federal agencies who want 
        the option value (either in terms of money or negotiating 
        leverage) of such a benefit. Given the asymmetry of information 
        that leads to difficulty in evaluating the real needs of 
        spectrum for an agency's mission, the law of unintended 
        consequences may kick in and NTIA could find that its job of 
        spectrum manager is more difficult and the process could result 
        in less spectrum repurposed.

    To be clear, I am not saying to take the option of a government 
incentive auction off the table. The experience of the Base Closing 
Commission is instructive for how to incent Federal employees to 
support repurposing assets and there is some evidence from that 
experience that my concerns are overstated.\29\ My own experience, 
however, suggests that Federal employees consider spectrum as a 
strategic asset in a way that real estate is not, so my skepticism 
about the ability of a government incentive auction remains. But I urge 
further study and consideration of all options.
    \29\ http://www.brookings.edu//media/research/files/papers/2014/
    Other Alternatives to Repurposing. In that light, as Congress 
considers the question of how to accelerate repurposing of government 
spectrum, it ought to consider the concerns I have noted as well as 
other options for inserting market signals into government spectrum 
decisions. These other options include the following:

  1.  Administrative pricing. Administrative pricing is the idea that 
        each government agency that utilizes spectrum is charged in the 
        budget some amount that reflects a broad measure of opportunity 
        costs, thus creating a market signals among government users 
        and others in the government, such as Congress, about the cost 
        of spectrum and encourages agencies that are not using spectrum 
        to move the spectrum off its books. As discussed in the 
        National Broadband Plan, England has been successfully using 
        this technique to more efficiently plan for and use spectrum in 
        government operations.\30\ Work on this has already taken place 
        through a Presidential memorandum \31\ and an OMB Directive 
        \32\ but I believe a clear Congressional directive could 
        strengthen the impact of such a policy.
    \30\ The National Broadband Plan, page 83, Box 5-1.
    \31\ https://www.whitehouse.gov/the-press-office/2013/06/14/
    \32\ OMB Circular A-11 Office of Management and Budget (OMB) 
Circular No. A-11 (OMB 2013)

  2.  Further amendments to the Commercial Spectrum Enhancement Act 
        (CSEA). The CSEA \33\ encourages Federal incumbents to clear 
        spectrum not being put to its most productive use by 
        establishing a Spectrum Relocation Fund (SRF) to reimburse 
        Federal agencies operating on certain frequencies that have 
        been reallocated to non-federal use. With certain revisions, 
        CSEA could become an even more effective tool for relocating 
        Federal incumbents from reallocated spectrum and for developing 
        technological advances that will enable future repurposing of 
        Federal spectrum.
    \33\ Title II of H.R. 5419, Pub. L. No. 108-494, 118 Stat. 3986, 
3991 (codified at 47 U.S.C. Sec. Sec. 151, 301,302. 303.)

      The CSEA funding mechanism was first utilized in connection with 
        the auction of former Federal spectrum in the AWS-1 auction, 
        which concluded in September 2006. The auction proceeds 
        attributable to the former Federal spectrum amounted to $6.85 
        billion, while, the relocation costs totaled approximately $1 
        billion, a return on investment the most successful investors 
        on Wall Street would envy. Further, Federal incumbents received 
        modernized systems in other frequency bands, demonstrating that 
        relocation can be a win-win-win: for incumbents, for the U.S. 
        Treasury, and, most importantly, for the American public, which 
        benefits from increased access to the airwaves.

      Congress should improve the CSEA to ensure that the full range of 
        costs is covered to provide Federal agencies incentives and 
        assistance, including up-front planning, technology development 
        and staffing to support the relocation effort. Agencies should 
        be compensated for using commercial services and non-spectrum-
        based operations, in addition to dedicated spectrum-based 
        system deployments. The SRF should be available to reimburse 
        incumbent Federal users who have to upgrade equipment to 
        accommodate other Federal users moving onto the incumbents' 
        band. Most importantly, Congress should allow funds to be used 
        to ``prove out'' new deployment concepts that have a high 
        likelihood of resulting in a major auction. Agencies will not 
        commit to major technology transitions unless they believe 
        their mission capability will be significantly upgraded. The 
        law, as currently written, makes it difficult for OMB to 
        authorize the release of SRF money to spectrum repurposing 
        projects unless the agency commits to the auction, presupposing 
        the outcome that the money is needed to test. This creates a 
        Catch-22, boxing in Federal agencies and leading to inaction 
        instead of providing a clear path forward to repurposing when 
        the economics justify the repurposing.

  3.  Providing Incentives for private sector bounty hunters. Taking 
        the CSEA idea one step further, we should incent the private 
        sector to come up with creative solutions for repurposing 
        government spectrum to create the kind of win-win-win options 
        that the CSEA enables. One way to do so, as suggested by my co-
        panelist Commissioner Rosenworcel, is to create a prize for the 
        first person to use spectrum more efficiently.\34\ Another way, 
        more focused on repurposing government spectrum, is to give 
        private sector actors incentives to free up government spectrum 
        by giving the private actors the right to use and sell the 
        spectrum if they can provide the government agency with an 
        equivalent service. This could be accomplished in a number of 
        ways but one would be to auction to private enterprises the 
        right to negotiate with a particular government agency. While 
        such an auction would not likely raise much money, it could 
        give private sector actors incentives to develop creative ways 
        to more efficiently use equipment and other technological 
        developments to free up spectrum.
    \34\ http://www.mercurynews.com/opinion/ci_26597034/marty-cooper-

  4.  A GSA for spectrum. Another approach is to treat spectrum the way 
        the Federal Government treats most of it real estate needs, by 
        centralizing the spectrum management function. Instead of each 
        agency handling its own real estate, the Government Services 
        Administration controls the overall portfolio. Similarly, the 
        Federal Government could put all government-used spectrum under 
        the control of a single administrator. That agency, 
        particularly if it is part of the Office of Management and 
        Budget, will ensure that the spectrum is used efficiently and 
        would be able to balance the needs of the government agencies 
        for spectrum and the possibility of raising revenues by leasing 
        spectrum to private parties.\35\ As this idea was first 
        proposed by my co-panelist, Tom Lehnard \36\, I will let him 
        explain it, but I think it is an excellent idea \37\ and urge 
        its adoption.
    \35\ Some might believe that NTIA is already authorized to perform 
this function. Unfortunately, in my view, NTIA is structurally 
hamstrung. It is a coordinator, rather than a manager, without budget 
authority, of spectrum resources. I think NTIA in recent years has done 
an extraordinary job of repurposing spectrum, even more extraordinary 
when one understands its limited tools. One option Congress should also 
consider would be to give NTIA the tools to be a strong central manager 
of Federal spectrum.
    \36\ https://www.techpolicyinstitute.org/files/
    \37\ I recognize that some have suggested the analogy with GSA has 
it limits, particularly as spectrum issues go to the core mission of an 
agency, which is not true of real estate decisions. See http://
fedscoop.com/federal-spectrum-reform. Still, I believe that having a 
dedicated team, expert in spectrum and networks, serving the broader 
Federal needs would go a long way to providing a balance of information 
about options that is essential for the Federal Government to use 
spectrum more efficiently.

    None of these ideas are exclusive and each carries their own trade-
offs, in terms of time and execution risk. Nonetheless, all should be 
on the menu of options Congress should consider in addressing the 
country's long-term spectrum needs.
    Wired Broadband Deployment Agenda. In addition, Congress should 
understand the emerging hybrid relationship of our broadband networks. 
It is a mistake to think of two distinct broadband networks, fixed and 
mobile. The different network architectures interact and Wi-Fi, which 
largely connects over fixed, wireline infrastructure, carries more 
increasingly carries more of what we think of as ``mobile'' data 
traffic.\38\ That is relevant to this hearing because the more robust 
our wireline network is, the more Wi-Fi off-load can relieve the 
pressure on our scarce spectrum assets.
    \38\ Juniper recently predicted that Wi-Fi networks will carry 
almost 60 percent of smartphone and tablet data traffic by 2019. http:/
    Last week the House Communications and Technology Subcommittee held 
a hearing on ``Promoting Broadband Infrastructure Investment'' \39\ to 
explore how to incent investments to increase bandwidth abundance on 
the wireline side. In truth, we are not really looking for a path to 
spectrum abundance; we are looking for capacity abundance, which 
requires multiple strategies using multiple assets. As was clear from 
that hearing, there are a number of private,\40\ federal,\41\ and local 
\42\ developments accelerating next generation wireline network 
deployments. Just as I hope the House Committee holds hold a hearing on 
repurposing spectrum,\43\ I hope you explore the topic they addressed, 
as there is an important relationship between developments on both the 
wireline and wireless sides.
    \39\ http://energycommerce.house.gov/hearing/promoting-broadband-
    \40\ http://docs.house.gov/meetings/IF/IF16/20150722/103745/HHRG-
    \41\ The FCC approval of the AT&T/DirecTV deal includes a 
significant commitment to build-out Fiber to the Premises networks.
    \42\ http://www.gig-u.org/cms/assets/uploads/2012/12/Val-
    \43\ That hearing wisely included testimony on wireless 
infrastructure but did not focus on spectrum.
    Plan Beats No Plan. In closing, I would like to take this 
opportunity to thank Congress for directing the writing of the National 
Broadband Plan, which I was privileged to lead. It was a great and rare 
gift to work with an incredibly dedicated and talented group of 
Americans on a short-term basis with a mandate to think long-term. As 
we look back over five years we can see a number of benefits of that 
kind of process in terms of accelerating clarity about the long-terms 
obstacles and opportunities we have. In looking at this critical 
question of repurposing government spectrum, I urge you to consider 
using a similar, though appropriately modified, process of a short, 
focused, analysis that quickly leads to plan for repurposing the 
government spectrum we need for bandwidth abundance and economic 
leadership in the 21st Century Information Economy.

    The Chairman. Thank you, Mr. Levin.
    Dr. de Vries?






    Mr. de Vries. Chairman Thune, members of the Committee, 
thank you very much for inviting me. It is an honor. It is a 
pleasure to be here today.
    There is no need to rehearse for this committee the boom in 
wireless services and technologies and the opportunities and 
the challenges we face. We have just heard some of that. And 
this very hearing, if nothing else, demonstrates that you fully 
grasp the scope of the situation.
    I have come to believe that the promised spectrum bonanza 
is at risk if government does not create the tools to respond 
to the unprecedented diversity and crowding that we are seeing 
in spectrum. The more we squeeze services together in 
frequency, in space, and in time, the greater the cost of 
unwise spectrum allocation, and the greater the risk of service 
failures due to harmful interference.
    The problem is not unlike that of a booming city where you 
must make room for more and more kinds of traffic--pedestrians, 
cars, trucks, motorbikes, buses--and, at the same time, real 
estate values are booming and space is at a premium.
    So this growing variety, intensity, and dynamism of 
spectrum use requires that regulators make initial rules wisely 
and that we find ways to shift routine spectrum management 
decisions, like rule adjustments and dispute resolution, from 
regulators to spectrum users.
    I have recommended in my written testimony three steps to 
help deliver on the promise of spectrum, and I think they 
address the three stages of the spectrum lifecycle.
    First, when planning new allocations, the FCC and NTIA 
should move away from worst-case interference analysis and 
instead use risk-informed methods that consider not only the 
consequences but also the likelihood of harmful interference.
    Second, when issuing operating rights, regulators should be 
clearer about operators' interference rights and obligations, 
and they should use harm claim thresholds to do so. The FCC 
typically doesn't define rights and obligations very clearly. 
And this made sense when spectrum rights were not in such great 
demand, but it is not tenable, given the crowded spectrum 
bazaar we now face. Harm claim thresholds are good fences, and 
they will make for good neighbors.
    And, third, when in the middle of spectrum disputes, any 
spectrum user should have the option of taking action against 
any other, either in front of an FCC judge or in a to-be-
created Federal court of spectrum claims.
    A Federal court is essential because there is currently no 
venue where intractable disputes between the FCC and the NTIA 
can be resolved. And, ultimately, fact-based, transparent, and 
timely adjudication is going to help make for efficient 
spectrum management.
    Now, while I am convinced that each of these three 
recommendations on its own brings great benefits, I think there 
are great synergies between them. To start with, bargaining and 
contracting, based on harm claim thresholds, is facilitated by 
a well-functioning system of adjudication. In turn, 
adjudication is facilitated by clear statements of rights and 
obligations, as enshrined in harm claim thresholds.
    And, finally, a risk-informed rather than a worst-case 
interference assessment makes for wise rights allocation, and 
it makes for efficient enforcement. It gives you a quantitative 
way to balance the rights and interests of interfered-with 
services and interfering services.
    So let me wrap up by saying that I believe Congress, as you 
know, plays a vital role here, and here are three things you 
might consider doing.
    The first is to take a risk-informed view yourselves when 
you are presented with questions of harmful interference and 
avoid the temptation of lapsing into the worst-case analysis.
    Second, you can encourage the FCC and the NTIA to use risk-
informed interference assessment themselves and to be more 
explicit about interference rights and obligations.
    And, last, you can create a court of spectrum claims as 
part of the U.S. Court of Federal Claims.
    Mr. Chairman, that concludes my testimony. Thank you again 
for inviting me, and I look forward to your questions.
    [The prepared statement of Mr. de Vries follows:]

 Prepared Statement of J. Pierre de Vries, Co-Director of the Spectrum 
Policy Initiative, and Senior Adjunct Fellow, Silicon Flatirons Center 
  for Law, Technology and Entrepreneurship, University of Colorado at 
    Chairman Thune, Ranking Member Nelson and members of the Committee, 
I am very pleased and honored to appear before you today to testify 
about spectrum policy. My name is Pierre de Vries and I am Co-Director 
of the Spectrum Policy Initiative at the Silicon Flatirons Center for 
Law, Technology and Entrepreneurship at the University of Colorado in 
    I am a physicist by training and I have been working on spectrum 
policy for about fifteen years, first as an executive in a software 
company and a consultant, and now as a policy researcher. I am 
currently a member of the FCC Technological Advisory Council.
    My testimony today is based on my experience and my current 
academic research interests. It reflects my views alone, and no 
opinions or recommendations that I offer should be ascribed to any of 
the institutions with which I am affiliated. I am testifying today 
entirely on my own behalf as a private citizen.
    My testimony makes the following points:

   Realizing the promise of spectrum--improved public safety 
        and national defense, new services for citizens, profits for 
        companies, and revenue for the government--entails squeezing 
        radio services ever more closely together and shifting as much 
        spectrum management as is prudent from regulators to spectrum 
        users and the marketplace. This in turn requires new approaches 
        to planning, issuing and enforcing spectrum rights. I strongly 
        recommend the following three:

   First, when making judgments about the trade-offs between 
        the benefit of a new service and its impact on incumbents, 
        spectrum managers like the FCC and NTIA should move away from 
        worst case interference analysis and use risk-informed 
        interference assessment that considers not only the 
        consequences but also the likelihood of harmful interference. 
        This will improve the analysis of harmful interference, and 
        lead to wiser trade-offs.

   Second, when defining allocations, spectrum regulators 
        should provide more clarity about interference rights and 
        obligations, e.g., by providing harm claim thresholds--explicit 
        statements of the interference that systems have to tolerate 
        without being able to claim harmful interference. This will 
        help parties to optimize spectrum boundaries and resolve 
        disputes without relying on the government.

   Third, for cases where interference disputes cannot be 
        resolved, parties should have the option of acting against each 
        other directly in front of an FCC judge, and/or in a Federal 
        Court of Spectrum Claims. Fact-based, transparent, and timely 
        adjudication will facilitate decentralized spectrum management.

   Congress can help by itself taking a risk-informed view when 
        presented with questions of harmful interference, and not 
        fixating on the worst case; encouraging the FCC and NTIA to be 
        more explicit about interference rights and obligations; and 
        creating a Court of Spectrum Claims.
1 Squeezing ever more radio services together requires new regulatory 
        tools the planning, issuing and enforcement of rights to use 
    There is no need to rehearse for this Committee the explosive 
growth in wireless services and technologies like cellular data, Wi-Fi, 
airborne communications, satellite broadcasting, and radar of all 
sorts; the boom in the wireless economy; and the increasingly tight 
packing of services in spectrum bands that has resulted. The very fact 
that you are holding this hearing is testament to your recognition of 
the value of spectrum to growth and prosperity, and the imperative to 
rethink the spectrum policy tools we need going forward.
    We are in a period of great promise as spectrum-based services 
offer unprecedented new value to citizens, companies and government. We 
are inventing new ways to put spectrum to its best use, including--
notably--rethinking the division of spectrum between Federal and non-
federal uses.
    The promise of a spectrum bonanza is at risk, however, if the 
government does not put in place the appropriate institutional tools to 
respond to the unprecedented diversity and crowding in spectrum.
    The demand for the benefits that radio services can bring to both 
private and public operators, and to the government through auction 
revenues, means squeezing together more and more applications and 
devices--of increasing variety, that require ever more spectrum 
capacity--into ever-more crowded spectrum. This means ever closer 
packing in time, space, and frequency. To give one example along each 
dimension: a cellular service operating near a NOAA earth station 
during times when a weather satellite is below the horizon and not 
visible; geographic exclusion zones that grow or shrink depending on 
whether a mobile radar is present or absent; and eliminating frequency 
guard bands between allocations by using receivers that can reject 
interference from adjacent channels. Even though the accessible 
frequency range for radios keeps growing, demand is growing too. 
Greater proximity increases the cost of getting it wrong by flaws in 
allocation (the spectrum equivalent of land use zoning) or the 
assignment of spectrum use rights (like auctioned licenses, license 
exemptions, and Federal frequency assignments), and increases the risk 
of service breakdowns due to harmful interference.
    The problem is not unlike that of a booming city that must make 
room for more and more traffic of all shapes and sizes--pedestrians, 
bicycles, motorbikes, cars, trucks, buses, etc.--at the same time that 
real estate values are exploding and space is at a premium.
    The growing variety, intensity and dynamism of spectrum use demands 
that we find ways to shift the adjustment of rule changes from 
regulators to operators in more cases. We need to enable private 
ordering and remove the FCC from a gatekeeping role.
    The challenge is particularly acute when it comes to getting the 
maximum value from Federal spectrum, since these services are vital to 
that national interest, are competing for access with private uses and, 
in many cases, jurisdiction over spectrum bands is shared with the 
Federal Communications Commission (FCC). If we want to reap the full 
benefits from Federal and other spectrum, we need to create an 
environment of good governance, and anticipate the problems that 
success will bring.
    These constraints apply regardless of whether one favors spectrum 
sharing, clearing and reallocation, or some hybrid (like the AWS-3 
blocks where cellular licensees have to protect weather satellite earth 
stations); and regardless of whether one prefers licensed or unlicensed 
allocation, or some hybrid (such as the 3.5 GHz band where unlicensed 
devices will be controlled by a Spectrum Access System). These choices 
are important, but do not change the underlying physics.
    The challenges I've described must be addressed at all stages of 
the spectrum lifecycle: planning new allocations, issuing operating 
rights, and resolving interference disputes.
    The three actions I recommend today correspond to these three 

   When planning new allocations, spectrum regulators should 
        move away from worst case interference analysis and adopt risk-
        informed interference assessment that considers not only the 
        consequences but also the likelihood of harmful interference.

   When issuing operating rights, regulators should provide 
        more clarity about interference rights and obligations by 
        specifying harm claim thresholds.

   When resolving interference disputes, parties should have 
        the option of taking action against each other directly, either 
        in front of an FCC judge or (particularly in the case of 
        disputes between Federal and non-federal entities) in a Court 
        of Spectrum Claims.
2 When making the trade-off between the potential benefit of a new 
        service and its cost to incumbents, spectrum managers like the 
        FCC and NTIA should move away from worst case analysis and 
        adopt risk-informed 
        interference assessment
    Should a spectrum manager like the FCC or the National 
Telecommunications and Information Administration (NTIA) allow a new 
radio service if it might diminish the value of an existing service by 
introducing harmful interference? This question is at the heart of 
spectrum regulation. It has traditionally been answered by engineering 
analysis focused on the worst case, followed by qualitative rather than 
quantitative judgments of risk. There is an alternative, however: 
quantitative risk-informed 
interference assessment.
    Risk assessment sets out to answer three questions: What can go 
wrong? How likely is it? What are the consequences? For example, when 
considering whether to install a burglar alarm system one might 
consider the various circumstances under which unwanted people might 
enter your house; how likely each possibility might be; and what harm 
might befall in each case, from pranks and petty larceny to assault.
    The purpose of risk assessment is to provide quantitative evidence 
to inform decisions on how to avoid and manage risks, and choose 
between options. In spectrum management, the risk is that of harmful 
interference, and the choice is between various possible operating 
parameter values--such as values for maximum transmit power, the amount 
of energy leaking into adjacent bands, and antenna directivity--
including the option of not allowing a new service at all. Applying 
quantitative risk assessment to spectrum yields risk-informed 
interference assessment.
    Quantitative risk assessment has been used in other regulated 
industries for decades but has not yet been applied to spectrum 
management. A working group of the FCC's Technological Advisory Council 
(TAC) examined the potential of risk-informed interference assessment 
last year, and recently published a paper recommending that the FCC 
begin to use this technique.\1\
    \1\ The Spectrum and Receiver Performance Working Group of the FCC 
Technological Advisory Council, A Quick Introduction to Risk-Informed 
Interference Assessment (April 1, 2015), http://transition.fcc.gov/
bureaus/oet/tac/tacdocs/meeting4115/Intro-to-RIA-v100.pdf. For a 
summary, see J. Pierre de Vries, Risk Informed Interference Assessment 
(May 12, 2015), http://www.ntia.doc.gov/files/ntia/publications/15-05-
2.1 Worst case analysis is inherently conservative, leading to over-
        protection of 
        existing services and under-provision of new services
    A worst case analysis considers the single scenario with the most 
severe consequence, regardless of its likelihood. However, there are 
many kinds of radio interference, and their impacts vary; for example, 
a weak interfering signal leaked into an operating channel may cause 
more or less harm than a strong signal in an adjacent band, depending 
on the circumstances. Fixating on a single interference scenario--
typically a worst case--does not accurately represent reality and can 
lead to false confidence that the resulting rules will avert harm. The 
worst case may be so rare that it can be safely ignored; and a more 
common but less extreme effect may be more problematic in practice than 
the worst case.
    A worst case approach is inherently conservative and usually 
inappropriate. For example, when deciding on the amount of domestic 
protection to buy, most consumers do not plan for a worst case like 
home invasion. Rather, they take a view--based on the particular 
threats in their neighborhood, their need for security, and costs--of 
various options like deadbolts, burglar bars, intrusion alarms and 
steel doors.
    In the case of spectrum, worst case analysis all too easily leads 
to rules that severely limit the benefits of new services while giving 
incumbents more protection than they need. This approach arguably made 
sense when spectrum rights were not in such great demand. It is not 
tenable when high value services have to be squeezed ever-more tightly 
    \2\ There are exceptions where a conservative approach remains 
appropriate, such as services where interruption is absolutely 
unacceptable and spectrum protection is the only way to guarantee it. 
Even when doing a worst case analysis in such cases, however, one still 
needs put various hazards in context by comparing interference risks 
with non-spectrum risks like operator error, power outages, device 
misconfiguration, intentional jamming, etc.
    In engineering practice, risk is typically evaluated by considering 
the combination of likelihood and consequence for multiple hazards. By 
contrast, a worst case analysis focuses on a single scenario with very 
severe consequences, regardless of its likelihood.
2.2 Quantitative risk assessment is used in many regulated industries
    For decades, quantitative risk assessment has been used in 
regulated industries from finance to food safety, including cases where 
safety of life is paramount:

   The U.S. Nuclear Regulatory Commission adopted quantitative 
        risk assessment in the Seventies. Its 1995 policy statement on 
        probabilistic risk assessment (PRA) encouraged greater use of 
        this technique to improve safety decision-making and regulatory 
        efficiency. In 2009 it published guidance on the use of PRA to 
        support licensee requests for changes to plant licenses.

   The U.S. Environmental Protection Agency (EPA) uses risk 
        assessment to characterize the nature and magnitude of health 
        risks from chemical contaminants and other environmental 
        stressors. The EPA first issued a cancer risk assessment in 
        1976. A series of guidelines followed, based on a 1983 risk 
        assessment paradigm developed by the U.S. National Academy of 
        Sciences. Risk assessment practices are now well established at 
        the agency and are widely used for public and environmental 
        health protection.

   The U.S. Food and Drug Administration uses risk analysis to 
        ensure that regulatory decisions about foods are science-based 
        and transparent. It has developed FDA-iRisk, a publicly 
        accessible online tool to estimate the health burden of 
        microbial and chemical hazards in food.

    Risk assessment methods are also used by other U.S. Government 
agencies and departments including the Office of Science and Technology 
Policy and the Office of Management and Budget; the Departments of 
Homeland Security, Health and Human Services, and Transport; and the 
Federal Aviation Administration, NASA, and Occupational Safety & Health 
2.3 Using risk assessment in spectrum policy
    The FCC TAC has proposed a three step method for analyzing radio 
interference hazards: (1) make an inventory of all significant harmful 
interference hazard modes; (2) define a consequence metric to 
characterize the severity of hazards; (3) assess the likelihood and 
consequence of each hazard mode, and aggregate them to inform decision 
    \3\ Spectrum and Receiver Performance Working Group, supra note 1.
    Continuing the home safety analogy, householders would first to 
consider all the hazards they are exposed to, like fire, theft, 
windstorms and earthquake. Second, they would put them all on same 
footing with a common consequence metric such as dollars: how much it 
would cost to recover from a particular eventuality. Third, they would 
consider the likelihood and severity of each of these hazards, which 
would depend among other things on where they lived and their desire 
for personal security. Householders assess the likelihoods and 
consequences intuitively when deciding whether to buy a smoke alarm or 
install burglar bars; insurance companies do a quantitative analysis to 
calculate the insurance premiums for various risks. In the final 
aggregation step, the householder considers all these risks together 
when deciding how to allocate their limited resources on insurance 
policies and protective measures.
    The benefits of risk-informed interference assessment include:

   Providing quantitative information to policy decision-makers 
        who are balancing the benefits of a new service against its 
        adverse technical impact on incumbents, including services that 
        are essential to life safety and national security;

   Providing a single framework for comparing different 
        interference scenarios and assessments, in other words, 
        enabling apples-to-apples comparisons of different kinds of 
        interference; and

   Enhancing the completeness of analysis and increasing the 
        chances of identifying unexpected harmful interference 

    Achieving widespread use of risk-informed interference analysis 
will take time, not only to work through spectrum-specific technical 
issues but also to shift the management culture from a worst case to a 
risk-informed worldview. However, the sooner we start applying these 
methods, the sooner citizens, industry, and the Treasury will reap the 
benefits of squeezing services more tightly together. In other words: 
Start small, but start soon.
    Congress should encourage spectrum managers like the FCC and NTIA 
to start using quantitative risk assessment in their own work; to 
publish the analyses and results so that others can learn from them; 
and to pilot risk-informed interference assessment in limited-impact 
cases. There is no need to start with headline-grabbing initiatives; an 
incremental approach will build expertise and confidence. Congress can 
also set a good example by itself taking a risk-informed view when 
faced with arguments about harmful interference, and not fixating on 
the worst case.
3 When defining operating rules, spectrum managers should provide harm 
        claim thresholds--explicit limits on the interference that 
        systems have to tolerate without being able to claim harmful 
    Users operate their radios within the constraints set by 
regulators. These constraints are codified in operating rules--maximum 
transmit power, allowed out-of-band emissions, antenna directivity, and 
so on--made by the FCC and NTIA. These arrangements aim to strike a 
balance between the interests of incumbents, whose operations should be 
protected against harmful interference, and entering services that 
could deliver significant new value such as wireless broadband, home 
healthcare, and the much-vaunted Internet of Things.
    Given the imperfect information available to the regulators, the 
balance they strike is likely to be sub-optimal, that is, it is 
unlikely to minimize costs and maximize benefits. Even if it is 
perfect, the chosen balance is likely to become obsolete as 
technologies, businesses and missions evolve. For example, there might 
be a net social gain if the benefit of faster data services, enabled by 
increased transmit power, outweighed the cost of increased interference 
to an adjacent service or the cost of improving receivers to be more 
impervious to such interference. Adjustments to the rules are therefore 
inevitable and desirable.
    At the moment, adjusting the rules requires action by the 
regulators in almost all cases. This is slow and inefficient, since 
regulators have limited resources and imperfect knowledge, and the 
variety, intensity and dynamism of spectrum use keeps increasing. We 
need to enable as much spectrum management as possible by spectrum 
users themselves, individually and collectively, and minimize the FCC's 
gatekeeping role.
    There are a few cases where parties do successfully renegotiate 
spectrum boundaries--that is, the operating parameter values such as 
license area boundaries, frequency band edges, time of operation, or 
limits on transmitted power that demarcate spectrum rights--typically 
in situations where there is a small number of parties, ideally all in 
the same business; the adjustment of cellular service boundaries is an 
oft-cited example.
    Sufficient clarity helps parties to an interference negotiation or 
dispute to know what their rights and obligations actually are. This is 
essential when parties have limited information about each other's 
technology and business, as is usually the case at spectrum boundaries 
or in bands shared among very different services, and/or when they do 
not negotiate repeatedly.\4\ Harm claim thresholds--the explicit 
statement in the operating rules that govern a service of the 
interfering signal levels that it needs to tolerate without being able 
to bring a harmful interference claim--provide the required clarity.\5\ 
They are good fences that will make for good neighbors.
    \4\ These constraints usually do not apply to negotiations between 
cellular operators--perhaps the reason why they can bargain 
successfully about adjusting spectrum boundaries.
    \5\ J. Pierre de Vries, Optimizing Receiver Performance Using Harm 
Claim Thresholds, 37 Telecomm. Pol'y (2013), http://dx.doi.org/10.1016/
    Harm claim thresholds give manufacturers and operators the 
information they need to determine the best way to tolerate potentially 
interfering signals in adjacent bands without the government placing 
requirements on their designs. For example, vulnerable operators can 
invest in high performance receivers that tolerate interference in 
adjacent bands even when their own desired signals are weak; or they 
can deploy more basic receivers and invest in increasing the desired 
signal level by deploying more transmitters. Conversely, harm claim 
thresholds allow potentially interfering operators to plan their 
transmissions so that they are not vulnerable to claims of harmful 
    In cases where the initially assigned harm claim threshold is not 
(or is no longer) economically optimal, it can be adjusted by 
negotiation among affected neighbors. If a service can generate 
additional value by operating above a set threshold, it will have to 
share some of that value with the affected service--which is entitled 
to protection against interference above the threshold--to be allowed 
to breach the threshold. This is like a utility paying a property owner 
for an easement that allows their pipeline or cables to cross a piece 
of land; the land owner is willing to allow some encroachment on their 
rights in return for a payment.
    Making analogies between spectrum and property is a tricky business 
since all metaphors have their limits.\6\ However, it is worth 
recalling that real estate transactions depend on clear definitions of 
property boundaries, and the associated rights and obligations. 
Transactions will only flourish if purchasers know what they are 
buying, whether it's an easement or the property itself. It is also 
essential that they can be confident that their rights will be 
enforced--a topic tackled later in the recommendations on adjudication.
    \6\ J. Pierre de Vries, De-Situating spectrum: Rethinking radio 
policy using non-spatial metaphors, 3rd IEEE Symposium on New Frontiers 
in Dynamic Spectrum Access Networks (2008), http://dx.doi.org/10.1109/
    Setting a harm claim threshold thus has a variety of benefits:

   It reduces uncertainty about the rights and obligations 
        regarding interference for both interfering and affected 
        parties, allowing them to plan and invest with more confidence.

   It shifts decisions about system design, including receiver 
        performance, away from government to where it belongs: with 
        manufacturers and operators.

   It allows parties to adjust operating rights and spectrum 
        boundaries among themselves, which reduces rent seeking and the 
        load on regulators; it facilitates such negotiations by 
        providing an unequivocal starting point, unlike the current 
        obligation not to cause harmful interference--which lacks a 
        quantitative definition.

    The implementation details of a harm claim threshold approach have 
been discussed elsewhere.\7\ I will note just a few key points here.
    \7\ Receiver & Spectrum Working Group, FCC Tech. Advisory Couns., 
Inference Limits Policy: The use of Harm Claim Thresholds to improve 
the interface tolerance of wireless systems (2013), http://

   Different allocations can have different thresholds; the 
        approach is not one-size-fits-all. An allocation's harm claim 
        threshold can be customized--for example, lower interference 
        thresholds to provide more protection for life-safety services. 
        It can also be used to allocate costs in ways that best serve 
        the public interest, for example by imposing interference 
        mitigation requirements on the party that can most easily meet 

   A harm claim threshold is not a receiver performance 
        specification. It merely describes the interference conditions 
        an affected system needs to tolerate without claiming harm. It 
        does not prescribe how a receiver should perform in the 
        presence of such signal levels, but relies on the marketplace 
        to find the best solution.

   Harm claim thresholds may not be sufficient in cases where 
        receivers are not controlled by a license holder (such as 
        television or GPS), for life-safety systems like aviation, or 
        for unlicensed devices. Additional measures may be required to 
        ensure that receivers operate adequately.

    The use of harm claim thresholds will also facilitate the 
enforcement of spectrum rights, the subject of the next recommendation.
4 More adjudication options are required for cases when interference 
        disputes cannot be resolved, including the option for parties 
        to act against each other directly in front of an FCC judge, 
        and/or in a Court of Spectrum Claims
    The current regime for resolving interference disputes limits the 
value of spectrum use because it is too often not fact-based, 
transparent, or timely. The problem is particularly pressing where 
Federal and private systems are squeezed tightly together because it is 
not clear where intractable disputes between the parties will be 
    \8\ Close coexistence will not just occur in so-called shared 
bands, but also as a result of clearing and reallocating Federal bands. 
Given the universal need to squeeze services more tightly together, the 
result in both cases will be narrow frequency guard bands and small 
exclusion zones.
    Conflict between neighbors about spectrum use is inevitable, and 
will become more prevalent as more users and uses are squeezed 
together. While increasing numbers of disputes will be resolved by 
negotiation--especially so if my first two recommendations are 
adopted--adjudication is a necessary backstop; it provides a framework 
and incentive for negotiation, and a means of resolving intractable 
disagreements. As is often the case in civil disputes, the mere threat 
of litigation and opportunity for document discovery can aid the 
parties in moving to a settlement.
    The FCC's adjudication process is ad hoc and unpredictable. Many 
interference disputes--since records are generally not public, I do not 
know how many--are resolved by field agents of the Enforcement Bureau. 
However, the agency's capabilities, both in terms of personnel and 
equipment, are limited. When a conflict cannot be resolved in the 
field, FCC enforcement is often delayed or addressed through notice-
and-comment rulemaking when adjudication would have been more 
appropriate and efficient.
    The shared jurisdiction between the FCC and NTIA means that there 
is currently no venue where intractable disputes between them can be 
resolved; the FCC is responsible for managing non-federal, including 
commercial licensees, and the NTIA is responsible for managing Federal 
authorizations.\9\ Since a substantial collection of frequency bands is 
already shared between Federal and civil users, jurisdictional 
disagreements occasionally arise between FCC and NTIA.\10\ It is an 
open question how intractable disputes between Federal and non-federal 
users will be resolved. Coordination between the NTIA and FCC is the 
only currently available mechanism; this will fail when they themselves 
    \9\ The NTIA is part of the Executive branch, while the FCC is an 
independent regulatory authority whose mandate and authority derives 
from Congress and the Communications Act of 1934.
    \10\ Executive Office of the President, President's Counsel of 
Advisors on Science and Technology, Report to the President Realizing 
the Full Potential of Government-Held Spectrum to Spur Economic Growth 
(July 2012), http://www.whitehouse.gov/sites/default/files/microsites/
    In collaboration with Dean Weiser of the University of Colorado Law 
School, I have proposed an adjudication regime that moves from the 
current ad hoc, politically charged, and notice-and-comment driven 
process to a more-fact-based process of hearings before specialized 
judges.\11\ I will now describe the two components: more intensive use 
of judges by the FCC, and the establishment of a Federal Court of 
Spectrum Claims. The measures we recommend address non-urgent harmful 
interference cases, and not those that pose an immediate threat to the 
safety of life or property.
    \11\ J. Pierre de Vries & Phillip J. Weiser, The Hamilton Project, 
Unlocking Spectrum Value through Improved Allocation, Assignment, and 
Adjudication of Spectrum Rights, (March 2014), http://
.pdf. For a full set of related resources see, Hamilton Project, http:/
unlocking_spectrum_value_through_improved_allocation_assignment/ (last 
visited July 20, 2015).
4.1 Using FCC judges to resolve disputes between parties under FCC 
    First, regarding the FCC, the development of a specialized 
interference adjudication function would involve building or co-opting 
a capacity it does not currently have. One solution would be to second 
technical advisers to the existing Office of Administrative Law Judges 
(ALJs) from other parts of the agency; another is to appoint 
Administrative Judges.\12\
    \12\ The key difference is that Administrative Judges are not a 
formal part of the Federal Government-wide system for selecting such 
officials. Since the FCC does not have many ALJs on staff (only one, at 
present) and those in place may lack the specialized knowledge that 
would enable more effective adjudication in this area, using 
Administrative Judges may be an appealing alternative.
    In order to advance this proposal, the Samuelson-Glushko Technology 
Law & Policy Clinic at the University of Colorado Law School and I 
requested that the Commission initiate a rulemaking to provide a fact-
based, transparent, and timely adjudication process for spectrum 
interference disputes.\13\ We proposed that the Commission should:
    \13\ Petition: Samuelson-Glushko Tech. Law & Pol'y Clinic and J. 
Pierre de Vries, Petition for Rulemaking: Spectrum Interference Dispute 
Resolution (May 8, 2015), http://apps.fcc.gov/ecfs/comment/
nT8Q!-1954627099!-774309124?id=60001031161. Notice: Fed. Commc'n 
Comm'n, Consumer and Gov't Aff. Bureau Reference Info. Center Petition 
for Rulemaking Filed, Proceeding RM-11750, Report No. 3023 (June 11, 
2015), http://apps.fcc.gov/ecfs/comment/view;ECFSSESSION=

   Permit a private party to file a spectrum interference 
        complaint against another private party directly with the 
        Office of Administrative Law Judges, thereby providing 
        operators with fact-based, transparent, and timely process to 
        resolve harmful interference disputes;

   Modify existing rules to add deadlines to the adjudication 
        process; and

   Make resources available as and where needed to ensure the 
        adjudication process is fact-based and timely; for example, by 
        providing support staff, hiring or loaning additional ALJs, and 
        obtaining spectrum engineering advice from inside or outside 
        the agency.

    FCC adjudication would not be appropriate in all cases. Cases that 
fall within its scope are those where appropriate FCC rules already 
exist; where both parties are under the FCC's jurisdiction; and where 
one private party claims that another private party is causing harmful 
interference. The ALJ option would be ideal for small bilateral 
disputes, while rulemaking by the Commission would be more appropriate 
for multi-party disputes, and single-party cases that highlight broader 
    The ALJ option would not be appropriate for disputes between the 
government and private parties--the situation I turn to next.
4.2 Creating a Court of Spectrum Claims to resolve disputes between 
        Federal and non-federal users
    Even with the FCC acting as an expert adjudicator, Dean Weiser and 
I proposed that Congress establish a Court of Spectrum Claims that 
could hear cases in this field. Such a body would be housed within the 
existing United States Court of Federal Claims, the court that hears 
cases involving claims against the U.S. Government. It would consist of 
specialized decision makers who could hear cases regarding spectrum 
    Such a venue is essential if Congress wants to see more delegated, 
dynamic negotiation and reassignment of spectrum rights between Federal 
and private users. Federal and non-federal users will be operating in 
ever-closer proximity regardless of the spectrum management regime: 
both band sharing and band reallocation will lead to ever-tighter 
packing of radio services in time, space and frequency. Consequently, 
spectrum disputes between Federal on non-federal users become ever more 
    Mutually beneficial arrangements between parties are most likely if 
both sides know their rights and are confident claims will be enforced. 
A government agency or department would be loath to give up control and 
allow sharing if it cannot depend on reliable enforcement--and that 
might be doubly true of a company buying spectrum access from the 
government in an auction, or by contract with a Federal entity. Most 
contract disputes do not go to court, but the backstop of judicial 
recourse gives parties the confidence they need to enter into a 
contract. The Court of Federal Claims provides this backstop for 
entities contracting with the Federal Government; a division for 
spectrum claims would fulfill that function in the specialized case of 
federal/non-federal spectrum cooperation.
    The CSMAC Enforcement Subcommittee addressed the question of how 
spectrum sharing arrangements between Federal and non-federal operators 
could be enforced, and by whom.\14\ Even if implemented, this industry 
recommendation--that the NTIA and FCC enact parallel dispute resolution 
tools, and that a joint NTIA/FCC coordination committee would oversee 
federal/non-federal sharing--is not sufficient.\15\ It promises to be a 
good mechanism for avoiding disputes and facilitating their resolution, 
assuming good will on all sides. However, it is not clear that the NTIA 
has the ability to order a recalcitrant agency or department to turn 
off an interfering device or system, and the CSMAC recommendation does 
not address how a disagreement between the NTIA and FCC themselves 
would be resolved.\16\ For this, a backstop adjudicator with authority 
over both Federal and non-federal operation--such as a Court of 
Spectrum Claims--is required.
    \14\ Commerce Spectrum Management Advisory Committee, NTIA, 
Enforcement Subcommittee Report (May 12, 2015), http://
    \15\ The parallel dispute resolution approach contemplates that 
Federal users could rely on the FCC's authority over non-federal 
spectrum users to enforce sharing arrangements, and non-federal 
entities could rely on the NTIA to take necessary actions against 
Federal users.
    \16\ Neither the CSMAC recommendation nor this proposal addresses 
interference events that are immediate threat to life and property.
    Thus, even if the FCC were operating effectively as an adjudicator 
(and the establishment of such a Federal body would greatly enhance 
that likelihood), the FCC is not set up to handle disputes involving 
the Federal Government as a party. The establishment of a specialized 
court outside of the FCC would enable the U.S. Government to sue or be 
sued when appropriate.
    Dean Weiser and I also recommend that the Court of Spectrum Claims 
be allowed to hear disputes between two private parties, ending the 
FCC's monopoly on hearing such claims and providing a choice of forum. 
This Court would provide an alternative and a check against the FCC's 
possible failure to operate effectively in this area. In all events, 
appeals from either the FCC or the Court of Spectrum Claims would 
proceed to the Court of Appeals for the District of Columbia to promote 
uniformity of decisions in both forums.
    In summary, courts with expertise in spectrum policy, either in the 
FCC and/or in a newly created Court of Spectrum Claims, can transform 
adjudication from the current ad hoc and sometimes politically charged 
process to a more fact-based, transparent, and timely procedure that 
could resolve spectrum-related disputes more expeditiously.
5 The three initiatives complement each other
    While each of the three proposals outlined here--using risk-
informed interference assessment, defining harm claim thresholds, and 
allowing parties to resolve interference disputes before a judge--will 
bring noteworthy benefits on their own, there are significant synergies 
between them.
    Harm claim thresholds realize their full promise when parties can 
use them to (re)negotiate spectrum boundaries that are closer to the 
optimum without the cost and delay associated with relying upon 
spectrum regulators.
    Such bargaining and contracting is facilitated by a well-
functioning system of dispute resolution that includes the backstop of 
adjudication. If a dispute arose--for example, about whether and how 
entitlements were breached--the parties could resolve the matter 
through negotiation, mediation, or formal adjudication either at the 
FCC or in the Court of Spectrum Claims.
    In its turn, adjudication will be facilitated by objective criteria 
for establishing whether harmful interference has occurred. This will 
be aided by clear statements of the rights and obligations regarding 
interference protection, e.g., through harm claim thresholds.
    For its part, risk-informed interference assessment supports both 
efficient allocation (including the setting of harm claim thresholds) 
and efficient rights enforcement (including inter-party adjudication) 
by providing an objective, flexible tool for balancing the interests of 
interfering and affected services.
6 Action by Congress can lay the foundation for continued growth in 
        spectrum use
    If the Nation is to reap the full value of Federal and other 
spectrum, Congress needs to create the tools of good governance and 
anticipate the problems that success will bring.
    Action by Congress can unlock the potential of Federal and non-
federal spectrum and lay the groundwork for continued growth in all 
three stages of the spectrum lifecycle: planning new allocations, 
issuing operating rights, and resolving interference disputes.

   Regarding the planning of new allocations, Congress should 
        avoid the temptation of worst case analysis and nightmare 
        scenarios, and instead itself make--and encourage the FCC and 
        NTIA to use--risk-informed interference assessments that 
        consider both the likelihood and consequences of interference 

   Regarding the issuing of operating rights, Congress should 
        support and encourage the FCC and NTIA to bring greater clarity 
        to interference rights and obligations, such as through the use 
        of harm claim thresholds.

   Regarding the resolution of interference disputes, Congress 
        should put in place any instruments that are needed to allow 
        parties, both Federal and non-federal, to take action against 
        each other directly in front of a judge, including by the 
        creation of a Court of Spectrum Claims within the existing 
        United States Court of Federal Claims.

    Mr. Chairman that concludes my testimony. Once again, I want to 
express my appreciation for being invited to testify here today on this 
important topic. I would be happy to respond to any questions that you 
might have.

    The Chairman. Thank you, Dr. de Vries.
    Mr. Lenard--Dr. Lenard, I should say.


    Mr. Lenard. Thank you, Chairman Thune, Ranking Member 
Nelson, and members of the Committee. I appreciate the 
opportunity to testify before you today.
    I would like to stress two points today in my testimony. 
First, while the broadcast auction is of course extremely 
important, I think attention should also be paid to another 
category of spectrum: the mobile satellite service, or MSS, 
spectrum. And, second, the all-important long-run task of 
freeing up more government spectrum should be addressed with a 
combination of administrative, budgetary, and market 
    The MSS spectrum, because it is already licensed and 
doesn't need to be auctioned, could be deployed for mobile 
broadband more quickly than other spectrum blocks. The 
inability to efficiently utilize the MSS spectrum results from 
a history of regulatory failures, mostly recently involving the 
LightSquared spectrum. Not approving the LightSquared spectrum 
for mobile broadband would effectively transfer a large block 
of spectrum from the commercial sector back to the Government--
exactly the opposite of what we are trying to achieve.
    The issue of government spectrum has been a challenging one 
for policymakers for some time now. Most inputs used by 
government agencies are subject to annual budgetary allocations 
and must be purchased in a market. In contrast, spectrum was 
awarded by the Department of Commerce and now is effectively 
owned by those agencies. From the agencies' perspective, the 
spectrum is free. Moreover, even if government agencies could 
sell their spectrum, any benefit might be offset by budget 
reallocations that would net out the agencies' gain.
    From an agency's perspective, a better strategy might well 
be to make some use of the spectrum even if that use is of low 
value or even to let the resource lie idle and wait for some 
future use, since doing so is costless.
    A TPI study I co-authored with Professor Lawrence White of 
the NYU Stern School of Business recommends a combination of 
administrative, budgetary, and market mechanisms to free up 
government spectrum.
    On the administrative/budgetary side, the NTIA should 
prepare an annual report that reports data on the government 
spectrum inventory, the opportunity costs of the various bands, 
and the likely sources of surplus spectrum.
    Most importantly, OMB should become a skeptical auditor of 
government-held spectrum--its use and its opportunity costs. As 
part of its annual budget process, OMB should require 
government agencies to provide an accounting of their spectrum.
    OMB should have a heightened awareness of spectrum as a 
scarce resource. The NTIA estimates of opportunity costs would 
be helpful in this regard and should routinely search for 
underutilized spectrum that could be auctioned by the FCC.
    Over the long run, the Federal Government should pursue 
incentive pricing mechanisms that force government agencies to 
internalize the costs of the spectrum they use. We recommend 
considering a model based on the GSA, which leases office space 
to government agencies at market-based rents. These rental 
payments provide an incentive for government agencies to 
economize on space.
    Following the GSA model, the Federal Government should 
create what we call a government spectrum ownership 
corporation, or GSOC. The GSOC would lease spectrum to user 
agencies at rental rates based on estimates of the relevant 
opportunity costs, with the net proceeds going to the Treasury.
    In the first year, OMB would add to each agency's budget a 
sum just equal to the rental payment, so the first year's 
financial transactions would be a wash for all agencies as well 
as for the Treasury. In subsequent years, spectrum would be 
treated the same as any other budget item. Thus, the normal 
budgetary negotiation process would recognize the opportunity 
costs of spectrum in the same ways that the opportunity costs 
of an agency's use of other resources are recognized.
    The goal would be that such a system would, like the GSA 
framework, provide sensible incentives for agencies to 
economize on spectrum use. The GSOC might then have a surplus 
of spectrum that could be sold or leased to the private sector. 
The GSOC could also accumulate a fund, again, similar to the 
GSA, that could be used to purchase additional spectrum if 
needed for leasing to government agencies.
    Thank you again for the opportunity to present my views, 
and I look forward to answering your questions.
    [The prepared statement of Mr. Lenard follows:]

  Prepared Statement of Thomas M. Lenard, Ph.D., President and Senior 
                  Fellow, Technology Policy Institute
    Chairman Thune, Ranking Member Nelson and Members of the Committee. 
My name is Thomas Lenard, and I am President and Senior Fellow at the 
Technology Policy Institute, a non-profit, non-partisan think tank that 
focuses on the economics of innovation, technological change, and 
related regulation in the United States and around the world. I 
appreciate the opportunity to testify before you today on wireless 
broadband and the future of spectrum policy.
    The growth of wireless broadband is a bright spot in the U.S. 
economy, but it depends on the availability of spectrum and in 
particular flexibly licensed spectrum rights. Freeing up spectrum from 
other uses would allow greater expansion of wireless broadband, 
bringing substantial gains for U.S. consumers, businesses, and the 
Federal treasury. A recent study by the Brattle Group, using the 
Federal Communications Commission's methodology, estimates that by 2019 
the U.S. will need more than 350 additional MHz of licensed spectrum to 
support projected commercial mobile wireless demand--50 percent more 
than is currently available.\1\
    \1\ Coleman Bazelon and Giula McHenry, ``Substantial Licensed 
Spectrum Deficit (2015-2019): Updating the FCC's Data Demand 
Projections,'' the Brattle Group, prepared for CTIA--the Wireless 
Association, June 23, 2015.
    Despite significant progress toward a more market-based approach to 
the allocation of spectrum, much of the most valuable spectrum remains 
unavailable to the private sector or locked into inefficient uses under 
FCC license terms. The latter group includes allocations to broadcast 
TV and mobile satellite services (MSS). Even more spectrum is 
unavailable to the market because it is occupied by the Federal 
    In the short run, the largest block of available spectrum--indeed, 
the only significant block of spectrum that is already licensed but not 
deployed--is the Mobile Satellite Service (MSS) spectrum. Beginning in 
1986, the FCC allocated over 150 MHz of prime spectrum to MSS--mobile 
``satellite phone'' service--for which demand has been extremely 
limited. Because it is already licensed and doesn't need to be 
auctioned, the MSS spectrum could be deployed for mobile broadband more 
quickly than other spectrum blocks. The National Broadband Plan 
initially counted 90 MHz of MSS spectrum, mostly controlled by Dish and 
LightSquared, toward its 2015 goal of an additional 300 MHz for 
wireless broadband; but this estimate has been cut by more than half 
due to exclusion of the LightSquared spectrum. The failure to utilize 
the LightSquared spectrum represents a costly regulatory failure. 
Interference disputes between LightSquared and users of adjacent 
spectrum are a complex issue, but ultimately the inability to resolve 
them stems from the absence of a flexibly licensed regime--in essence, 
the lack of clearly defined quasi-property rights and the absence of a 
market mechanism for buying and selling those rights. This has made it 
difficult for the occupants of adjacent bands to strike a mutually 
beneficial deal that would have enhanced the value of the spectrum and 
benefited consumers. The FCC should do what is needed to rapidly return 
as much as possible of the LightSquared spectrum to the spectrum 
    \2\ For a discussion of this issue, see Thomas M. Lenard and 
Lawrence J. White, '' The Spectrum Crunch, MSS Spectrum and 
LightSquared,'' Technology Policy Institute, April 2013; and Thomas 
Lenard and Lawrence White, ``Broadcast Spectrum is not the only 
Spectrum Available, The Hill, July 23, 2013.
    The broadcast TV spectrum is the other major private-sector 
category that under current FCC license terms can't be used for 
wireless broadband. At the conclusion of the DTV transition in 2009, 
294 MHz of prime spectrum remained allocated to broadcast TV. The FCC 
projects the upcoming incentive auction will release 120 MHz of this 
broadcast spectrum for mobile broadband uses, but many consider this 
projection optimistic. Moreover, U.S. experience indicates that large-
scale reallocations of spectrum such as the proposed incentive auction 
have taken 6-13 years to complete. Indeed, it has already been five 
years since the National Broadband Plan proposed the incentive auction 
and three years since Congress authorized the FCC to do it.
    Potentially the largest source of additional spectrum is the 
Federal Government, which has ``sole or primary use of between 60-70 
percent of the spectrum suitable for wireless broadband.'' \3\ My 
testimony recommends both administrative/budgetary and market 
mechanisms for freeing spectrum from these bands based on a TPI study I 
co-authored with Professor Lawrence White of the NYU Stern School of 
    \3\ CTIA, ``From Proposal to Deployment: The History of Spectrum 
Allocation Timelines,'' p. 3, available at http://www.ctia.org/docs/
    \4\ Much of this testimony is drawn from Thomas M. Lenard, Lawrence 
J. White, and James L. Riso, ``Increasing Spectrum for Broadband: What 
Are the Options?'' Technology Policy Institute, February 2010.
Government Spectrum Use and Opportunity Costs
    There is a widespread consensus that spectrum in government hands 
is likely not being used efficiently and that some--perhaps a 
significant amount--could be reallocated to more efficient private 
uses.\5\ However, efforts to determine the extent of this ``surplus'' 
and then to devise a method of freeing it from government hands 
confront a dilemma: the absence of a market mechanism, or even a 
budgetary mechanism, that could encourage this reallocation.
    \5\ This is implied by the broadly popular Radio Spectrum Inventory 
Act, which is premised on the ability to ``promote the efficient use'' 
of spectrum. In 1996 former Senator Larry Pressler recommended that the 
Federal Government reallocate 25 percent of its holdings below 5 GHz 
(see https://www.policyarchive.org/bitstream/handle/10207/8335/bg-
1085.pdf, p. 8). For additional references on why government users 
might be expected to use spectrum inefficiently see Mark M. Bykowsky 
and Michael J. Marcus, ``Facilitating Spectrum Management Reform via 
Callable/Interruptible Spectrum,'' presented at TPRC 2002, available at 
.umich.edu/tprc/papers/2002/147/SpectrumMgmtReform.pdf; Kenneth R. 
Carter and J. Scott Marcus, ``Improving the Effectiveness and 
Efficiency of Spectrum Use by the Public Sector: Lessons from Europe,'' 
presented at TPRC 2009, available at http://papers.ssrn.com/sol3/
papers.cfm?abstract_id=1488852; and Martin Cave and Adele Morris, 
``Getting the Best out of Public Sector Spectrum,'' presented at TPRC 
2005, available at http://web.si.umich.edu/tprc/papers/2005/497/
    First, government agencies do not operate in a market context, and 
their goal is not to maximize profits. Consequently, the ``opportunity 
cost'' paradigm that naturally applies in a market-oriented context is 
often neglected within government agencies.
    Second, unlike most of the inputs that are used by a government 
agency--e.g., personnel, materials, vehicles and equipment, real 
estate--which are subject to annual budgetary allocations and must be 
purchased in a market, spectrum under a government agency's control was 
awarded by the Department of Commerce and now is effectively ``owned'' 
by those agencies. From a government agency's perspective (i.e., the 
perspective of the agency's senior management), the spectrum is a free 
resource, for which it pays no rent or upkeep costs. The perceived 
opportunity costs of spectrum are small at best, since there is no 
market for this spectrum because the agencies are not allowed to sell 
    Further, even if there were an active market for government-held 
spectrum (and hence readily apparent opportunity costs), and even if a 
government agency were interested in exchanging spectrum for revenues 
that could be used to achieve agency objectives, the agency could 
nevertheless be largely indifferent to those opportunity costs for the 
following reason: If an agency were to sell its spectrum, the agency's 
net gain might be far smaller than the selling price--or even zero. 
That result could occur due to budget reallocations that would net out 
the agency's gain. From an agency's perspective, a better strategy 
might well be to make some use of the spectrum under its control (even 
if that use is of low value, as judged by opportunity costs), or even 
to let the resource lie idle and wait for some future use, since doing 
so is costless.
    As an analogy, one might think of real estate that, at some time in 
the past, had come under a government agency's ownership and control. 
If that real estate has little or no upkeep costs, then from the 
agency's perspective it is a free resource. The opportunity costs of 
the real estate may be of little interest to the agency, for the 
budgetary recoupment reasons mentioned above. The agency may put the 
real estate to low-value uses, or even keep it idle. When challenged by 
higher governmental authority, an agency's narrow interests will be 
best served by claiming that the real estate is vital to the agency's 
current and future functions.
    There are limits, of course, to the real estate analogy. As 
compared with spectrum, the opportunity costs of an agency's real 
estate holdings are likely to be much clearer. Physical inspection of 
the property to determine whether the agency is making reasonable use 
of it (in light of its opportunity costs) is surely easier as well.
    Accordingly, the task of determining the extent of surplus spectrum 
in government hands and reallocating it to wireless broadband use is 
more difficult than if the resource were real estate. Further, implicit 
in this discussion is the inability to bring the power of markets as a 
force for assisting in the reallocation. As a consequence, the 
effectiveness of market or quasi-market mechanisms in identifying and 
freeing up government spectrum might be limited--at least in the short 
Spectrum Sharing
    Spectrum sharing has become the preferred means of freeing up 
government spectrum. The 2012 report by the President's Council of 
Advisors on Science and Technology (PCAST) concluded that ``the 
traditional practice of clearing government-held spectrum of Federal 
users and auctioning it for commercial use is not sustainable'' and 
recommended a policy of ``share[ing] underutilized spectrum to the 
maximum extent consistent with the Federal mission.'' \6\ But this task 
is also hindered by the lack of market forces.
    \6\ ``Realizing the Full Potential of Government-Held Spectrum to 
Spur Economic Growth,'' President's Council of Advisors on Science and 
Technology, July 2012.
    Establishing a system in which Federal agencies face the 
opportunity costs of the spectrum they use would greatly facilitate 
efficient sharing of government spectrum. When faced with the 
opportunity costs, the government user may decide to make investments 
or otherwise alter the way it uses the spectrum so as to increase 
spectrum availability and/or permit less restrictive conditions for 
private-sector users. This increases the combined social value (to 
government and private users) of the spectrum. Thus, it is important 
that Federal users internalize the costs of their spectrum use.
    For government agencies that have only an occasional need for 
spectrum--e.g., for emergencies--consideration should be given to 
purchasing an ``option'' to over-ride/displace some private spectrum 
users at such times (rather than owning the spectrum and letting it sit 
idle or severely underused most of the time). This would be an 
innovative way of ``sharing'' spectrum. The government agency could 
hold a procurement auction. Potential sellers of this (call) option for 
``when needed'' spectrum would presumably be those who could economize 
or dispense with their spectrum usage during such emergency periods 
(rather than, for example, wireless broadband providers whose networks 
likely would also be severely stressed during such emergencies).
Administrative/Budgetary Mechanisms
    Strengthening administrative and budgetary mechanisms holds the 
greatest promise for freeing up government-held spectrum for the short 
run and would complement the market mechanism discussed subsequently. I 
recommend the following:

  1.  The National Telecommunications and Information Administration 
        (NTIA) should prepare an annual report that presents data on 
        the government's spectrum inventory, the opportunity costs of 
        the various bands, and the likely sources of surplus spectrum. 
        The data on surplus positions should take into account changes 
        in usage and technology.

  2.  The Office of Management and Budget (OMB), as part of its annual 
        budget process, should require any U.S. Government agency that 
        has a spectrum allocation to provide an annual accounting of 
        that agency's use of that spectrum.\7\ OMB should have a 
        heightened awareness of spectrum as a scarce resource (the NTIA 
        estimations of opportunity costs would help in this awareness) 
        and should routinely search for under-utilized spectrum that 
        could be auctioned by the FCC.\8\ In essence, OMB should become 
        a skeptical auditor of government-held spectrum, its use, and 
        its opportunity costs.
    \7\ A partial step in this direction is included in OMB Circular A-
11, which provides guidance on the preparation of the budget. Section 
31.12 instructs agencies to consider the value of radio spectrum 
required for telecommunications, radars, and related systems, to the 
extent practical, in economic analyses of alternative systems/
solutions. https://www.whitehouse.gov/sites/default/files/omb/assets/
    \8\ OMB should also be encouraging agencies to share the use of 
under-utilized spectrum, again encouraging greater efficiency.

  3.  OMB should encourage (and provide the funding for) agencies to 
        create employee incentive plans that would provide rewards 
        (including cash awards) to agency employees for devising ways 
        for their agency to economize on its use of spectrum. The 
        spirit of these awards would be consistent with other 
        government awards that encourage employees to take special 
        efforts to utilize resources efficiently and to provide 
        outstanding performance.
Market Mechanisms: A Government Spectrum Ownership Corporation (GSOC)
    Over the longer run, the Federal Government should pursue incentive 
pricing mechanisms that force government agencies to internalize the 
costs of the spectrum they use.
    One model to consider is based on the market-oriented rental rates 
that agencies are charged when they lease space in buildings that are 
owned (or leased) by the General Services Administration (GSA). The 
GSA's Federal Buildings Fund (FBF) provides recognition of the 
opportunity costs of those buildings.\9\ The government agencies make 
rental payments to GSA, which can use the money to acquire additional 
property if necessary. These rental payments provide an incentive for 
government agencies to economize on space.
    \9\ As another analogy, government agencies pay postal rates to the 
U.S. Postal Service (USPS) when the agencies make hard-copy mailings 
through the USPS.
    Suppose, then, that all U.S. Government-used spectrum was ``owned'' 
by a central government agency and leased to government users. In this 
case, the idea that the spectrum-using agencies should pay rental fees 
to the central agency--and that those rental fees should represent 
something approximating the opportunity costs of the spectrum 
holdings--would not be much different from the practice that government 
agencies pay rent for their use of the GSA's buildings.
    Accordingly, the Federal Government should create a ``Government 
Spectrum Ownership Corporation,'' or GSOC. The GSOC would take 
possession of all government-held spectrum, with the existing user 
agencies granted annual leases (that are perpetually renewable at the 
option of the agency) at annual rental rates that are determined by the 
GSOC, based on its estimates of the relevant opportunity costs. The 
GSOC would forward its net proceeds to the Treasury. In the first year 
OMB would add to each using agency's budget a sum that is just equal to 
the rental payment, so the first year's financial transactions would be 
a ``wash'' for all agencies (and for the Treasury).
    In subsequent years the agencies' budgets would start from the base 
that included the initial assignments and rental charges; but the GSOC 
would change the rental rates in light of updated information about 
opportunity costs. The agencies and OMB would then negotiate (as they 
do now) over resource usage and budget allocations; but, although the 
agency's budget would take into account its spectrum rental costs, 
there need not (and should not) be a one-to-one adjustment in an 
agency's budget allocation in relation to any changes in its spectrum 
rental costs. Instead, the agency's budget allocation should reflect 
its overall resource needs in light of its overall mission and 
operations. Thus, this ``normal'' budgetary negotiation process would 
recognize the opportunity costs of spectrum in the same ways that the 
opportunity costs of an agency's use of other resources are recognized.
    The goal would be that such a system would (like the GSA framework) 
provide sensible incentives for agencies to economize on spectrum use. 
The GSOC might then have a surplus of spectrum that it could sell or 
lease to the private sector (or turn over to the FCC for auctions). The 
GSOC could also accumulate a fund (again, similar to GSA) that could be 
used to purchase additional spectrum if needed for leasing to 
government agencies.
    There is a significant opportunity for large economic gains for the 
U.S. economy from expanding wireless broadband by freeing up under-used 
government spectrum and reallocating broadcast and MSS spectrum. Public 
policy should take advantage of that opportunity.
    Thank you for the opportunity to present my views and I look 
forward to answering your questions.

    The Chairman. Thank you, Dr. Lenard.
    And we now have been joined by the Ranking Member, the 
Senator from Florida, Senator Nelson. I want to recognize him 
for a statement, and then we will get into some questions.

                   U.S. SENATOR FROM FLORIDA

    Senator Nelson. Mr. Chairman, before I make the statement, 
I want you to know and the members of the Committee how much I 
appreciate the well wishes and support in the course of the 
last couple of weeks. For that kind of outpouring, indeed it is 
humbling to me.
    And I want to thank you for having this hearing on this 
important topic of spectrum.
    It is true there are more wireless devices in this country 
than there are people, and the number is going to continue to 
grow. And as this demand for these wireless devices continues 
to increase, so, too, is going to be the necessity of 
dedicating more spectrum to help power this technology. And, 
while businesses are clamoring for more and more spectrum, of 
course we have our government reliance on a certain amount of 
spectrum, and that is going to become even greater.
    So, as we begin looking to the future of spectrum policy, I 
believe that we have to approach this from a balanced position 
between licensed spectrum--the frequencies used to transmit 
radio, TV, and broadband signals--and the unlicensed spectrum, 
which supports technologies such as Wi-Fi.
    And since spectrum is a finite public resource, we must 
also ask the commercial and government spectrum holders to 
become more efficient users. We should reallocate spectrum when 
we can, and we should fully embrace spectrum-sharing when we 
cannot allocate the spectrum.
    We have the ability to meet future spectrum demands for 
both private-sector and government users. However, it is 
critical that the Department of Defense, NASA, the FAA, and 
other agencies have access to the necessary spectrum and 
updated technologies to meet their future critical mission 
    And so, as we look to the future, it is important to 
recognize that spectrum legislation is not only necessary but 
it has traditionally been bipartisan. And there is no better 
evidence of that than the 2012 Act, which was generated in this 
committee with the leadership of Senator Rockefellers and 
Hutchison. And this committee should exert that same degree of 
leadership and consensus in addressing this future spectrum 
    And I want to say how pleased I am that FCC Commissioner 
Rosenworcel is here today. And I want to thank her for her 
leadership on spectrum policy.
    And we are the beneficiaries of your thoughtful approach to 
    Mr. Chairman, I know that the Commissioner's re-nomination 
is before this committee, and I would simply request that we 
consider it without any significant delay.
    And thank you for the opportunity.
    The Chairman. Thank you, Senator Nelson. And welcome back. 
We are delighted to have you back, even fitter and better-
looking than before, and appreciate the progress you have made. 
When you are not here, we have a significant deficit in the 
knowledge of oceans and space, the things that this committee 
covers that we don't have a lot of in South Dakota. So we need 
your good Florida representation and voice. Great to have you 
    As we get into questions here, I want to just mention one 
thing. The FCC is currently considering a large number of 
wireless and spectrum-related items, several of which are on 
its open meeting agenda for next week. And so I want to ask my 
colleagues to please keep that in mind, as Commissioner 
Rosenworcel will have limited ability to comment on active 
items that are on circulation currently at the commission.
    I am going to start. Mr. Levin, in your recent filing with 
the Broadband Opportunity Council, you discussed a number of 
ways to lower the cost of deploying broadband networks. And I 
want to know, are there any specific proposals regarding 
wireless infrastructure that you recommend Congress should 
    Mr. Levin. Certainly. Thank you. There were a number which 
were discussed at the hearing at the House, and I think you 
mentioned some of them, in terms of greater access to Federal 
property. This has been an ongoing thing. When I was Chief of 
Staff at the FCC in the early 1990s, we dealt with those 
issues. But I think that there is an increasing focus on them 
because we need to create bandwidth abundance. So I would 
certainly encourage you to take a look at the broad range of 
things that a number of government agencies can do.
    And, by the way, I think the Broadband Opportunity Council 
is a terrific initiative and very much look forward to their 
report later this month. Hopefully they will adopt a number of 
recommendations that I and others made that will facilitate the 
lowering of the costs of deployment on Federal property.
    The Chairman. Good.
    Ms. Baker, you have voiced concern in the past that the 
U.S. risks falling behind other countries in deployment of 
fifth-generation mobile technologies, or what we refer to as 
5G, without access to more wireless spectrum. Some companies 
have begun considering whether they can feasibly deploy mobile 
services in high-band spectrum, including what is referred to 
as millimeter wave bands.
    What steps can we as policymakers take to encourage the 
continued deployment of 5G technologies?
    Ms. Baker. So I appreciate the question, and I think that 
we need to look at everything. I think Commissioner Rosenworcel 
is quite right in looking up, but we need to look--for now, it 
took 6 years to roll out from when it was proposed to when it 
was deployed. And so I think we were not the leaders in 3G; we 
were the leaders in the 4G. And how did we get there?
    We got there through conversations like this, forward-
thinking. We got there through aggressive auctions. So I think 
we really need to look at the base of 350 more megahertz of 
licensed spectrum by 2020 for our industry, for the wireless 
industry. We got there through a light-touch regulatory 
environment. And we got there through sound tax policy.
    So if that got us to where we were winning in 4G, I think 
that will get us to where we are winning in 5G.
    If you look at Europe, for instance, during the same period 
of time when we started to win in 4G, we deployed 73 percent 
more cap-ex than they did. I think that is largely due to their 
regulatory environment. Our speeds are now 30 times faster than 
they are in Europe, and we have three times more LTE 
    So I think we have the winning equation right now, and we 
need to keep it up and start with 350 megahertz more for 
licensed spectrum.
    The Chairman. OK.
    Commissioner Rosenworcel, how do we move beyond the current 
adversarial process, whereby the private sector identifies a 
desirable band of spectrum, the Government users resist, and 
then both sides spend significant time and resources fighting 
over the costs of relocation?
    Commissioner Rosenworcel. Thank you for the question, 
    This is a movie we have seen before. We tend to do this 
over and over again, where we knock on the door of Federal 
authorities like the Department of Defense and the Federal 
Aviation Administration, and we beg and plead for some 
spectrum, and, over time, we secure some scraps and slowly, 
slowly relocate them and then auction off those airwaves.
    That system is just too slow for the modern wireless 
economy. It is absolutely essential that Federal authorities, 
which control as much as 60 percent of our vital airwaves, that 
those Federal authorities start seeing some incentives to be 
efficient with those airwaves so that when reallocation comes 
they see gain and not just loss.
    The Chairman. Does anybody else want to address that 
    Ms. Baker?
    Ms. Baker. Thanks. I would love to.
    I think that this committee is really on to--I appreciate 
all the hard work this committee has done. And there are a 
number of bills out there and there are a number of ideas that 
I think have merit. I think for our spectrum need, we need to 
look at all of them, but I would say you, Senator, were 
completely right when you said it can't be antagonistic; it has 
to be a win-win situation for everyone.
    The top three items, to my mind, that will make a material 
difference in the short term, as well as many of these ideas 
that are going to make a difference in the long term, are 
updating the Spectrum Relocation Fund--and I think what I mean 
by that is there needs to be money for the agencies to do 
technical deployment.
    If we are going to move them into another band, we ought to 
let them study whether they can share, whether they can use a 
different technology. There is not money for that right now, as 
well as for long-term spectrum. We don't want to move somebody 
into a band and then move them again.
    So I think updating the Relocation Fund so that it will 
fund those projects would be great help.
    I also think that incentive auctions for Federal agencies 
is a very good idea--that is the Markey-Fischer bill--making 
sure that they get some money out of giving up their spectrum.
    And, last, I think as Commissioner Rosenworcel has talked 
about, more commercial-government partnerships, the 
Miscellaneous Receipts Act in particular.
    When I was actually at NTIA during AWS-1 and we were 
relocating, there was a wireless company that wanted to move 
the Department of Justice faster than the Department of Justice 
had money to and was planning to move. That wireless company 
wanted to pay for updated equipment for the Department of 
Justice, but they couldn't. Every way we looked at it, it was 
going to be a gift to the Department of Justice that would have 
been illegal from a private company.
    So I think that just makes sense, that is just good 
government, to try and have a commercial entity pay to move 
faster. Things like that that we consider all make good sense.
    The Chairman. Good. Thank you.
    Senator Nelson?
    Senator Nelson. Mr. Chairman, Senator Booker has another 
commitment. I want to defer my time to him.
    The Chairman. Senator Booker?

                  U.S. SENATOR FROM NEW JERSEY

    Senator Booker. I appreciate the graciousness of the chair. 
I only really have one question. But I do want to thank both 
the Chairman and the Ranking Member for working so closely with 
Senator Rubio and I on legislation.
    And I really want to direct my one question to Commissioner 
    You know that Senator Rubio and I have this legislation 
that is directing the FCC to just take a look, just to examine 
the spectrum in the 5-gigahertz band to see whether or not 
spectrum-sharing is possible.
    This bill clearly, plainly states in it, that this is not a 
taking of spectrum at all. I have had conversations with folks 
in the auto industry. It is just asking you to examine it, to 
see if spectrum-sharing is possible. I have never seen such an 
overreaction and a reaction that has nothing to do with what 
the text of the bill says. It is just asking for you to examine 
    And so you have spoken and written at length about this, 
the importance of using this spectrum in the upper 5-gigahertz 
band effectively and efficiently in order to reap the vast 
benefits that may exist if--and, again, our bill says ``if''--
we find the spectrum-sharing is safe, first and foremost, and 
    The longer we wait to examine it just to know the facts, 
this important and valuable real estate could possibly risk 
losing out on new innovations and capabilities that could be 
    So my simple question is, can you just describe for the 
Committee the importance of this examination and why this is 
such an important band as a bastion for future innovation? And 
what is your response to this common sense legislation that is 
just asking to examine that band? And what do you see as some 
of the greatest challenges in moving forward?
    Commissioner Rosenworcel. Thank you, Senator.
    I very much like your legislation, as you know, and I am 
optimistic we can find a way forward that both brings us more 
Wi-Fi and continues to allow the auto industry to proceed with 
its safety efforts associated with dedicated short-range 
communications systems.
    As you probably know, it was 1999 when we assigned this 
spectrum to the auto industry, and, since that time, they have 
been working on roadside safety and vehicle-to-vehicle safety 
efforts. But back in 1999, I had a phone that was the size of a 
brick, and I paid a princely sum to use it. And since that 
time, we now have lots of new wireless technologies that help 
with automatic braking and lane changes and other safety 
    So I feel like what we need to do is figure out how to take 
all those advances in technology, what we know now about 
interference, and test to see if we can combine Wi-Fi use with 
auto safety efforts in this band. I am optimistic we can do 
    I appreciate that the auto industry is, in fact, testing 
with one manufacturer a listen-before-talk system. I think 
there are other kinds of tests we can run, because I think 
there is a way forward here that both delivers vehicle safety 
and more Wi-Fi.
    Senator Booker. And the bill does not in any way threaten 
safety at all.
    Commissioner Rosenworcel. It encourages testing, and I 
think that is a smart and prudent course.
    Senator Booker. Mr. Chairman, thank you very much.
    The Chairman. All right. Thank you, Senator Booker.
    Senator Schatz?
    Senator Schatz. Should you go to the other side?
    The Chairman. Well, we do it in order of appearance, and 
you were actually here first. But if you would like to defer, I 
am sure my colleagues on this side would be happy.
    Senator Schatz. Well, having said that, I would be pleased 
to defer, and then I will go next.
    The Chairman. All right. We will then recognize Senator 

                   U.S. SENATOR FROM MONTANA

    Senator Daines. Thank you, Mr. Chairman.
    I want to talk a little bit about rural America. You have 
several members here who represent rural states. The question 
is for Ms. Baker and Ms. Rosenworcel regarding spectrum 
    Industry and regulators continue to talk about the shortage 
of spectrum and the need to make more spectrum available for 
commercial use, but really this is only half the problem.
    I am concerned, in a state like Montana--for example, there 
are two nationwide wireless carriers, providers, and they 
collectively own over 100 megahertz of spectrum in some of my 
counties but provide zero coverage. There are many places in 
Montana that we still don't get any coverage, particularly in 
tribal areas of my state.
    So my question to Ms. Baker and Ms. Rosenworcel is, what 
can industry and government do, working together, to make sure 
that spectrum held in rural communities is actually put to use?
    Ms. Rosenworcel. All right. Good question. We have got to 
find ways to make sure that rural America is not left behind in 
the wireless revolution. And I take your point that we have 
spectrum and it does not always get deployed in our most remote 
communities. So here are some things that we can do.
    First, we can make sure that when we auction off spectrum 
we auction off licenses that are small enough that small rural 
providers can easily purchase those licenses and participate. 
Because those small providers are more likely to deploy in 
their rural communities.
    We have also set up a new designated entity program that 
helps small rural providers by giving them bidding credits in 
our auction, so they can buy spectrum and get a slight discount 
because we know it is harder and more expensive to deploy in 
rural America.
    We also have a tribal bidding credit to help with 
deployment on tribal lands.
    And, going forward, we are going to enhance our Mobility 
Fund to make sure we support small wireless providers serving 
in rural areas.
    That is a lot of different things. I think together they 
can be effective over time. And I think it is important that we 
actually pick up the pace and make all of them happen as soon 
as possible.
    Senator Daines. OK.
    Ms. Baker?
    Ms. Baker. Thanks for the question. And I think there were 
actually two questions within there. And the first one, I think 
that there are two answers as to how do we incite--well, there 
are obviously more than that, but you have two good available 
options right now. The, how do we get more citing to more rural 
areas--and I do want to compliment the Fischer-Klobuchar bill, 
the Rural Spectrum Availability Act. I think that that will 
bring about more citing in rural lands.
    As former Senator Burns used to say, Montana is so 
beautiful, but there is a lot of dirt between streetlamps.
    Senator Daines. There is.
    Ms. Baker. So I think that that is a pretty important act. 
I think that that is going to allow rural areas to pick off the 
licenses of the larger spectrum----
    Senator Daines. Yes. And, importantly, because of the 
beauty of a state like Montana, with the trout streams, the 
backpacking, the camping, the hunting and so forth, we are now 
attracting a workforce, that they want to be right next to the 
stream as well as being able to access their wireless device 
and be part of this global economy. We are seeing some amazing 
things going on in the technology business in places like 
Montana, building world-class companies.
    Ms. Baker. So the FCC also has promised a Mobility Fund, 
and the Mobility Fund was I guess promised 5 years ago. And 
that will--we have LTE built out to 98 percent of the people in 
this country, but the 2 percent that aren't part of that 98 
percent cover a large bit of territory. And so where it is not 
economically feasible for the carriers to deploy, this Mobility 
Fund really needs to get enacted so that they can----
    Senator Daines. Yes, and I think that is something to look 
at in terms of where we are going to be in the next 10 or 20 
years. Millennials, they want to be able to have a fly rod in 
one hand and their mobile device in the other, and they don't 
want to trade off quality of life for quality of career. And 
this is why it is going to be so important in some of these 
areas that aren't--they don't want to be sitting in traffic 
jams, having to worry about an hour back and forth to work, 
when they could be in a trout stream within 5 minutes from 
where they work.
    That is literally happening right now in Montana. It is 
very exciting. So we appreciate your help on that.
    I want to just finish up with a question regarding some of 
the concerns we are hearing from the broadcasters as it relates 
to translators.
    I am a strong proponent of innovation technology. I was 
part of a cloud-computing company for 12 years in Montana. We 
took the company public, a global company based in Montana. So 
I am a strong advocate for technology.
    But one idea being discussed in next year's incentive 
auction plan would be to take channels that our local Montana 
broadcasters use in these places where we have high mountains 
and valleys and set them aside for unlicensed uses. Because of 
our topography, translators is how the signals reach the far 
ends of a state like Montana.
    I am a huge proponent of Wi-Fi, the Internet of Things, and 
other potential unlicensed apps. But I also want to ensure that 
Montanans can continue to receive our local news, our local 
programs over the air.
    So it is my last question; I am out of time. But has the 
FCC done any modeling or studies relating to the translators 
and potential impact?
    Commissioner Rosenworcel. Thank you.
    I definitely understand that translators are particularly 
important for broadcasting out west in states like Montana. 
That is how people get their television signals. And I know, as 
we try to crowd more devices into our airwaves and in the 600-
megahertz band, they are going to be competing for space.
    Now, in a state as rural as Montana, I don't think that 
competition will be quite the same as it is in New York City. 
So I have some confidence they are going to continue to be able 
to remain on the air.
    But with respect to modeling, I would like to get back to 
you. I am sure our auction team has done some, but I am not 
familiar with it, and I would be happy to provide that for you.
    Senator Daines. I would appreciate that, to look at it 
exactly, make sure I understand what is going on there in the 
details of this competition. I appreciate it.
    Commissioner Rosenworcel. Absolutely.
    Senator Daines. OK. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Daines.
    Senator Schatz?
    Senator Schatz. Thank you.
    Ms. Baker, you mentioned in your testimony that it can take 
as much as 13 years to reallocate spectrum for wireless 
broadband use from start to finish. Can you just very briefly 
tell me, what do you think are the key things we can do to 
improve that?
    Because, you know, we are making policy here, but even if 
we make the most brilliant policy in the world, 13 years is not 
going to cut it in order to make our broadband infrastructure 
work. So give me your thoughts on that, please.
    Ms. Baker. Great question. And I think some of the ideas 
that you have seen on this panel are important.
    I think the shortest time it has been has been 6 years; the 
longest has been 13. It is getting better, and I would say that 
is because of the cooperative stance and the win-win that we 
are starting, the rapport that we have developed with the 
    But I think improving the incentives for agencies to move, 
such as, you know, in the Relocation Fund; improving citing on 
Federal lands--all of that is going to help shorten the period 
of time.
    And so I think that we, working together, can shrink it to 
more of 6 years than 13.
    Senator Schatz. So it seems to me that the things you are 
talking about, in terms of the Relocation Fund and the other 
kind of mechanical fixes, have to do with shrinking it, say, 
from 13 years to the 5-to-7-year range.
    But there is this other question about the kind of 
misalignment of incentives that the commissioner talked about, 
which is that DOD doesn't get anything for having given up 
their spectrum. And to make it easier for them to give up their 
spectrum through the Relocation Fund is probably not enough of 
a pot-sweetener to get them to actually let go of this.
    And if we are going to get this to happen, we are going to 
be contending with the Armed Services Committee, Defense 
Appropriations, and others. And so, to me, you know, we are 
going to have to go beyond just improving the execution side. 
Because, in the end, that will compress the 13 years to 6, but 
we may still get a ``no'' unless they know, look, that billions 
of dollars in revenue are on the table, and it is not 
unreasonable for them to say, if this is our spectrum, maybe it 
should be substantially our revenue.
    Commissioner, do you want to comment on that?
    Ms. Rosenworcel. Yes. Thank you, Senator. I think those are 
terrific points.
    The bottom line is we need our Federal authorities to 
internalize the cost of the spectrum they use. They don't do 
that right now. It is just a resource they have. So when we try 
to take it away, we are trying to take something from them.
    If we can come up with incentives so that they see gain 
when we do that, we can both make them more efficient and have 
more spectrum for the pipeline that we are talking about here 
    Senator Schatz. Right.
    And I will just--by way of a comment, and then, Mr. Levin, 
I would be anxious to hear your thoughts on this.
    There are kind of two paths here. One would be to sort of 
adjust the next budget and adjust the way CBO scores it and all 
that, and I understand that that is one path. But that will 
also take a very long time. And so it may be that the 
legislative branch actually has to orchestrate an agreement in 
the short run to kind of make sure that this happens in a 
reasonable timeframe.
    Because if we decide that we are going to change the way 
that CBO scores it, then we need language in the budget, so 
that we are, again, talking about 5 to 10 years, in my opinion.
    I think we all understand the misalignment of incentives is 
the basic problem, and we can solve that, you know, 
appropriators and authorizers. It won't be uncomplicated, but 
it won't be any more complicated than if we tried to do it sort 
of through the regular order. And given our looming 
sequestration problem, there is some urgency and some incentive 
for us to just get after this.
    Mr. Levin?
    Ms. Levin. Yes. A couple of comments.
    First of all, when Congress passed the 1996 Act, it put 
deadlines on every one of the proceedings. As Chief of Staff at 
the FCC at the time, I hated those, but they were great. They 
basically enabled me to be able to manage the process, 
obviously with the Chairman, in a way where there were no 
excuses for not meeting the deadlines. We met the deadlines. So 
I certainly urge you to create deadlines, even if, fortunately, 
other people will have to implement them.
    Second, I think we have to understand the asymmetry-of-
information problem. And Dr. Lenard, I think, has done a good 
job articulating this. But part of the problem that I saw at 
the FCC in both of my stints there was that there are always 
experts in spectrum at the agencies who have greater 
knowledge--and this is not NTIA's fault; they don't have the 
resources, they are hamstrung--or at OMB. I think there needs 
to be, as Dr. Lenard said, some kind of information.
    Because the principal-agency problem is where the agent has 
both different incentives than the principal--and the principal 
here is the American public--as well as greater information, 
asymmetric information. So I think we need to address that 
problem, as well, and I think there are a number of different 
    Finally, I agree with the Commissioner's comment about 
incentivizing or internalizing the costs. I think there are a 
number of different ways, but, again, administrative pricing 
and also amendments to the Commercial Spectrum Enhancement Act 
I think go a long way to doing that, can be done more quickly, 
and I think, actually, the last few years, have proven--for 
example, when Congress said in the 2012 legislation we want 
AWS-3 quick, that gave the political mandate to the forces in 
the Executive Branch to be able to do that.
    Senator Schatz. Thank you very much.
    The Chairman. Thank you, Senator Schatz.
    Senator Peters?

                   U.S. SENATOR FROM MICHIGAN

    Senator Peters. Thank you, Mr. Chairman.
    And thank you to the panelists here today to talk about 
this important issue.
    And I just want to take a moment to kind of piggyback on 
comments made by my colleague Senator Booker regarding opening 
up the 5.9-gigahertz spectrum. And I certainly appreciate his 
desire to open up that band, but I also want to thank the 
Committee for slowing down that process.
    We have some significant interests that are very concerned 
about what that means, particularly in the area of safety. 
There are and will be incredible advances in safety, as 
vehicle-to-vehicle communications, vehicle-to-infrastructure 
communications advance.
    In fact, I had the opportunity just a couple weeks ago to 
be at the ribbon-cutting for a new test track at the University 
of Michigan for advanced vehicle technology, a 35-acre track 
that will test these incredible technologies. And I have to 
say, it is an incredible public-private partnership with a wide 
range of companies, from auto suppliers to insurance companies 
to telecommunications companies, everybody coming together 
because of the exciting potential that this technology has to 
save lives.
    I mean, we can talk about new apps and new creative ways to 
communicate. This is about saving lives. It has been estimated 
that up to 80 percent of all auto crashes could be eliminated. 
And at a time when 30,000-plus people die on our highways every 
year, that is a big deal. As a father to young daughters who 
are driving, it is a really big deal to me, as I am sure every 
mom and dad in the audience, as well, as to how important it 
    And so we have to get this right. And I think that is the 
concern with folks, is just to make sure that before we open it 
up we are getting it right and we are not interfering with this 
    So, on that note, Ms. Baker, you said in your written 
testimony that the wireless industry supports experimentation 
with new spectrum-sharing regimes. But you also warned in that 
testimony against settling into shared regimes that may rely on 
some untested technologies. And I certainly share that concern, 
and I think that is where most of the intelligent 
transportation community is right now, just concerned about 
whether or not these are tested.
    And I know the parties who are eager to open up this 
spectrum to unlicensed use make the argument that these 
advanced vehicle technologies won't be interfered with because 
there are untested technologies that will protect them. But for 
groups who have invested millions and millions of dollars into 
these technologies over the last decade and are on the very 
verge of starting to see the return of those investments in 
unprecedented ways, that is not real comforting, that there may 
be untested technologies out there that will protect them, 
don't worry. We need to have more than that.
    So I wanted to ask you, what sort of testing of these 
shared technologies and what scale would wireless carriers need 
to see completed in order to be convinced of their viability?
    Ms. Baker. So I think this is one of those questions--and 
thank you for the question. But I think this is one of those 
issues where we in Washington see it as a policy issue and our 
companies see it as a business issue. The verticals for the 
wireless industry are the most important part of the future 
growth, and certainly in the automobile and the automobile 
industry is at the very top of that list.
    So I think that we have the policy questions and the 
jurisdictional questions, which--we at CTIA have joined in 
partnership with the automobile industry to form the 
Intelligent Car Coalition to really address some of these 
policy issues. But the technical issues are real, and these 
really shouldn't be policy questions; they should be technical 
issues. And I think we now have a new CTO so that we can 
actually look at these questions.
    We are all for sharing. With the Internet of Things that is 
coming our way, we have to be for everything. We are for 
sharing, we are for unlicensed, we are for licensed. But it has 
to work. And so I think that you raise very important points, 
that we are for unlicensed, we are for experimentation, but it 
can't interfere with the underlying critical use.
    Senator Peters. So what is the role for private industry? 
How do you see private industry dealing with that?
    Ms. Baker. Well, every single one of our major carriers has 
deals with the automobile industries, and they are all--it is 
in their future use to work together. And I see AT&T has Drive 
Lab in Atlanta, as well as you have, you know, in Michigan. So 
I think that these are working together probably outside of our 
Washington space faster than we are working together here.
    Senator Peters. Yes. And so we have to let that process 
move forward as it is happening now. We don't need additional 
legislation at this point; we just need to let things continue 
to move forward.
    Ms. Baker. I think the commercial world is working really 
    Senator Peters. Great. Thank you so much.
    The Chairman. Thank you, Senator Peters.
    Senator Heller?

                    U.S. SENATOR FROM NEVADA

    Senator Heller. Mr. Chairman, thank you, and thanks for 
holding this hearing as we continue to work in this committee 
and try to bring more spectrum to the market.
    I was lobbied out in the hallway on my way in, and I was 
requested to ask one of our witnesses if any of them know where 
Tom Brady's cell phone is.
    Senator Heller. But I think I will--maybe that is a hearing 
for another day.
    But, anyway, thanks for holding this hearing.
    Senator Markey. Mr. Chairman, when you have a hearing on 
that, could I have equal----
    Senator Heller. Controversy. Controversy.
    But, anyway, we all know that spectrum provides Internet 
access in places that wireless won't reach and provide Internet 
competition where it does reach. This is about innovation and 
ensuring competition in the marketplace so that it exists to 
empower consumers in dictating price, speed, and efficiency in 
the data plants.
    As we continue our work, it is my opinion that these are 
the beacons we should continue to reach for. I know it is not 
easy, and that is why I appreciate the chairman staying focused 
on clearing more spectrum and holding this hearing today. And I 
believe that after the scheduled 2016 broadcast incentive 
auction is up, we probably will not have anything in the 
pipeline to follow.
    Now, we cannot close the digital divide and provide an 
environment in which services will get better and prices lower 
if we don't have more spectrum coming to the market. The 
digital divide is something that severely impacts my home state 
of Nevada.
    As Politico wrote extensively on this this week and many of 
us have known for a long time, the money provided to RUS 
through the stimulus has been an unmitigated disaster. I was 
adamantly opposed to the stimulus, and I am not about to go 
into all that, but we have to admit that the inability of RUS 
to get these projects going should not be a surprise.
    It is the same argument that was raised, of course, in 
2008. It is not realistic to expect any company to lay wireless 
across rugged terrains like Nevada to bring broadband to rural 
areas. Instead, we need to think critically on how we bring 
faster Internet to these areas. And I know the discussion today 
can provide and has provided some answers to that.
    And while today is about the long-term need for spectrum, a 
lot of questions remain about how spectrum auctions are 
conducted and how to enhance the benefit of these auctions. So 
I hope that we have the opportunity, as a follow up hearing, to 
learn more about that and how to address some concerns that 
will remain.
    I want to give a couple of examples--and, Ms. Baker, I am 
going to direct them toward you, if I may--just a couple of 
examples of the problems that exist. And this is in line with 
what Mr. Daines had to say earlier about a rural state.
    People don't realize, when you think of Nevada, you 
probably think of Las Vegas or Lake Tahoe, but it is a vast 
state--110,000 square miles. Las Vegas is in about 5,000 square 
miles of it; Reno, a couple thousand square miles. But 110,000 
square miles is a lot of space.
    Recently--and I say ``recently''--a few years ago, I was in 
a motor home, with four children in the motor home, and it 
broke down. Now, I am a pretty good mechanic, but that day I 
wasn't good enough. Fortunately, we were pulling a vehicle 
behind it. Got in the vehicle, drove down the road for 2 hours 
before we could get a signal on the cell phone. I would suggest 
that if someone were to do that today and break down in the 
same spot, they would still have to drive 2 hours to find a 
cell phone signal in order to get the help that they need.
    Another example is I have a son and his wife who have 1.5 
million followers on Vine. Now, if I was driving through 
Nevada, I probably couldn't get the weather, I probably 
couldn't get the news, and I probably couldn't see their latest 
Vine, because there just isn't the access to that information.
    So I think the key to it, is what I am trying to say, is 
that we can talk about spectrum, we can talk about all these 
issues, but the problem, foremost, is the ability to actually 
have the access to it. And so I guess in line with what Mr. 
Daines said, we have 85 percent of the property in the state of 
Nevada is Federal lands. And that is the problem.
    What can we do, Ms. Baker, what can we do, with the vast 
holdings that the Federal Government has, in the ability to get 
wireless service to rural portions of the state?
    Ms. Baker. That is a great question.
    And I do know that Nevada is disproportionate, at 85 
percent of Federal lands. I think the country average is 30 
percent, so you are greatly over there. So I think you should 
turn to your colleague Senator Johnson and thank him, because 
he did question the GSA nominee on Federal lands.
    I understand you got an answer back from her last night 
about making citing on Federal lands a priority.
    Senator Heller. I will stick around for his questions.
    Ms. Baker. This committee did a great job in directing the 
FCC in the Spectrum Act to expedite citing on non-Federal land. 
And we need to finish the job and get GSA to actually enact 
their promise. I know that Klobuchar and McCaskill have a bill. 
Senator Johnson, you have been on this.
    Expediting the citing on Federal lands, so it should take 
months instead of years, would be a great big help, I think, to 
states like Nevada.
    Senator Heller. OK.
    You had a comment?
    Ms. Rosenworcel. I agree. How about that?
    Federal lands are about 30 percent of the lands in this 
country, obviously a lot more in Nevada. And if we want to get 
deployment there, we are going to have to bring the cost 
equation to a new place. Because if you don't have a lot of 
people, it is really hard to spend the money to deploy because 
there aren't a lot of people who are going to be able to use 
that service.
    So one of the things we can and should do is make sure that 
the Federal Government manages those lands in a way that 
accelerates deployment and doesn't impede it.
    Senator Heller. Commissioner, thank you for understanding 
the problem.
    Ms. Baker. Can I just say that this has been a problem 
since I was at CTIA 17 years ago.
    And I think, Senator Markey, you are going to remember 
trying to get citing in Rock Creek Park.
    So, while we have some commitments from the GSA, this is 
something that I think we should probably stay on.
    Senator Heller. Ms. Baker, thank you.
    Mr. Chairman.
    The Chairman. Thank you, Senator Heller.
    Senator Markey?


    Senator Markey. Thank you very much.
    And Ms. Baker is correct. It was driving me crazy. We had 
deployed all this spectrum, and every day I was riding in 
through Rock Creek Park, and every day I was losing the 
connection at the same place. And 1 year went by, 2 years went 
by, 3 years went by. It is kind of a National Park kind of a 
thing, but it is not in the middle of Nevada. How come we can't 
figure it out here in the middle of Washington, D.C.? So we had 
to act in a bipartisan fashion to kind of work with the 
telephone companies to try to figure--let's solve this problem.
    And I agree with you, Senator Heller, that it is critical, 
because I have heard your family sing, and there is a good 
reason why they have 1.5 million followers on Vine.
    Senator Heller. They don't get it from me.
    Senator Markey. It is not a genetically transmitted skill?
    Senator Heller. It is from their mother. From their mother.
    Senator Markey. From their mother.
    So it is very, very important that we have them listened to 
everywhere in America.
    And so that is why, ultimately, spectrum is the oxygen of 
the wireless world, and we have to make sure that we continue 
to accelerate the pace at which we accomplish these goals.
    And, again, back in 1993, I worked with Mike Oxley and 
others, and we moved over 200 megahertz of spectrum to create 
the third, fourth, fifth, and sixth cell phone companies. The 
first two companies were analog and 50 cents a minute, but once 
we moved over that spectrum, we had a revolution by 1996. And 
everyone all of a sudden had a cell phone in their pocket 
because it was under 10 cents a minute and it was digital.
    And that was bipartisan. And the revenues went to the 
Federal Government. It was great. It was an auction. We did a 
good job.
    But the Government didn't really want to give up the 
spectrum at the time. They were very much--generals sat here 
and said, you don't know what you are going to do to our 
national security and you can't move over that spectrum. But we 
did it.
    So that is why, you know, Senator Fischer and I have 
introduced our legislation. We say, OK, we are going to work 
with you to move over the spectrum, but you will be 
incentivized because a certain percentage of the auction will 
go back into the Government, into these agencies.
    Can you talk a little bit about that, Ms. Baker and Ms. 
Rosenworcel? If you could, both of you, make brief comments on 
    Ms. Baker. I think we both have praised that bill. We both 
think it is a very good idea. I think an agency is going to be 
much more incentivized if they are able to keep some of the 
profits when they are moved. And it creates not only a win-win 
but a win-win-win, because they get profit from the auction, 
they get updated, more efficient equipment and newer equipment, 
and then, of course, we have the mobile industry can move in 
and innovate in that spectrum.
    Senator Markey. Commissioner Rosenworcel?
    Ms. Rosenworcel. Yes. Thank you.
    I think your bill with Senator Fischer is a terrific idea. 
Again, we need to internalize the cost of spectrum that our 
Federal agencies use. They need to be rewarded when they are 
efficient and help us get more spectrum into the mobile 
economy, because right now all they see is loss.
    Senator Markey. Mr. Levin, you were there back in 
prehistoric telecommunications time.
    Mr. Levin. Yes.
    Senator Markey. Can you give us your perspective on it?
    Mr. Levin. Yes. Two things I would just say.
    First, as to your history, it is exactly right, though I 
would note that one of the things we did pursuant to the 1996 
Act was to equalize the terminating access charges between 
wireless and wired. And I think that is an important lesson 
about certain bottlenecks and barriers. And it was really, once 
we did that, then AT&T Wireless created the one plan, and that 
really turned mobile from being a luxury product to being a 
mass market product.
    Senator Markey. Thank you.
    Mr. Levin. Can I just say real quickly, on the incentive 
auction, I am a big believer in incentive auctions, and I am 
delighted that you wrote the bill. I do have some concerns, as 
I have indicated in the written testimony, simply about whether 
it will work. My experience in the Federal Government--and I 
have had two stints there--suggests a number of concerns that I 
would have. And so I think whenever the Congress considers a 
number of paths, you have to consider, you know, the likely 
outcome. And reasonable people can estimate things 
    Senator Markey. And you know what I think? I think we are 
going to work it out. Once you say ``work it out,'' that is 
what happened back then, and----
    Mr. Levin. No, I agree with that.
    Senator Markey.--all of a sudden, the Defense Department 
was working it out. And they got benefits, and the public got 
benefits, and I think the same thing is going to happen here.
    And, Ms. Rosenworcel, could you talk a little bit about 
this constant understating by the Federal Government of the 
value of unlicensed spectrum? Can you talk a little bit about 
that, how historically that has always happened and it has 
almost invariably been wrong?
    Ms. Rosenworcel. Oh, do you mean when the Congressional 
Budget Office estimates just how much our airwaves are going to 
bring in?
    Senator Markey. Can you talk about that?
    Ms. Rosenworcel. I can. I can talk not just as a 
Commissioner but as a former congressional staffer.
    It is----
    Senator Markey. On this committee.
    Ms. Rosenworcel. On this committee, on these issues.
    So here just for starters. We recently held an auction of 
spectrum we call AWS-3. It raised over $40 billion. That is an 
extraordinary sum by any measure, and it is a testament to how 
valuable our airwaves are.
    The Congressional Budget Office, when reviewing the auction 
of 65 megahertz of AWS spectrum, suggested that as a result of 
the cost of relocation that auction would net out to zero 
    Now, there is a pretty big delta between 40-plus billion 
and zero dollars, and I think it is instructive. Our airwaves 
are extraordinarily valuable, but our accounting systems for 
measuring them in the legislative process don't appear to be 
fully up to date.
    Senator Markey. And I agree with you 100 percent. And it is 
just something that I think we have to continue to monitor, 
because there are tremendous benefits, even reducing the 
Federal deficit, of having the proper accounting standard. And 
sometimes the agencies get behind in terms of what these 
technologies can produce in terms of general benefits for the 
    And I thank all of you for all your work.
    Thank you, Mr. Chairman.
    The Chairman. Yes, sir. Thank you, Senator Markey. And it 
wouldn't be the first time they missed an estimate or two.
    Senator Johnson?
    Senator Johnson. Mr. Chairman, Senator Gardner asked for 10 
seconds, so I will yield him 10 seconds.

                   U.S. SENATOR FROM COLORADO

    Senator Gardner. Thank you, Senator Johnson.
    Every committee that could meet now is meeting now, and so 
I apologize for not being able to attend.
    But, Dr. de Vries, before I have to go vote in the Energy 
Committee, I wanted to welcome you to the Committee. I owe my 
law degree and my student loan to the University of Colorado, 
so welcome to the Committee.
    Thank you.

                  U.S. SENATOR FROM WISCONSIN

    Senator Johnson. That actually was 10 seconds.
    Senator Johnson. I thought it was going to be Senate time.
    The Chairman. He hasn't figured the Senate out yet, has he?
    Senator Johnson. Thanks, Senator Gardner.
    Ms. Baker, I just want to go back to what Senator Heller 
and Senator Markey were talking about, the challenges that your 
members have faced trying to, you know, locate broadband 
infrastructure on not only Federal land but also Federal 
    Can you give us some even better examples or just talk 
about how significant a challenge this really is?
    Ms. Baker. Well, I mean, as we mentioned, across the board, 
the Government owns 30 percent of the land in the United 
States. That is a third, so that is a lot. And in a place like 
Nevada, that is even--you know, as we talked, that is 85 
    It literally takes years. You know, there are some stories 
of 5 years. And, shockingly, some of the Department of Defense 
bases are some of the worst. And historic buildings are bad. 
These places where people are now expecting broadband to be 
ubiquitous and to be in contact constantly are now taking 
years, with multiple different reviews of environmental and 
animal--all sorts of different studies that have to be done.
    So it is extremely costly; it takes years. Anything that 
would be streamlined, whether it be the forms, whether it be 
the reviews, whether it be the timelines, all of that would be 
helpful to us in deploying on those Federal lands.
    Senator Johnson. And who pays for that, that time delay and 
that cost?
    Ms. Baker. Well, ultimately, consumers, but obviously the 
companies pay for all of the studies that go into the citing on 
Federal lands.
    Senator Johnson. But, bottom line, it is consumers. You 
know, we drop calls, we can't get access to the data, and, in 
the end, it is our bills that really reflect those costs.
    Can you just speak--obviously, we have been encouraging the 
GSA to actually complete its mandate under the Spectrum Act of 
2012. Can you just talk--first of all, I would like your 
evaluation. If you are in contact with GSA, are they moving 
forward? Are they going to meet their commitment to complete 
their work by the end of this fiscal year?
    Ms. Baker. Well, I mean, we were making light of the citing 
on Rock Creek Park, but when I worked for CTIA 17 years ago 
this was a priority, of trying to get citing on Federal lands. 
So then I actually went into the Government and thought, well, 
I will fix this.
    And so we were at NTIA and we had a Federal working task 
group to cite on Federal lands and create a portal and make it 
easier for industry to be able to cite on Federal lands. And 
here I am 17 years later, and it is one of the top priorities 
of CTIA, to be able to cite on Federal lands in a more 
streamlined process.
    So I think that, you know, ``trust but verify'' is probably 
a good warning here.
    Senator Johnson. Any suggestions you can provide GSA in 
terms of actually completing its mandate and, you know, again, 
information you can offer them to encourage their activity?
    Ms. Baker. I think having Senate oversight is a really 
important--it obviously worked for the FCC for non-Federal 
    Senator Johnson. OK. Well, thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Johnson.
    Senator Wicker?


    Senator Wicker. Thank you very much.
    Ms. Baker, Ms. Rosenworcel and Senator Markey have learned 
one lesson from the AWS-3 auction, and that is that it could be 
scored incorrectly by billions of dollars. I think we will 
acknowledge that that auction was a huge success. What other 
lessons learned are there, other than this scoring snafu that 
was talked about?
    Ms. Baker?
    Ms. Baker. So, you know, it is interesting, because I guess 
I have been at this for so long, but every time we have one of 
these auctions the lessons learned really are lessons learned. 
And so I think AWS-3 was tremendously easier in the relocation 
and the lead-up to the auction and in the actual auction than 
AWS-1 was.
    We learned that cooperation really works. So if you can be 
not antagonistic and work together to cooperate beforehand as 
well as once the auction happens, you can actually relocate 
    I really think that there needs to be funding for 
technological research for the agencies so that they can figure 
out how they can make better plans and they can have longer-
term plans. I think that is a really important priority going 
forward for the Relocation Fund to apply to.
    Senator Wicker. That wouldn't need to come out of the 
appropriations, would it?
    Ms. Baker. It could come out of the $45 billion proceeds of 
the last auction.
    Senator Wicker. Ms. Rosenworcel, what other lessons 
learned, other than the obvious accounting snafu?
    Ms. Rosenworcel. First lesson: Spectrum is incredibly 
valuable. That goes without saying, but I think that that 
dollar figure makes it really apparent.
    The second lesson is we were able to clear some of the 
airwaves of our Federal authorities a lot faster because of the 
kind of cooperation that Ms. Baker just described. Developing 
cooperative relationships with our Federal spectrum users is 
important because it will speed the process.
    And then, finally, I don't want to talk too much about it, 
but it has also become clear that we have to update our 
designated entity process to make sure that big companies do 
not abuse bidding credits designed for very small businesses.
    Senator Wicker. What do you mean by that?
    Ms. Rosenworcel. We have a situation before us right now 
where a very large company was able to avail itself of some 
bidding credits that were designed for small businesses, and we 
are making active efforts to make sure that that situation is 
remedied and doesn't happen again.
    Senator Wicker. Ms. Baker, do you agree with that?
    Ms. Baker. Designated entities are pretty much completely 
in the FCC's jurisdiction to decide how to--we at CTIA really 
work for more spectrum so that the industry--as mentioned, 350 
megahertz is what we need to continue our global lead in 
wireless. How it gets divided up is really Commissioner 
Rosenworcel's job.
    Senator Wicker. Well, thank you for that punt. And it went 
very, very high.
    Senator Wicker. Just to end up, Mr. Chairman----
    Mr. Levin. If I----
    Senator Wicker. Yes. Please.
    Mr. Levin.--might just interrupt. I apologize.
    But in terms of scoring, I do want to just note--I was 
Chief of Staff when we did the first auctions, and I followed 
on Wall Street pretty much every auction after that--the 
private sector also gets it wrong. And the reason is, you don't 
know until you hold the auction; that is why you hold the 
    And I think that part of the challenge for policy is when 
there is--and, by the way, these things go up and they go down. 
There are certain auctions that--a lot depends on market 
conditions and new uses. So it actually is a difficult 
    I think that particular one--again, I agree with 
Commissioner Rosenworcel--it shows the incredible value of the 
spectrum. And that is only going to increase, in my view.
    But I do think that we have to try to find mechanisms and 
tactics that are not dependent on being 100 percent right and 
that kind of over time send signals so that we kind of create 
that pipeline. And that is what I think the real challenge for 
this committee and the Congress is.
    Senator Wicker. Thank you very much.
    And let me just ask this final line of questioning. I am 
very interested in telehealth, and I think members of this 
committee are. We are trying to be innovators and actually lead 
the transformation in my home state of Mississippi.
    As we begin to benefit from the intersection of wireless 
and health care, do we have adequate and available spectrum we 
need to foster growth and innovation in this industry and to 
fully enable members to deliver more patient-centric treatment 
solutions using wireless?
    Ms. Baker. I will take it first.
    No, we don't. We have just really finished a very 
thoughtful series of papers to look at what our need is going 
to be. And as we move forward, as wireless is the platform for 
connected life, for the Internet of Things, we need more 
spectrum. We need more licensed spectrum. We need 350 more 
megahertz by 2020.
    I agree with you that telehealth is an incredible platform 
that is going to affect all Americans. And for us to get it 
right and for us to be able to continue to innovate, we are 
going to need more spectrum.
    Ms. Rosenworcel. I agree.
    Senator Wicker. Wonderful.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Wicker.
    Senator Udall?

                 STATEMENT OF HON. TOM UDALL, 
                  U.S. SENATOR FROM NEW MEXICO

    Senator Udall. Thank you very much, Mr. Chairman. Really 
appreciate this hearing today.
    Commissioner Rosenworcel, let me direct my first question 
to you.
    With so many wireless devices connecting to the Internet, 
we are facing what I would call a spectrum crunch that could 
hinder the next Internet revolution. And I am exploring some 
spectrum policy ideas in a bipartisan way with Senator Moran. 
But I think American ingenuity could solve this. We just need 
to get more innovators and researchers to focus on it.
    And that is why I really like the idea that you and your 
cell phone pioneer, Marty Cooper, proposed. And, in fact, I 
plan to push for a Spectrum Challenge prize. This contest would 
provide a significant monetary award to the first person who 
finds a way to make spectrum use vastly more efficient.
    Could you share your thoughts on how a Spectrum Challenge 
prize could spur American innovation and competitiveness?
    Ms. Rosenworcel. Sure. Thank you so much for the question.
    There are really three things we can do to make sure that 
we clear space in our skies for all of these wireless uses that 
are coming into our economy. We can clear more spectrum; we are 
talking about that here. We can deploy more towers, and we have 
been talking about that, particularly with respect to Federal 
lands. But, finally, we can get more innovative with 
    And so I worked with Marty Cooper, who is widely known as 
the ``father of the cell phone,'' to come up with the idea of 
``Race to the Top, a Spectrum Challenge.'' We need to create a 
prize that incentivizes the development of new technologies 
that are cost-effective that could increase the capacity of 
existing airwaves by, say, 100 times.
    If we did that and we were able to tap into American 
ingenuity and create those kind of new technologies, we would 
find all the spectrum that we have today would be able to 
perform better and carry more traffic.
    So Marty Cooper and I have proposed that the winner of that 
type of prize should perhaps just get some spectrum license 
themselves in order to keep this internally consistent. That 
would be valuable for them, but the greater value for all of us 
in the wireless economy who would benefit from those new 
    Senator Udall. Yes. Thank you very much for that response.
    And I would note we had an earlier hearing where we talked 
about prizes, Chairman Thune. And it was very interesting to 
hear the witnesses talk about the innovative capability and 
developing that and that there is huge potential.
    Ms. Baker, Senator Moran and I recently wrote a letter, 
signed by Chairman Thune and Ranking Member Nelson and other 
members, to the Office of Management and Budget about the 
Spectrum Relocation Fund.
    This multimillion-dollar fund pays the costs of relocating 
Federal users when a particular spectrum band is auctioned for 
commercial use. But my understanding is that the rules 
governing this fund seem to limit the ability to meet President 
Obama's goal of freeing up more spectrum for commercial use.
    Could you expand on your earlier comments on making better 
use of this Spectrum Relocation Fund?
    Ms. Baker. Well, first of all, thank you for your letter, 
and thank you for your efforts. We think it is really important 
and critical, and we think it can make a significant difference 
in the way that agencies do their planning.
    I think that it is very important for them to be able to do 
technology research to see if they can share, to see what sort 
of technologies are out there that they can move to if they are 
going to be moved but not when they are under the gun of 
moving. So I think that that research is important.
    And I also think that long-term spectrum planning is 
critical to our future. You don't want to move someone to a 
band that you are then going to move them again. That is just a 
waste of everyone's time and money.
    So I think giving the financial support for these agencies 
to do long-term planning--it is tough, because a place like the 
Department of Defense has people who are spectrum experts. Some 
of the smaller agencies who are using, you know, spectrum do 
    But providing them more money to be able to look into this 
is going to be really critical to our future and to be able to 
get the 350 megahertz that the wireless industry sees that we 
need by 2020. So we appreciate your efforts.
    Senator Udall. Yes. Thank you.
    Do any other panelists have comments on that?
    Mr. Levin. Two things.
    First, on prizes, I completely agree with Commissioner 
Rosenworcel. I just might note, consistent with Dr. Lenard's 
testimony, a version of that is providing greater flexibility 
in the uses of the MSS spectrum. We pushed for that in the 
plan; the Commissioner has done that. And I think you are going 
to see private incentives drive new innovation and 
technological change.
    Second, I completely agree with the spirit of the letter. 
And, indeed, Recommendation 5.5 in the plan talked about 
amendments to the CSEA and, I think, are consistent with that 
letter. And I look forward to OMB's response and hope that 
there is follow-up to that.
    Senator Udall. Thank you. Thank you very much.
    Thank you, Chairman Thune.
    The Chairman. Thank you, Senator Udall.
    I think we have kind of started to wind it down here. I do 
want to ask one last question. I want to direct this to Dr. de 
    You have raised concerns about that inability of private 
spectrum licensees to negotiate agreements related to 
interference. Do you believe interference disputes are likely 
to increase as license holders live closer and closer together? 
And what obstacles exist for parties to enter into arrangements 
that would enhance efficiency?
    Mr. de Vries. Yes, thank you, Chairman Thune. That is a 
very good question, and I think it is inevitable, as we squeeze 
all these services closer and closer together.
    I mean, we have heard from Senators from rural states, but 
I think, in terms of spectrum, we are facing a transition from 
a rural spectrum society to an urban spectrum society, where, 
you know, in the past, if you think about, you know, you have a 
large land holding, if you have a feedlot, it is really not 
going to bother your neighbor, who is, you know, 40, 80 acres 
away, and even if it does bother them, they have one too. Now, 
in spectrum, we are building a situation where we have feedlots 
right next to residential neighborhoods. So the likelihood of 
interference disputes grows.
    There are a couple of things we can do to deal with that. 
The first is we need to make sure that there are expedited ways 
to deal with those disputes. Many options.
    Right now, if private parties have an issue, they have to 
ask the FCC to resolve it. They should be able to deal with 
each other directly. If there is a dispute between the FCC and 
the NTIA, as far as I know--and I am a physicist, and I 
apologize--but, as far as I know, there is no way you can go to 
resolve a dispute between the FCC and the NTIA.
    We should also allow parties to find the optimum 
arrangements themselves. Right now, because rights to spectrum 
are vague, it is OK if everybody is in the same business. If 
everybody is a farmer, you can make the arrangements, but if 
you are actually talking between farmers and householders and 
factories, it is much harder because of the ambiguity in the 
    And that is why I suggest things like harm claim thresholds 
that actually make it clear what interference protection one is 
entitled to and what you are not entitled it. That will make it 
easier for people to negotiate, because they will know what the 
starting point is for the negotiation.
    The Chairman. Thank you.
    Well, I think we have covered a lot of ground today. I 
appreciate very much all our panelists, your responses, your 
testimony. We will take it to heart and encourage you as we 
move forward, and we will have, hopefully, a plan moving 
    We encourage you to work with us and share suggestions, 
thoughts, advice, recommendations with us. Because, obviously, 
this is an issue that is not going to go away; demand is only 
going to increase. And we need to make sure we are doing 
everything to ensure that there is an available supply of 
spectrum for the future needs in our economy.
    Thank you all very much.
    The hearing record will remain open for 2 weeks, during 
which time senators are asked to submit any questions for the 
record. Upon receipt, the witnesses are requested to submit 
their written answers to the Committee as soon as possible.
    Thanks again.
    This hearing is adjourned.
    [Whereupon, at 12:24 p.m., the hearing was adjourned.]

                            A P P E N D I X

                           Aerospace Industries Association
                                       Arlington, VA, July 28, 2015

Hon. John Thune,
Committee on Commerce, Science, and Transportation,
United States Senate,
Washington, D.C.
Hon. Bill Nelson,
Ranking Member,
Committee on Commerce, Science, and Transportation,
United States Senate,
Washington, DC.

Dear Chairman Thune and Ranking Member Nelson:

    The Aerospace Industries Association (AIA) represents an industry 
that employs more than one million direct workers across all 50 states 
and adds $240 billion in sales to our national economy. Our industry 
leads the manufacturing sector in net exports, adding over $60 billion 
each year to a positive balance of trade. Equally important, our 
members design, develop and manufacture the cutting-edge aircraft, 
satellites, radars, and weapon systems that keep our Nation safe and 
protect U.S. national interests around the globe.
    As you know, many of these technologies are spectrum-dependent. 
Without continued and reliable access to spectrum, Federal agencies and 
military service members may not be able to accomplish their missions 
effectively. Consequently, our industry is a critical stakeholder in 
the debate about spectrum policy and the management and use of spectrum 
by the Federal Government. We understand that the civilian economy 
demands increased access to additional spectrum, while government 
demands for bandwidth increase as well. However, changes in spectrum 
policy must take care to ensure that any such transition not be 
conducted to the detriment of our national security, intelligence 
capabilities, or new entrants to our economy such as the integration of 
unmanned aircraft into our national airspace. We urge you to consider 
the need for future sharing among Federal and commercial users of 
    The systems built by our members are primarily developed and 
manufactured in the United States. All of AIA's members are U.S. 
manufacturers. We have an established industrial base and supply chain 
that makes enormous contributions not only to our economy, but also to 
our Nation's safety and well being. Our ability to maintain this 
resource relies on the continued availability of spectrum to support 
our systems and solutions.
    I respectfully request your approval, if appropriate; to place a 
copy of this letter in the hearing record of your March 26, 2015 
hearing titled ``Next Steps for Spectrum Policy''. We greatly 
appreciate your expertise and leadership on spectrum issues, and as you 
pursue changes in spectrum policy in the current Congress, I hope you 
will consider the needs of our industry and consider us a resource in 
future stakeholder discussions.
                                          David F. Melcher,
                                                 President and CEO,
                                      Aerospace Industries Association.


                           Competitive Carriers Association
                                      Washington, DC, July 29, 2015

Hon. John Thune,
U.S. Senate Committee on Commerce, Science, and Transportation,
Washington, DC.
Hon. Bill Nelson,
Ranking Member,
U.S. Senate Committee on Commerce, Science, and Transportation,
Washington, DC.

Dear Chairman Thune and Ranking Member Nelson:

    Competitive Carriers Association (CCA) respectfully submits this 
letter for the record regarding today's hearing on ``Wireless Broadband 
and the Future of Spectrum Policy.'' CCA commends the Committee for 
beginning a bipartisan process to consider ways to meet future demand 
for wireless services through a long-term legislative solution.
    Mobile broadband is a critical component of modern life, and 
spectrum is the lifeblood of mobile services. CCA represents over 100 
competitive wireless providers ranging from small, rural carriers to 
regional and nationwide providers, as well as approximately 200 
associate members consisting of small businesses, vendors, and 
suppliers that service carriers of all sizes. All CCA members depend on 
procompetitive policies that support their ability to access critical 
spectrum resources and continued growth of mobile broadband to meet 
their customer's needs.
    In addition, mobile broadband powers advanced telemedicine, 
limitless education, employment prospects, public safety, precision 
farming, and other innovative new services and opportunities, both in 
urban population centers and in rural America. Indeed, nearly half of 
all United States households are now ``wireless only'' and PEW Research 
recently found that ``nearly two-thirds of Americans are now smartphone 
owners, and for many these devices are a key entry point to the online 
world.'' While carriers continue to make impressive progress to provide 
innovative services, there is still work to be done. CCA supports the 
Committee's focus on fueling broadband investment and growth with 
additional access to spectrum and by promoting policies that remove 
barriers to competition and facilitate the next disruptive innovation.
Ensure Competitive Spectrum Policies
    Building on the Spectrum Act and the progress made implementing it, 
Congress has a key role to play in creating durable, enduring processes 
to meet our wireless nation's spectrum needs. Looking over the horizon, 
rather than focusing on a particular spectrum band or technology, 
policymakers should foster efficient spectrum management that maximizes 
utilization of this finite, taxpayer-owned resource.
    While we all must cooperatively work to identify additional 
spectrum resources for mobile broadband use, competitive principles 
currently in place should guide future spectrum policy. For example, 
spectrum must be interoperable to support open ecosystems that allow 
carriers of all sizes and technologies to maximize use of spectrum to 
unleash new services. Interoperability was required for the original 
Cellular spectrum band, and policies requiring or restoring 
interoperability in other spectrum bands provide carriers with the 
certainty that scarce spectrum resources can be used to enhance 
competition and service offerings. Future spectrum allocations must be 
interoperable to support a competitive mobile ecosystem.
    Additionally, the FCC should continue to allocate spectrum in 
smaller geographic license sizes. CCA applauds efforts to reinforce 
this principle, and commends Chairman Thune's repeated support in 
previous hearings for using smaller geographic license sizes to 
encourage interest in rural areas. Smaller geographic license sizes, 
like Cellular Market Areas or Partial Economic Areas, are necessary for 
smaller carriers to be able to compete for spectrum at auction and 
support utilization nationwide, particularly in rural areas. 
Furthermore, policymakers should consider appropriate build-out 
requirements and, as required by the Communications Act, policies that 
help to avoid excessive spectrum aggregation that impedes competition.
The Next Band: A Broad Range of Solutions Should Be Considered
    There is no one-size-fits-all solution to making more spectrum 
available for mobile carriers, and each additional spectrum band will 
have unique utilization challenges and opportunities. Congress should 
consider a broad range of ideas that collectively add up to new and 
enhanced opportunities for access to additional spectrum resources. 
Market-based proposals, like those contemplated in the Rural Spectrum 
Accessibility Act (S. 417), provide incentives for wireless carriers to 
enter into business agreements to partition or disaggregate a spectrum 
license to make unused spectrum available to small carriers or for 
carriers to serve rural areas, particularly when this spectrum may 
otherwise go unused.
    Despite recent efforts to repurpose the AWS-3 band, the Federal 
Government remains the holder of the largest amount of spectrum. While 
Federal users must retain access to resources necessary to complete 
their missions, Congress should consider policies to support 
reallocation where appropriate. A good example is the Wireless 
Innovation Act (S. 1618), which supports identifying Federal spectrum 
that can be reallocated for mobile broadband use and encourages 
deployment on Federal buildings and lands. Another example, the Federal 
Incentive Auction Act (S. 887) provides monetary incentives for Federal 
users to reallocate spectrum for commercial use in exchange for a 
percentage of the auction proceeds. These legislative efforts provide 
opportunistic uses of spectrum which encourage more efficient use. As 
FCC Commissioner Rosenworcel has articulated, carrots to incentivize 
spectral efficiency among Federal users allow the mobile broadband 
industry and the Federal Government to cooperate to identify 
opportunities to maximize use of otherwise under-utilized spectrum.
    Increasing demand for spectrum, and the limited amount of new 
spectrum resources available for license, requires policies that 
consider opportunities that unlicensed spectrum offer for innovators, 
entrepreneurs and existing mobile operators to maximize spectral 
resources. Unlicensed spectrum, as a compliment to licensed spectrum, 
helps to support enhanced services and competition. In identifying 
future spectrum bands for potential reallocation for commercial use, 
higher frequency spectrum can support on-the-spot capacity solutions, 
while continued work to identify lower frequency spectrum to support 
wide area coverage, particularly in rural areas. Progress in 
identifying spectrum for unlicensed use in the 3.5 GHz and 5 GHz bands 
provides a good example of ways to support new technologies while 
enhancing licensed carrier services. Stakeholders prefer exclusive use 
of licensed spectrum, yet facing today's realities all options should 
be on the table. Access to new frequencies and technologies, with open 
ecosystems that support the availability of devices in all spectrum 
bands, for all carriers, should be encouraged.
Role of Technology
    Spectrum availability, as vital as it is, requires sound standards-
setting to support both competition and meet growing wireless demands. 
Policymakers should continue to play a role as standards are developed 
to ensure all Americans benefit from new innovations and technology 
advancements. Establishing core competitive principles for emerging 
technology while avoiding unnecessary regulation will help bridge the 
digital divide between urban and rural areas. New technologies like 
LAA, LTE-U, smart antennas, dynamic spectrum access and cognitive radio 
may help alleviate network congestion and provide carriers with new 
avenues to offer faster, more efficient service to otherwise unserved 
areas. This is a particular focus of CCA members that do not have the 
same spectrum portfolios of their largest rivals. Ensuring the 
capabilities of future networks now will help us to meet the needs of 
urban and rural consumers alike and in turn will spur development of 5G 
services. The United States has led the world in 4G deployment. The 
same should be true of 5G deployment, and these policies will foster 
that leadership. Policymakers should keenly emphasize that new 
technologies and services are available nationwide to maximize spectrum 
utilization and make sure that rural areas are not left behind as new 
services evolve.
    While spectrum is the invisible infrastructure over which mobile 
services ride, carriers also depend on towers and other physical 
network components. Wireless broadband is necessarily dependent on 
costly infrastructure to provide services. Competitive carriers depend 
on reasonable facilities siting policies to deploy critical wireless 
services. Many competitive carriers serve the most rural areas of the 
United States and often face challenges obtaining prompt collocation or 
tower construction permits or rights of way for siting on Federal 
lands. Efforts to streamline the siting process and remove unnecessary 
red tape encourage faster deployment of mobile broadband infrastructure 
and services to consumers.
    The Bureau of Land Management (BLM), National Parks Service (NPS), 
United States Forest Service (USFS) Fish and Wildlife Service (FWS) and 
other Federal agencies own, manage, or administer significant portions 
of land, particularly in western and rural states. Competitive carriers 
seeking to deploy mobile broadband in these areas face unreasonable 
delays and other impediments to constructing and siting on these lands. 
Barriers to deployment often raise a carrier's cost through onerous 
administrative, legal and regulatory requirements. Consolidating 
Federal requirements, and trimming excessive or duplicative rules when 
multiple Federal agencies are involved in approving the same 
infrastructure project would help to streamline an otherwise laborious 
process. For example, creating an application clearing house to 
coordinate all Federal permitting required for a project would reduce 
delays and utilize limited resources more efficiently.
    Similarly, carriers depend on timely responses from state and local 
governments on siting applications. Shot clocks and other defined 
timeframes and parameters allow for efficient application consideration 
without creating unnecessary delays or obstacles for carriers to expand 
their facilities. The Supreme Court's ruling in T-Mobile South LLC v 
City of Roswell, which requires local and state governments to act 
expeditiously and clearly state their objections to a tower siting 
application, is a step in the right direction. Should further disputes 
regarding state and local authority continue to arise, we encourage 
Congress and the FCC to provide additional guidance to provide clear 
rules of the road for tower siting.
Certainty Regarding Other Inputs to Wireless Broadband Supports 
    While today's hearing is focused on spectral inputs for continued 
growth of mobile broadband services, CCA would be remiss not to mention 
the need for certainty regarding access to other inputs and incentives. 
For example, carriers, non-nationwide carriers in particular, require 
access to reasonable data roaming, access to devices, and certainty 
regarding the Universal Service Fund (USF) to continue to invest to 
meet growing demands. Congress created USF to provide reasonably 
comparable services to urban and rural consumer alike, requiring that 
support be predictable and sufficient. These policies have enabled 
years of expansion of mobile wireless services in rural America. USF 
injects a healthy dose of funding to supplement and compliment 
competitive carriers' private sector investments to expand mobile 
broadband service in rural and high cost areas that are otherwise 
uneconomical to serve. Any uncertainty regarding existing and future 
support has the potential to delay or prevent deployment of broadband 
    Uncertainty regarding existing and future support has the chilling 
effect of stalling deployments and forcing carriers to make difficult 
decisions regarding existing and planned mobile broadband services. In 
addition, this uncertainty has the potential to strand existing 
investments, leaving behind a legacy of rusty towers and reduced 
services. Congress must continue its oversight to ensure that USF 
support is sufficient and predictable to support wireless service 
throughout rural America.
    Similarly, uncertainty regarding the availability of devices to 
utilize new spectrum allocations or access to backhaul and roaming to 
provide services limits smaller carriers' ability to invest and provide 
services in rural and underserved areas. As the legislative process 
continues, CCA encourages the Committee to focus on providing carriers 
of all sizes with access to all inputs necessary to meet continually 
growing demands.
    In conclusion, CCA applauds and supports committee efforts to 
provide additional spectrum resources for mobile broadband and welcomes 
the opportunity to help craft a proactive approach to potential 
solutions. Enacting policies that provide competitive carriers with 
certainty while eliminating or streamlining burdensome procedures and 
creating innovative solutions to access finite spectrum resources will 
encourage investment and expansion in mobile broadband infrastructure 
and foster continued innovation and economic growth. Consumers across 
the United States, especially in rural areas, will benefit from 
Congress's continued focus on policies that support competition and 
investment in mobile broadband. CCA appreciates the opportunity to 
contribute to the record for today's hearing, and looks forward to 
continued work with the Committee, its Members, and the FCC on these 
important issues to increase mobile broadband services and support 
competition in the industry. Please do not hesitate to contact me with 
any questions.
                                           Steven K. Berry,
                                                 President and CEO.
     Response to Written Questions Submitted by Hon. John Thune to 
                        Hon. Jessica Rosenworcel
    Question 1. Commissioner Rosenworcel, you have emphasized the 
importance of small-scale policy experiments to examine the impacts of 
new policies and laws before they are put in place on the large scale. 
How can policymakers use small-scale experiments to develop innovative 
approaches to spectrum policy?
    Answer. Our economy now depends on a potent mix of mobility, 
increased broadband capacity, and the decreased cost of cloud 
computing, allowing us to send information anytime and anywhere. Up 
ahead lies the Internet of Things, where billions of machines with 
sensors seamlessly communicate with one another, turning today's steady 
stream of data into a torrential flow.
    While this new digital landscape is dynamic, the traditional 
regulatory process is not. It can often be risk averse to new ideas. 
But we can overcome this risk aversion if we experiment on a smaller 
scale, with ``sandbox'' projects, before implementing ideas on a 
national scale.
    The Commission has already begun to embrace this kind of sandbox 
thinking. We have tested broadcast channel sharing on towers serving 
television stations in Los Angeles. We have towns in Alabama and 
Florida that are our test cases for migration to all IP networks. We 
also have created an experimental spectrum licensing process to help 
researchers and developers tinker with our airwaves--a process that has 
already led to systems that support rocket launches, patient-monitoring 
equipment, and robotic technology for the armed forces.
    I believe we also can use this approach for developing innovative 
ideas in spectrum policy, including ideas that facilitate the 
reallocation of airwaves from Federal to commercial use. To do this, we 
could identify specific spectrum bands used by Federal authorities that 
are ripe for repurposing through auction. We could test different ways 
of expediting reallocation with these bands--by providing financial 
incentives for speedy Federal relocation, by encouraging other Federal 
authorities with spectrum to make space for those being relocated 
through benefits in the Spectrum Relocation Fund, or by exempting some 
Federal users from the Miscellaneous Receipts Act and allowing the 
auction of spectrum not yet fully cleared for commercial use.

    Question 2. Commissioner Rosenworcel, you have proposed auctioning 
to commercial entities the right to negotiate with a particular Federal 
agency for access to its spectrum assignment. Please explain how your 
proposal would operate as a practical matter. Would a reasonable 
alternative be to allow agencies to directly lease their excess 
spectrum to the private sector?
    Answer. We need a Federal spectrum policy that is based on carrots, 
not sticks. In other words, we need to develop a system of incentives 
to help free more Federal spectrum for commercial use. If we do this 
right, we can reward Federal authorities for efficient use of spectrum 
in a manner where they see gain in commercial reallocation, rather than 
just loss.
    We can do this by designing auctions of imperfect spectrum rights. 
These auctions would involve spectrum bands that have not fully been 
cleared of Federal users. However, we would provide the winning bidder 
in such auctions with the right to negotiate directly with remaining 
Federal users to help meet their wireless needs. This option would 
require adjusting the Miscellaneous Receipts Act. This law presently 
prevents negotiations between Federal agencies and winning bidders. It 
also prevents provision of service or equipment from winning bidders to 
remaining Federal users. But if we made changes to this law, we would 
be able to speed repurposing of our Nation's airwaves and provide 
commercial carriers with incentives to help update Federal systems that 
are past their prime. To do this right, however, we would have to have 
sufficient information about remaining Federal uses at the time of 
auction. This information would be necessary for bidders to assess the 
viability of their participation in the auction, including the 
likelihood that they would be able to address existing Federal needs 
and also make commercial use out of the band.
    To some extent, the same kind of repurposing could be accomplished 
with allowing agencies to directly lease their excess spectrum to the 
private sector. However, the leasing approach has some problems that 
need to be considered. Arguably, this approach would deepen the 
property right of Federal users in spectrum they presently hold. It 
also would create challenging incentives, encouraging Federal 
authorities to hold onto their excess airwaves for leasing instead of 
working to help clear them for auction. In addition, commercial 
entities may be better positioned to develop new efficient solutions 
for Federal users through an exemption in the Miscellaneous Receipts 
Act, than Federal authorities themselves, who may have an institutional 
bias toward providing service through more limited changes to existing 
   Response to Written Question Submitted by Hon. Roger F. Wicker to 
                        Hon. Jessica Rosenworcel
    Question. During your testimony, you noted the need to make sure 
that rural America is not left behind in the wireless revolution and 
that smaller carriers are more likely to deploy in rural communities. 
The Universal Service Fund (USF) plays a critical role in supporting 
existing and planned wireless services in these areas. To this point, 
you stated that ``we are going to enhance the Mobility Fund to ensure 
we support small wireless providers serving in rural areas.'' Congress 
created USF to provide reasonably comparable services to urban and 
rural consumers alike, and required that support be predictable and 
sufficient. Uncertainty regarding existing and future support can have 
the chilling effect of stalling deployments and potential reductions in 
wireless service.
    What steps is the Commission taking to ``enhance'' the Mobility 
Fund, and will ongoing support through Phase II of the Mobility Fund be 
sufficient to support existing services in rural areas as well as 
continue to expand mobile broadband in rural and high-cost areas?
    Answer. The Commission first developed the Mobility Fund in the 
Universal Service Fund and Intercarrier Compensation Transformation 
Order, which was adopted in 2011. In doing so, the agency sought to 
support ``the universal availability of mobile networks capable of 
delivering mobile broadband and voice service in areas where Americans 
live, work, or travel.'' The development of this fund has proceeded in 
phases--in an effort to ensure that the limited dollars available are 
deployed in rural areas that truly lack service and are most at risk of 
falling behind.
    The Mobility Fund kicked off with Phase I, which offered roughly 
$300 million in a one-time reverse auction to providers serving rural 
areas where updated wireless service was not available. This auction 
concluded three years ago, in September 2012.
    It was followed in February 2014 by another reverse auction 
specifically designed to provide support for updated wireless service 
on tribal lands. This Tribal Mobility Phase I auction awarded 
approximately $50 million in support for mobile voice and broadband 
service offered by providers serving tribal communities.
    These efforts were followed by a rulemaking in June of 2014 seeking 
comment on Phase II of the Mobility Fund. This rulemaking made clear 
that our purpose was to ``target. . .Mobility Fund Phase II on 
preserving and extending service in'' rural areas ``that will not be 
served by the market without governmental support.'' In particular, the 
rulemaking sought comment on how to ensure that our Mobility Fund Phase 
II is devoted to ``preserving service that otherwise would not exist 
and expanding access to 4G LTE in those areas that the market will not 
serve.'' I think this approach is a good one. With this next step in 
our Mobility Fund efforts, we should apply laser-like focus on areas 
that lack service and areas where updated service requires additional 
support. I believe the funds we have available will be sufficient to 
make this happen and the Commission should move forward to complete 
Phase II of our Mobility Fund efforts.
    Response to Written Questions Submitted by Hon. Steve Daines to 
                        Hon. Jessica Rosenworcel
    Question 1. Given that all of the spectrum that is best suited for 
mobility is occupied, much of it by Federal users, what can we do to 
ensure that agencies are using spectrum efficiently and/or reallocate 
some of the Federal spectrum for mobile broadband use?
    Answer. Federal authorities have substantial spectrum assignments. 
They use their airwaves for everything from protecting our borders to 
keeping planes in the skies to fighting forest fires. These are 
critical tasks that we should support. But if we want to continue to 
grow our wireless economy, we need to reassess just how much of our 
airwaves are dedicated to these tasks and consider if there are ways to 
accomplish the same objectives using scarce spectrum resources more 
    I believe the best way to do this is to develop a Federal spectrum 
policy based on carrots, not sticks. In other words, we need to find 
ways to reward Federal authorities for efficient use of their spectrum 
so that they see benefit in commercial reallocation--rather than just 
    To do this, we need a series of incentives to serve as the catalyst 
for freeing more spectrum for commercial markets. We could begin with a 
valuation of all spectrum used by Federal authorities, ideally 
developed by the Office of Management and Budget. This effort would 
help us develop consistent ways to reward efficiency, identify 
incentives for reallocation for commercial use, and better understand 
the opportunity cost of continued Federal use.
    We also could adopt a system of incentives that are straightforward 
and financial--under which a certain portion of the revenue from 
commercial auction of spectrum previously held by Federal authorities 
would be reserved for the Federal entity releasing this spectrum. This 
is a complex undertaking, because agencies do not operate in a market 
environment and are subject to an annual budget allocation. 
Nonetheless, we could explore such incentives with discrete spectrum 
bands or agencies.
    In addition, we should consider auctions of imperfect spectrum 
rights, which could provide the winning bidder with the opportunity to 
negotiate directly with the existing Federal authority calling those 
airwaves home. This option would require adjusting some laws, like the 
Miscellaneous Receipts Act. This law prevents negotiations between 
Federal agencies and winning bidders in wireless auctions. But if 
changes are made, the Federal Government could auction spectrum that is 
not fully cleared and allow winning bidders to negotiate directly with 
Federal authorities remaining in the band to help meet their wireless 
needs. This could speed repurposing of our Nation's airwaves and also 
help provide commercial carriers with incentives to help update Federal 
systems that are past their prime.
    Finally, we should look at the Spectrum Relocation Fund, which was 
created in the Commercial Spectrum Enhancement Act. Today this fund 
assists Federal authorities with relocating their wireless functions 
when their spectrum is being repurposed for commercial use. But this 
fund also could provide incentives for more government spectrum 
sharing, if changes were made to reward Federal users when they share 
their airwaves with agencies that are being relocated.

    Question 2. While many parts of the country are gearing up for 5G, 
there are still parts of the U.S. where it is not possible to make a 
phone call wirelessly. Are there things we can do to encourage build-
out and streamline infrastructure deployment in rural areas, and 
particularly tribal areas?
    Answer. Yes. We can and should take steps to encourage 
infrastructure deployment in rural areas, including on tribal lands. 
This is not only the right thing to do--it is consistent with our duty 
to promote universal service under the law.
    To encourage wireless deployment in rural areas, the Commission has 
taken a number of steps. These include recently revising our auction 
policies to include a bidding credit for rural service providers so 
that they can compete more effectively for spectrum in the remote 
communities where they serve. The Commission also has a Tribal Land 
Bidding Credit program to facilitate service on underserved tribal 
lands. In addition, for the upcoming 600 MHz auction, the Commission 
will offer licenses in Partial Economic Areas, which are smaller than 
traditional Economic Areas, and facilitate broader participation by 
small and rural service providers.
    To encourage infrastructure deployment in rural areas, on October 
17, 2014, the Commission adopted a Report and Order updating its 
infrastructure policies. Among other things, the Commission exempted 
certain wireless deployments on utility structures from review under 
the National Historic Preservation Act. This approach will reduce 
bureaucratic hurdles that can slow infrastructure deployment, 
especially in rural areas with limited population.
    Going forward, there are additional actions we should consider. For 
instance, I think we should explore incentives for wireless carriers to 
lease unused spectrum to rural or smaller carriers in order to expand 
wireless coverage in rural communities. I know this approach is under 
consideration in the proposed Rural Spectrum Accessibility Act. I also 
believe the Commission should work closely with the Advisory Council on 
Historic Preservation, tribes, and other stakeholders to develop a 
``program alternative'' which could expedite deployment of small cell 
infrastructure under the National Historic Preservation Act. This would 
help facilitate the deployment of this infrastructure nationwide, but 
could be especially helpful in rural areas.

    Question 3. What steps is the FCC taking to encourage wireless 
deployment on tribal lands?
    Answer. Wireless deployment on tribal lands lags behind deployment 
elsewhere and puts residents at a clear disadvantage in an economy that 
is increasingly dependent on mobile connections. As a result, a variety 
of Commission polices have been put in place to help expedite 
deployment and improve wireless service in tribal communities.
    For nearly a decade and a half, the Commission has had a Tribal 
Land Bidding Credit program, which provides incentives for wireless 
carriers participating in spectrum auctions to offer service on tribal 
lands. Today, this credit is available to any entity that secures a 
license at auction and deploys service to federally-recognized tribal 
areas where the wireline penetration rate is 85 percent or less. In 
order to ensure that tribal lands receive timely service, deployment 
covering 75 percent of the qualified tribal lands is required within 
three years.
    More recently, in February 2014, the Commission concluded its 
Tribal Mobility Fund Phase I reverse auction, known as Auction 902. 
This auction for universal service support offered up to $50 million in 
one-time funding to accelerate service on tribal lands and enhance 
broadband availability. To encourage tribal participation, the 
Commission offered a 25 percent bidding credit for tribally-owned 
entities participating in the reverse auction. It is my understanding 
that two of the winning bidders from this auction plan to provide 
service on tribal lands in Montana. As the agency continues to update 
its universal service support policies, we will need to study the 
impact of this auction--in Montana and elsewhere--and identify what 
further efforts are necessary to facilitate greater deployment on 
tribal lands.
    In addition, the Commission has an outstanding Notice of Proposed 
Rulemaking seeking comment on how to promote greater use of spectrum 
over tribal lands--in order to improve the availability of wireless 
service to unserved and underserved tribal communities.
    Response to Written Question Submitted by Hon. Amy Klobuchar to 
                        Hon. Jessica Rosenworcel
    Question. The recent AWS-3 spectrum auction raised a record $45 
billion. However, some of the big winners were the largest wireless 
carriers. Last Congress I held a hearing in the Antitrust Subcommittee 
about competition in the wireless market and I believe it is important 
to make sure that auction rules do not create barriers to entry for 
other wireless carriers. Additionally, I have worked with Senator 
Fischer on making sure that rural carriers can also get access to 
already licensed spectrum in the secondary markets by introducing the 
Rural Wireless Spectrum Act to incentivize companies with spectrum 
licenses to partner with small rural carriers to provide service in 
rural America.
    Commissioner Rosenworcel, do you agree that we need to protect 
competition in auctions as well as use additional tools to boost 
wireless coverage in rural areas through the secondary market?
    Answer. Yes. I agree that our spectrum auctions must remain 
competitive and that we must take steps to improve wireless coverage in 
rural areas.
    I believe that fostering competition in our spectrum auctions is 
not just a good idea--it's required under the law. In Section 309 of 
the Communications Act, Congress charged the Commission with 
``promoting economic opportunity and competition'' when developing the 
bidding methodologies that govern the auctions of our airwaves. To this 
end, the Commission recently revised its competitive bidding rules in 
order to provide more opportunities to participate in our auctions and 
win spectrum licenses. As part of this effort, for the first time ever, 
the Commission adopted a bidding credit for rural service providers so 
that they can better compete for spectrum in the remote communities 
that they serve. In addition, for the upcoming 600 MHz auction, the 
Commission has established a market-based spectrum reserve that will 
provide competitive carriers and rural service providers with greater 
access to valuable low-band spectrum.
    I am optimistic that these recent revisions to our competitive 
bidding rules will both enhance competition and expand coverage in 
rural areas. But I recognize that more can be done, especially with 
respect to deployment in rural areas through use of the secondary 
market. That is why I believe we should explore developing incentives 
for wireless carriers to lease unused spectrum to rural or smaller 
carriers in order to expand wireless coverage in rural communities. 
This is the fundamental idea behind the Rural Spectrum Accessibility 
Act--and a concept I support.
    Response to Written Questions Submitted by Hon. Brian Schatz to 
                        Hon. Jessica Rosenworcel
    Question 1. Commissioner Rosenworcel, as you may recall, Hawaii 
transitioned to digital television a month earlier than the rest of the 
United States to accommodate the unique nature of the state and to 
ensure a smooth transition. As we prepare for the upcoming incentive 
auction, likewise, we want to be certain that the needs and economic 
realities of non-contiguous states are taken into account to make sure 
this transition is successful as the digital television transition.
    The law specifically created a $1.75 billion fund to compensate any 
broadcasters for expenses associated with repacking. Do you expect that 
this fund will be sufficient for the affected broadcasters to repack?
    Answer. Yes. At this point in the auction process, I believe that 
the $1.75 billion fund established by Congress will be sufficient to 
cover the reasonable costs and expenses associated with the relocation 
of stations following the incentive auction. I recognize, however, that 
there are estimates from the broadcasting community that suggest that 
the cost of relocation may be slightly greater than the amount in 
existing law. If in the future the current fund proves insufficient, 
Congress may wish to take steps to provide additional support.

    Question 2. The law also provides a 39 month window for the 
transition. Is the FCC confident that the equipment and personnel 
required to repack the affected stations will be available within the 
specified timeframe?
    Answer. Yes. At this point in the auction process, I believe that 
the 39-month period for the transition will be adequate for the 
repacking process. The Commission has already adopted policies designed 
to facilitate a smooth transition for broadcasters and their viewers 
during this period. For instance, in the Incentive Auction Report and 
Order, the Commission determined that stations required to repack 
following the auction will receive a construction period tailored to 
their specific circumstances. Stations also will have the opportunity 
to request a one-time, six-month extension of construction permits if 
they experience delays or unexpected challenges. In addition, the 
Commission will work with stations to help mitigate any service 
disruptions if construction of post-auction facilities is not completed 
prior to the 39-month deadline for all stations to cease operating on 
their pre-auction channels. I believe these policies will support an 
orderly transition during the 39-month period. But I also recognize 
that unexpected difficulties may arise, including pressures on the 
capacities of tower and transmission companies as well as regional 
weather events. I believe that the Commission must work with Congress 
to ensure that such difficulties do not jeopardize a smooth transition 
or harm viewer access to free, over-the-air television.
     Response to Written Questions Submitted by Hon. John Thune to 
                      Hon. Meredith Attwell Baker
    Question 1. Ms. Baker, the Spectrum Act created the Technical Panel 
to review agency spectrum relocation plans. What has been the 
experience of the wireless industry with the Technical Panel? In what 
ways might the panel be improved to address our Nation's spectrum needs 
going forward?
    Answer. Industry's experience with the Technical Panel, which is 
comprised of three agencies, the FCC, NTIA and OMB, has been positive 
and, in general, we believe anything that enhances communication and 
collaboration between the government and industry is a positive. In the 
AWS-3 process, carriers and vendors alike participated in the CSMAC 
working groups to collaborate with agency stakeholders on ways to gain 
spectrum access on a system-by-system basis and this interaction proved 
to be very helpful in understanding each side's operational 
requirements and ultimately paved the way to developing each agency's 
transition plan.
    As far as improving upon this concept, it likely would be 
worthwhile to have a Technical Panel post-auction so that it can review 
each agency's transition plan throughout the implementation process. 
This oversight could include measuring agency progress toward certain 
milestones, which in turn could be tied to payment to agencies as a way 
to incentivize quicker transitioning of the spectrum for commercial 

    Question 2. Ms. Baker, you have previously argued that continued 
growth of wireless broadband is based on availability of exclusive use 
licensed spectrum. Please share your views on whether exclusive use is 
a viable model for the future and the appropriate role for sharing 
arrangements and technologies.
    Answer. Exclusive use spectrum has played a central role in the 
U.S.'s global lead in 4G technologies. Exclusive use auctions in 2006 
and 2008 provided spectrum that is the backbone of much of our national 
4G deployment. As I noted in my written testimony, the backbone of our 
national spectrum policy should remain licensed and exclusive use 
spectrum for the foreseeable future. Exclusive use spectrum is critical 
to carriers' planning; without it, they would be unwilling to make the 
enormous capital investments to build network capacity--investments 
that drive technology, create jobs and provide services to businesses 
and consumers. Of course, as the wireless industry evaluates spectrum 
that may be made available for exclusive licensed use in the future, we 
recognize that temporal and geographic sharing may be required, 
particularly as incumbent licensees relocate to other bands, or 
otherwise vacate their spectrum. The AWS-3 band provides a good example 
of how commercial users will work with Federal licensees to share 
spectrum while the relocation process occurs. This type of sharing, 
which always has been part of our national approach, can be an 
effective bridge to exclusive licensed use. Other types of database-
based sharing may be appropriate in the future. For example, the FCC 
continues to refine the rules that will govern shared access to the 3.5 
GHz band for government users, licensed entities and unlicensed 
operations. However, these forms of flexible sharing, driven by 
database access and other technologies that have not been fully tested, 
cannot currently satisfy our spectrum needs and consumer demand. While 
we continue to support the FCC's efforts to evaluate potential sharing 
arrangements and technologies, they are not yet mature enough to meet 
our Nation's critical spectrum requirements.

    Question 3. Ms. Baker, are reforms needed to the Spectrum 
Relocation Fund to meet Federal agencies needs and facilitate 
reallocation of Federal spectrum? Please provide specific examples of 
changes that you believe are required.
    Answer. The Spectrum Relocation Fund has been an important and 
positive development, and further enhancements to the Fund could 
facilitate more efficient and effective spectrum use. CTIA strongly 
supports changes to how auction proceeds that are deposited into the 
Spectrum Relocation Fund are distributed, to provide Federal entities 
with incentives to use spectrum more efficiently and potentially make 
additional spectrum available for auction to commercial users. Today, 
money from the Spectrum Relocation Fund only compensates Federal users 
whose spectrum is being immediately auctioned. A portion of auction 
proceeds should be available to Federal agencies that wish to conduct 
research and development activities, even if their spectrum has not 
been designated for auction. Of course, distribution of those research 
and development funds cannot be unchecked; Federal agencies should be 
required to show specific plans and how they may lead to the re-
allocation and auction of some or all of the spectrum they currently 
use. Another way the Spectrum Relocation Fund can be reformed is to 
provide an incentive to Federal entities that vacate their current 
spectrum when it is auctioned, instead of being relocated to 
alternative spectrum. Today, Spectrum Relocation Fund money is only 
available to cover relocation costs. However, if a Federal agency 
vacates the spectrum completely--and uses a commercial system or shares 
a system with other Federal users--it should recognize a benefit for 
doing so. Finally, because the Spectrum Relocation Fund only covers 
spectrum that is auctioned, there is no path to compensate Federal 
entities whose spectrum becomes available for unlicensed operations. 
While CTIA believes that exclusive use licensed spectrum should 
continue to be the focus of U.S. spectrum policy, if Federal spectrum 
becomes available for unlicensed use, those incumbent users must also 
be compensated.

    Question 4. Ms. Baker, what actions can Congress or the Federal 
Communications Commission take to promote United States leadership in 
    Answer. As I noted in my testimony, a combination of sound spectrum 
policy, a light-touch approach to regulation, and pro-investment tax 
policy, have propelled the U.S. to its current status as the world's 
leader in 4G services. And it is a continued commitment to that course 
that will help us retain our lead as we move toward 5G. That requires 
filling the spectrum pipeline to ensure that America's wireless 
providers can meet user demand for mobile bandwidth with a mix of low-
band, mid-band, and high-band spectrum. It also requires the FCC to 
exercise regulatory restraint and avoid the imposition of regulations 
that raise cost and slow innovation and infrastructure investment. And 
finally, it requires the adoption of both regulatory and tax policies 
that facilitate the deployment of advanced wireless infrastructure. 
Each of these elements is important and collectively they can work to 
help us maintain America's competitive edge.
    Response to Written Question Submitted by Hon. Kelly Ayotte to 
                      Hon. Meredith Attwell Baker
    Question. In your testimony, you noted that the FCC's 2010 spectrum 
demand study was quite accurate in estimating the incredible growth of 
mobile data traffic. The technological advancements of the Internet of 
Things has no doubt assisted this skyrocketing usage. Earlier this 
year, I coauthored a resolution with my colleagues--Senators Fischer, 
Schatz, and Booker--regarding the significance of the Internet of 
Things, which unanimously passed the Senate.
    The Internet of Things incorporates innovative devices, services, 
and applications that already are and will continue to influence all of 
our lives. However, none of this is possible without a robust mobile 
network. For our role in creating sound spectrum policy, what is the 
most important action Congress can take to ensure the mobile network 
has the capacity to support the full potential of the Internet of 
    Answer. CTIA is pleased that the Senate has recognized the 
significance of the developing Internet of Things (IoT), which is a 
means to wirelessly connect everyday objects to the Internet and to 
each other, allowing them to send and receive data. This exciting 
advance depends on a robust mobile infrastructure. And, the 
technological advancements brought about by the increasing popularity 
and continued growth of IoT has contributed to the skyrocketing demand 
for innovation and faster speeds. Support for IoT will require greater 
amounts of spectrum; ideally a continual mix of licensed and 
unlicensed, depending on the intended use cases. For instance, given 
the need for heightened security and reliability, health information, 
medical monitoring, financial records and connected vehicles, for 
instance, would be best suited to a licensed spectrum platform. When it 
comes to connected home devices and beacons, an unlicensed platform may 
be appropriate.
    To best ensure that American consumers may fully benefit from the 
myriad benefits of IoT, I would encourage the Senate to undertake 
comprehensive action to ensure an ongoing, plentiful supply of licensed 
and unlicensed spectrum. CTIA supports the broad availability of free, 
unlicensed spectrum as long as uses of such spectrum do not interfere 
with licensed users or reduce the availability and usability of 
licensed spectrum.
    Response to Written Questions Submitted by Hon. Ron Johnson to 
                      Hon. Meredith Attwell Baker
    Question 1. The AWS 3 auction was a huge success for taxpayers, 
government, and industry. What can Congress do to ensure that future 
auctions are as successful, if not more successful?
    Answer. Consumer appreciation for the convenience and ease brought 
by the mobile connected life has led to skyrocketing demand for ever 
more substantial services at ever faster speeds. By 2019, wireless 
networks will face an estimated six-fold increase in data traffic over 
record 2014 levels. While carriers continue to upgrade their networks 
and deploy advanced services to more areas, infrastructure and 
technology alone cannot satisfy consumer demand. To keep up, our Nation 
will need more than 350 megahertz of new licensed spectrum by the end 
of the decade.
    Congress can help ensure that future spectrum auctions are 
successful in several ways. First, Congress should prioritize freeing 
up clear, unencumbered licensed spectrum for commercial mobile uses. 
Unhindered access to clear spectrum is the best way to provide the 
reliable and robust services that consumers have come to expect.
    Next, Congress should emphasize the importance of freeing up 
uniform spectrum bands across the globe rather than in individual 
countries, known as ``internationally harmonized'' spectrum bands. 
Allocating harmonized spectrum minimizes radio interference and 
facilitates international roaming. Further, harmonization reduces the 
cost of mobile devices for consumers because the economies of scale 
encourage manufacture and delivery of more products and services to 
more people and allows them to use their mobile devices for less cost 
and with greater ease when travelling.
    In addition, Congress should take steps to ensure that auction 
winning bidders have access to their spectrum as quickly as possible 
post-auction. Condoning or appearing to condone delay in the post-
auction transition process would impede broad auction participation, 
hinder competition and delay investment. On the other hand, improving 
the speed at which new licensees may access their spectrum would 
incentivize more rapid deployment and foster greater broadband 
    Finally, Congress should require the FCC to develop and implement 
straightforward auction procedures, as well as understandable and 
predictable licensing rules for new spectrum bands. Regulations must be 
minimal and interference rules must be clear up front. The FCC should 
not condition or suggest technologies or uses. The benefits of flexible 
use have become even more apparent over time and thus must remain the 
default approach. Similarly, the AWS-3 auction illustrated that paired 
spectrum blocks are preferable to unpaired given that bidders in that 
auction won unpaired blocks for a fraction of the cost of paired 

    Question 2. What can Congress do to ensure that the necessary 
infrastructure is in place to handle the ever-expanding mobile 
broadband service offerings and increased data traffic?
    Answer. The FCC's 2009 ``shot-clock'' order, which was upheld by 
the U.S. Supreme Court in City of Arlington, Texas, Et Al., v. Federal 
Communications Commission, Et Al. (2013), has significantly improved 
the process for siting wireless infrastructure on properties governed 
by the municipal zoning process. Similarly, the FCC's 2011 decision 
facilitating access to utility poles has improved the process for 
deploying small cell and distributed antenna system technologies. 
Unfortunately, the process does not work as well when a provider is 
attempting to site on property controlled by the Federal Government, 
which accounts for 28 percent of the landmass of the United States. 
This property is often adjacent to population centers or transportation 
corridors and is attractive for siting if approvals could be gained in 
a reasonable expeditious manner. While Congress made a good-faith 
effort to address this in Section 6409 of P.L. 112-96, and the 
President did so as well in Executive Order 13604--Improving 
Performance of Federal Permitting and Review of Infrastructure 
Projects, and Executive Order 13616--Accelerating Broadband 
Infrastructure Deployment, siting on Federal properties continues to 
take significantly longer than siting on properties governed by the 
municipal zoning process. To remedy this disparity, Congress should act 
to impose streamlined timeframes for review and approval of wireless 
infrastructure deployments on Federal property. Industry does not seek 
free access to these locations, and CTIA recognizes that there may be 
instances in which siting requests may not be granted, but enactment of 
procedural reforms should generally have the effect of promoting 
investment and wider access to services.
     Response to Written Question Submitted by Hon. Dean Heller to 
                      Hon. Meredith Attwell Baker
    Question. Ms. Baker, while it is clear that additional spectrum is 
necessary moving forward, I am also interested in another aspect of 
mobile broadband--infrastructure deployment, particularly on Federal 
lands considering Nevada is 85 percent Federal lands. What are some of 
the challenges industry faces in deploying wireless infrastructure on 
Federal lands? Do you have any recommendations for streamlining the 
    Answer. Compared to the process for siting infrastructure in a 
location governed by the municipal zoning process, which generally 
works well, the process for siting on Federal property is cumbersome 
and time consuming. While the municipal zoning process takes months, 
Federal processes often are measured in years. This is true across many 
agencies, and it is certainly the case at the Bureau of Land Management 
and the National Park Service, two of the largest landholders in 
Nevada. Leases to place new sites on lands regulated by BLM and NPS can 
take two or three years to negotiate and even simple lease renewals can 
take 12-18 months. In addition, even though BLM generally requires 
applicants to collocate antennas at existing sites (reducing the impact 
on subject lands), its processing of applications for ``joint use of 
facilities'' is time consuming. Both agencies should take steps to 
ensure that applications necessary for the deployment of wireless 
broadband service are processed without delay. As a first step in this 
process, BLM and NPS should consider adopting more standardized and 
streamlined procedures for processing wireless broadband siting 
    Response to Written Question Submitted by Hon. Cory Gardner to 
                      Hon. Meredith Attwell Baker
    Question. Ms. Baker, I recently introduced the Wireless Innovation 
Act with Senator Rubio and others. Our legislation would create a 
spectrum pipeline as well as lead to more transparency and efficiency 
among Federal spectrum users. Moving forward, is this the right kind of 
spectrum policy to enable industry to keep up with consumer demand and 
maintain its global leadership?
    Answer. It is, and CTIA greatly appreciates the work you and the 
other sponsors of S. 1618 have invested in crafting a blueprint to 
ensure that our wireless future is as bright as our present. The bill's 
comprehensive acknowledgement of and plan to address the need for both 
licensed and unlicensed spectrum, improved spectrum management, and a 
streamlined process for infrastructure deployment offers an outstanding 
starting point for the Committee's work to address the critical 
question of what comes after the broadcast incentive auction. 
Collectively with other bills pending before the Committee, such as the 
Federal Spectrum Incentive Act (S. 887), the Rural Spectrum 
Accessibility Act (S. 417), and the Wi-Fi Innovation Act (S. 424), 
there is clear bi-partisan interest in advancing America's wireless 
future. CTIA stands ready to work with you and all members of the 
Committee to advance comprehensive spectrum legislation at the earliest 
possible date.
    Response to Written Questions Submitted by Hon. Steve Daines to 
                      Hon. Meredith Attwell Baker
    Question 1. Ms. Baker: what steps is industry taking to increase 
deployment on tribal lands?
    Answer. By making available licensed spectrum on Tribal lands for 
commercial use, wireless carriers can provide the Tribes with access to 
a valuable resource that gives rise to a number of economic, social, 
and public safety benefits. But while broadband--and wireless broadband 
in particular--can be a boon for economic development, this is only 
true if broadband can be and is actually deployed. Steps can and should 
therefore be taken to streamline the siting process, while protecting 
Tribal interests and cultural resources. There are several steps the 
Bureau of Indian Affairs (``BIA'') should take to facilitate wireless 
broadband deployment on Tribal lands.
    First, BIA should conclude its pending proceeding to streamline the 
right of way approval process. On June 17, 2014, BIA sought comments on 
new rules that would streamline the process of obtaining BIA grants of 
rights-of-way on Indian lands. BIA recognized that the rules, which 
were last updated in 1980, were burdensome and outdated. CTIA supports 
the proposed changes to the extent they would expedite broadband 
deployment on Tribal lands. Parties filed comments in November 2014 and 
BIA held Tribal consultations during August 2014. Thus, this item is 
ripe for action and BIA should act expeditiously to conclude its 
    Second, BIA should consider ways to implement or encourage 
uniformity in the Tribal consultation process. For example, Tribes 
generally do not follow uniform timetables for responding to Tower 
Construction Notification System (``TCNS'') notifications. Tribes often 
enter the process late and then seek additional information regarding a 
project, which merely delays action. CTIA recommends that Tribes have a 
standardized window not only to respond to the initial TCNS 
notifications of a proposed facility, but also for responding to 
information subsequently provided by the applicant to the Tribe at the 
Tribe's request. The Tribal application process should also be 
standardized to the extent possible. That way, applicants are better 
able to provide necessary materials and information to Tribes at the 
outset. A more simplified application process also could simplify and 
streamline review. In addition, BIA should encourage use of a uniform 
fee schedule by federally recognized Tribes for reviewing and 
processing wireless applications. The fees should be cost-based and 
used to ensure that Tribes are not penalized for protecting their 
cultural rights.
    Finally, BIA should make clear that Tribal monitoring should be 
limited to situations of particular concern where the proposed site and 
excavation indicates that a potential impact on items or areas of 
Tribal significance is likely, based on clearly articulated factors. 
Monitoring can be an expensive process. In some cases, negotiation of 
these monitoring agreements, or the actions of monitors themselves, has 
delayed projects. For example, Tribal monitors have effectively shut 
down projects by refusing to oversee work until the financial terms of 
their employment are re-negotiated. BIA should work with Tribes to 
narrow the scope of antenna siting actions that require Tribal 
monitoring, subject at all times to the applicant's obligation to cease 
excavation and construction immediately upon the discovery of any items 
of cultural significance. In this way, the relevant Tribe(s) can be 
consulted during the most sensitive siting projects without impeding 
the deployment of valuable broadband services in areas where extensive 
Tribal monitoring is not needed.

    Question 2. Ms. Baker: In your testimony, you mention that other 
countries are working to leapfrog the U.S. in the race to 5G. Can you 
talk a bit more about what our European and Asian trading partners are 
doing in this area?
    Answer. From Western Europe to South Korea and Japan, our trading 
partners are taking steps to enhance their competitiveness and overtake 
the U.S. in wireless innovation. While the steps they are taking vary 
by country, these initiatives include the allocation of additional 
spectrum and investment in or support for research into 5G 
technologies. South Korea has pledged to facilitate the deployment of 
5G trials for the 2018 Winter Olympics, with full deployment 
anticipated by 2020. South Korea's initiative, which includes 1.6 
trillion Won in government support, is intended to include ultra-HD and 
hologram transmission. Japan has undertaken a similar initiative, aimed 
at delivering 5G by the time Japan hosts the 2020 Summer Olympics in 
Tokyo. While the U.S. is widely acknowledged as the world's current 
leader in wireless, these and other countries are working to claim that 
mantle, which is exactly why the United States needs a comprehensive 
plan to maintain our advantage in this key sector. That plan starts 
with a meaningful spectrum pipeline.

    Question 3. Ms. Baker, I think we can all agree that more spectrum 
is needed to keep up with consumer demand and maintain our lead 
globally. But once spectrum is made available, the industry then 
invests billions more to deploy wireless infrastructure. As you know, 
in a state like Montana we have unique challenges but I want all of 
Montanans to be able to enjoy all of the benefits that access to mobile 
broadband provides. Are there things we can do to streamline 
infrastructure deployment in rural areas, and particularly tribal 
    Answer. Deploying infrastructure in rural, less dense areas is a 
challenge for any networked industry, and wireless is no exception to 
that. While the substantial fixed costs associated with infrastructure 
deployment make such investments difficult, there certainly are things 
policymakers can do to help strengthen the business case for rural 
    First, Congress and the Executive Branch should take steps to 
streamline the process for deploying telecommunications 
infrastructure--wireless and wireline alike--on Federal properties. The 
Federal Government controls more than a quarter of the lands that make 
up the United States. In many cases, those Federal land holdings are 
adjacent to, or even surround, rural communities. Streamlining the 
process for deploying infrastructure on or across these parcels may 
improve access for all those who live or work near, or traverse, these 
areas. Such relief also should be afforded to energy providers, as 
communications networks rely on access to commercial power.
    Second, Congress should enact legislation to extend bonus 
depreciation, a proven tool to encourage businesses to make additional 
capital investments. High fixed-cost industries like wireless are very 
sensitive to tax policies and a failure to extend this provision, which 
lapsed at the end of 2014, would raise the cost of infrastructure 
deployment, the exact opposite of what is needed to encourage 
investment in hard-to-serve areas. Senator Roberts has proposed a bill, 
S. 1660, to extend bonus depreciation permanently and CTIA urges 
support for his legislation.
    And third, it is imperative that a meaningful Universal Service 
Mobility Fund component be available to facilitate wireless deployment. 
Universal Service Fund support should be disbursed in a technologically 
neutral manner to support services that consumers--including those who 
live in rural areas--actually want and need. Increasingly, those 
services include mobile broadband. While 4G LTE service is available to 
97 percent of the American public, there is more to be done. As 
industry works to fill in gaps in coverage, there are many providers 
that view the current Mobility Fund as inadequate to support the sort 
of ubiquitous deployment you seek for all Montanans.
    Individually and collectively, these policy initiatives would 
improve the case for continued, or new, investment in rural America.
    Finally, with specific respect to tribal areas, please see my 
answer to question 1.

    Question 4. Ms. Baker, in a Wall Street Journal opinion piece that 
ran the day before the hearing, two former FCC officials noted that 
U.S. investment in mobile infrastructure--nearly $32 billion last 
year--is more than 50 percent higher than in Europe. I'm sure that 
delta has a lot to do with why you say we lead in this space. Can you 
talk a bit about what conditions have led U.S. companies to invest at 
such a significantly faster rate than their counterparts in other parts 
of the world?
    Answer. There are a number of factors that have helped drive the 
disparity in investment that divides the U.S. from Europe. First, the 
U.S. was ``first to market'' with the spectrum that provides the 
foundation for 4G services, and the first to deploy LTE technologies. 
Second, until the FCC's recent Open Internet Order, the U.S. market had 
benefitted from a twenty-year, bi-partisan consensus that ``light 
touch'' regulation was the right approach to enabling both competition 
and investment. The Open Internet Order marks a departure from this 
course toward a European-style of regulation that has been proven to 
result in reduced investment. Third, the U.S. market has more 
competition than is the case in Europe. This vibrant competition among 
networks necessitates investment by providers hoping to attract and 
retain subscribers. Providers that fail to invest lose out in the 
marketplace. And finally, a decade-long, bi-partisan commitment to 
incenting investment through enactment and extension of bonus 
depreciation initiatives has helped fuel investment in U.S. network. In 
a high fixed-cost industry like wireless, the right tax policies 
matter. As I noted in response to question 1, Congress should extend 
this policy.
   Response to Written Questions Submitted by Hon. Amy Klobuchar to 
                       Hon. Meredith Atwell Baker
    Question 1. Earlier this month I was in rural Minnesota and heard 
some heart-breaking stories from families, communities and students 
about how they needed better broadband access. Many of them are looking 
to wireless broadband as an answer. One student wrote an essay to his 
local carrier about how he would hold his phone up by the window in 
order to try and download information he needed to do his homework. 
Another family talked about how when they got Wi-Fi they suddenly had 
young kids in their front yard using it. I've also heard from farmers 
who are looking to use new technology in their equipment but are 
limited based on coverage in the fields. This is one of the reasons I 
have introduced the Rural Spectrum Accessibility Act with Senator 
Fischer, to incentivize more rural spectrum deployment.
    Ms. Baker, right now population density drives where spectrum is 
built-out. What more can we do at a national level to reframe spectrum 
policy so that rural communities, businesses, and students are not left 
    Answer. Deploying infrastructure in rural, less dense areas is a 
challenge for any networked industry, and wireless is no exception to 
that. While the substantial fixed costs associated with infrastructure 
deployment make such investments difficult, there are things 
policymakers can do to help strengthen the business case for rural 
    First, Congress and the Executive Branch should take steps to 
streamline the process for deploying telecommunications 
infrastructure--wireless and wireline alike--on Federal properties. The 
Federal Government controls more than a quarter of the lands that make 
up the United States. In many cases, those Federal land holdings are 
adjacent to, or even surround, rural communities. Streamlining the 
process for deploying infrastructure on or across these parcels may 
improve access for all those who live or work near, or traverse, these 
areas. Such relief also should be afforded to energy providers, as 
communications networks rely on access to commercial power. With this 
in mind, CTIA greatly appreciates the support you expressed for these 
efforts in your July 2015 letter to the co-chairs of the Broadband 
Deployment on Federal Property Working Group.
    Second, Congress should consider initiatives such as the Rural 
Spectrum Accessibility Act (S. 417) you have sponsored with Senator 
Fischer. By providing an incentive for licensees to partition or 
disaggregate licenses to make unused spectrum available to small 
carriers or carriers serving rural areas, your bill could help bring 
increased investment to those communities. S. 417 could provide an 
important supplement to industry efforts such as Verizon's LTE in Rural 
America program, which has assisted smaller carriers in bringing the 
benefits of 4G LTE service to more than 2.4 million people.
    Third, Congress should enact legislation to extend bonus 
depreciation, a proven tool to encourage businesses to make additional 
capital investments. High fixed-cost industries like wireless are very 
sensitive to tax policies and a failure to extend this provision, which 
lapsed at the end of 2014, would raise the cost of infrastructure 
deployment, the exact opposite of what is needed to encourage 
investment in hard-to-serve areas. Senator Stabenow has proposed a 
bill, S. 1666, to extend bonus depreciation through 2016 and CTIA urges 
you to support her legislation.
    And finally, it is imperative that a meaningful Universal Service 
Mobility Fund component be available to facilitate wireless deployment. 
Universal Service Fund support should be disbursed in a technologically 
neutral manner to support services that consumers--including those who 
live in rural areas--actually want and need. Increasingly, those 
services include mobile broadband. While 4G LTE service is available to 
97 percent of the American public, there is more to be done. As we work 
to fill in gaps in coverage, there are many providers that view the 
current Mobility Fund as inadequate to support the sort of ubiquitous 
deployment you seek and your constituents deserve.
    Individually and collectively, these policy initiatives would 
improve the case for continued, or new, investment in rural America.

    Question 2. I've continued to work on issues to promote broadband 
investment and deployment. Consumers are demanding increasing speeds 
and service levels from both wireline and wireless providers. However, 
deployment can often be hampered by slow and redundant permitting 
processes, particularly when it comes to placing infrastructure on 
Federal lands. That is why I worked with the Administration to advance 
the concept of ``Dig Once'' at the Department of Transportation. 
Additionally, I sent a letter with Senator McCaskill calling on the 
Broadband Deployment on Federal Property Working Group to take action 
and streamline permitting and siting processes as well as improve 
consistency across Federal agencies.
    Ms. Baker, how does the lack of consistency and the resulting 
uncertainty affect your member companies' ability to deploy wireless 
broadband to more rural areas? What else needs to be done to improve 
infrastructure deployment across the country?
    Answer. CTIA provided extensive input on this very subject when we 
responded to the Broadband Opportunity Council's Request for Comment. 
See http://www.ntia.doc.gov/files/ntia/ctia-
the_wireless_association_boc.pdf. In particular, substantial effort 
should be undertaken by the Executive Branch, or, failing that, by 
Congress, to streamline and expedite antenna siting decisions. The 
process for deployments governed by the municipal zoning process 
generally works well, with approvals usually issued within the 150 days 
contemplated by the Federal Communications Commission's rules. By 
contrast, siting on Federal properties can take years, with wide 
variance between the processes employed by various agencies and 
departments. Initiatives that would move toward the use of common forms 
and fee schedules, master contracts, and uniform schedules and 
processes for deploying broadband facilities on Federal lands, 
buildings, rights-of-way, federally assisted highways, and Tribal lands 
would assist the industry in expanding broadband access.
     Response to Written Question Submitted by Hon. John Thune to 
                           J. Pierre de Vries
    Question. Mr. de Vries, you have recommend creating a Court of 
Spectrum Claims to deal with spectrum disputes. In what way would your 
proposal help alleviate conflicts in the marketplace that are likely to 
occur as spectrum utilization increases?
    Answer. A Court of Spectrum Claims would provide a forum and a 
process where conflicts in the marketplace--especially between Federal 
and commercial users, but also others--could be resolved.
    It could help prevent conflict, or nip it in the bud, by providing 
parties with the reassurance that any disputes that might arise could 
be resolved in a neutral forum with expertise in spectrum matters. The 
Court would be independent of the FCC and NTIA whose interests, or 
perceived interests, might cause concern to some or all of the parties 
to a dispute.
    The Court's most important contribution would be in fostering 
cooperation--the flip-side of conflict. Successfully freeing up and 
sharing government spectrum for others to use productively--and 
likewise, for government users to gain access to non-federal spectrum--
requires a back-stop to ensure that the promised access rights and 
interference protections in such a bi-lateral market will be delivered.
    Since Federal and commercial spectrum users are under the mutually 
exclusive jurisdictions of the Department of Commerce and the FCC, 
there is a need for a new entity--a Court of Spectrum Claims, for 
example--that can oversee both types of users (federal ones and private 
ones), adjudicate potential disputes, and spur cooperation in advance 
of any judicial claim.
     Response to Written Questions Submitted by Hon. John Thune to 
                        Thomas M. Lenard, Ph.D.
    Question 1. Dr. Lenard, in your testimony, you argue that 
government agencies do not operate in a market context, and therefore 
their goal is not to maximize profits. Please explain incentives that 
can be provided to agencies to maximize efficient use of agency 
spectrum while allowing agencies to fulfill their statutory 
    Answer. The key is to have a mechanism that requires government 
agencies to internalize the costs of the spectrum they use. My 
testimony suggests a mechanism based on the General Services 
Administration (GSA) model--a Government Spectrum Ownership Corporation 
(GSOC) that would take possession of all government-held spectrum and 
lease it to agencies at rental rates based on estimates of the relevant 
opportunity costs. In this way, agencies would have appropriate 
incentives to economize on the spectrum they use. Surplus spectrum 
could then be sold or leased to the private sector.

    Question 2. Dr. Lenard, do you support permitting agencies to lease 
their excess spectrum to the private sector? What considerations might 
there be if this idea is pursued by Congress?
    Answer. Yes, this would be one way of inducing agencies to 
internalize the costs of the spectrum they use and incentivizing them 
to release more spectrum into the private sector. For this to be 
successful, agencies should be able to keep the lease payments and 
Congress (and the executive) should refrain from instituting offsetting 
budget cuts.


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