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

LEGISLATIVE HEARING TO ADDRESS SPECTRUM AND PUBLIC SAFETY ISSUES

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

HEARING

BEFORE THE

SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

OF THE

COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

__________

JULY 15, 2011

__________

Serial No. 112-76

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COMMITTEE ON ENERGY AND COMMERCE

FRED UPTON, Michigan
Chairman

JOE BARTON, Texas HENRY A. WAXMAN, California
Chairman Emeritus Ranking Member
CLIFF STEARNS, Florida JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania EDOLPHUS TOWNS, New York
MARY BONO MACK, California FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina GENE GREEN, Texas
Vice Chairman DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma LOIS CAPPS, California
TIM MURPHY, Pennsylvania MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California JAY INSLEE, Washington
CHARLES F. BASS, New Hampshire TAMMY BALDWIN, Wisconsin
PHIL GINGREY, Georgia MIKE ROSS, Arkansas
STEVE SCALISE, Louisiana JIM MATHESON, Utah
ROBERT E. LATTA, Ohio G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington JOHN BARROW, Georgia
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey DONNA M. CHRISTENSEN, Virgin
BILL CASSIDY, Louisiana Islands
BRETT GUTHRIE, Kentucky KATHY CASTOR, Florida
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia

7_____

Subcommittee on Communications and Technology

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

(ii)

C O N T E N T S

----------
Page
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, opening statement...................................... 1
Prepared statement........................................... 4
Hon. Lee Terry, a Representative in Congress from the State of
Nebraska, opening statement.................................... 8
Hon. Anna G. Eshoo, a Representative in Congress from the State
of California, opening statement............................... 8
Hon. John Shimkus, a Representative in Congress from the State of
Illinois, opening statement.................................... 12
Hon. Cliff Stearns, a Representative in Congress from the State
of Florida, opening statement.................................. 12
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 13
Prepared statement........................................... 15
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, prepared statement................................... 194
Hon. Edolphus Towns, a Representative in Congress from the State
of New York, prepared statement................................ 197

Witnesses

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

Submitted Material

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

LEGISLATIVE HEARING TO ADDRESS SPECTRUM AND PUBLIC SAFETY ISSUES

----------

FRIDAY, JULY 15, 2011

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

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

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

[GRAPHIC] [TIFF OMITTED] T3418.001

[GRAPHIC] [TIFF OMITTED] T3418.002

[GRAPHIC] [TIFF OMITTED] T3418.003

[GRAPHIC] [TIFF OMITTED] T3418.004

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

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

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

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

[GRAPHIC] [TIFF OMITTED] T3418.005

Mr. Walden. I thank you. The gentlewoman's time has
expired.
I would now recognize the gentleman from Illinois Mr.
Shimkus if he has any comments.

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

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

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

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

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

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

[GRAPHIC] [TIFF OMITTED] T3418.006

[GRAPHIC] [TIFF OMITTED] T3418.007

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

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

STATEMENT OF CHRISTOPHER M. MOORE

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

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

STATEMENT OF PETER CRAMTON

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

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

STATEMENT OF HON. GORDON H. SMITH

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

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

STATEMENT OF MICHAEL A. CALABRESE

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

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

STATEMENT OF CHRISTOPHER GUTTMAN-MCCABE

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

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

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

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

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

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