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Commission Document Attachment

DOC-327109A2

STATEMENT OF

CHAIRMAN TOM WHEELER

Re:
Policies Regarding Mobile Spectrum Holdings, Report and Order, WT Docket No. 12-269
I’m an unabashed believer in competition. And I’m committed to this proceeding because it begins and
ends with one basic idea – how best to preserve and promote competition to the benefit of all Americans.
I am also a believer in the Incentive Auction that Congress has established and that will be held in mid-
2015. The approach we are voting on today marks a critical turning point in our work towards the
Incentive Auction. I am confident that the wireless industry, including providers of all sizes, will rally
around this rules package and make clear that they want to participate aggressively in this auction. With
this consensus on a path forward, we can turn our attention to making clear to the broadcast industry that
this is a once-in-a-lifetime opportunity and there are companies ready to spend real money at auction.
We have been working hard to develop pro-competition and pro-consumer rules to promote a healthy,
competitive mobile marketplace with clear rules of the road regarding spectrum aggregation.
Without spectrum, mobile carriers can’t compete. But not all spectrum frequencies are created equal.
Spectrum below 1 GHz, known as “low-band” spectrum, has physical properties that increase the reach of
mobile networks over long distances at far less cost than spectrum above 1 GHz, and are better suited for
transmitting wireless signals through walls. High-band spectrum has more bandwidth, meaning that it
carries data well, but it doesn’t travel as well over distances or through walls.
For consumers, the mobile spectrum holdings rules we adopt today will mean more competition in more
markets. All American consumers, regardless of where they live, should enjoy the benefits that
competition can bring: more choices of wireless providers, lower prices, and higher quality mobile
services.
There are three interrelated parts to the Mobile Spectrum Holdings rules we adopt today. Many parties
have focused on just one piece of the package; yet, all of the pieces work together.
First, we increase our spectrum screen to reflect spectrum that is currently suitable and available for
mobile broadband.
Second, we clarify that we will continue to look closely at low-band spectrum transactions in our
competitive review of proposed transactions.
Third, we set clear pre-auction rules regarding spectrum aggregation for our upcoming auctions.
In the upcoming AWS-3 auction of high-band spectrum, any bidder will be able to win any amount of
spectrum it is willing to pay for. And any spectrum a bidder wins, it can keep. We will not require any
divestitures, regardless of whether the adjusted total spectrum screen is triggered.
In the upcoming Incentive Auction, we adopt reasonable spectrum aggregation rules to promote
competition, with all bidders vying to win spectrum at a fair market price, as explicitly authorized by the
Spectrum Act. There has been much focus on this aspect of the rules, so let me be clear about what it
means.
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Every bidder, regardless of size or spectrum holdings, will be able to bid on spectrum in every market
throughout the country.
Let me repeat, every bidder, regardless of size or spectrum holdings, will be able to bid on spectrum in
every market throughout the country.
We are also adopting a rule that establishes a “market-based reserve” for bidders that do not currently
hold significant amounts of low-band spectrum in specific markets, provided that “reserve bidders” pay
their fair share of auction costs. When the Incentive Auction commences, all bidders will be bidding and
competing against each other for all blocks of spectrum. Given the value of this spectrum, we expect a
fulsome bidding process. When the auction reaches the “spectrum reserve trigger” point – which includes
fully funding FirstNet – wireless providers without significant low-band holdings in a license area will
bid on “reserved” spectrum blocks. Put another way, we are adopting a limited rule that says the biggest
holders of low-band spectrum can’t run the table, as long as there is sufficient demand for reserved
spectrum.
Here is the bottom line: for the first time ever we have established a viable spectrum reserve for
competitors in every market nationwide. Most importantly, this reserve will make sure that consumers are
more likely to benefit directly from increased competition in all parts of the country – rural, suburban and
urban areas included.
Again, this is about bringing the benefits of competition to consumers and this market based reserve will
deliver on our core objective: better service, more choices, and ongoing innovation.
Thank you to the Wireless Telecommunications Bureau and the Office of General Counsel for their work
on this item.
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