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Expanding the Economic and Innovation Opportunities of Spectrum Through Incentive Auctions,
Docket No. 12-268

We often talk about leaving this world, and this country, better than we found it; reducing the
national debt, lowering our carbon footprint, preserving and striving for peace between nations, and so on.
What we are affirming in this room, today, improving our mobile and broadcast industries, I believe,
should be added to the list.
I have been hearing about the looming spectrum crunch for as long as I’ve been here. And even
as a casual observer of one’s surroundings, you can’t help but notice that everyone we know and see in
coffee shops, at sporting events, and on subways, is using mobile broadband for various purposes.
This insatiable demand for mobile services forces the industry to work hard at ensuring that their
networks can keep pace. Now, we’ve reached a point where government can and must lend a
constructive hand to ensure the platforms, that many now take for granted, keep moving efficiently. We
are quickly outraged when the smallest delay in service affects our experiences. And while getting angry
at the DMV remains at the top of everyone’s list, being unable to log-on to Facebook in a Wi-Fi hotspot,
is making a steady climb towards first place.
However, we will not be able to take this giant leap forward without patience, positive
engagement, and great assistance, from the outstanding engineers and professionals in the broadcast
industry. At the beginning of this process and during our early discussions on repacking and voluntary
auctions, there was no small amount of anxiety from broadcasters. And while some anxiety remains,
today, as I have said all along, the word voluntary is the most important word contained in all of the pages
that comprise this document.
In the press release issued when staff circulated this NPRM, Chairman Genachowski made two
points I wish to underscore. First, voluntary incentive auction authority gives us the ability to strengthen
both our mobile and broadcast industries. Second, to “maximize the opportunities of spectrum [which
this new authority creates], depends on the active engagement of the public and all stakeholders.”
Both points should be guiding principles as we continue in this proceeding. The incentive auction
authority Congress gave us also presents novel challenges. The Commission must comply with the
statutory language and carefully consider all relevant issues necessary to properly design three key
aspects of the unprecedented voluntary incentive auctions: the reverse auction, the repacking of
remaining broadcast TV licensees, and the forward auction. Each of these has its own set of difficulties,
so we need the engagement of all relevant parties to design the auction properly and make the most of this
Gary Epstein, Ruth Milkman, Julie Knapp, Bill Lake, and Bill Scher, have made much time in
their busy schedules to brief me on the NPRM and the Incentive Auction Rules Option attached to the
item. I am confident the staff is doing their best to provide parties with meaningful opportunities to
participate in a process that can improve both the mobile and broadcast industries. It is also clear that
considerable time and effort went into trying to simplify the incentive auction process and remove as
many computational challenges as possible from broadcasters who may be interested in relinquishing
spectrum. If we need to make changes to add more clarity to the process, the staff has shown that they are
open to all recommendations.

I generally support all the preferred proposals in the NPRM. But there are a few I believe deserve
special mention. I was particularly pleased to see proposals that would preserve sufficient spectrum for
unlicensed operations. Promoting continued innovation in the unlicensed service industry is important to
our National economy and to maintaining leadership in the mobile broadband services market. It is
estimated that unlicensed spectrum, generates between 16 and 37 billion dollars each year, for the U.S.
economy. In November of last year, the Consumer Federation of America found that Wi-Fi offload,
resulted in wireless carriers, not having to construct 130,000 cell sites. This resulted in annual cost
savings of more than 25 billion dollars.
Finding sufficient spectrum for unlicensed services is also important to companies, who have
already spent considerable capital and other resources, trying to develop networks and devices that
comply with the TV White Space rules we adopted, in September 2010. Successful TV White Space
business models increase the chances that some Americans who live in low-income rural and urban areas,
will receive the affordable competitive options for mobile broadband services that most Americans
already enjoy.
I was pleased to see that the NPRM seeks comment on bidding credits, which could create
opportunities, for small businesses to acquire wireless spectrum in the forward auction process. I also
appreciate that we are seeking comment on whether those small business credits are sufficient to create
opportunities for businesses owned by women and minorities. At most of my appearances, and in
meetings in my office, small business owners and prospective owners, explain to me just how difficult it
is to succeed in a down economy. And while the economy is rapidly improving, these innovative
entrepreneurs, and hard-working people find it nearly impossible to get access to capital or find
worthwhile inroads to credit.
What we do, today, will further assist us in realizing growth opportunities for these individuals
and their ideas. We should be very proud of that. Small businesses are the powerful little engines that
run America, and I am glad to have a hand in their growth potential.
I was also happy to see questions on what the Commission should do to ensure interoperability in
the band plan for the forward auction. The current lack of interoperability, in the lower 700 MHz band, is
impeding the deployment of competitive options for consumers. To ensure that this incentive auction
yields the greatest possible benefits for consumers, we must consider whether we should mandate
interoperability in the spectrum we repurpose for mobile services.
Thank you, Gary for your presentation. I especially appreciate your efforts to identify each of the
70 staff members who worked on this NPRM. I also want to thank my wireless legal advisor, Louis
Peraertz. You should all feel great; for this is truly an impressive item.

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