The s. E. C. Plans on auctioning spectrums next fall. That would allow broadcast tv spectrum to be used for wireless communications. The house commerce and subcommittee took a look at the spectrum auction proposal. Well hear from sfals officials athe s. E. C. , private companies. The hearing runs about an hour nd 50 minutes. As most things, the devil is in the details. We convened all five sitting f. C. C. Commissioners on a Progress Report on implementation of the law. This was a step on making sure the commission stays within the act and acts within the confines of the law. In order to ensure that the f. C. C. Follows the law, prort oversight is necessary. A successful auction will require the f. C. C. To get two parts of equation correctly. The broadcast side and the broad band side. Now for broadcasters, the intent of the law could not be more clear. For those that plan to exit the market, the f. C. C. Has an obligation to let the market work. Im concerned the commission seems to be needs to use its judgment. For the incentive auction to be successful, broadcasters that participate should be assured they will be compensated based on the market value of their licenses as determined by the auction. Not based on estimates in the s. E. C. We should look asignificance at policies that would dissuade participation. For those that remain in the broadcasting, i have been equally clear what i believe is needed. The statute is clear what they deserve is certainty. Broadcasters should be assured they will remain viable ollowing the akes. Viable following the actions. The f. C. C. Should take into consideration the unique challenges across the country as they reclaim broadcast spectrum repack existing channels. In order to participate in the auction, lowpowered trans the commission should consider the translators has they repackage their broad cag casting analysis. The commission should consider how to package the auction in a with the tent communications act. A successful auction will be dependent on broadcast and broad bant interests. The f. C. C. Would be wise to realize rarely does the Industry Speak with a single voice. Im concerned a large voice seems to be coalescing around a plan that promotes competition and maximizes uction proceeds. Would like to talk about the auction participation. Just like broadcasters, potential broadcast licensees should be courted as participants and not subjected to economic manipulations at the hands of the f. C. C. As we have learned time and again in spectrum auctions, well meaning people have tried to restrictions. Recently, as some have suth it would be followy at best to think that the f. C. C. Could know better a carefully crafted auction and has the the market et decide the value of spectrum will best serve all the goals of the legislation. So our Witnesses Today represent the many sides of this debate. Broadcasters that want to sell and broadcasters that want to broadcast. Two of our nations four largest providesers. Communitytives of the and federal communse communications commission. Hile our witnesses may not see eyetoeye, i have looked forward to your testimony. And your Council Counsel as we look Work Together on this. I thank you all for being here today. I would yeelyeel yield the balance of my time to the vice chairman of the subcommittee. Spectrum has been a priority for the subcommittee over the past several years, and it is income bebt on congress to exercise oversite of the auction. The Jobs Creation act in 2011. Legislation with the broadcast incentive auction. The success of this auction, which will be the most has seen, the world is absolutely critical for bringing more spectrum to the market and for mobile broad band supporting our nationwide Broadband Network. I look forward to hearing from our witnesses on each of the implementationon and the benefits or consequences of the certain auction designs. Yield to the representative from california, anna eshoo. As wireless has increased, so as data consumption. As the f. C. C. Well hear divergent ideas today, but we will also hear ways kneed to make this needed to make this project a success. We knew implementation would be challenging. The f. C. C. Quickly retained a group of world class experts to help design the spectrum auction. The f. C. C. Is staffed. We immediately started working around the clock. I want to thank dozens of f. C. C. Staffers who have worked hard to address the challenges posed by this akes. In my view, the success of the auction will be measured by how well we meet the goals layed out by the law. Congress snacted the law with multiple goals in line to help relieve the spectrum crunch and help meet the exploding demand of wireless data. They raised revenue to fund multiple priorities, including the creation of a Broadband Network or First Responders or first net to promote competition in the wireless marketplaces, and to spur continued innovation such as the creation of new super wifi services. The law we passed promotes all of these goals where necessary to ensure competition. To promote innovation, the law calls for the establishment of nationwide guard bans than used for unlicensed use. Not surprisingly, some policies are now engaged in revisionist history suggesting the f. C. C. Has Less Authority than the statute provides. No party im aware of is excluding the fcc from participating in the auction. It makes no sense to allow the two Biggest Companies with an already dominant Company Position to acquire all of this high quality beachfront spectrum. The Justice Department wrote this earlier emphasizing how important it is for competition and consumers that this low band spectrum not be dominated by the two big carriers. These views deserve careful consideration. Guard bands are important to consider the broadband being auctioned and create spectrum to be used for the next generation of wifi services. The goals are all achieveable. With carefully designed rules, the f. C. C. Can raise revenue and promote competition and innovation. Our job should be to resist the importuning of special interest and help the f. C. C. Make this groundbreaking auction an historic success. I look forward to the testimony of our distinguished witnesses. Id like to ask unanimous consent to pu put two new documents into the record. Free press at the Writers Guild of america in support of pro consumer limitations on spectrum concentration as part of the auction of the 600 megahertz ban by the f. C. C. Without objection and the second is to ender into the record ex parte that the rules for the 600 megahertz auctions are necessary to ensure competition in the marketplace. I yield back the balance of my time. The gentleman yields back the balance of his time. We return to our witnesses that will provide us with great testimony and counsel today. We will start with gary epstein who is the seeno procedure vider of the federal communications commission. The man who has the biggest weight on his shoulders to do it all right and make it work. Mr. Epstein thank you for yaur work at the f. C. C. We look forward to your comments today. Thank you Ranking Members of the subcommittee. My name is gary epstein. I am from the commerl commune cages Auction Task Force. In our evert to design and implement point incentive auction, the commission is guided by four primary Public Interest objectives. One, relieving the spectrum scrun much or repurposing licensed and unlicensed flexible use to reflect multiple data usage which is predicted to grow by a factor of 9 by 2017. Two, fulfilling our statchtri obligations and congressional objectives that include re purchasing brought broadcasters. Three, providing a unique financial opportunity for participating broadcasters while preserving a healthy broadcast services for those who choose not to contribute their spectrum. And four promoting the innovation in a vibrant market. As we pursue these objectives we are focusing on the engineering issues and are drawing on auction designed experts and engineers both inside and outside the agency. We are engaging with all interested parties in an open and transparent process in which we will learn from the probust Public Record we are building, a for simplimplift and adjust our proposals as necessary to ensure that the auction succeeds. With respect to process it is also important to remember that we are in the middle of an open proceeding and the commission has made no final determinations. The staffs role in the incentives proceeding is to conduct as comprehensive and exhaustive of a range in order to best advise the commission. Ultimately within the bounds of the statute, it is the commission that will determine the design of the incentive auction. The commission has moved squiftly. The guiding principle has been to get it done, and get it done right. Under the acting chairman the staff has continued progress toward a 2013 order and 2013 auction. In the First Six Months after the act was passed, the commission quickly formed a crossagency task force, retained auction design experts, and officially launched a proceeding by adopting a comprehensive and specific notice of proposed rule making. Both to inform the public and elicit auction design sequences. Today we have had reimbursement for location costs and the notice itself. In addition in the interests of Public Engagement in an open, transparent, and participate tri process, the commissioners and staff have participated in over 180 incentive auctionrelated events meetings since the enactment of the spectrum act, including numerous discussions with our colleagues in canada and mexico. Perhaps not surprisingly, the task force has met with each of our panelists to discuss their views with respect to the auction. Since the notice, we have also released several Public Notices on issues we have believed warrant further consideration and opportunities to provide additional input. Today we received and contributed over 460 supply comments from incentive auction Public Notices. Our Public Notices have solicited input on interference calculation many software. In the case of a public notey we released just yesterday, the repackaging process. Yesterdays results include whether any particular challenge could be reassigned consistent with statchtri and other requirements. Statutory and other requirements. We expect yesterdays release, which was only the first of several Public Notices we expect to issue regarding repackaging, will allow interested parties to understand some of our methods in establishing methodology and elicit p. M. Proposals. Finally, we are committed to an open and transparent process. On some issues stakeholders seemed to be coming to agreement on some topics. On some important topics there remained divergent positions. The key is to carefully review ideas from the experts both outside and within the commission to enable the commission to make the hard zigs based on the best available data and ideas. The neff Auction Task Force will make recommendations that we believe will result in a public auction that will serve the Public Interest and achieve the object siffs and goals Congress Objectives and goals congress layed out in the spectrum act. Thank you, and i look forward to your questions. Mr. Epstein, thank you for what you and your team are doing. Thank you. We will go to the Senior Vice President of public knowledge. We appreciate your being back to the subcommittee to testify. We look forward to your comments. Thank you very much. Thank you for inviting me here to testify today. Two years ago i testified before the subcommittee that a properly structured incentive auction could be a rare Public Policy trifecta. A winwinwin. In addition to raising revenue for an interoprable Public Safety, now called first net, it could also enhance competition to the benefit of consumers. At the same time while we aloe indicate a portion from broadcasting to wireless services, it raiseded possibility of creating more 0 access to crowded outlets. The f. C. C. Could create a national unlicensed bid that would encourage developers to develop new devices and offer Innovative Services to take advantage of these services. The last two years have approved and shown the importance of competition. In this time period we have seen the cable industry recognize the value of licensing. They proved their value in the aftermath of super storm sandy. We talk about a carrier grid. Wireless i. S. P. Is using tv white spaces to bring affordable broad band to rural america. In 2011 the f. C. C. Imposed data roaming rules. Whml the f. C. C. Blocked when the f. C. C. Blocked at t from buying veizon, we have seen more investment in the wireless market in the last year than we had many years before. Billions of dollars of new investment demrode into the market as both tmobile and others attracted new interest. In response, at t and verizon have redoubled their interests to provide 4g networks as rapidly as possible. In short, competition works and needs to be preserved. All of this highlights the need for getting incentive auctions right. This spectrum is highly valued for itsable to travel long distances and penetrate buildings and trees. Companies looking to invest in unlicensed such as comcast, google, and microsoft have likewise indicated this is critical for developing licensed and unlicensed services. We must stop creating false choices and pushing the f. C. C. To choose sides. Congress passed a bill to give the f. C. C. Authority to promote competition within limits. We should embrace this promies rather than refighting old battles. The priorities of this auction are to Work Together not push against each other and fly apart. Second, we need to respect the f. C. C. Task as they work through this difficult process. We cannot have the transparancy and trust we need in people with the staff browbeat them over choices. This will increase the value of the service as a whole. This is not about artifically inflating broad bands, this is about being mindful to achieve all our goals. Instead of setting this up where every broad band seen as lost revenue. Finally, we need to make sure we have enough participation in the auction to make it holding. Dont ban anyone from the auction, but limit the number of licenses that any one company can win. Opponents rule we need to have at t and verizon in the auction. Thats true. But the beauty of the rule is that it lates lets it lets at t and verizon participate. To conclude, the key to a successful incentive auction is a balanced approach. We get there by deliberating on a current process. A winwinwin for mobile, broad band, and build an interoperable Public Safety net that we all need. Thank you, and i look forward to your questions. Thank you for your testimony. We will go now to mr. Rick kaplan. Welcome back. We look forward to your testimony as well. Good morning. Thank you for inviting me on behalf of the National Association of broadcasters to testify before you today. National association of broadcasters is committed to ensure the successful completion of the worlds first ever broadcast incentive auction to the benefit of american consumers, the u. S. Treasury, and Public Safety. Now, to the casual observer at todays hearing might be led to believe that the upsumming incentive auction is just a wireless issue. We will here about the drive to maximize spectrum freed up. The reality however is that the industry on which this auction will have the greatest impact is the broadcast industry. To offer some perspective, organize to o. S. T. P. And the National Economic council, the u. S. Commercial Wireless Industry will soon control more than 660 megahertz of spectrum, more than any other commercial enterprise and well more than its counterparts in nearly every other country. This amount is nearly double the amount allocated to to the broadcast industry. In fact, it will likely contribute less than 15 . By contrast, this will lead an indelible impact. Up upwards of 50 of stations remain on the air. Potential changes could greatly impair the ability of the nearly 60 americans. Our goal is to continue to that those stations that remain ot air will have the samente opportunity to operate as they had prior. The opportunity to provide news, the opportunity to provide direct local residents to lifesaving services to safety in hurricane sandy, and the opportunity some described this auction as a winwinwin although the final victory to be awarded to the broadcasters. To be candid, from what we have seen so far, we will be lucky to escape with the tide. However, the f. C. C. Must ensure three things. First, broadcasters that remain on the air should not be harmed by voluntary auction. Broadcasters must be able to serve the same broadcast area as they did the day before. The f. C. C. Should not move the goalposted by altering the formula by which they calculate. Nor should the f. C. C. Force people people to go out of pocket when they move to the Wireless Industry. The Relocation Fund must be used for its benning budget. If not, broadcasters could face many costs that offer them no benefits whatsoever. The engineering behind the f. C. C. Staff has not been vetted in an open forum. And the time has come to put the engineering assumption to the test. Are sm 4 if this attacks to aggressively, thousands of translators and more will disappear and never return. They continue to support the marketbased incentive is some incentives by congress. Getting it done right is more important than simply getting it done right now. Ours is to continue to serve our local communities in a way that no other service can