April 19, 2007 - FUTURE OF WIRELESS SERVICE

WASHINGTON, D.C.  -- Representative Edward J. Markey (D-MA), Chairman of the House Subcommittee on Telecommunications and the Internet, convened a hearing of the future of wireless service. His prepared remarks follow below.

Good Morning.  Today we have another in the series of hearings that we began with Sir Timothy Berners-Lee on the future of the World Wide Web.  We have had oversight hearings on the FCC, NTIA, digital television, public safety interoperability, and the radio industry.  Today we look at wireless services.

As television broadcasters move out of TV channels 52 to 69 as part of the digital TV transition, a significant and valuable amount of spectrum will become available for other purposes in 2009.  Congress stipulated that 24 Megahertz of this spectrum – or the area today occupied by TV channels 63, 64, 68, and 69 – should be allocated for public safety use.  And last year’s budget bill required the auction of another 60 Megahertz of this spectrum -- an auction which must begin by January 28, 2008.

This upcoming auction presents a huge opportunity to achieve important policy objectives, including addressing public safety needs.

So, what should guide the development of the FCC’s auction rules and the band plan for these frequencies over the next few weeks?  The answer is the policy objectives Congress itself mandated the Commission to promote in the underlying auction law.  In general, the law specifies that the Commission should seek to achieve the following: 

      1. the development and rapid deployment of new technologies, products, and services for the benefit of the public, including those residing in rural areas, without administrative or judicial delays;
      2. promoting economic opportunity and competition and ensuring that new and innovative technologies are readily accessible to the American people by avoiding excessive concentration of licenses and by disseminating licenses among a wide variety of applicants, including small businesses, rural telephone companies, and businesses owned by members of minority groups and women;
      3. using auctions as a way to obtain for  the public a portion of the value of the frequencies made available while avoiding unjust enrichment when using such auctions;
      4. the efficient and intensive use of the spectrum; and,
      5. ensuring that, in the scheduling of any auction, that interested parties have sufficient time to develop business plans, assess market conditions, and evaluate the availability of equipment for the relevant services.

These objectives underscore that Congress knew that simply throwing more spectrum into the marketplace by selling it to the highest bidder does not, in itself, create the greatest value for consumers.  Moreover, absent sufficient competition, the sale of more licenses for additional spectrum does not, in itself, mean innovative new services and gadgets will necessarily arrive for all consumers, in all neighborhoods, or arrive in timely fashion. 

While it is alluring to budget policy types to raise billions of dollars literally out of thin air, telecommunications policymakers know that the taxpayers are also consumers.  And the consuming public will get more in the form of lower prices, innovative new services, increased service quality, and job creation -- if the auctions are done the way Congress intended – than any benefit a short-term injection of cash provides to the Treasury from this or any auction.  For this reason, the Subcommittee will be watching the FCC’s implementation of the auction law with respect to these auctions very closely over the next several weeks. 

 Today’s panel will also allow us to look at issues beyond the upcoming auction, including how we get service to rural markets, how smaller companies can participate, the level of competition and the policies needed to ensure wireless competition in the future, how business plans that encompass a wholesale or “open access” model might reach the market, and how we can best advance public safety interests.  Today’s panel will also allow the Subcommittee to analyze how the Commission addresses, in an efficient and equitable manner, requests to utilize spectrum that is otherwise not being used. 
 
With a market segment as broad as the wireless industry, it is obvious we could have several hearings -- and we may return to the wireless area to look at some other important policy issues in the coming months, such as so-called “wireless Carterfone” policy, use of unlicensed spectrum or “white spaces”, consumer protection issues, state pre-emption, public interest obligations, municipal wireless issues, and others.

I want to thank our witnesses for their willingness to testify this morning and look forward to their testimony.