STATEMENT OF AJIT PAI
COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION
HEARING BEFORE THE SUBCOMMITTEE ON COMMUNICATIONS AND
TECHNOLOGY OF THE UNTED STATES HOUSE OF REPRESENTATIVES
COMMITTEE ON ENERGY AND COMMERCE
KEEPING THE NEW BROADBAND SPECTRUM LAW ON TRACK
DECEMBER 12, 2012
Chairman Walden, Ranking Member Eshoo, and Members of the Subcommittee, it is a
privilege to appear before you today. The Spectrum Act originated in the efforts of this
Subcommittee and was the result of bipartisan leadership, hard work, and compromise by you
and many other dedicated Members of Congress. You deserve great credit for the passage of this
historic legislation.
I began my term at the Federal Communications Commission just a few months after
Congress passed the Spectrum Act, and thus a large part of my time at the agency has been spent
evaluating and implementing the responsibilities that Congress entrusted to us in the statute.
The Commission's primary charge in this regard is to release additional spectrum into the
commercial marketplace to address the looming spectrum crunch. As an advocate of an all-of-
the-above approach to spectrum policy, I have happily embraced the challenge.
When it comes to FCC implementation of the Spectrum Act, two factors counsel in favor
of prompt action. First, consumers are adopting devices like data-hungry smartphones and
tablets operating on 4G LTE networks that are straining the capacity of the airwaves. More
spectrum is needed to meet this demand. Second, the broadcast incentive auction is our best
opportunity to push a large amount of spectrum well-suited for mobile broadband into the
commercial marketplace. Accordingly, this past summer, I called for the FCC to commence the
incentive auction rulemaking process in the fall. To his credit, Chairman Genachowski launched
a timely proceeding in September, and I thank him for that.
As the Commission moves forward, I believe that four principles should animate our
work. First, we must be faithful to the statute. It is our job to implement this legislation, not to
rewrite it to conform to our policy preferences. Second, we must be fair to all stakeholders. This
is especially important because the incentive auction will fail unless both broadcasters and
wireless carriers choose to participate. Third, we must keep our rules as simple as possible. The
broadcast incentive auction is inherently complicated; unnecessary complexities are likely to
deter participation. And fourth, we need to complete this proceeding in a reasonable timeframe.
I believe that we should set a deadline for conducting these auctions no later than June 30, 2014.
I am optimistic that fidelity to these principles will result in a successful broadcast incentive
auction.
That said, I do have some concerns with the direction of our proceeding. Most notably,
September's Notice of Proposed Rulemaking appears to envision an auction that will yield no net
revenues. That would mean no money for the First Responder Network Authority (FirstNet) to
build out a nationwide, interoperable public safety broadband network; no money for state and
local first responders; no money for public safety research; no money for deficit reduction; and
no money for next-generation 911 implementation. The Spectrum Act mentions each of these
items, which makes it difficult to square that legislation with an auction that would provide no
funding for them.
Most of the problem stems from the structure of the proposed auction. The only closing
condition set forth in the NPRM is that the revenues from the forward auction must cover the
costs of the reverse auction.1 I do not believe that this closing condition is sufficient since it is
essentially like ending a traditional auction as soon as the reserve price is met.
Another part of the problem derives from limits the Commission might place on auction
participation. We need robust participation from television broadcasters, current wireless
operators, and new entrants. The more people at the party, so to speak, the better the party will
be. But if the Commission preemptively tells broadcasters You may bid this high, but no
higher,2 many may not show up for the reverse auction. And if the Commission starts picking
and choosing who may participate in the forward auctionsuch as by setting a spectrum cap or
narrowing the spectrum screen despite the robust competition in the wireless market3it will
result in less participation, less revenue, less spectrum available for mobile broadband, and less
funding for public safety.
It's worth exploring a bit further the implication of the last item I mentioned. Ensuring
interoperable public safety communications has been a national priority for over a decade.
Indeed, the 9/11 Commission identified the lack of interoperability as a serious hole in our
nation's public safety communications and demanded that it be addressed.4 Given the
importance of constructing an interoperable public safety network, as well as the need to reduce
the deficit and fund next-generation 911, I believe the FCC must seek to maximize the net
revenues obtained through the commercial broadcast incentive auction.
We have yet to hear from the public about the Commission's proposed structure for that
auction. But I hope that commenters will point us in the right direction. I also look forward to
continuing to receive input from Congress, particularly Members of the Subcommittee. Given
your key role in crafting this legislation, it is vital that the Commission keep open the lines of
communication with you.
Aside from the broadcast incentive auction, the Spectrum Act sets several additional
targets for getting more spectrum to market. An im
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STATEMENT OF AJIT PAI 
