OLYMPIA J. SNOWE
MAINE
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Web Site: http://snowe.senate.gov
DEPUTY WHIP
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COMMERCE, SCIENCE, AND
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WASHINGTON, DC 20510-1903
November 16,2011
The Honorable Julius Genachowski
Chairman
Federal Communications Commission
445 12th Street,SW
Washington, DC 20554
Dear Chairman Genachowski:
INTELLIGENCE
RANKING MEMBER, SMALL BUSINESS
With the growing calls for Congress to pass incentive auction authority, I feel it
necessary to once again raise several critical issues that must also be addressed to meet the long­
term spectrum needs of this nation. Unfortunately, there has been a disproportionate amount of
focus on incentive auctions as being the principal elixir to addressing the industry's need for
spectrum while other more important mechanisms, like fostering greater technical innovation and
implementing more robust spectrum management, seem to be discussed more like footnotes.
While incentive auctions have the potential to free up additional spectrum for wireless broadband
and raise revenue for the treasury, further examination of this tool is necessary to ensure we are
setting realistic expectations for its effectiveness.
In your recent speech at the U.S. Chamber of Commerce, you noted that incentive
auctions·would raise $25 billion in potential deficit reduction. But as you know, that $25 .billion
is what might be generated over ten years. By comparison, the Joint Select Committee on Deficit
Reduction is charged with finding $1.5 trillion in debt saving over the same period. So the
possible funds raised by incentive auctions would constitute only 1.7 percent of the Super
Committee's goal. Andthat result is only achieved if the full $25 billion goes directly to deficit
reduction and no other appropriation.
It is also unclear incentive auctions will end up raising the amounts touted because 1)
such figures are dependent on a notable number of broadcasters relinquishing spectrum and 2)
recent spectrum auctions in other countries have garnered lower than expected revenue. For
example, a 2010 auction of approximately 360 MHz of spectrum in Germany raised only 4.4
billion euros-analysts had estimated it would raise 5.8 to 8 billion euros. The yhanging
competitive landscape of the market, the number of eligible bidders in an auction, and the
growing use of unlicensed spectrum1,2 could also impact auction proceeds. And, as I've written
1 Athima Chansanchai, More smartphone users turning to Wi-Fi, http://technolog.msnbc.msn.com/news/2011/06/08/6813297­
more-smartphone-users-tuming-to-wi-fl.
2 Kyunghan Lee and others, Mobile Data Offloading: How Much Can WiFi Deliver? In Proceedings ofACM
CoNext, 2010, http://research.csc.ncsu.edu/netsrv/sites/default/flles/CoNEXT201O.pdf
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before, incentive auctions will only yield a fraction of the 500 megahertz the FCC and
Administration intend to free·up for wireless broadband over the next decade and just a sliver of
the amount the International Telecommunication Union (ITU) estimated would be needed by
20203. So we need to look beyond incentive auctions and its revenue generation as the main
drivers in spectrum policy reform.
Even more concerning if the super committee only includes incentive auctions in its
recommendation, as some have called for, then it would be very difficult to enact more
comprehensive reform in the future since a necessary "pay-for" would be eliminated that could
have been used for other measures such as a comprehensive spectrum inventory, spectrum
measurements and analysis, and modifications to the Commercial Spectrum Enhancement Act4
in order to free up more government used spectrum. Government agencies will need the
adequate resources and funding to upgrade systems or relocate to other frequencies in order to
shorten the timeframe of getting more government spectrum to market.
As part of reforni, we must also address other critical· issues like harmful interference and
receiver performance. The escalating demand for this finite resource presents significant
challenges. As more entities use spectrum to provide services, the ecosystem becomes more
crowded and efforts among users to coexist become more difficult. As a result, disputes among
licensees regarding potential harmful interference are occurring with greater frequency. Just in
the past few years, interference disputes have arisen between various parties such as
MVDDS/DBS, AWS-I/AWS-3, WCS/SDARS, and, more recently, with LightSquared/GPS.
I believe one of the problems contributing to the recurrence of these interference disputes
is the lack of clear receiver performance guidelines. As you know, the RADIOS ActS, which·
Senator Kerry and I introduced, includes provisions addressing these important issues. The
legislation promotes more spectral efficiency and interference immunity of device receivers and
tasks the FCC and NTIA to. conduct an interference sensing study to provide greater
predictability in the determination of harmful interference. Taking these steps or similar ones
will help mitigate, and even prevent, future interference disputes.
As Michael Gallagher, the former Assistant Secretary for Communications and
Information, once stated "receiver standards mean less interference and more available
spectrum.,,6 So ifmore spectrum is to be made available, receiver performance must be included
in any general spectrum policy discussion and as part of the equation to prevent a spectrum
shortage. In addition, solving this problem of spectrum availability is also contingent upon
proper and constant planning and coordination between the FCC and NTIA, which historically
has been irregular-at times-there is an old saying "if you fail to plan, plan to fail."
3 International Telecommunication Union, Report ITU-R M2078: Estimated Spectrum Bandwidth Requirements for
the Future Development ofIMT-2000 and IMT-Advanced, at 25, Table 25 (2006) (ITU Report).
4 CSEA, Title II ofP.L. 108-494
5 S.455, Reforming Airwaves by Developing Incentives and Opportunistic Sharing Act
6 Ensslin, Cylde. "NTIA Urges FCC to Adopt Radio Receiver Standards." National Telecommunications and
Information Administration . November 5, 2003. http://www.ntia.doc.gov/l~gacy/ntiahome/press/2003/receiverstds11122003.htm
The questionable urgency of the need for more spectrum that some have injected into the
dialog has devolved the policy making into a reductive process that is incomplete. I feel it
paramount to iterate my concern that if there is not a more comprehensive reform to our dated
spectrum policy then we will only partially address the problems that exist and fall very short in
setting the proper path to meet the growing demands being experienced in the spectrum
ecosystem.
As a recent Real Wireless report for Ofcom rightfully points out, increasing wireless
network capacity depends on a combination of spectrum, technology, and topology.7 Such
reform that focuses on a more balanced multi-faceted approach is the only true path to
modernizing our nation's radio spectrum planning, management, and coordination activities to
better meet the future spectrum needs of all users and provide a more fertile ground for
continued innovation in the marketplace. So I urge you to do more to expand the current
discourse on spectrum policy to better highlight the correct complement oftools that compose
the real solution to addressing the spectrum challenges that exist.
s Senator
cc: Commissioner Michael J. Copps
Commissioner Robert M. McDowell
Commissioner Mignon Clyburn
7 Real Wireless Ltd., "Report for Ofcom 4G Capacity Gains - Final Report." January 27, 2011, page 115,
http://stakeholders.ofcom.org.tklbinaries/research/tedmology-research/2011/4g/4GCapacityGainsFinalReportpdf