tuesday. ..

>> host: the senior commissioner, commissioner mcdowell, i want to start with the topic of spectrum. robert caplin of the national association of broadcasters was quoted yesterday saying he thinks the current spectrum auction schedule is doomed to failure because there's too many issues to work out and because of the res, there's not enough interest by parties to participate in the auction. >> guest: first of all, thank you for having me back. it's great to be here, and what you're talking about the is incentive auction. so congress passed a law last year giving tv broadcasters a financial incentive to be used in the wireless broadband purposes. we at the fcc a busy to solicit public comment and analyze it for purposes of putting together what will be quite literally

thee most complex spectrum auction in world history. i know it sounds like hyperbole, but it is the truth, and there's three components which i will get to in a minute. i expressed caution. it's not doom and gloom as you presented it, but caution in terms of when that will happen and how that happens. i'm not sure it will yield quite as much spectrum as was first advertised, some of the first chatter would yield 120 megahertz which is a lot. that was paired back to 80 megahertz because peek about about border issues with canada and mexico. then it was back to 60 megahertz. where? new york city? that's the equivalent of six tv stations -- well, six to sen, actually, going off the air and potential for channel sharing and all of that. that would take a lot of broadcasters in the major markets, but it is complex right

in that we have to be careful. there's a lot of moving parts here, and there does not seem to be agreement among the comments parties among people who gave us thoughts and ideas regarding the proposals that we watched last year. the three segments are the reverse auction, how cheaply will a broadcaster give up spectrum for? the forward auction, how expensively will a wireless broadcaster pay for spectrum and money to go to the treasury to fund the nationwide public safety wireless network, and then there's the repacking aspect, so to stay on the air, where are they located on the dial, and where would the wirelessed bro casting companies be on the intiel, -- dial, and what interference concerns would there be? we have fabulous engineers at the fcc. we need more, by the way, those interested in an engineering job, sends in the applications. they are complex, should be

driven by the data, and it could very well be that it takes longer than expected for the spectrum auction to happen. > well, commissioner, i would imagine a threshold issue is how do you entice broadcasters to participate? because they don't give up the airways, there's no airways to sell to the mobile carriers to the people who sell us our blackberries and smart phones. in the steps, what can be done to alaw the broadcasters' concerns? >> right. i'm the only person left in the commission who is a veteran of the two largest spectrum auctions in u.s. history, one in 2006 and one in 2008, and i learned a lot with those auctions, and one is to keep it as simple as you can. one question i have, and i have not drawn conclusions, but is whether or not the idea of combining that reverse auction i talked about with the forwards

auction in a simultaneous way, is that overly complex and giving potential bidders and broadcasters enough data to make their decision? there are theories on both sides of that, but i think we need to think about do we keep that opaque black box, have a reverse and forward auction when the bidders are not sure what it is that's available to bid on, and then in the meantime, it's supposed to be a software put out for comment and public inspection that helps with the repacking program. after each bidding round, i've already probably lost you in terms of how complex it is, but keeping it simple is step one, and, step two, there's got to be a financial incementive for broadcasters to yield spectrum. we need it most in the larger, crowded city, and that's where there's more eyes looking at tv, and the more opportunity to make money if you're a broadcaster,

so it's harder to entice them to yield. some will, indeed, but maybe not as many as we like. >> do we need a uniform price nationwide so airways in the midwest go for the same value in new york, or do we have different values in different markets? >> guest. you know, historically, different values in different markets is the way to go. you wouldn't get far, i don't think, maybe broadcasters in wyoming would love to get manhattan prices, but i'm not sure the folks in manhattan go for that because they think they were undercut by the subsidization with the folks in wyoming. historically, the best way we accomplish these spectrum auctions has been geographic markets by geographic market. >> host: commissioner, how many megahertz are you talking about without involving government run spectrum? >> we'll get to the spectrum and

the question in a minute when we know what you are thinking there, so each tv station and it's poll to share 3 megahertz a piece. add up the six or three, it takes a lot to free up the spectrum to get to the 60 that was hoped for in chicago, manhattan, or l.a.. can you find, let's say 10, 15 # broadcasters or maybe more in the new york market to give up their spectrum, particularly to share with others? depending on how you use the math. what do you mean by "government run spectrum"? >> host: will government run spectrum will a part of the process? >> guest: late last year, there was a story about some nationwide government run, free wireless broadband network, maybe earlier this year, actually, that story was printed, and there was just no basis to that. i think people were confusing and conflating the idea of

unlicensed spectrum. i've been a proponent of unlicensed uses of what we call the td white spaces, the unused tv channels in certain markets, and they are scratch spectrum if you will, and it's more ideal for low powered devices. i'm spectacle of a nationwide block of 30 megahertz, a big chunk of spectrum, in the country to be reserved for license use. the characteristics of that screen license exclusive use, license because you need large transmitters, you know, when you talk about big chunks of spectrum in large geographic markets, you talk about powerful transmissions that go a long distance, and that mean as lot of electricity behind it and big towers that requires a lot of capital. people only invest capital if it's an exclusive use license, so i'm skeptical of big blocks of spectrum, and it's destructive in a positive and

constructive way in the economy and yield innovation that we can't even imagine right now, but narrower slices in smaller areas. >> host: back to tom shield of bloomberg news for more questions. >> thank you. it's an interesting con cement, you mentioned the big powerful transmitters to cover big blocks in big areas, but there's an al -- alternative vision, use smaller shrubbery to make it work where we have a lot of small wifi hot spots capable of carrying internet traffic, and these days, it's some of what was behind the report you mentioned earlier by nationwide free service, and whether anybody builds a network that thick and extensive is another question. there is the debate going on that you'll get to weigh in on which is when you design the auctions, how much of the air waves should be devoted to the

unlicensed uses versus should it be carpet remnants or a bigger chunk? to the extent you devote those unclinessed uses, it's not sold to at&t, verizon, t-mobil, whoever are the competitors. a little bit of unlicensed use or a lot and see what might happen with it? >> guest: i think we have to auction as much as we can. i think if they have broadcasters giving up six megahertz, we should then auction that. it's not a zero-sum game, and your analogy was a good one. >> all right. >> guest: we have voted out an item having it done in the 5 megahertz range, a shorter range, propagation characteristics of the nature of that frequency, but also in the 600 area, we can have that 600 megahertz area as well, and 700

hertz where the tvs operate. they have to yield the right of way to the license, and if you are having one company or a lot of company bill proprior tear networks in an unlicensed ban, there's some license somewhere that can override that. if you think back when you were a kid, you had a walkie-talkie that's unlicensed, and as a kid, you heard the neighbors' kids talking. or a baby monitor, that's unlicensed or kids who play pranks with garage door openers, walk in the neighbor's garage to open and close it in stuff as a prank. all that illustrates how chaotic it can be and how interference can result through unlicensing. that's why you need to be

careful about how you approach it. a mix of as much licensing as you can, but in the gaps, there's a robust opportunity. it is exciting and can be a win-win. >> host: is that the general feeling at the fcc? >> guest: i think it's mixed feelings. i won't speak for the commissioners, although, i'd love to, they probably don't want me to. there's a difference of opinion on this one. >> host: another question on spectrum. >> when the incentive auction happens, it's one of the biggest opportunities in many years to trueness form the use of the airways from television to the mobile devices of which there's great demand. in that opportunity, should the fcc try to ensure the smaller companies have an opportunity to buy a sufficient amount of airways to ensure there's a competitive landscape, and here i'm asking whether it's just -- what should the fcc -- be frank about it, at&t and veer rison

don't escape with the lion share of the airways because they have more money than anybody else. >> right. i think there's a way to give a home to small carriers, mid size companies, entrepreneurs, and large companies. with the 700 megahertz auction, part of the transition in the 2007-2009 time frame, and, actually, proposed a plan that would have dope just that, but the plan adopted was not to different from that, but you can have a home. where it's tricky is what conditions you place in the spectrum or what are the unintended consequences? there were conditions placed in the auction, the 700 auction, that drove large players into the spectrum block they thought others would want, and they were scared away by certain regulation. we don't want that to happen. i think you can have a place for -- and should have a place for smaller players, and i hope they will when they have the

final word. >> host: you're watching the "communicators" on c-span, and the quest is republican commissioner robert mcdowell of the federal communications commission, our guest reporter, todd shields of policewomanberg. next topic. >> you've been on the commission of 2006, the chairman has been on since 2009. his term is up. yours is up next year. will there be turnover? >> guest: always expect turnover because we have staggered terms. the past six years have flown by quickly, and we shall see. you know, stay tuned. i'm asked this question every couple years, and we've been there seven years. inflexion points are like this, and i'm openly thinking about it, but we'll see. >> host: openly thinking about what? >> guest: what to do next. i thought about that several times, what's after the commission? as a limited government person, i don't think we should stay in the positions forever, but at the same time, i love my job,

and that's part of what is keeping me here. we have a lot of important work to do. i have to balance the decisions. >> host: well, last week at the senate commerce committee, the chair, senator rockefeller, talked about violence in video games and wanted the fcc to have more control, further monitoring of violence in video games. what currently is the fcc's role when it comes to that, and what -- how do you foresee the role? >> guest: violence or violence in video games? >> host: violence in video games. >> guest: we have no role, no legal or statutory role. we can have a bully pulpit. i'm the father of three young children, and we deal with this in our house as well in types of content is streaming over the tv or video games or whatever, what do we feel as parents is the prompt thing for our children to watch? from a constitutional perspective, violence becomes sticky very quickly. what is violence? is a hockey game violent?

is a cartoon violence? is the evening news violence? the answer could be yes to all of those. there's the first amendment issue there in terms of what can the government do. the fcc has no statutory authority to regulate violation, only indecency, and that's another standard, and that's only over the broadcast of tv and radio, not over cable, satellite, or the internet, so it's an ongoing issue. i know it's important to chairman rockefeller and important to me as a parent, but right now, the fcc actually has no legal or constitutional authority to act in this area. >> host: what if it did? >> guest: well, that's a big hypothetical, but we would have to have some direction from congress, and i don't know what that would be, and that would be assuming there's no system. that's a big assumption. >> host: todd? >> where does indecency stand in the wake of the supreme court decisions last summer which you sum them up for me, you're the lawyer, i'm not. they made it difficult, as i recall, for the fcc to proceed

in the areas. >> guest: the court murkied up the waters for us. each time they declined to address the 1st amendment. we don't have a lot of guidance from the court as to whether things like fleeting expletives are constitutional or not, and whether or not they want to redefine the earlier standards and things of that nature, so it's helpful as a commission issue, the public notice for public comment on what standards should be. i think everyone would be better served if we had a defined standard going forward. i will say this, though, for a long time, we had about a million and a half indecency complaints pending at the commission. a lot were against satellite and cable tv channels and such, and those aren't enforceable, so the commission has been actually able to dismiss or process the lion share of thoughs who were

done to about half a million to 1.5 million, an unwritten story, but i think the enforcement bureau gets a lot of credit for that. >> host: should cell phones be allowed to be unlocked by consumers? >> guest: i brought my prop. thank you for letting me use the prop. so what we have here is a cell phone, a smart phone packed full of intellectual property. we have to get beyond the initial headlines of the story, which is odd with the companies saying it's impossible for consumers to unlock the phones. you have patents, trademark registration, and hundreds, if not thousands, in just that device right there. i want to make sure whatever happens in the area that we continue to have robust, intellectual property protection, property rights protection, in that we don't undermind the freedom to contract.

if consumers are informed and well educated to what their rights are, versus the rights of the device maker or carrier might be, then i think we'll have a better marketplace. going forward, i think we all have a role, that would be congress, federal trade commission, federal communications commissions, and others in terms of making sure we know exactly what we are talking about here, but we don't want to undermind the property rights and allow consumers to have the freedoms to contract with those carriers and be able to transfer their devices around once they own the device. they own the device, but not the copy right, but not all the intellectual property or the licenses to it. >> smart, the white house put out a statement a couple weeks ago saying they support unlocking of devices when you are not under contract. they don't say get your carrier contract and unlock the device the next day and walk from the contract. >> guest: exactly. a very important point. >> i think that's missed in the debate. unlock any time.

well, no, if you have a considerate, that's a subsidy for the phone, and the idea is to prevent unlocking once the contract is finished once i understand that correctly. >> guest: you're right. i'm sure bloomberg reported that completely, but a lot of outlets didn't. we have image of consumers hauled off in cuffs because they trieded to open their phone. that's not happening. it's not going to happen. you're absolutely right. once you own something, or own the license to something, then you ought to be able to take it to your carrier of choice, and that's available now, by the way,. there's unlocking going on now, even before whatever the copyright office did. >> host: todd shields. >> talk about the itu and internet freedom. it's a topic you spent time on. >> guest: thank you. the union is an arm of the u.n., has a long history going back into the 19th century. there was a big treaty negotiation in dubai in december, this past december, where, for the first time, the

itu claimed control over the operation content in economics of the internet through definition changes in the treaty, and it was a divided vote. about 40% of the countries that showed up for the vote did not sign on to the treaty. 55 countries did not plan on, 89 signed on to the treaty, and 49 countries didn't show up to the treaty negotiations. now, the countries have until january 1st of 20 # 15 to sign on. in the meantime, there's a bigger, really sort of constitutional convention that will go on in korea in no -- november of 2014. between now and then is a crucial time for the u.s. and foreign policy because there are steps in many international meetings across the globe that happen in 2014 that shape that treaty outcome.

it's constitutional convention literally from the icu to elect a new secretary general. by rewriting the constitution, the countries that have been pushing for, literally international regulation of the internet, will be able to take all of their ideas a step further. they've been very patient incrementalists, very per sis tent over the years, and they will not quit until their goals are realized. it sounds like black helicopter conspiracy theory, but it's not as with evidence in dubai last december. i'm not optimistic. our state department and department of commerce do have a role here, and the good news here in the u.s. is that we're all unified. congress is unified, had a rare moment last year when there were house and senate resolutions that passed unanimously by both chambers. really, underscoring our country's view of internet freedom and why that's important for the future of the developing

world, and that's what's heart breaking here. there's a lot of developing world nations that are signing on to this treaty that will actually undermind their economic future and political future, and it might be the regimes that are more author authoritarian and don't want the freedom of information and other political freedoms that follow behind an unfettered internet. that is what's motivating a lot of them. >> right. they want the ability to block traffic, if i understand it correctly, and, perhaps, the charge, also, part of the agenda? >> guest: yes. local state owned phone companies want to be able to charge websites for consumers accessing websites and want international political cover for having one-stop shopping or choke points, one point of failure or one point of choking for content, maybe under the guides of things like span or network congestion, things like that. they -- there will be always be a reason that seems innocuous, but it's

actually much darker. >> host: if this passes and happens, what would -- what would be the result for the end user at home? >> guest: excellent question. again, throughout the developing world, it's it stumps the growth of the internet and throughout the world that signs up on this. if there's a partitioned internet with an iron curtain across it so to speak, the -- first of all, that's app engineering nightmare. the internet is a global network of networks without borders. various technology to transmit data. to answer directly, for consumers it creates uncertainty and raises costs. a lot of things that are free now, now may no longer be free because costs are raised. it could stop the growth of it. you know, what's hard to measure are innovations that never make it to market due to some sort of governmental action. you can't measure what never existed, and so that uncertainty

alone, i think, drives up costs and creates chaos and a lot of engineering headaches. hopefully, you know, our country and others will stand strong, but what we really need to do is convince the developing world this really is not good for the human condition overall and for the development of their country. >> host: commissioner mcdowell, last week, senator bill nelson of florida called for more information, for the fcc to require more information in the disclose act and more for political backing information to be displayed on ads. what do you think about that? >> guest: so the disclose agent regarding the disclosure of donors to groups that air political ads of one form or another didn't pass. it's not the law of the land. there's an argument both from members of the house and senate that the act of 1994 gives us

the authority to do this. sex 17 speaks to sponsorship idea and who pays for the ads or product mentioned on the air has to be revealed. it didn't con temperature plait that when written in 1934. looking into all of the donors and contributors to any group that may have directly or indirectly funded the ad, so, in shrt, we don't have the statutory authority to do this, and i don't think we're at the right place for the debate. first of all, the debate should happen in congress, and, second of all, there's a federal election commission that's about revealing transparency in political donors and the whole political campaign finance realm. that's the better place for this. >> host: todd shields, time for one or two more questions. >> another authority question, a long ago battle, the net neutrality battle where there's rules claiming to ensure that big companies don't interfere

with web content into my house. that's been challenged in court. what happens if the court overturns the fcc? what happens if the court supports the fcc? where do we go with the issue? >> guest: excellent question. i descended to that on december 21st, 2010, i believe, the shortest day of the year in 2010, and -- >> the darkest day. >> guest: yes, the darkest day for the fcc in 2010. so the idea that interpret service providers in an anticompetitive way would interfere with consumers' internet traffic was at the heart of this. i argued it first of all there was no market study, and there's no problem to be solved. second of all, the fcc didn't have the statutory authority to do what it did. there was a ruling in april of 2010 where there was an -- a similar attempt where the court struck down what the fcc did and sent it back to explain

itself better. with this one, the fcc tried to explain itself better, but i want consumers to know, should that ever happen, which is really hypothetical, that there are plenty of laws on the books, antitrust laws, consumer protection laws, the potential class action lawsuits with portion of interference with contract. there's a lot of ways to have a legal disincentive for internet service providers to do that, should they think it makes a good business case. >> in addition to the business incentives. >> with competition through wireless broadband and more and more consumers and vast majority of consumers having a choice of four wireless providers, and, plus, the unlicensed we talked about which mixes if up as well. i hope the fcc closes the title 2 docket to classify interpret access as a monopoly phone service under the 1934 # communications act. the internet operates completely

differently from that. it's a bad idea and fuels the effort at the itu for there to be global regulation of the internet, and, ironically, some of the companies that push for net neutrality like google, they have thousands of miles of fiber and offer voice and video services. i described at&t, comcast, and verizon. some of the tech companies like like telecom companies meaning they are this close to be regulated globally as a moo notary public -- monopoly. if we do that in the united states, classify the service as monopoly phone service, it will be absolutely catastrophic for the interpret economy. >> host: unfortunately, we're out of time. commissioner, as always, appreciate you being on "the communicators," and todd shields, you and bloomberg as well. >> guest: thanks for having me.