we actually call it hits 2.0. my kids like that. hip 2.0 would offer three basic options and i want to roll through them. first would be a premium

assistance plan that helps low income working hoosiers access employee coverage coverage and second we have two health savings accounts like lance with varying degrees of coverage. it's essentially a three-legged stool. for health care in indiana. we call it hip link, hip plus and hip basic. now each of these would allow people to utilize private insurance options in consumer behavior to increase access to quality health care and the managed cost and health outcomes in the long run. first off, in hip 2.0 we would offer a hip link which is a premium assistance program for people who have access to insurance through their employers today but simply may not be able to afford it. now this is -- this is a defined contribution premium assistance program and it is the first of its kind.

those who qualify for hip, hip link would receive the defined contribution to the state into what we call their power account. that's their health savings account which they could use for payams co-payments or deductibles area that's first. secondly is the first of the two health savings account like the grams. hip plus first and foremost i will say is available to all qualified hip members who make their contributions to the health savings account their power account. those contributions will range from $3 a month to $25 a month based on income. the hip plus plan offers enhanced coverage including vision and dental for adults in a conference of prescription drug for graham grandma covers maternity services with no cost-sharing during the duration of the pregnancy. lastly is hip basic and it's something of the default plan. it's exclusively for hoosiers

below 100% of the federal poverty level who we fail to make their required contributions to their health savings account. members of this plan must make co-pays. they will receive fewer benefits until they can continue to contribute to their health savings account again and move back into the hip plus program. again i way of summary premium assistance program helps people who don't have access to a plan. the enhanced health savings account plan hip plus provides incentives to save and use preventative care offers a more generous set of benefits. the second health savings account plan hit basic serves as a default for those under 100% of federal poverty who failed to make their payments under hip plus. it contains intent is -- incentives for them to reinjure they have plus program. both plans penalize emergency room use and encourage preventative care instead.

contributions are required for all hip members who choose one of the health savings accounts plans. those above 100% of federal poverty level risk losing their coverage entirely if they do not make contributions. those below, those below 100% of federal poverty level should they stop making contributions as i said must make co-pays receive fewer benefits until they begin to make contributions again. the contribution amounts are reasonable and fair by income level and are designed to be that way. as we have seen in our pilot program let me say this emphatically. low income working hoosiers in our state take pride in managing their accounts and making their contributions to their health savings accounts consistently. and we are proud of that fact. a couple of other elements. the plan also includes what we call a gateway to work referral program that will connect those who qualify for hip coverage

with job training and job search programs offered by the state of indiana so they can move up and out of the program. hip 2.0 is not intended to be an entitlement. it's a safety net program that alliances and incentives with human aspirations. the plan also includes high co-pays for inappropriate er usage to encourage enrollees to use primary care rather than emergency room care and management content on emergent health needs and i'm very pleased to say that hip 2.0 will be fully funded at no additional cost of hoosier taxpayers. hip 2.0 will be funded through a combination of federal funds and an agreement with indiana's hospitals who have partnered with us to improve access to health care coverage within the state of indiana. this means if approved by the federal government are waiver will allow us to expand health care coverage to hundreds of thousands of hoosiers with no

new state spending and no tax increases required. now if i haven't thoroughly confused you or if i have you can go to our web site and read all about hip to point out to your hearts content. it's at hip.i and.com. i think hip to point a maintained emphasis on the principles that animate my political career and i think i am at the very heart of the people of our state and the people of this country. to put the emphasis on personal responsibilities. they also represent a continuing effort in indiana to find innovative fiscally responsible ways to get people the care they need. reforming traditional medicaid to this kind of market these consumer-driven approach i believe is essential to creating that her health outcomes for the people of our state and curbing the dramatic growth in medicaid spending for the people of our

country. i truly believe that once obamacare is repealed that the consumer-driven plan we are proposing and a healthy indiana the other plan will serve as a model to what lott granted medicaid programs could be in states across the country. with this i will close. and i would be pleased to take some questions. i believe there are only two futures for health care in america today. there is government driven health care or there's consumer-driven health care. years ago when the healthy indiana plant was first adopted indiana chose the better portion by embracing consumer-driven health care giving eligible hoosiers a power to make own health care decisions and now we are seeking permission from the federal government in the form of a waiver to build on that choice by expanding the healthy indiana plant to more working hoosiers. hip 2.0 takes consumer-driven medicaid reform to the next

level by replacing traditional medicaid in indiana for all nondisabled adults and offering instead a health care culture that is built on healthy cost conscious decision-making. again let me say hip 2.0 is not intended to be a long-term entitlement program. our hope is that people will not be on it for very long at all. but will transition either to private insurance marketplace and opportunities in taking greater ownership will lay a foundation for good health and prosperity in their family as they move up and out of the program and are able to obtain insurance in the marketplace. hip 2.0 is a safety net that aligns incentives with earned success hope and opportunity. the truth is the soft paternalism of the modern welfare state has failed to honor the dignity of the working poor in many ways. by failing to give them the benefit of the doubt and by

failing to believe in them in indiana we believe our people regardless of their income regardless of where they find themselves on the path to success and hip 2.0 is really designed and built with that faith and that confidence in the people of indiana and their ability to take hold of their futures if given the opportunity to prosper. lastly let me close here at this policy group surrounded by so many think-tank people. let me ground this a little bit more in the world in which i work everyday. i think as we talk about policies and coverage and health care reform and the debates that take place on cable television in the airways across the country we must never forget we are talking about real people.

working people who deserve a better life. hip to point out in our proposal to reform traditional medicaid in indiana is about reaching out to people that are working hard to build a better future but simply don't have the ability and don't have the means in the health insurance economy that we have today to be able to provide coverage for themselves and for their families. but the real hoosiers and i have talked to many of them across our state since i have begun to serve as governor. and one of them i will close with was named diana. i met diana at a visit to community hospital in indianapolis.

just a few weeks back. she was in with a heart condition but she said it was okay if i came there anyway. she was self-conscious about how she looked and i try to set her at ease. i told her you look great and i sat down next to her bed and took her by the hand and she told me her story. diana had lost her insurance when she lost her job. shortly thereafter she started having chest pains. even though she knew she could go to the emergency room to get treatment she waited. she actually told me sitting up in her bed, she said the doctors told me i had put off coming in a little too long. but she said i didn't want to commend because i was embarrassed because i didn't have insurance.

thank god she is okay. i prayed for her more than once since that day at her bedside. but she touched my heart. i mean here is a hard-working woman who just wanted to find a way to pay your own way and not rely on the free access of a public hospital. i think diana isn't like a lot of working hoosiers. people that don't want a handout but they need a hand up. in indiana we have long cherished the principle that you should love your neighbor as yourself. and that we should never walk by on the opposite side of the road

when someone is hurting and in need. i think it's what makes indiana special. let me say that is what hip 2.0 is really all about. respecting the dignity of every hoosier including our working poor to find a way to cover themselves and their families respecting their ability to make their own health care choices and empowering them to lead healthier and better lives. i think the healthy indiana plan is a better way. it's a better way to better health, better coverage to a better health care system and a better future for working people in the state of indiana and beyond. i hope that our success with this program will help other states as well and serve as yet another reason why we should

start over on health care reform in america, why we should repeal obamacare and replace it with a plan that includes consumer-driven health care for low income americans and empowers them and their families to meet their needs and make their own way. thank you very much. i appreciate your time and attention today. [applause] i think we have a little time for questions. go ahead. see my name is dan parent. i am the head of the hsa coalition. i want to thank first of all for mentioning my mentor and his role in this. secondly i want to just endorse what you are doing here. i think it's incredibly

innovative. i think it's incredibly courageous. you have got tremendous street cred for the 96% of state employees who are using hsa's now. in addition to that your hip one plan is the only one in the country like it and the results are clear on their face. people say money. you save money and you bring personal responsibility and choice within a government construct under an obama construct. that's no small trick so i just want to say thumbs up. he very much. i appreciate it and we are proud of our heritage that health savings accounts in indiana. i really do believe this idea was worn in the hoosier state and someone asked me last week after we announce this wire you expanding the healthy indiana plan and i said this it works. sometimes i work in this town

for 12 years and everyone has got a new idea. this is in the new idea. this has been in the field working for people eligible for medicaid in indiana. that's the very core practical core of why we want to expand this program. please, hi. a microphone real quick. >> my name is barbara and i'm a nurse and a caretaker of an elderly parent i want to thank you for the work you are doing on this. does healthy indiana work through a combination of health savings accounts and sometimes a modified insurance and doesn't have to work within the mandatory benefits package that sometimes gives too much of one kind of care and not enough of

another and drives up cost? >> the short answer is and i recommend that you go and i will plug it for our c-span audience again. it's hip.i am.com. it's basically a three-legged stool. the first piece of it hit the link basically allows individuals to use what would be the state's contribution to their health savings accounts for premium assistance. there's a lot of people in this category and again if you walk out of here with no other, no other realization this is a program that we are designing to meet the needs of working hoosiers. these are people with jobs. maybe they have fallen on hard times but these are people that are working for a living and is aspiring to work for a living. first would be the premium assistance piece allows people to purchase health insurance they might not otherwise be able to afford through their employer and as i said and this is for

the technical people in the room. it's a defined contribution premium assistance program. it's the first of its kind in the country. it is in effect a voucher for people these days public resources and purchase their piece of their health insurance. the other two pieces hit plus is very much designed after our current healthy indiana plan today and the future health savings account. there are consequences for nonpayment. it's open to everybody that is eligible within the population up to 138% of the federal poverty level. to your last point for people under 100% of the federal poverty level with current federal regulations there is a certain minimum amount of coverage that within the waiver we have today in the waiver we are requiring that cannot be denied but the way we have structured it is in effect by

making full health savings account plans a hip plus more attractive imminently affordable with better benefits we have every confidence that people are going to choose the hip plus plan in increasing measure and believe that we have created what we call a value proposition that will drive people to that outcome. but again our waiver has been structured within existing federal law and regulations. yes, right here. go ahead. >> good morning governor and my name is jim gandalf. i'm the chairman of the hsa counsel for the american beggars association. they represent 92% of the agents in the united states and i can tell you that the word to use here today resonated. it was one that i use years ago and in 06. what you are doing so i can tell

you inherently would be happy to share this with anyone who's interested in hearing about her reading it can tell you the outcomes that derive from ownership and dignity of ownership will drive correct choice and will over time teach our fellow americans all the way across the country how to handle their health care expenses. we endorse you. we thank you for what you are doing and congratulate you in indiana. my question is --. >> i didn't know that when i called on you. >> is there an appetite with other republican at the assertions in the states today, your fellow governors to follow this type of example? what is your opinion? >> guest: i will have a better idea after this week. i'm traveling to new york on the train to go to the governors -- and i think there will be some discussion about this so i will defer on that sack one want to thank you for your eloquent

statement. about health savings accounts and their value. at the core of this the reason i'm so enthusiastic about indiana's leadership on consumer-driven health care is because it's better for people's health to give people a greater opportunity to take ownership in their health care decisions. and there's that old saying that says when you have your health you got lots of problems. we don't have your health you have one more problem. in my family and yours we all aspire to good health. what's great about consumer-driven health care and yes there are the advantages that offends the cost curve. most experts suggest the advent of consumer-driven health care is what what's slowing down the rate of inflation of the health care economy today. i get all of that. i get more excited when i talk to somebody working for small business in indiana or a healthy

indiana today this is my life got better because i have incentive to take advantage of preventative medicine. i found out some things i could do in the area of smoking cessation or losing weight for all these different areas that a lot of people that have the opportunity to avail yourself of primary care on a regular basis go see your own doctor you take for granted. for people to have greater access to have the incentive to take greater ownership in their own health care choices which is the very core of that original vision for consumer-driven health care and health savings accounts is what i get most excited about. yes please, hi. >> hi. my name is sarah and i was wondering obviously the obama administration is motivated to

close this coverage down that you've talked about. you think this is a moment when you and your colleagues across the state have more leverage to in this waiver if he could talk about those negotiations in this particular moment when you're working towards the same goal it seems. we haven't shaken hands on this deal yet but i'm hopeful. what i can tell you is that right after i was elected governor i said then that i did not believe indiana should set up a state-based exchange and i ruled out an expansion of traditional medicaid for the state of indiana for all the reasons that i stated today. and i have stood by that decision. early in art administration that we reached out to federal officials to seek to renew our existing healthy indiana plan. our waiver was running out and

as i reached out to officials at health and human services and i spoke to the secretary and our team met with them we said we have a two-step process here. first because of the healthy indiana plan had in such an unambiguous success for the people of indiana as i said some thousand hoosiers enrolled in this today, 40,000 hoosiers that are all medicaid eligible. my first objective was i wanted to preserve the healthy indiana plan and frankly in the wake of the 2012 election so there were some that speculated we wouldn't be able to do that with traditional medicaid expansion available. there was a lot of skepticism whether the administration would be willing to extend a waiver that we made it very clear what our position was and we made it very clear that if we were able to see the healthy and then plan waiver renewed that we would then be willing to continue a

dialogue about using the healthy indiana plan and consumer-driven health care as framework for further discussions. i meant to tell you that i continue to be very grateful for the good faith negotiations that took place between art administration and the administration washington over the renewal of the existing healthy indiana plan. since that time i would say we have been in continuous discussions with federal officials. and a proposal that we and failed last week has been the result of that dialogue. again there is not agreement on it but we remain hopeful that the administration will allow about the state of indiana to continue to build on the healthy indiana plan and to an effective

build on our commitment to medicaid reform in the state of indiana. so that is how we characterize the discussions but they have been ongoing. we are in a comment period right now where reef unveiled the proposal. the law requires us to collect comments from across the state of indiana and then we will be submitting a waiver formerly we think sometime next month. then i expect the discussions will continue their. we believe the proposal that we unveiled last week is the right proposal for the people of indiana. we also believe it's a good-faith proposal and that i think will serve the people of our state well for many years to come. we will seek the maximum allowable time under the law which i think is five years for that waiver but let a say as i close and then we will finish the formal program but i can

catch up with some of you afterward if you want. i served 12 years in the congress and i served the better part of the year as governor. i have become more convinced every day that the cure is going to come from the nation-state capitals than it ever will from the nation's capital. at the very core of this waiver request is my belief that many of the most intractable issues facing our country including health care can best be solved by giving the states the freedom and flexibility to design programs that can solve the challenges the people of their state are facing in those areas. we will continue those discussions with federal officials. i'm hopeful that we will be able to expand the healthy indiana plan anyway that will serve the

people of our state. we will close the coverage gap that dude in a way that continues to advance its pulse of empowerment personal dignity and consumer-driven health care in our state and maybe be an example to other people around the country. thank you all very much. [applause]

on a partyline vote the federal communications commission approved a plan to limit to the mount of spectrum the largest mobile carriers can buy in next year's auction. democratic commissioners said the measure would ensure competition good republican members opposed the plan saying the government was determining winners and losers. this is a little more than an hour and a half. [inaudible conversations] >> it's all yours.

>> commissioners clyburn rosenworcel pai my colleagues are here to. [inaudible] that would establish rules for implementing the broadcast television incentive option. thank you for your continuing oversight and support of the process. today's item is the product of an extraordinary piece of work done by my colleagues throughout the commission. i want to thank each and every one of them. joining me at the table today are julie knapp chief of engineering and technology bill lake chief of the media bureau roger sherman chief of the wireless telecommunications bureau rob porter did the chief of the international bureau and how words simons pfister incentive auction task force. our presenters today will be bill scher who serves as a legal counsel to the incentive auction and test scores and is truly the

architect of the report in order and edward smith who has provided invaluable substantive process to the entire venture to this point. bill and smitty will discuss the report and order. >> good morning mr. chairman and commissioners. ace on the extensive record developed in this proceeding the decisions provide the framework for the auction. the commission will adopt final auction procedures in the coming months. process that will allow public input and conclude well in advance. for new services in the incentive auction for draft item adopts a 600 megahertz band plan with paired up blank endowment bans comprised of building blocks. the draft item adopts areas as the service area for the new band finding localized

competition and may be aggregated to provide service on a larger scale. the band has the flexibility to accommodate spectrum recovery scenarios and variation in the amount of spectrum covering different geographic areas. the band plan incorporates technically recent of guard dance including an 11 megahertz duplex to prevent harmful interference between licensed services. the guard bands will be made available for unlicensed use. depending on how much spectrum the auction recovers 20 to 34 megahertz of spectrum will be made available for unlicensed use on a nationwide basis. devices will be required to be interoperable across the megahertz band. the draft item establishes an efficient approach to repacking broadcast television bands that will fulfill congress's mandate to use all reasonable efforts to preserve the coverage area the

population served the broadcasters the remain following an option. in particular it will ensure that each eligible station serves essentially the same viewers is served before the incentive auction and no station causes more than .5% new interference to another station. to help preserve the important services provided by low power television television translator stations the draft item establishes streamlined procedures for display stations to relocate. also states the commission's intent to initiate a rulemaking proceeding to consider additional means to mitigate potential impact of incentive auction in the repacking process on low-power television and transfer stations. television white space devices will be able to continue to impact television bands following incentive auction. draft item explains there will be at least one channel not assigned to a television station in every market at the end of the repacking process that stays

the commission's intent after public notice and comment to designate one such such channel in each area for shared use by wireless microphones and television white space devices. see the draft items add speed in their design design. but to equate the format participation transparent and easy pay broadcasters need indicate only whether they accept the opening price and if so any subsequent prices. if at any time the broadcaster decides prices are too low may drop out of the auction. the identity of broadcasters that participate in a reverse auction will be kept confidential for two years after the incentive auction except for winning bidders. the forward auction is innovatively designed for speed so her first auction participants need not await its outcome for weeks or months. bidding for generic or interchangeable spectrum blocks

rather than specific frequencies will condense the time required for bidding significant way. the draft item adopted a final stage role that will allow market forces to determine the best balance of spectrum repurposed in revenues raised. while ensuring that the auction satisfies the minimal proceeds requirements established by congress and fully funds firstnet. following the incentive auction the transition to a reorganized uhf band will be as rapid as possible without causing unnecessary disruption. the time required for stations reassigned to a new channel to modify their facilities will vary. construction deadlines will be tailored to specific situations. every purpose spectrum will be cleared no later than 39 months after the effective date of the incentive auction. the draft item establishes procedures to reimburse costs reasonably incurred by tv stations that are reassigned new channels and to continue to carry substations.

these procedures will make reimbursement available for stations nppd's have out of pocket use of repurposed spectrum during the transition while ensuring access to new licensees. lp tv and tv translator stations will be able to continue operating in newly licensed spectrum unless and until they are displaced. wireless mics and the licensed devices will be able to operate and repurposed spectrum during the transition. math. the auction represents a once-in-a-lifetime opportunity for broadcasters and the commission is committed to providing them with information to enable them to make informed business decisions about whether and how to participate. beginning this summer our outreach efforts will include information about the auction mechanism and estimated timeline for actions in information about potential opening bids. our outreach will be nationwide

with the focus on key markets. closer to the auction we will offer demonstrations in the auction bidding service and other opportunities for broadcasters to familiarize themselves with reverse applications in advance of the auction. >> as the commission is well aware of the incentive auction team is a large group of highly dedicated professionals each of them deserves individual recognition and thanks but unfortunately as you can see from the chart we don't have enough time. the incentive auction is only possible thanks to the really hard work of all of these dedicated people and others on the commission said to our brave and intrepid team thank you very much and we look forward to continuing to work on this project. >> thank you to you gary for your leadership and the entire intrepid team. mr. clyburn. >> like many in this room i

spend a fair amount of time at airports. during my early days of travel newspapers magazines and actual books were the must-have must read attachments. today not so much. if you take the metro or other service you more likely will find glued to a tablet cell phone or other to -- wireless device. news information attainment or even basic communication is now delivered anytime anywhere. school aged children and old-school stalwarts people from all walks of life are adopting the dakotas and utilitarian tools of the day which make their lives more accessible and more efficient. this is a world in which we live and it is a wonderful place indeed but as there are societal appetite for future rich content increases and in order for us to continue along this path we must position ourselves to provide this nation with an adequate

amount of spectrum making this proceeding one of the most important and challenging of the day. innovation in mobile broadband has spurred demand at a breathtaking rate. i still marvel of the fact that when i first took office in the summer of 2009 tablet computers had not even hit the market. now estimates are that by 2016 more than 100 million people and our nation will all. those tablets as you have heard me say time and time again use 121 times as much spectrum as the traditional cell phone so if you want all communities to have access to the most advanced wireless technologies our regulatory policies must keep pace and that includes repurposing more spectrum for commercial wireless services. in 2012 congress took a dramatic

step by giving statutory authority to conduct the world's first voluntary incentive auction in a way that also preserves the integrity of the broadcast tv industry. now the commission must expeditiously and carefully carry out this directive. designing this auction is daunting and unprecedented. it must integrate three major elements the reverse options for those tv stations that want to relinquish their spectrum rights for payment the repacking of rock's television stations that want to stay on the air and the forward auction which will repurposed spectrum for wireless services. each element presents its own set of difficult technical issues but further public hitting the task is that congress imposed specific requirements for each element. however the commission staff has shown that it's more than up to the challenge and the npr am the

staff set us on a course that indeed would benefit both the broadcast television and wireless industries in advance communication policy objectives such as participaparticipa tion by smaller companies competition and accommodating other existing services that have proven so valuable. with this order the staff has recommended rules that improve on these goals. i am particularly pleased that the order does more to promote participation by designating entities and small businesses. we make clear we intend to initiate a rulemaking that would revisit a number of te rules including increasing bidding credits and material relationship rule and wrap up that proceeding early enough so that parties can account for any rule changes as a plan for incentive in the incentive auction. we also state we intend to

resolve opinion request to waive the material relationship brewing in the near term. another noteworthy change in the forward auction rules will promote more competition. it's important that our wireless auctions attract carriers who may have a smaller service footprint unless capital the nationwide providers yet possess a strong desire to apply more spectrum in order to serve a particular footprint. this approach promotes competition in local markets and has the added benefit of ensuring the option -- auction permits spectrum to the highest and best use. this is particularly important in this case since we must incentivize broadband television stations to participate in the reverse auction. we can promote these by auctioning smaller block sizes of spectrum in smaller geographic license area so i'm glad they push large and small

carriers to develop a consensus so we can shift from the larger economic areas to smaller partial economic areas. i am also pleased that we have reaffirmed our commitment to ensuring that unlicensed spectrum in the 600 megahertz band can be used to provide broadband service. i have been a strong advocate for unlicensed use of tv white spaces since we adopted those final rules in 2010. this technology which takes advantage of the excellent signal propagation of the one gigahertz spectrum has provided wireless broadband services in low income communities that are often difficult to serve. there are initiatives such as a partnership between new america foundation technology companies that are finding solutions for universities in those areas. this past summer they worked with west virginia the university to launch a pilot

program that provides campuswide wi-fi services using tv white spaces. i commend commend chairman who therefore considering an alternative plan that would provide for more unlicensed spectrum in the 600 megahertz band. this assures spurring new innovations and unlicensed broadband services worldwide. it provides more protection for certain services than the npr had originally proposed. for example i have concern about the impact in the 2012 statute in this proceeding could have on low power television stations are ltte and translators. they provide diverse and local television programs and translator stations in particular are an important free over the air television resource in the most remote of locations. it was important for me that the commission explored all reasonable options to allow the stations to continue to

broadcast over the option -- auction. this order goes further. by explaining the commission will initiate a more comprehensive rulemaking proceeding to explore several other auctions for ltte. it will explore allowing the stations to transition to the hf channels using repacking software to help them find new locations to operate and extending the september 2015 deadline for converting digital services so low powered television stations do not have to relocate to me that deadline and relocate yet again after the incentive auction. the order adopts a rule that would allow the stations to continue post-auction to serve

in the 600 megahertz area into a wireless carrier commences operation. the wireless carrier must notify lpte's 100-2020 days in advance of that day. i also commend the staff are working hard to find solutions for wireless microphones. rochester's and other entities which rely on wireless microphones for latebreaking electronic news gathering of life defense dba insurance is of reliable high-quality -- and the incentive auction or we will permit marlys -- wireless mics in the naturally occurring empty television channel in every market. in the companion wireless microphone order we also adopt today we are granting venues that routinely use 50-ohm or wireless microphones same rights

rights as low-power exhilarated station licensees. this will provide a meaningful meaningful -- that require the protection without unduly reducing the amount of spectrum available for other uses in the television band. this order marks an important milestone for this proceeding but as it makes clear our work is not over. we must comment on auction design and other issues to address important policy issues before conduct in the auction. we have greatly benefited thus far from the input of many in the industry. still needed however his continued participation to ensure that we get the final details right. at this time i want to thank once again gary epstein will share edward smitty smith for their presentations and a special thanks to all staff members who have spent hours briefing mean working with me to

address my many questions about the items particularly my wireless legal advisor louis perez who of course i always think though he may not acknowledge that. i also want to thank politari brenda boykin and sinead for their work on the wireless record found order. thank you. >> ms. rosenworcel. >> a few weeks ago that during annual long road trip by family pulled off the highway and rolled into a restaurant for dinner. you know this kind of place. the adults get the laminated full-sized minis and the kids get the paper menus with coloring games and puzzles. armed with only a cheap crayon and what i like to think his wisdom beyond her years i watched my daughter -- she accomplished this feat by beginning at the finish line of the maze and ending at the start

it donned on me while i was watching my child she was playing out the old management maxim began with the end in mind. i think a report in order today begins with the end in mind. the chairman and his hardcharging auction team have focused on the finish line. freeing up more spectrum for local broadband providing more opportunities for broadcasters and raising funds to support our first responders. i am also pleased that the report is largely faithful to the four central building blocks to a successful incentive auction that if guided my thinking since we began this process in 2012. simplicity fairness balance and public safety. simplicity is key. incentive auctions are undeniably complex undertaking

but it every structural juncture i believe that i is toward simplicity is crucial. so i'm pleased that we choose simplicity with the clock auction rules without today. the design quite a simple unwrapped to the auction and allows broadcasters to come armed with little more than a willingness to participate. no need for a bevy of experts and lawyers. fairness is essential. this is especially true with regard to the treatment of broadcasters that do not participate in the auction. fairness demands that we consider how to accomplish read pac in by minimizing unnecessary disruption and maximizing the ability of the public to continue to receive free over the air television. balance is necessary. none of the three legs of the

incentive auction the reverse auction rate packing or the forward auction can stand on their own and we must realize the choices we make in one area have implications throughout the action. i am particularly excited however we have found creative ways to strike the right balance between licensed and unlicensed spectrum. this creativity started ditching the tired notion that we face a choice between licensed and unlicensed spectrum. this is a simplistic relic from the past that we should have long since retired because good spectrum policy requires both. moreover we recognize that other services striving for white space in the 600 megahertz band like wireless microphones with low power television and like medical telemetry matter to math. by create -- being creative we had found ways to expand the gap find locations

for unlicensed microphones and provide unlicensed opportunities in channel 37 while also protecting existing users. this approach could increase the value of the license spectrum without diminishing the number of licenses we sell at auction. it is all around good. finally public safety is fundamental. built into the fabric of our upcoming incentive auctions is a recognition that they are intertwined in a future public safety and medications. the revenues we raise our designated to support a nationwide interoperable wireless broadband network for public safety. this is important. although i'm pleased with the general framework we put in place today i would like to suggest a few areas where we should pause and lift their crayon from the paper to do more in the name of simplicity and

fairness. simplicity after all remains key in the size is set up front station owners that operate small and medium-size businesses should be able to understand their options without hiring high-priced auction experts. to this end i'm pleased with the assistance of casey ellis and kj in los angeles we have explored the technical feasibility of channel sharing which could provide some broadcasters with a new way to operate. bram artists of sharing are now well understood. however we know too little about the legal and business arrangements that are needed to put sharing into operation. for instance how do you address property ownership issues between commercial and noncommercial broadcasters? should we consider developing some off the rack templates that assist with putting the sharing arrangements in place? i am concerned that without this

kind of groundwork we risk broadcasters setting this opportunity out. fairness also remains essential. we are asking broadcasters to make a fair assessment of the opportunities this auction provides the industry. i have spoken with many broadcasters large and small about what the commission can do to help them make a decision about how to proceed. every meeting yields the same refrain. we need a number. this does not need to be difficult for resource intensive but until the agency can provide broadcasters with a better sense of what price they're spectrum might yield including the tax consequences broadcaster to not get the tools to make smart and dispassionate decisions about whether or not to participate.

this is not just a matter of fundamental fairness. this is a threshold matter that could very well determine whether or not these incentive options to achieve their lofty goals. so we have come a long way and chairman wheeler deserves tremendous credit. sodas are big auction team. they took the difficult maze of issues involved in incentive auctions and put us on a path to get this done. this is historic. this is exciting. i'm pleased to be a part of it and i'm pleased that we began with the end of mine. thank you. >> thank you commissioner. mr. pai. thank you mr. chairman. i want to be in my thinking the many who are listed on the page we saw in the upper. when we adopted the notice of proposed rulemaking is proceeding on september 22012

feels like just yesterday i referenced the wire and i said amanda scott to have -- and certainly each of you have lived up to that. going back to the wire and that's all in the game for people who know how the -- operates. turning to the item itself when we adopted the npr and i shared principles that but dyed my deliberations. in particular he said we should keep the auction as simple as possible and be as fair as possible to all officers and remained -- this item strays from each of these principles in both the reverse in the forward actions. the commission for civic simplicity for unnecessary complexity primarily for the purpose of manipulating the

market. the rules that we adopt are not fair to many important constituencies. the taxpayer's public safety officials broadcasters rural americans in wireless carriers that were chosen to participate in past spectrum auctions. the commission a key juncture substitutes its own policy preferences for the direction given by congress the spectrum act. for all these reasons i respectfully dissent. let's start with simplicity. the world's first spectrum incentive auction was always going to be complicated. there are many pieces of the puzzle but have to fit together for this project to succeed including reverse auction forward auction and every packing plan. the chairman is aptly preparing the task to solve the rubik's cube. that's why i thought it was important for the commission to keep the incentive auction as simple as possible. we don't need to introduce

unnecessary complexities that could lead to failure. this item in my view makes precisely that error. take for example the reverse auction. pursuant to the site and the commission will be setting individualized prices for each participating broadcast station. keep in mind that there could be over 1000 such stations. through a process known as scoring. how specific way will the commission broadcast spectrum? i have read the item every word but charitably the answer is unclear. my objection to scoring is simple. the commission should not impose a value on particular stations in the reverse auction. ..

broadcasters may be deterred from entering in the auction in the first place if they are dissatisfied with the commission said score. and it in a forward auction there are yet more rules designed to manipulate the market. in my statement on the forthcoming novel spectrum aggregation item i will set forth my objections to bidding at restrictions and much more detail, but here i'll focus just on the issue of complexity. my vision of the forward auction is as simple as ebay c'mon but -- let anyone bit of a neat blocks of spectrum and the highest bidder when it beat the system has served the commission well with past auctions, and i am confident that it would work well here. the commission's vision is more difficult to explain. one spade's reach a certain amount a complex set of restrictions will pick and.

specifically, certain blocks of spectrum in a given partial economic area or pa, will be reserved for bettors with less than one-third of low ben spectrum in that al qaeda. all blocks of spectrum will be open to all bidders that are not named verizon or at&t. that is not all. should there be insufficient demand some of it or all of it could become unreserved once again. this complicated scheme gives the commission at least three levers for manipulating the market in order to pick winners and losers. first, the commission must choose at which point the spectrum will be divided in the reserve and unreserve blocks. second, the commission must decide how much spectrum will be placed in the reserve and unreserve buckets for each clearing target. those seemingly arbitrary decisions are made in the mobile spectrum aggregation item.

third, commission must decide when formerly reserved spectrum will become unreserved due to a lack of demand. now, whenever you might think of these three aspects of the scheme, it does not reflect faith in the market, and i feel that it will take us down the road the commission has trouble before. the 700 mhz auction, for example , the commission drafted elegant and well intended rules for that the block at designed to facilitate the construction of a nationwide interoperable public sector broadband network what did those complicated rules produced? nothing other than of failed d block auction. ironically in 2012 statutory mandate to conduct an incentive option partly to fund construction of that same network. second, turning from simplicity to fairness, i have indicated repeatedly in this proceeding my view that the commission must treat all stakeholders in and

just manner. unfortunately today's order also fails as critical test. most importantly, this item is unfair to taxpayers and public safety officials. congress charged the fcc with the twin goals of pushing more spectrum into the commercial marketplace and the raising $2,795,000,000,000 for a number of critical national priorities. what are those national priorities? public safety and deficit reduction. now, regarding the former, public safety, a successful auction will finalize the $7 billion in funding that congress specified for a first net. also will produce the one under 35 million that congress marked for state and local public safety officials. the $300 million that congress identified for the research and development of wireless public safety communication and the $150 million that congress sought for the deployment of next-generation 91.

now, through deficit reduction our upcoming auctions, including the incentive auction, all the promise of raising more than $20 billion to help reduce our national debt. just yesterday a bipartisan group of senate leaders, such as corn and, schumer, of them, and brown, called these funds a critical return for the sale of a valuable taxpayer asset. indeed, congress counted on us meeting this target when it passed the spectrum act, so much so that it already spent those funds. if we don't need it the commission will be responsible for increasing the budget deficit above the nonpartisan congressional budget office's current projections. i am therefore disappointed that the commission is not structuring the incentive options to maximize net revenue. to be short, the item does attempt to raise money for first met, but what about deficit reduction, the deployment of next-generation 911, wireless

publicity communications, research and development, the unmistakable message of today's item, that those priorities don't count. now, it would have been easy, in my view, to establish auction rules that would have maximized net revenues. it could contain a minimum of two stages. the auction would continue until one stage raised less read that -- net revenue than the preceding stage. at that point the outcome of the preceding stage would yield the final results of the auction. the contrast and will end the auction after any stage where we can cover necessary funds, the broadcasters, and deposit almost $2 billion in to the relocation fund. my approach would have raised more money for the important national priorities i contained in the spectrum act, in particular, it would have been better for first nat. suppose, for example, we head into the auction still needing

to raise $4 billion for first met, but no stage of the auction is able to produce more than $3 billion in net revenue. under the commission's approach the incentive auction would fail and produced no money for first nat. under my approach the auction would succeed, and first that would receive $3 billion. as they say come on board in the hand is worth two in the bush. additionally, this order also in treats them fairly those broadcasters who either choose not to participate in the auction. congress provided the one and three quarter billion dollar fund to reimburse the relocation expenses of broadcasters that choose to stay in the business and will be required to relocate as a result of the incentive auction. in my opinion the commission adopted the one and three quarter billion dollar budget for any repackage. but the commission declines to establish any limits on estimated repackaging cost. as a result, the incentive

auction may produce every packing plan that will cost two or $3 billion to implement with repacked broadcaster's stock footing much of the bill. this outcome would be unfair. broadcasters that do not participate in the incentive auction are not asking for special treatment. they're not asking to be long now many winners whereas wireless carriers will obtain beach front spectrum for mobile broadbent participating broadcasters receive substantial amounts of money cannot participating broadcasters are simply asking to be held harmless rather than being made losers. this is a reasonable request, and we should have granted it. additionally, i am concerned that today's order is unfair to rural americans. they often rely on translators for free over the air television service. the incentive auction will require many of these transmitters to relocate. some may disappear entirely because there will not be room

for them a less spectrum is reallocated and television stations repacked. now, there is nothing that the commission could have done to avoid these consequences entirely, but we could have done more to mediate their impact. specifically, when the time comes for the commission to find room for low-power television stations and transmitters after repackaging, we could have given a preference applicants providing a community with its only low over the air television service, as was proposed in the npr and. i am disappointed that the commission reject taking even this modest that in today's item as a result, there is a greater risk that some americans will lose in the oil have no over the air television service after the incentive options. pro-american it may be left behind. lastly, i don't believe the bidding restrictions we adopted there are fair to those carriers that have participated in past

fcc auctions off willow bend spectrum he. the commission today prevent some carriers of the least one-third of the lebaron spectrum and given pa from bidding for certain blocks of spectrum and that croupier. but carriers did not come into the spectrum. in many cases they bought licenses to use it at open and fair auctions. for example, there are carriers that spent billions of dollars purchasing spectrum in the 700 mhz auction their participation was a good thing, helping to make the auction is excessive interest substantial amounts of money for treasury bill read the spectrum, moreover, is being used city to deliver high-speed for gl t e service to american consumers across the country. today we are effectively penalizing those carriers for their past participation and an auction by limiting their ability to bid in this auction. to the restrictions benefit on carriers that chose to set up

the 700 mhz auction, and to be clear, that was their decision, and i do not fault them for it. it is certainly not my place to issued rates and corporate strategy, but i to object to rewarding such carriers for their failure to bid prior auctions as we are effectively doing here. our goal should be to encourage robust participation of all of our auctions rather than holding open the prospect. shifting from fairness of greuel law. i don't believe that this item stays faithful to the terms of the spectrum backed him. most importantly, our rules run afoul of congress's mandate during the repacked in process to make all reasonable efforts to preserve as of the date of enactment of this act the coverage area and population served of these broadcast licensee and determined using the methodology described in avi

tebow in 69 of the office of engineering. it is that last part, as determined using the methodology described, that i will focus on in my statement. in this item the commission decides to use for reporting purposes td status of four is that the parts in several respects from a methodology described in novi. ♪ nine but. i want to be clear, from a policy perspective i generally agree with the commission's decisions in this report pop. for the most part these departures from the of the. ♪ nine methodology appear to be changes for the better off. i fear, however, that from a legal perspective all these changes will be for naught if a court postpones or invalid is the incentive auction having found those changes on lawful half. detail the reasons why i believe our actions violate the spectrum hacked. and so this morning al will spare you a discussion, which i

am sure you are eager to have of such exciting topics as the three art second to renovation data and the default vertical antenna pattern set forth in table eight of 0869. stepping back from those details, there is the larger question that needs to be asked, why is all this being done? to be sure, the commission maintains that certain changes had to be made so that it could successfully support incentive options. i don't object to those changes as they did not affect the over the. ♪ none of the biology mob of many of the changes we are making don't fall into that category. there are lectures, necessities commensurately are not worth the risk that a core will delay or invalid the incentive auction because our failure to comply with the spectrum knocked. last but not least, a brief word about delegation. i don't dispute that the incentive our action to be a success, requires a delegation

of certain tasks to the commission's top staff. today's high combustion much responsibility away from the five commissioners to have been appointed by the president. our objective, no fewer than tensest allegations of authority. i will mention just one. the commission delegates to a broad range of bureaus and offices the authority to change the rules adopted in the seven as necessary to conform them to the text of the order that we adopt the dead. both as a commissioner and as a long-term staffer in the office of general counsel of iphone this curious. the commission's orders, in my view, are designed to explain the rules that we adopt and intend to publish in the code of federal regulation here. not the other way around. to conclude, i am disappointed with where we find ourselves today. conducted a broadcast incentive option is one of the fcc most

prominent responsibilities. i deal to move four and a bipartisan basis. i cannot in good conscience support this are and believe that it will produce an incentive auction that is unnecessarily complicated, not fair to all stakeholders and is not faithful to the terms of the spectrum act. for all of these reasons i respectfully desist. >> commissioner riley. >> thank you, mr. chairman of. let me start by checking the incentive auction taskforce. first i appreciate your incredible effort to consider the many complex legal and technical towns as opposed by the incentive martian i am immensely grateful for the numerous briefings provided to me and my staff, some of which went late into the are. i must dissent from this order. follow the bidding restrictions,

and ben and inseparable bulls but kamal adham that the commission also about some day, these two items are inextricably linked by forbidding them, did not allow them to ignore congressional intent on my own principles for establishing a spectrum set aside for well-capitalized companies separately, i have a number of other fundamental concerns about the incentive rock structure itself that should a been addressed. first, i disagree with the items final stage rule which will determine whether the auction can successfully close. in this order the auction ends wants enough revenue is covered to a cover the payout. fish anything that is needed for the first responders now working toward.

a stronger support been the steps toward funding target. and i believe the commission has the right to pick and choose which of the congressional funding jurors is funding expected from the successful incentive option for many purposes if. accordingly the final stage will she continue the auction until was raised as much revenue as we can beyond the payments to effectuate the relocation or reallocation of broadcast spectrum to wireless broadbent use. or it should incorporeal all the items, including deficit reduction in the finals to original. she's in just one program for guaranteed funding smacks of politics and tarnishes the agency's credibility. second, i am concerned what the extent to which the ordered delegates authority very.

as i stated before such decisions should be voted on at the commission level. for example, the media baron was given broad authority to determine how the commission east and if they do not cover all the packing expenses. the media bureau would decide the specific construction deadlines for individual station . reimbursement of repackaged cost and a priority in which the commission will consider certain broadcast requests to change channels following the repackage process. at least as of now the auction, and procedures public notices will be considered and voted on by the commission. third, the commission is adopting rules. although low commissions adopting rules it to for specific details about how many of these rules will work in future will make his public notices. for instance, the commission acknowledges that it needs

additional information on how it said prices for their resorption further consideration will also record on the extended mongrel. the item also defers to reciting the methodology for preventing adjacent and co channel interference between wireless and broadcast services impaired markets and the german in aggregate interference for broadcasters. to many important pieces are punted to a later date, especially since the atom and its decisions made today and may be decided in the future. these may be at best temporary decisions i have concerns about the questionable dynamic reserve i worry about establishing a

mechanism that could cause more marked impairment thereby lowering auction participation in revenue. we should do all we can to award marked impairment except in a very extreme circumstances. fifth, i am worried that the adoption of a standardized 11 naggers duplex got instead of the six to 11 meyers depending on the spectrum clearing jargon as originally contemplated was an unnecessary change, not a decision grounded solely on what is technically reasonable to prevent harmful interference. i am a strong proponent of online services, as many of my colleagues are in the back of my words with actions, but i am very real concerns of the uniformed duplex gap is a political solution potentially exposing american taxpayers to a significant loss a revenue except one nectars 84 nighter it's a spectrum. finally, i will suggest there are legitimate questions as to whether this item complies with the requirement and statute to

for checked broadcasters should choose not to participate in the auction and their corresponding viewers. the adams seems to skin across the line a couple of instances, and i expect the court may find difficulty in supporting the commission here, notwithstanding any formal deference given. congress was abundantly clear that it wanted to hold harmless on participating broadcasters and their ability to serve their over the air viewers. i am disappointed to see this not sufficiently honored. although i respectfully dissent on to this item, i recognize that this auction is of utmost importance. americans will benefit from putting the spectrum to its highest valued use. the construction of a public safety network and deficit reduction. i hope to collaborate with my colleagues in the entire incentive options in going forward to assure that this auction as the greatest chance at success. a lot of uncertainty remains to and many details still need to be finalized, but i am hoping for the best. >> thank you, mr. chairman. >> and thank you to all of my colleagues.

i have a statement for the record which we will submit for the record. let me just make one quick observation. not only is this of rubrics you that as three simultaneous moving parts in it, but nobody has ever asked this kind of low rubrics to be put together, let alone tried. you cannot go on the internet and find a quick solution to how you do the rubrics you. and that is why so much credit is due to the great work of the auction team. we are creating a marketplace so that the market can decide the highest and best use of spectrum it has never been tried before. it is incredibly complex, and we are grateful to if there is

nothing further, we will move to vote on aiden to regarding wireless microphone 2. all those in favor say aye. opposed. the ayes have it. now we will move to item three, the just discussed and set to auction. all those in favor say aye. i. opposed. the ayes have it. the request for editorial privileges is granted. thank you very much for all of your work. now, let me turn to my colleagues for a second. it is now 1230. it is not atypical that we are

sitting here at 1230. i had announced a tentative break year. does anybody feel the need for it, or would you like to charge on forward? we are moving on forward. madam secretary, over to you. >> mr. chairman, commissioners, the fourth and final item will be presented by the wireless telecommunications bureau. it is entitled policies regarding mobile spectrum moldings. >> roger, are you going to start it off? >> good afternoon, mr. chairman, commissioners. it is my pleasure to introduce this report in order that would adopt mobile spectrum of the policies that internal americans

regardless of where they live in urban, suburban, or rural areas and to the benefits of competition. as wireless bureau staff will explain in further detail the report and order establish a will spectrum of the policies for auctions and secondary markets to promote complication. and god at the table by jim swift income of the senior deputy chief to w t b, the chief of the spectrum and competition policy division, the associate chief of the division and the senior counsel on the division. in addition to the team at the table of like to give special thanks to a front office legal adviser michael jackson for his tireless work on this issue as well as matthew collins, dean you brought, back with commendable, tom trend, the staff of the mobility broadband and action division, the incentive auction team and a d.c. for their expert contributions to this effort. kate will present the atom. >> good afternoon.

i am pleased to present to you today immobile spectrum holdings report and order. then the i would update and adult mobile holding spectrum and for options to insure that these policies promote competition and the mobile wireless marketplace to the benefit of every american consumer. specifically the report and order update the spectrum screen for our competitive review of proposed secondary market transactions to reflect current suitability and availability of spectrum for the provision of mobile wireless services. in particular, we removed certain spectrum bands from the screen such as the other 700 mayors the block and at other bands to the screen such as aws4, the majority of pbs, and age block. the item reaffirms the case by case review a proposed secondary

market transactions with the continued use of the spectrum screen trigger and aggregations of approximately $1 more. the auction states that certain increased concentration of below one gear spectrum will be treated as an enhanced factor in our review of individual secondary market transactions. the aiden establishes a market market-based spectrum reserve and the incentive auction of no more than 30 mhz of 600 mhz spectrum licenses and each license area targeted for those eligible bidders to can -- currently lack substantial low band spectrum moldings. the item includes safeguards to ensure that all bidders bear a fair share of the cost of the incentive auction, including fully funding first night, if necessary, after the age block and wfc auctions.

further, certain limits on secondary market transactions of 600 mhz spectrum licenses for six years post auction. last, the item adopts a bright line rule to the aws3 option that allows bidders to acquire any amount of spectrum. the mobile spectrum holdings report and order concludes that together these actions will advance the public interest by offering all service providers opportunities for additional access to spectrum while protecting against the risk that further concentration of spectrum, particularly low band spectrum would have significant effects on competition. indeed, the atom finds that the policies proposed today will preserve and will promote competitive choices enabling all americans to enjoy the benefits of competition and a mobile wireless marketplace and to the foreseeable future regardless of whether they live in urban, suburban, or rural areas.

the wireless telecommunications bureau recommends adoption of these items and requests editorial privileges. thank you. >> thank you, kate. >> there are many aspects of this order i fully support. i am glad we are updating the commission's policies on measuring how spectrum aggregation impacts competition in the wireless industry. our last comprehensive review of these policies occurred more than a decade ago, and since then significant developments have impacted the structure of the market for mobile wireless services. most significant are dramatic increases and the demand for wireless services, especially mobile broadband and the reduction in the number of service options for consumers particularly in rural areas. today 92 percent of the consumers have access to of for providers offering 3g or four g's services, but in rural markets that figure stands at

only 37%. .. it hit has distinct deployment advantages for carriers who want to deploy in indoor locations.

therefore i command the decision to certain levels of increased aggregations of below one gigahertz spectrum as an enhanced factor during case-by-case review of transactions involving such spectrum. i also strongly support the rule that would reserve up to 30 megahertz of spectrum for the 600 megahertz auction. it would condition eligibility to bid on among other factors whether a carrier holds less than 35 megahertz of a low one gigahertz spectrum on a population weighted average and a particular local market. there is no question we have the statutory authority to allocate spectrum licenses in an manner that promotes competition for the communication act instructs the fcc to avoid excessive concentration of licenses and to disseminate licenses among a wide -- of applicants.

it reaffirms the commission authority to and i quote that topped rules of general applicability including rules concerning spectrum aggregation that promote competition. such a spectrum allocation rule would also be consistent with our president. as the order explained since the 1980s the commission has often adopted policies designed to prevent undue concentration of spectrum licenses necessary to provide those services. there are number of factors that suggest we should apply such a rule to spectrum made available in the incentive auction below one gigahertz spectrum is particularly valuable for deploying wireless services in a more cost-effective manner. currently there are substantial consolidation of below one gigahertz spectrum in the hands of just a few nationwide carriers. the upcoming 600 megahertz option could allow the same

carriers to increase this advantage over their competitors and there is unlikely to be another auction in the near future that would permit these competitors to acquire below one gigahertz spectrum. that is why i am glad that in setting the unreserved reserve amounts in the forward auction we are doing so with a local market approach. in the annual mobile services report i always focus on the never people who limit with two or a few wireless providers. in last year's report that number stood at 7.7 million. i believe closely examining the relevant aspects of the local markets competitive structure helps to ensure that our policies are best able to promote more competition in rural markets. i must say however that there are aspects of this order i have problems with. these are the amounts of unreserved reserve spectrum and

the scenarios where we recover 60 megahertz and 50 megahertz of broadcast spectrum. in the draft order the chairman originally circulated the split of unreserved to reserve spectrum in the scenarios would have been 30-30 and 30/20 respectively. much to my dismay those original proposals were changed to 40/20 and 40/10. in short i preferred the original proposals. a number of wireless carriers told my office if they want the opportunity to acquire 20 megahertz of spectrum in the incentive auction. by allocating 30 megahertz of spectrum for unreserved spectrum we would have created an incentive for these companies to compete intensely to require 20 megahertz of spectrum. encouraging competition between the strongest providers in the market has repeatedly proved

effective for increasing auction revenues. take our neighbors to the north. who most recently took a similar out rocha of that auction. canada reserved some licenses for bidders rather than the dominant three carriers and it resulted in a very successful 700 megahertz option. those rules forced force the largest carriers to bid against each other for the blocks of unreserved licenses. the ensuing bidding war generated the most revenue ever raised by a wireless auction in canada. by shifting to 40 megahertz of unreserved spectrum in the 60 and 50 megahertz recovery scenarios we are encouraging the top two carriers in every local market to each acquire their coveted 20 megahertz of spectrum without having to aggressively compete against each other. this approach i believe fails to

promote the most efficient allocation of spectrum. it will not i feel replied incentive for wireless carriers to bid higher which in turn would further entice more broadcasters to participate and relinquish their spectrum in the reserve auction. it is also taking from the reserve category valuable spectrum that smaller carriers would have had a better opportunity to acquire in order to remain competitive and provide their customers with enhanced products and services. these doubts force me to partially concur on this item. but i believe it's important that we have spectrum aggregation rules that can be applied in a 600 megahertz auction. therefore our compromise here was necessary in order to achieve the minority vote on the aspects of the order that make reserve spectrum available. i wish to thank roger sherman

jim schlichtmann joe and michael jensen and bill richardson for their detailed briefings and i always say your name wrong so hey. kate and other staff members who worked hard to produce an item with very creative proposals and i want to once again acknowledge the excellent work of my wireless advisor. and mr. chairman he did not pay me for that last one. thank you. >> thank you commissioner. commissioner rosenworcel. >> it's the nearly dozen years as the commission conducted its last major review of our spectrum holdings. think about that. 12 years ago a flip phone with state-of-the-art. color displays on any phone were new and novel. cameras have not yet invaded all of our wireless devices. it was a long time ago. a fresh look is not only in

order, it is overdue. so today we take up the task of updating our policies for spectrum holdings. we are guided by section 309j of the communications act which directs the agency to promote economic opportunity and competition. but we do not act in a vacuum because our rules for spectrum holdings are intertwined with their upcoming efforts to identify new spectrum for wireless broadband. as part of these efforts in the middle class tax relief and job creation act congress directed the commission to conduct a series of new incentive auctions. as part of these auctions we have a solemn duty. we are entrusted by congress with the responsibility to ensure that the proceeds from these auctions are sufficient to support a nationwide interoperable wireless broadband network for public safety.

it has been more than a dozen years since the horror of 9/11. too much time has passed and too many lives were lost for us to fall short of our promise at long last to provide interoperable communications to our first responders. i believe our efforts today honored this responsibility. we update our spectrum screen the prism through which we reviewed transactions. in doing so we acknowledge the carriers now use more spectrum than ever before to provide wireless broadband service. but we also acknowledge that transactions involving valuable low-frequency spectrum merits enhanced scrutiny. at the same time we adopt policies to guide bidding in their upcoming auctions. our new rules make sure that everyone is welcome to bid and that everyone will have a fair shot.

but our approach also ensures that we meet our special responsibilities to our nation's first responders. consequently this report and order has my support so i want to thank the chairman for his work with my office to reach this result and for his commitment to public safety. >> thank you commissioner. commissioner pai. >> thank you mr. chairman. >> thank you commissioner clyburn for the kleenex. i am very moved by commissioner rosenworcel's statement. [laughter] spectrum does it to me. it really does. okay have got to get the game face on here. on the floor of the u.s. house of representatives members often ask for unanimous consent to revise and extend their remarks and with respect to this order i will likely be taking advantage of that same privilege.

this is because 10 minutes to midnight last night my office was presented a substantially rewritten order. indeed the new draft contained 3268 revisions to the previous version. key key elements of the rules have been changed and the rationale for imposing bidding restrictions have been substantially altered and even in the bewitching hours of early this morning we were discovering changes that the office requested and his impact is uncertain. with that caveat i will turn from the process to the substance as i presently understand it. when the commission launch this proceeding i held up the hope that we would remedy a widely acknowledge defects in our approach to evaluating spectrum holdings. there are a few flashes of that in this order. for instance one critical flaw was that her previous spectrum screen consistently understated competition in the wireless marketplace by failing to account for all spectrum

suitable and available for mobile broadband. i welcome our decision in today's order to include in that screen the broadband radio service and educational broadband service spectrum that is being used today to provide forgey service across the country. i also appreciate the order's determination that there is no basis for imposing bidding restrictions in the upcoming aws three auction. these narrow acknowledgments of marketplace realities are exceptions rather than the rule. the primary objectives of today's decision seems to be the reengineering of the wireless marketplace to reflect the commission's vision of how it should be structured rather than choosing competition we restrict it. rather than embracing the free market which is part constant innovation over the past two decades the commission places its faith and centralized economic planning. rather than relying on private carriers to decide what spectrum is most suited to their needs or

business models the commission decides for them. today's order also misses an opportunity. we adopted a notice of proposed rule making with the promise of providing needed transparency and predictability to secondary market transactions. today we offer only a black box. indeed we make the problem worse than before by adopting a vague and undefined enhanced review standard for transactions involving below one gigahertz spectrum. this begs the question. of the 2100 own. transfers of low-frequency spectrum that have occurred since 2007 how many would have survived this enhanced review? how many would have been proposed in the first place at the prospect of enhanced review been working? no one knows. that's a problem for all players in the market big and small because everyone from coast to

congress and as we all benefit from a vibrant secondary market. moreover disorder takes the unprecedented step of specifically warning against any major transactions among the top or national carriers. it goes so far as to state that a city such transactions are even proposed and i know you know and we all know what that has in mind here the commission will declare no soup for you and all preferences handed out today. that is not letting consumer preferences drive the marketplace or objectively reviewing the specific facts of a particular deal. that's not even leveraging the power of government to regulate by a raised eyebrow. that's the public sector preemptively deciding who in the private sector should be able to compete on what terms no matter what the realities of the marketplace might be. perhaps worst of all today's order endangers this excess of the broadcasting and sent of

auction. as i stated when we launch this proceeding the fcc should not limit competitor's ability to compete. as commissioner clyburn eloquently observed on the net neutrality item government should not pick winners and losers. the inevitable effect of a policy that restricts participation is less spectrum repurpose for mobile broadband less funding for national priorities in the higher the budget deficit and increase chance of a failed incentive auction. that last point bears further explanation. it's trick and participation in the incentive auction needlessly jeopardizes its success. as i observed earlier in the spectrum sets out the -- for commercial use and raising $27.95 billion for critical national priorities namely public safety and deficit reductions. now the key to achieving those goals is to maximize participation and they forward auction.

this would incentivize broadcasters to relinquish spectrum voluntarily and it would drive revenue to work congress is funding parties. restricting bidding puts all of us at risk because remember her up coming incentive options when you persuade readers to bring billions of dollars to the table and we can't afford to engage in ideologically motivated experiments. this is not a partisan view great 78 democrats in the u.s. house of representatives recently wrote to the fcc and made these exact same points. as they put it for the auction to be a success the commission should maximize participation by both broadcasters to relinquish their spectrum rights and bidders seeking to buy those rights are in fact they went on to say inviting as many bidders is possible to compete in an open and fair auction on equal terms will allow for the full market price of spectrum to be realized. in turn lead to higher

compensation to greater broadcast interpretation. their republican counterparts the leaders of the house and the committee on energy and commerce similarly with the bidding restrictions operate to the detriment of auction participation and revenue. on the other side of capitol hill senators john cornyn charles sumer john thune and shared ground urged us to reconsider and the rules of the limit participation. they wrote in yesterday's letter that the bidding restrictions will have the effect of distance and advising broadcaster participation because of concerns about reduced returns. it could result in not only less spectrum being put back into the market to be used efficiently but also less revenue generated by the auction. others outside of congress have reached the same conclusion. the communications workers of america have argued that an open competition is the best way to

serve the public interest and maximize auction proceeds. rainbow/push coalition urges the commission to adopt rules that allow for full unrestricted for dissipation by all and just companies willing to bid for spectrum needed to provide mobile broadband to consumers. the national urban league similarly advocates for rules that maximize participation. the commission today rejects this counsel. in so doing there is little doubt the restrictions imposed will substantially reduce the revenues raised by the incentive auction. congress itself recognized when it first operates the commission to conduct spectrum auctions that limiting participation in any competitive bidding procedure creates a significant possibility that licenses will be issued for bids that fall short of true market value of the license. experience confirms this basic intuition. studies show the fcc's prior

restrictions have substantially reduced revenues led to significant delays and spit him being put to use by consumers and perhaps worst of all impose these costs without producing any long-term benefits for wireless competition or american wireless consumers. according to the congressional budget office previous bidding restrictions delay the deployment of up to 20% of the auction spectrum by up to a decade. data also shows in previous restrictions reduce auction revenues by up to 61% and the losses in consumer welfare work calculated to be $70 billion. the national experience reveals a similar story. studies of bidding restrictions imposed by foreign governments show that those efforts not only failed to achieve the goal of creating a wireless marketplace. they also imposed severe costs along the way including reduce auction revenues swaths of

spectrum and delay deployment. for example analyses of bidding restrictions and set aside some restrictions and set aside some post in canada and india to name just a few resulted in the spectrum selling for 27 to 75% less than expected. having recently visited india and spoken with many people across the industry about this very issue i can tell you one of the few things everyone agrees on is the conduct of previous spectrum auctions was wanted. at least those licenses into and elsewhere sold. restrictions have also resulted in up to 50% of available spectrum going unsold with new legislatures lunching increase into disappointing results. that is not where we want to be. but we now trod down the same path and he does so with arbitrary restrictions that are sure to produce anomalous results. here are just a few examples. first the order will permit one

of any number of companies to acquire every single 600 megahertz license in every market even though the order also claims restrictions are needed to prevent anyone from running the table. second the order set aside -- sets aside a high band spectrum altogether. this means the company that holds 44 megahertz of low band spectrum and large swaths of high band spectrum in the same market can acquire as much additional low band spectrum as it wants. a competitor that has just 45 megahertz of low band spectrum and no high band holdings in the market would be restricted from bidding for certain blocks of spectrum. would anyone seriously maintain the letter company spectrum position poses a greater threat than the former? third, the order ways have lead many to spur deployment to rural areas is adjusted patient for

restrictions but the rules we adopt aren't tailored to that goal. it will take effect in a number of urban markets where capacity in that coverage is needed. it will not apply in large parts of rural america. finally the orders broad prohibition on the transfer of 600 megahertz spectrum only compounds these errors. the item prohibits anyone from transferring a 600 megahertz license to someone with more than a certain amount of low band spectrum holdings for six years. just remember six years ago we were still getting used to smartphones. in so doing the item depresses the value of all 600 megahertz licenses. it forces the bidder to factor in the risk that their business plans or consumer preferences might change. it restricts the chance of spectrum will flow to its highest and best use. the arbitrariness of these results dovetails with the caprice evident from piecing those rules together.

the item contains a lengthy discussion of how the 45 megahertz threshold is the primary basis for determining whether the provider qualifies to bid on reserve spectrum and sent effective line of demarcation. the item also causes such a threshold is necessary to ensure multiple providers are able to access a sufficient amount of low band spectrum. with all that analysis simply tossed aside when it might apply to any carrier of the nat ntu or verizon. apparently nonnationwide providers offer the unique ability to offer consumer additional choices provide some constraint on the ability of nationwide providers to act in anti-competitive ways. assertions that lack evidentiary support undercut by the orders of frank in knowledge meant that quote the record of this proceeding does not support a finding of market power for any carrier. so what compels the commission to adopt these rules?

in my view is it's certainly not the spectrum act which left the fcc's authority to adopt general ability regarding aggregation limits intact. it also warned us not to prevent a person from participating in an auction. in fact i have serious doubts that today's order complies with this provision. we target two specific companies and made the affirmation of late changes to our rules to ensure that they do not apply to a single company other than those two. i doubt that a court would have much problem calling this anything other than an individual action masquerading as a general rule. nor does the communications act required to adopt such limits. that act requires us to promote the efficient use of spectrum which the commission repeatedly is interpreted to mean congress intended to ensure scarce spectrum is put to its highest and best use.

where does the fcc's precedence drive us into the structure and? only one open eligibility would impose a significant likelihood of substantial harm to competition in specific markets and when eligibility restriction would be effective in eliminating that harm. how does this order that we adopt today satisfy the standard? it doesn't and doesn't even try in for good good reason. the evidence shows no providers have been foreclosed for access for low frequency spectrum. to the contrary the two national providers to benefit the most from today's set-asides chose to sit out the last low band auction altogether while more than 100 bidders actively participated in acquired substantial megahertz holdings. when these two providers have chosen to participate they have proven they are large well-funded corporations and savvy competitors that can dominate the bidding. for the commission to aggressively tilt the playing field in the absence of market failure is caprice classic.

indeed rather than face this fact the orders certs restriction in -- restricting participation is the same thing as open eligibility. that can't be right. just last year the fcc set under open eligibility and i quote the commission does not exclude any potential applicants because of the amount of spectrum they already control unquote. the order tries to brush this precedent aside by saying that our words may not have been precise. there's nothing in precise about such precedence. they are just not consistent with what the commission chooses to do here. both law and policy require us to acknowledge and justify her change of heart. where does sound economic theory compel today's results? it does not even attempt to show the competitors would be unable to obtain low band spectrum and

an open auction. in fact the only basis the order offers for including restrictions as the commission's predictive judgment. this raises the question when it comes to spectrum policy how predictive has our judgment been the ledger in this regard includes the pcs bankruptcies in the 1990s the belief that we could lure a new national providers to the market if we tailored for 700 megahertz received open requirements to a particular business model and numerous other options where we were wrong about such basic facts who would show up how much participants would did or both. i don't take much comfort in this type of addictive judgment and neither have the courts. in the end i hope that our errors today will be harmless and they won't undermine the success of incentive auction our other auctions and they will not impede pro-consumer secondary

market transactions. there are ways we can and should promote competition in the wireless market including removing barriers to infrastructure deployment and freeing up additional spectrum for commercial use. i look forward to continuing to work with my my colleagues of those important issues. on this predicate item and must respectfully dissent. thank you mr. chairman. >> commissioner already. >> today's order effectively replaces our century-old belief in the american free market system as embodied in the commission's auction process with one that seeks to produce a specific outcome to benefit a select few. i'm sure some will assert this market manipulation is all in the public interest but i can't agree with such an argument of the resulting outcome. at the heart of this item is an enormous am the agency places on the scale of future secondary market transactions involving low band spectrum and most concerning the upcoming broadcasts incentive option. substituting the proven success of market days spectrum

allocations with the commission's subjective judgment goes against the spirit and more importantly the letter of the law. it also will result in harming consumers and could readily lead to the failed incentive auction. accordingly i strongly dissent. the spectrum act directs the commission to set the market mechanism to determine the highest available use of the 600 megahertz band a free and unfettered market is critical to the incentive auction. it will determine whether broadcast or wireless broadband is the best economic use of the spectrum and it will allocate new licenses allow wireless providers. the revenues raised should also fund the first responder network authority the next-generation 911 program and deficit reduction among other congressional priorities. with revenue so intrinsic to success the statutes specifically prohibits the commission from excluding certain parties from participating in the auction but

it allows rules of general applicability for spectrum aggregation to guard against undue spectrum concentration in any market. .. any bidder that is a nationwide service provider and has 45 mega hurst or