almost as prestigious as having run from johns hopkins. [laughter] and at the end of the table is founder and leading analyst of leading expert on telecom with the wireless communications industry before founding his company he was senior vice president for head of the telecom practice of the nielsen company the largest consumer research marketers in the world also with the research and vice president of telecom. thank you for joining us and finally peter is an expert on the capabilities and evolution of technology president of the executive director for portable computer communication organization now called

wireless technology. [laughter] he has a master's science from stanford we will lean on that heavily particularly with my first questions i will begin. each question is directed to one panelist but i encourage you to weigh in to get the conversation going. talk about neutrality and how this relates to wireless but putting that engineering degree to work advocates of strong neutrality where they pay for priority they are worried everyone will get a lower quality of service in this would be legitimate concern but does priority

necessarily entail a sacrifice of the quality of service? is a possible to introduce priority without degrading the quality. >> it depends if it is the zero sum game or not from an engineering perspective i do not view it as such maybe we do have restraint of capacity this there the wired networks so prioritizing certain types in the system does not necessarily have any adverse effect. >> as an economist in light of the answer is not have a

sacrifice that there could be a priority deal that there are no injured parties does it make sense to have a blanket prohibition on take priority or do we assess on the case by case basis? what is economics have to say about this? >> let me take a step back at the bigger picture looking after -- macroeconomics with a large pool of investable funds with low interest rates mentioning that investment we need to set a policy that creates incentives while the money is so cheap. by raising the price and quality can do that so that

is the framework. what can we do to create long-lasting incentives for investment? about paid priority we're producing a commodity product to allow higher quality products potentially to produce more competition. >> given the choice of that blanket prohibition? >> it is terrible from the big picture pointed you if we want to create learnt capacity with more room for competition we have to create a structure that people can say 0k i can earn that but with a blanket prohibition with new

providers and what they can do you block off the possibility of somebody to create a new network that potentially creates a lot more investment it would be a bad idea to have the blank deprivation them with terms of broader economics with the differentiation of products will create a lot more investment. >> talk about the blanket prohibition it means we are freezing innovation and progress in the way business models are evolving. it could be bad but then it should be a case by case basis. and in the marketplace to

innovate with business models with new innovative ways to provide services to consumers and not just say no it is this way or the highway. >> we should think about policy in the long-term sense rather than short-term and that produces different outcomes. >> there is a lot of talk they want a different set of neutrality rules to the wireline isp so what is the right answer? with a different market structure or with different capacity constraints to is

that dictate said different set of rules? >> cisco systems supported the 2010 order we saw those distinctions made there by the sec made a lot of sense to us we did not base that on the market structure but technology the wireless characters do deal with those to space by events happening like the world cup for the world series so the each have a different impact we got the 2010 petition in have been urging the fcc to

stick to that as it contemplates the next wave. >> i would like to add to that and with the recognition that wireless and wireline is different but not the average person looking at this knows how different they really are? so i will provide a with little insight into that one firebrick -- a fiber-optic has 2,000 times capacity from all mobile boat broadband spectrum orders and orders of magnitude of capacity wireless networks are extremely dynamic depending if they have a signal quality that could determine their capabilities

again by an order of magnitude if not more so it is the whole environment that is extremely dynamic than wireless networks tend to run much closer to the limits of capacity so that means it is fundamentally different and then also look at lte with its capabilities of quality of service to assume the transition to voice over ltv were over wireless and those packets are handled with higher priority where voice will not work and there is nothing comparable happening

so that emphasizes that fundamental distinction between that type of technology. >> what i hear perhaps they should be treated differently but we make that counter argument it depends on the rules go back to the 2010 open in internet rules that were vacated by the d.c. circuit and as a footnote we have blanket prohibitions but we will not do that here but there is a presumption any pay parity is in violation and this is what got trouble to put the burden on the i sp to come forward on bended knee they thought that was tantamount

but if we were to flip that presumption around to make the party deals proficient by a content provider to put the burden back on the content provider to prove it was discriminatory with that approach to necessarily need to different structures for wireless or not? >> certainly assuming your analysis is correct it definitely is a better approach. i hearken back to my fcc days and even there looking at the discrimination case with a carrier wanted to do

the party seeking to to make that decision had some burden to come forward to show that the tariff was discriminatory that there was no moving party just to wave the flag so i like we are going with the idea but i have to think if it is the right one. >> is the same approach the sec accuses complaints in the videos based? that they have the burden to prove that this was discriminatory and mentioning the blond yesterday -- the block yesterday at the roundtable the sec later out the alternative paths on the

blog with the presumption that priority would be in violation. but they did not lay out the third approach which is what the sec is begging for which is the case by case but to show that they are efficient and less proven otherwise. but i have two more questions then we will go to the panel this goes to the sponsorship deals i went back january 2011 metro peace yes has unlimited data plan $40 a month with full service and u2 was included.

the odor said those ideas are available for delivery but i don't know if google made aside payments to the trapezius we will remain agnostic on that they claim the was a net neutrality violation april 2011 maturities is quietly pulled the plan was the plan a good thing for wireless consumers or a bad thing? >> it is the recognition of resources there is only a certain amount the spectrum available. video is the biggest spectrum and the peace that exists because it has steady traffic. so for this to work, it is

already a challenge but to make it work is a bigger challenge the only way to do that is through compression so the deal with google but at that time the biggest band of consumption those who otherwise could not have video at all. it is better to bring some order to somebody who was thirsty in the desert band no water at all. >> i like that analogy.

>> if there is a quality differentiation is a better quality services that they could charge less for? so those that produce a wider range of services and if you think of those economics that you allow a range of products so in that sense it was perfect. >> so my follow-up question is conceivable certain content providers such as facebook and google might want to subsidize broadband access for low income users that they could monetizing

in such a way of all of the cost of the subsidy. should the sec bar any sponsored data plan to subsidize the end user? one of the rules we have is if money is an obstacle. in with that data it is for everybody involved.

>> i think we should think about this of general principles. us to principles that in this case that it was a good thing but both don't just want to subsidize with this service possibility. >> with the companies that are providing wireless are

benefiting quite handsomely. it generates more than $40 of revenue for googled average facebook user generates more than $10 in revenue. so for them they might use these services and and also benefits to share the revenues that they made they would benefit as the use goes up. >> we're in the early days of mobile broadband of multi decade of folding but what

will drive this industry and the constraints are likely to have adverse consequences with the different ways to make content and broadband services available with those service models so to encourage flexibility. >> we have been going 45 minutes now also are there in the questions from the audience? and perhaps introduce yourself. >> he can handle it.

what opportunities from private companies? for those too low to moderate income with affordable housing? picasso the tactical sport that makes access meaningful >> anybody? >> i will start. around the globe of the world's population connects to the internet now is through mobile devices. i would suspect is a march 4 were that trend will continue. should we be embraced by a

lower income populations is very firm and growing. and as we watch the cost of the equipment drop, those are all good things. a competitive market in this space is important. but to me the answer relies primarily on this sector or see your to bring as many people possible into the space. >> if they recognize what they are leading in the wireless revolution with a higher percentage of smart phone ownership than caucasians. of lot of the minorities have not made that jump.

we just have to help to make it more affordable. >> i with the alpine group. talk about neutrality with discrimination for new start-ups? then to talk about the rules the new provider has to prove discrimination or the isp test to? and the program side, the discrimination with a small start up i am thinking of that small provider that's tries to get to a customer that burden to say we can prove there is discrimination out there is very hard.

but the lions' first is goliath they don't care because they have enough players but you have any thoughts? the new guy will not be sophisticated to have a large enterprise backing them. >> i give you permission to answer that. [laughter] it all depends how we set up the evidentiary burden said to give an idea one though threshold he would not need to hire the economists that the quality of service was declining fee fiery the offer that the burden could shift to the isp why it was disparate on the deficiency grounds but it is all i use sine the ground rules if it is burdensome to go on for

five years that i would sympathize. there are infirmities it is not ideal but that does not mean it is still not the right answer. we can accommodate these concerns. are there any other questions? mary? he is in the house. >> i am still making highway through last week's infrastructure order and help the panelists have gone further than i have. are there items that are missing or that the fcc could do greatly accelerate

the deployment of the infrastructure? >> anybody been through it? >> what about to encourage of the structure? >> looking into the future it is important to encourage infrastructure investment as much as possible for that complementary spectrum. anything that makes that investment easier it is an improvement moving too small cells. so i think the conversation going for word will be more evenly balanced with infrastructure than it is now. >> it was one of the most interesting data points in that order that 60 percent

of voice traffic is happening in buildings. and the cutting edges is about building coverage. and also to help significantly in that endeavor for wireless carriers for that burden that they have to meet or that outdoor coverage is not alone because a lot of those municipalities say you have the upper coverage, it is fine but the reality of how americans use wire this is the use it indoors. we need more.

so this will help to stimulate investment to recognize how much happens indoors and to give more help to the carriers to build as the sites to manage indoor coverage. >> there is a question over here then we will go back to the panel. >> we talked a lot about access to wireless services and the demand to the providers are doing but we have not talked about spectrum. that is what we could do to keep costs as low as possible to get more spectrum in the pipeline for the wireless carriers. demand is skyrocketing wondering if anyone has any creative ideas how to gain

more access to government spectrum or how to transition? with usable spectrum for mobile carriers. >> about other government agencies? >> a lot of them with those incentives to be a good way. i think a debut as one spectrum tracy year for the launch arion to cape canaveral for about 10 minutes over the course of one year so nationwide 365 days of year.

there is a lot of i cannot afford it but if you take the spectrum analyzer to hold that out and where is the usage it is commercial mobile radio service and wife i other than that the spectrum analyzer will show virtually no usage other than here or there a little bit there is a lot of spectrum that is used 99% of the time and if we incentivize them we can clear lot a spectrum. >> . .

it was a long set of issues. at the end of the day, i think we have got into a place where it will be substantially cleared and put in service for mobile broader bans, which is a fantastic achievement. we ought to collectively pat ourselves on the back and end up on our friends on capitol hill. >> and the absolutely critical thing is not necessarily that we are getting 65 or 80 makers of spectrum. but this is a spectrum band

where we have global roaming it is the only piece of spectrum where everybody on this planet has been able to agree on it so that otherwise we have 55 or more different bands. but this is the only one that works globally that will allow americans to travel overseas and enjoy service. otherwise there are thousands of permutations where you may or may not be lucky when you go overseas so that you can actually access the l t e network that people have in that country. >> we can really add one thing. you should think of this as an improvement in global consumer welfare. what is happening is, this unused or underused spectrum is being transferred to use by consumers in the u.s. and around because of roaming around the world. you can value this probably

at billions of dollars. >> when i asked that we will get agencies to give it up, a famous economist in the house said that we should paid them. this is why we don't get invited back to cocktail parties. >> talk about giving government agencies, that ever talk about paying them to do so. nothing in it for them. i have a question, if primary chris everybody sarks about it as a wonderful resource, but economists think about it as a common property resource. increasingly they make demands on it over time. i see charts showing larger and larger demand. should i worry about potential and efficient use of unlicensed spectrum because of the fact that it is a common property resource?

>> you are already worried about it, right? >> you actually anticipated the next topic on my list, so let's get into it. i know that there are questions. let's knock out unlicensed spectrum. i promise we will come back and take care of these. you know, i was reading a piece -- this is for mary -- on stan's point. i read about this in the "washington post," for the very 2013, touting this new super public wi-fi network as being so powerful in broad and reach that consumers could use them to make calls or surf the internet without paying a cell phone bill every month. when i read this i got excited because i do not like to pay for some funds. >> it was a breathtaking statement. >> i don't want you were cisco to be standing in the way of my free cell phone service.

>> as best i can tell what that article was referencing was the initiative led by proponents and the tech sector to champion of licensed use of the television white spaces endure the television guard bands that will be left once the voluntary incentive auction is done. and this grew out of then ftc chairman janet kautsky's labeling of that elisa's use as super wi-fi. the irony being, it was neither super or wi-fi at the time he said it. so for those of you who are not steeped in the technology, wi-fi is a technology that began many years ago. it has also now migrated into the five gigahertz

band. in effect of the latest iteration of technology is exclusively designed for the five kidder hertz and? why? because the technology that it uses requires a very wide channels to deliver high throughput, throughput that is an excess of a gigabit per second. how wide the those channels? eighty mhz wide or 160 mhz wide. now, that is super wi-fi. that is the super part of it the television ban, they are not unusual, and one can certainly as a technologist designer radius system for that, but you do not have much our license spectrum's available in the big -- what we call the big nfl cities. you may just have six mhz or nine. so what do you do with 6 megahertz of spectrum in a

technology his latest iteration is adr 160? their is a little bit of a mismatch. and so while i read the article with great interest, i was reminded that back in 2006 when the fcc issued its very first report and order on tv white spaces, my good friend proclaimed we'll all see consumer devices under our christmas trees in 2009. i live every year trend i am still waiting. [laughter] >> i would like to add to that. in my view as an engineer, i view unlaces and wide area as mutually exclusive. they are incompatible with each other. the reason it works is you have very localized coverage areas. if you need capacity or

coverage you put up another. if they interfere with each other he figured up. they automatically find channels to use. it works great, even if you have a neighbor underneath were some other business in a floor below panel of darlings of coordinating and making it work. but now go to a wide area situation, the premise of unlicensed at 600 mhz is, you can build community networks that have a mile, 5 miles of coverage. guess what, over that area if you have multiple operators, people trying to use the spectrum it will be completely on coordinated privilege there are not in any standards -- and there are standards being developed, those standards do not recognize the problem of multiple service operators operating at the same time investing in large

amounts in a situation where you have no idea whether your network will function or not does not make sense. and my view is that the inspector might be used by wireless isp in rural areas, but in general it is not going to be efficient use. >> i was compared to an event. you have small groups of people having chitchat. that is unlaces usage because they are talking low-volume, among themselves that you have the designated speaker of the evening there needs to be somebody who will bring order to what so that people quiet down. and if they did not, that is called interference so everyone is quiet.

you have the designated speaker speak. and then, you know, somebody has a question. they look at the microphone. that is laces usage where you have somebody bring order. you can do that in wide areas. so places spectrum is most beneficial. >> so to put a bow on the unlicensed spectrum segment, i looked at the may 2014 incentive for broadcast auction rules that came out. it appears that they depending upon how much spectrum they get back from broadcasters will make a total of 14-28 mhz of broadband spectrum available. that sounds like a minimum of 14 and an additional six mhz available by allowing unlicensed use of channel

37. it. >> my question is, is this the right allocation? isn't that really the debate? >> absolutely. very disappointed with 14 or 20 megahertz of spectrum when they're used to live five with 40, 60, 80, 160. they will say, you know, this is the slew of trade. you know, i am not going to use it. there is something wrong with my equipment. and on top of it because it is 600 mhz you will have ranges of several miles, so someone on the other part of town can very easily into fear. so if we wanted to do unlaces spectrum we should move it up in the spectrum and the consumer, you know

-- we moved it to five panera i think if we go higher up there is more spectrum available and it is much more suitable for unlicensed usage. >> i would like to separate the question of the band planned from the u.s. the fcc has some very difficult problems and trying to figure out how to design a contingent plan based upon how many broadcasters would show up and he would take an offer, which is why we are not seeing the static plan that we are used to his auction. and i think that they have done a heroic job so far in trying to figure out how this is all going to work. the question of how one uses the duplex kapor their guard band is a difficult question. they have just released another notice of proposed rulemaking looking at those technical questions. from the vendor community everyone has that under a microscope because the most

important thing that can happen out of this voluntary incentive auction is that it is a success, carriers show up with their checkbooks and purchase spectrum which enables the fcc to pay the broadcasters, fund first met, the u.s. treasury, and give that tool a huge boost. and that is the most important thing. people have got to walk into that auction, particularly the forward auction, with the confidence that what they are by will be usable by then. >> peter, any other questions, comments? maybe it is a bad time to go to the audience. it will knock it out to your satisfaction? >> i guess i will just at -- >> you kind of rain on my street. >> neither super or wi-fi.

i think i used those same words in an article i wrote. i just want to mention, the current wi-fi standards do not work in that band. fifth in entirely new standard. cell no existing device is going to work. and i think it is instructive to look at where lights bases are getting the most usage today. it is not in the u.s. his in places like africa providing coverage to places where there is no broad band at all and then using those live frequencies as a fantastic way of providing back call to tell us that do not have broadbent and then using that as a back call connection for providing local wi-fi and high frequency. there are use cases for the spectrum. aren't just not sure it will ever be a viable alternative to the mobile broadband system that we all enjoy

today. >> i think that there was a question from the audience back your. >> hi. my name is sarah him. i have a much less sophisticated question that what you waller talking about in terms of spectrum. i have recently been accepted into the global start up the incubator program to launch a mobile application development company centered on health. and based upon what i heard today and read in the industry first on the positive side, i am thrilled at the market potential, estimated to be about as $6 trillion industry going forward. having said that, i have a concern based upon the interdependency, we're talking about in terms of infrastructure. that is, if i travel from dulles airport to this location and use my mobile

device i have a couple of challenges. one round trip will drain my battery. and there is no way to charge that on the metro. the second concern is that i don't have reliable service in terms of video and at usage. here we are in a very tech center to -- how do we capitalizing on what was referred to as maximizing investment and the equity of consumers feel comfortable capitalizing. the customer base, if we cannot provide the reliability and increase the power connection. >> let me answer your first question they have little power outlets. not true. not true.

>> we wish it was true, but it is not. i wake up in the morning. my phone drains before i get into work. if you think about help desk , help is a high value use, especially if you are monitoring in real time people's condition, and it is exactly the sort of high-value use that you can imagine being prioritized. and so this is where the different pieces come men. if you have a high value use that could be prioritized and paid a higher rate than you could end up being able to fund the infrastructure in a way that provides war coverage. you ask yourself the question, what would you need to sort of make sure that your health that had a sufficient connection at

every point? and you're talking about investing a lot of money and continuing to overtime. where we run a risk at this point is that policy ends up constraining the ability to identify high value uses and direct the money in that way. you can almost imagine that places like washington, new york, so forth, would have away of health related apps in real time cannot the sort of ones were you do fitness, but was that are directly connected to people would have priority, and to read in a way that is funded in different ways. so when we are talking about business models, business models is not an abstract word that says, oh, some people make money and some don't.

it has to do with this sort of services you can deliver to consumers in a way that works. >> i am grateful for the question. when we applied that neutrality to mobile, and our net neutrality, everybody should be treated the same way. your potential customer, somebody with medical monitoring is treated exactly. in not allowed to to approach us somebody with a hard marcher over somebody who plays a game. opposed to being exactly the same rate. does not allow for the health initiatives to be flourishing when you complete -- compete with somebody who has more entertainment usage rather

than less critical applications. this is, i think, very good example of where we should really let the marketplace decide. i am sure somebody with a heart condition will put a higher premium than somebody playing, you know, words with friends. >> one more figured. this is what place. they have to be fairly active. two things going on. one is that, the ability to create high reliability channels is extremely important, but it has to allow the small start-ups have a fair shot as well. pucks about what sorts of

roles you need to have an order to make sure that that is true. this is exactly what he is talking about. that you should be able to get into the marketplace and not feel like you are being squeezed out by large providers. >> if there are no comments, oh, yes. >> the communications system as a regular red line rider, that is where the problem is . >> with wireless telephones? let me move to another topic that is near and dear to my heart, wireless wireline substitution. the first question is for mary. some folks are trading in wireline connections for wireless.

15 percent of u.s. consumers could cut their broadband wireline connection in favor of a mobile data connection in 2016. more recently we found that one-third of sell internet users use mostly their farm to access the internet as opposed to other devices like desktop, laptop, or tablets computer. what is stopping but more folks from going to wire list? >> well, i think the 2011 study sort of identified. that is a top down study, if you will, of what could happen. and the point of the study was to say that the wireline providers, you need to put wi-fi at the edge of your network. so full disclosure, that is what was going along. it did identify some useful

torrance. there are categories of consumers who are probably not going to cut their connection. a family that has multiple people in their family using broadband connectivity will probably what that connection. there are people for whom there may be coverage issues. they do not get the coverage in their own that they would like to have, or is body and what not. but there are a category of customers in the study that we produced and the numbers that buried at where mobile is compelling. there might be coming you know, one-person household who is immobile, renters, then move around a lot and don't want to mess with broadbent to be it might be a rural house sold for home there is no real wireline comparable coverage.

and that still remains the case today despite all of our efforts to of find universal service and change that to a broadbent plan. their is a component of the consumer marketplace that is eligible. and i think that we are still early days in terms of figuring out how large that will grow. >> i think going mobile command using the mobile spectrum for internet usage makes a lot of sense in the rural parts of this country. we are always talking about the major metropolitan areas at the same time, what is also true is that we actually have a lot of spectrum because the population density is low. and the distance that we need to cover his far.

i have been working with small, rural telephone companies, and some of their customers are miles and miles about go right now trying to serve them. dsl punishes you severely from how far you are from the central office. the best way for them to serve that customer to be wirelessly. to that customer and then tell me five or ten, you know, if you are in rural kansas ourself to cover that with the bill has not hit yet you know, it can go up to 120 megabits per second. you know, dsl or even fiber.

the cost is simply prohibitive. providing these customers with wireless service would be the best solution for consumers and the providers alike. >> and roger brings up a great point. let me amend opposition. from a technology perspective we are early days on four g. we have advanced this conversation. we are starting to get to the point where wireless technologies are delivering a substantial thruput. again, as the technologies rollout into the marketplace and become available it becomes a lot more compelling. >> especially when only a few people actually share it when less people than in this room actually share the

benefits of the cell, then the throughput is delightful >> new york in silicon valley the eyes spectrum that we have at that point. >> the progress, i have been involved with wireless technology for 20 years now. a thousand times faster. i worked 20 years ago. but we still have zero long way to go. mobil broadband is that a point, if not heavily used, i have a remote office in a rural area which happens to have dealt seek. when i am there i use my phone as a hot spot, and my

family shared plan is sufficient for me to run my business off of my phone. the tough part today is cutting the cord to your tv and getting all of your entertainment and cutting the cord. has up to a disastrous situation. the fact is, hopefully you are consuming about a gigabyte prowler. you're going to go through whatever broadbent plan you have fairly quickly, but that is going to change. the capacity increases. advance with the small cells, all to me those developments will keep augmenting capacity. certain mary's point that just right now it is a subset of people, that

percentage will be increasing. wireless is never going to replace fiber. whereas it is only made the 15 or 20% surge by wireless now, by the end of the decade it might be twice that. five years after that may be twice again. it is hard to predict exactly, but the trend is positive. ..

>> >> there is a love does substitution on the margin and could be more in the future so with that we have concrete questions and you have a piece roger but talks how the sec shed carve up the spectrum but you say to

regain though beat the united states should quickly allocate more spectrum and larger contiguous blocks but it sounds that if you had your way it would make life at the margin borer difficult if the blocks were in tv tiny pieces it would allow for greater opportunities. would never have the choice but read my local coffee fender and starbucks i always go with the small guy you have something against wireless carriers? [laughter] >> i have a big fan of telecom providers and general. with of proverbial bicycle going up against the

steamroller. and with small providers you have to recognize in the small role providers and were their operating it is a spectrum is a laudable goal by the sec you cannot eat the cake and eat it at the same time. and carbon up in small pieces. and a necessary protection

and working with the larger wireless carriers and use it in a larger spectrum for example, the swiss rate the leader is in the paired spectrum with that allocation where they offer 300 megabits per second. with the 15 mhz pared.

so if we're serious about having the world's fastest internet service we cannot do anything but have large services we should make a conscious decision that we value competition that is a very valid id decision. >> weighing in with it an economic perspective if while with -- wireless is a substitute overtime and want to have that heavy demand this seems to me that will push out the benefits of having a larger network and i am just wondering how should this inform the fcc with a number of carriers

with that spectrum? >> what happens even if you don't cut the cord completely the wireless bill provides competition if you have wireless some of the time so that i shift back seamlessly with my wireless depending on what is happening. in terms of the original question does it provide competition? yes. even if we don't cut the cord complete the. >> if this stroke in the economies of scale to be so difficult for a small player

to complete what role is left for the small guys? is there anything to do from that perspective? >>. >> certainly if you deploy a network requires many, many billions of dollars of investment. i certainly think in rural areas there are opportunities up in the gorge with internet service provider there reusing wireless for ever they're all over it because people can only be served by wireless that is one example >> it is predominantly a out

of the major metropolitan areas where unfortunately you have huge economies of scale it is very laudable that we help with designated entities but we have to recognize building a nationwide network is $10 billion have a small family-owned business can raise that amount of money is difficult to grasp. we had very laudable social policies in direct conflict with economic reality. >> this one is to marry you have a new 2014 mobil report and cisco systems is predicting mobile data traffic to grow from 0.four

x zero bytes per month up at 2.5 by 2018 witches and eight fold increase item even know what the xl bite is but it sounds big. >> big. big. >> is the substitution and from wireline to meet --? >> the main drivers of demand are as follows. the devices are getting bigger with those new apple devices is bigger than my apple device and because we consume so much video says a lot more bits of data because the screen size and video.

explosion of tablets and the smart phones but the tablets to project on a monthly basis today on average has more data per month so coming as powerful as laptops. and the number of connections is growing as well. the internet that happens to us all of those drive demand that substitution effect is private -- probably not the primary mover with the explosion of data demand. >> year is the interesting tidbit every inch your screen size goes up your

data consumption doubles. >> why is that? >> because it is so much more enjoyable user experience. the number of pixels on the screen goes up that drives the your much more likely to watch of movie on a 5-inch device than 2 inches. >> and not in addition to the screen size but the resolution and that there are more pixels the you could gussied the individual pixels the screen had better resolution than your eyeballs. sova read the display quadrupled now we see it also with 4k display which is four times the resolution

of the standard ht display fortunately it is by better compression so the bandwidth requirement will only double instead of quadruple but is still doubles. >> the word require is a little funny because it is an interplay that just because your screen demands that many pixels that does not mean you would get from your wireless connection. you can see the business policy where this goes to what we talked about earlier that what you contract for edible or price below or resolution data coming to your screen you may not want to but the devices are

demanding that much but it is not a requirement. >> when the data forecast has built-in a certain assumption what will happen in the marketplace which is constrained by capacity of regulation and price. >> just to echo that it doesn't make sense to consume ht video on my 5-inch foam because i cannot see the difference between that and at one quarter their resolution. >> if we had the watch republican to 1 inch screen so that might not have that flexibility to have a discounted plan that transports video automatically? then maybe i cannot tell the

difference. >> this is deeply important policy play here with the economics intercept every time somebody says that it is what they mean nobody knows where we want to be in the end we have to allow more flexibility where the sweet spots are. >> at one point in time with the right policies in place it will go up dramatically. >> to be have been a questions with that international comparison as the preview? anybody waiting with questions? >> then march for word.

i will go back to the mobile device steady and it shows 4g connections can overtake 3g connections around 2016 but it will not surpass for gm europe even by 2018 and was confused and thought it should look to europe would is going on? do they have a problem? >> the rest of the world for now lives with tucci or 3g with and. -- land and what we have done here as they take credit we've made spectrum available that enables the carriers to move to the 4g network but other countries are lagging looking at that

transition and others are playing catch-up. these kinds of dances the flexible licensing approach the roger sherman talked about earlier today all enable the carriers to move to 4g and a rapid way we have a first broad scale deployment we will move to the 4g advanced technology we have driven development jobs into this country every major vendor regardless of the nationality of their headquarters so it has been a tremendous benefit to use spectrum policy to drive ahead to be the world leader right now it would be nice if we could continue to do

that. >> would be nice to be recognized to be a leader of 4g. >> also with the american carriers in this country where we take for granted is when you buy wireless service you have the same amount of teeeighteen '04 3g0 or 4g connection the wireless companies want you to have the best possible user experience that is usually the most advanced. in other countries like in the u.k. they charge a premium for the 4g you have to pay between five and 10 times for extra per month to

have that 4g service the smallest carrier in the u.k. offered the same price as 3g the others accuse them of devaluing the product rather than realizing it is the advantage that consumers have and the carrier has also because the price goes down go to continental europe but here it doesn't matter how bay your bucket is but for example, in germany the bigger the bucket the faster the jumbo speed so usage like that also by the way is an explanation why the average

data speeds are faster as they're artificially limiting the access so the average speed goes up / the number of people visited the united states medium speed and and really get this much more democratic way and even those people in europe. >> you have a new study on the international comparisons there are some amazing statistics many deal

that are pretty awesome but the u.s. used to live the world with wireless down this road speeds but we have been overtaken by canada and japan and france. i can understand canada and japan but i don't understand france? [laughter] that is embarrassing. what is that cost and how do we get back? >> the rule is spectrum allocation and sizes. they have made larger pieces of spectrum available for the 4g we have to couple that together through pure happenstance the wireless carrier - - carrier can put the spectrum together but it is working everywhere because in europe you by the specter of nationwide hear

our spectrum is divided 437 little slivers of spectrum put together in different ways and with ccs spectrum it is 100 something so on a nationwide basis it is a trivial task for characters -- carriers elsewhere in the world. that is part the the answer. >> something that struck me from your report is how much they are investing relative to their peers according to calculations to the gatt wireless scatbacks we're at

$109 per habitant -- inhabitants verses the european union? can you attribute this difference to any different policies or is it changing? >> this significant policy difference in the united states the wireless carrier can use whatever technology they want with whenever spectrum they have that allows significant flexibility to mix and match in europe and this changes and a few countries but previously you bought spectrum for a technology to

say i don't want the 2g but three ge and 4g the carrier had to say emissary the government said i can only give you 2g it is prohibiting the market development investments and the welfare of the entire country. >> he mentioned the difference retrain that space but could you talk about the 3g auction the u.k. had? like 22 or 23 billion pounds and it was about a few billion pounds from the of last year auction did that

have any effect the house services were deployed? and then they criticize those for being botched. and how that affected through the u.k.? >> what we saw with 4g was a bad hangover from the 3g auction. with the european carriers that went really carried -- crazy with a tremendous amount of money then to a certain extent by adopting a needed approach rather than stimulated uses i remember having worked for a european

company at that time. that was in 2000 or the late nineties when we were chastised for using a wireless connection like presentations. because the cost was so prohibitive the hangover and a slow adoption diminish the value of the auction are there any of their questions? >> this is been a good seminar but how can a maintained that leadership

or the global leadership? whether the two most urgent things you would ask the guests sec to do to speed this a long? >> i think we can all agree we need more spectrum for what drives the engine. the other thing is to maintain that has benefited us of greatly now that things are working so well it will change the formula. i would greatly caution you. >> to resist the temp --

temptation is the hardest thing for policy market-makers to get their arms around everything including changing will consumers benefit or harm so resist the temptation to take as snapshot that would be the determination of that auction is a big success. this is the early days so book taking us into the 60. looking at the semiconductor industry looking at 15 years

out the stop thinking about the market being static but think of a different business models and with less waiting in the market right now. with get that laundered tom of -- time frame that is extremely important. >> tell them one thing? [laughter] i would say encourage innovation do not put up barriers to make creative opposite -- applications to

those networks don't put up barriers to make them think twice about investing in the markets. >> thanks for coming i will wrap up my first time moderating we will see if i am invited back. [laughter] and thank-you to ppi for hosting and give the panelists a nice round of applause. [inaudible conversations] . .

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