**Remarks of FCC Commissioner Robert M. McDowell**

**Conference on Spectrum Management**

**Monday, September 17, 2007**

**11:00 a.m.**

**Capital Hilton Hotel**

**Washington, DC**

***Spectrum Issues Currently at the Top of the FCC's Agenda***

**As prepared for delivery**

Good morning, Tom. I appreciate your warm introduction. Many thanks to
you and Michele for inviting me to speak here today. I'm delighted to be
here. I find wireless issues to be among the most exciting elements of
the FCC's portfolio. I also want to thank both you and Michele for your
respective service as chief of the FCC's Wireless Telecommunications
Bureau. Certainly your efforts contributed to the growth and success of
the wireless industry and the myriad benefits to America's consumers and
our nation's economy. America should be grateful to you.

The folks putting together this conference have asked me to speak with
you today about the spectrum issues at the top of the FCC's agenda.
Well, there are a lot! So, I thought first I should outline some of the
issues that we may be addressing soon. I'll talk a bit about white
spaces; reduced orbital spacing (or "tweeners"); Early Termination Fees
(ETFs); the XM-Sirius merger; the forthcoming 700 MHz auction; and 800
MHz rebanding. I'll also mention what I would call a "sleeper" issue --
wireless backhaul. Then, I want to make sure that we have plenty of time
for your questions.

So let's begin: Last year, the Commission said we would take action this
fall on permissible uses for the spectrum located in between the TV
channels, or "white spaces." So here we are. This coming Saturday is the
autumnal equinox. And that must mean it's white spaces season. I have
long advocated vigorous promotion of unlicensed use of the white spaces,
provided such use does not cause harmful interference to others. I am
hopeful that a flexible, de-regulatory, unlicensed approach will provide
opportunities for American entrepreneurs to construct new delivery
platforms that will provide an open home for a broad array of consumer
equipment.

At the same time, the Commission has a duty to ensure that new consumer
equipment designed for use in this spectrum does not cause harmful
interference to the current operators in the white spaces. Perhaps we
should call this spectrum "gray spaces." I have enjoyed learning from
various parties who are engaged in the healthy technical debate
surrounding the best use of this spectrum. And I expect the discussions
will become ever more intense as we move forward. But, at the end of the
day, we will have a resolution. Inventors will continue to invent, and a
workable technical solution will develop. We should let science, and
science alone, drive our decisions. If we don't pollute science with
politics, powerful new technologies will emerge, and American consumers
will benefit as a result. And, who knows? This may spark a new wave of
economic growth that we can't even imagine right now.

But time is short, so let's rocket on to reduced orbital spacing. Last
summer, the Commission released an NPRM inviting comment on revisions to
our licensing procedures for applications in the direct broadcast
satellite (DBS) service. I was pleased to support this rulemaking. The
Commission has an obligation to explore and attempt to expand
opportunities for competitive entry among and within all platforms and
to expedite innovative services to consumers.

The Notice seeks comment on how and whether to update technical rules
that would facilitate launch of satellites in reduced orbital locations.
Sometimes called "'tweeners," these satellites would operate in the
orbital spaces between existing DBS satellites, which are currently
spaced nine degrees apart. In other words, if its application were
granted, a new satellite entrant would launch and be operational at a
position between its neighbors -- specifically, at four and one half
degrees between each neighbor.

Throughout the course of the rulemaking, I've met with a number of
interested parties on this issue. On the one hand, permitting launch of
additional satellites would potentially give consumers more video
choices, spur innovation, and create downward pressure on pricing. On
the other hand, the Commission must proceed mindful of the need to guard
against harmful interference. Now, I'm no rocket scientist, but, I've
learned that every one degree of separation is equal to roughly 1,000
miles. I've also learned that a satellite is approximately the size of a
minivan.

So, while there's never any certainty that allowing reduced orbital
spacing would ensure entry of a new nationwide DBS competitor, it is
important that the Commission study and determine whether to take action
to make DBS spectrum available at additional orbital locations. I am
always trying to find new ways to increase opportunities for new
competitive entrants to expand video service options for all kinds of
consumers, while ensuring that incumbent providers are protected from
harmful interference as well. But something tells me that it might be
possible to squeeze one more minivan into a 9,000 mile wide parking lot.

Before I terminate this speech, let me talk about Early Termination Fees
(ETFs). DBS providers, wireless carriers, traditional phone companies,
and cable providers all allegedly assess early termination fees. Earlier
this year, the Chairman indicated his intention to tackle this thorny
issue, and he appears to be signaling that this may happen sometime
soon. I've met with a few parties on both sides of this debate and look
forward to delving into it more deeply. While I appreciate that the
efforts to acquire a new customer is costly, at the same time, there are
customers that want to or have to cancel their service prior to the
expiration of the service contract term. Moreover, so far, the industry
has yet to coalesce on a meaningful voluntary solution. I would strongly
encourage the stakeholders to continue their efforts to forge consensus
in this area before the government tries to "solve" it for you. The
government rarely does as good a job as the private sector when it comes
to these sorts of things. But if the market can't fix it, consumers may
demand policy-makers to step in.

OK, so let's get serious about the XM/Sirius merger. I don't want
everyone to get excited ... I'm not going to make any pronouncement
today. The fact is that my briefing today would be incomplete if I were
to not mention this pending proceeding, and note that the Chairman
recently indicated his interest in handling this application by year's
end. Certainly the interest is high, and I've met with a number of
parties already. I look forward to further discussions with interested
stakeholders later this fall. Passions are already high, and they are
sure to rise to a fever pitch. There's more to come on this issue.

In case you haven't heard, the FCC is having a big after-Christmas sale!
A spectrum sale. 2008 will soon be here, and the Commission is on track
to meet Congress' mandate to commence the 700 MHz auction no later than
January 28. In fact, the auction is scheduled to start on January 16,
2008. So break open your piggybanks. Although, as I've disclosed before,
some of our sale items are slightly... encumbered. But please come
anyway and heed the slogan of a designer-wear outlet store when they
say, "an educated consumer is our best customer."

At this stage, the Commission's staff remains busy working through the
auction details, including anonymous bidding, combinatorial bidding,
reserve prices, and the like. In the meantime, Verizon Wireless has
sought appeal at the D.C. Circuit. Also, we've had a request to extend
the auction start date by about a week. Also pending is a petition for
reconsideration of our April order, which raises interesting questions
regarding the engineering decisions that will affect the lower portion
of the 700 MHz band. I applaud and appreciate the work of the incredibly
hard working Wireless Bureau team. Even at this late date, however, many
"ifs" remain. Let's all stay tuned.

In addition to being the month to deposit the 700 MHz auction proceeds,
June 2008 is also the deadline for completing the 800 MHz rebanding
process. I am pleased that the Commission has taken a number of actions
toward moving all of the stakeholders into high gear so we can work
together to get the job done. When I arrived at the Commission, the
rebanding process was behind schedule. I understand the reasons for that
situation and I have come to recognize that everyone involved bears some
responsibility. Not to mention that this is an extremely challenging,
multi-faceted process. We have made a final push, and all involved are
making progress. At the same time, a great deal of work lies ahead. I
stand ready to continue to assist, and look forward to a successful
completion of this important task.

Lastly, I want to raise one sleeper issue -- perhaps not at the top of
the FCC's agenda, but something to think about nonetheless: I recently
read that the cellular backhaul market is expected to reach \$23 billion
by 2012. I have been told that about 50 percent of wireless per minute
costs is attributable to the cost of backhauling cellular traffic. It
appears that, going forward, it will be increasingly more difficult for
independent, mid-size and smaller wireless carriers to compete given
this upward pricing pressure. Those costs ultimately get passed on to
America's wireless consumers. Having more competition in that space
would reverse that trend.

In the meantime, I am pleased that the Commission recently approved the
use of two-foot antennas in the 11 GHz Band. Our prompt action will
enable the companies seeking relief, as well as others interested in
entering the marketplace, to begin offering microwave backhaul service
in that band in areas where two-foot antennas are the most effective
means of meeting customer needs. This is especially important as the
consumer acceptance of 3G and 4G high-speed data services increases the
need for backhaul. I will continue to look for and support additional
relief the Commission can provide to entities seeking to enter this
business.

With that, I again thank you for having me today. And, I will be happy
to take some questions.