**STATEMENT OF**

**COMMISSIONER JONATHAN S. ADELSTEIN**

**APPROVING IN PART, CONCURRING IN PART**

*Re: Service Rules for the 698-746, 747-762 and 777-792 MHz Bands; WT
Docket No. 16-150 et al; Second Report and Order*

Our decision today is one of the most significant and groundbreaking we
have conducted in the time I have served. These 700 MHz licenses are the
finest crown jewels the FCC has to put up for auction. This coveted
spectrum presents us with a historic opportunity to facilitate vibrant,
spectrum-based opportunities for both consumers and wireless providers.
I am pleased that today's item, to some extent, embraces this potential
for the next generation of wireless broadband service providers. I
commend Chairman Kevin Martin for his leadership in steering this item
on a consensus path that serves consumers.

Most of the time, our decisions are relatively narrow -- limited to a
specific issue or segment of industry. Other times, we are presented
with an opportunity to shape a larger segment of the market. On this
rare occasion, we are presented with the dual opportunity to
fundamentally begin to change the way over 200 million U.S. consumers
receive their wireless services, while at the same time substantially
redefining the FCC's approach to spectrum policy for years to come.

It would have been easier to stick with what's tried and true in
considering the 700 MHz band. We could have declined to adopt any
controversial conditions to open the market; we could have stuck with
our traditional substantial service construction standard; we could have
allowed public safety agencies to fend for themselves in trying to
develop a long-awaited interoperable network. We could hold a fine
auction without much effort. But because our job is to promote the
public interest, the status quo was not an option.

I have heard the plea of 250,000 consumers who submitted comments in
support of open access. I have heard the concerns of Silicon Valley's
best minds expressing frustration with their inability to innovate in
the wireless space. I have heard the public safety community's cry for
help, and their willingness to join their spectrum with a commercial
provider in order to create a unique public-private partnership. And
we've responded.

*Open Access*. While this item does not deliver everything consumers and
innovators wanted, or many of the improvements I suggested, our decision
today represents an important step, if a modest one, in the right
direction. We can be proud to say we are offering consumers a new
paradigm they have longed for and certainly deserve. We cannot afford to
let innovation in wireless devices and applications take root in Europe
and Asia before it can occur in the U.S. If we want to maintain our
world leadership in technology, we need to harness the full creativity
of our many wireless engineers and entrepreneurs. We need to unleash
them from the shackles of a handful of gatekeepers who dominate access
to the wireless mass market.

The item before us is a positive step for consumers because its sets in
motion a new approach. I am pleased with the willingness of my
colleagues to support a meaningful, though not perfect, open access
environment on a significant portion of the 700 MHz spectrum. It
represents an honest, good faith effort to establish an open access
regime for devices and applications.

I especially appreciate my colleagues' willingness to work with me to
include real enforcement with teeth, and provisions to promote a
genuinely open standard that innovators can build upon. The Order before
us is significantly improved in these areas, although the true test of
their effectiveness will be seen over time and through future Commission
actions and oversight. So, we'll need a true commitment if this Order is
going to be effective. If successful, our approach can ultimately lead
to benefits for the many consumers who so desperately want unfettered
ability to use any wireless handset and download any application they
want on the C Block spectrum.

The past several years have seen an explosion of new opportunities for
consumers, like Wi-Fi, WiMax, and more advanced mobile services. But
despite these technological advances, consumers are frustrated by
arbitrary limitations on the types of devices and functions they can
access. The open access requirements we adopt today can and should
improve the consumer experience. Now, instead of being limited to
purchasing a phone and service contract from one network provider, a
consumer can purchase any wireless device compatible with the C Block
network and use all of the available features and functions.

This also means progress for wireless innovators -- application
developers, manufacturers, and carriers alike who will now be unleashed
to bring new multi-media products to market for use on this spectrum.
The Internet has been a source of remarkable innovation and an engine
for economic growth and productivity. It is critical that we bring the
benefits of the Internet to the wireless world, and I believe our
actions today take us in that direction.

*Wholesale*. One of the best options for promoting broadband,
particularly in rural areas, and for providing new competition all
across the country, is maximizing the potential of spectrum-based
services. Instead of the third "pipe," this holds promise as the third
"channel." Or -- if we can wax truly optimistic -- perhaps we have an
opportunity for a fourth or fifth channel through the innovative use of
spectrum. Ideally, this auction will facilitate the emergence of new
broadband channels with the goal of providing consumers everywhere the
benefits of a high-quality wireless broadband network.

Though we have hope and expectations for this auction, we must recognize
that today's decision alone won't solve our broadband challenges, nor
will it provide any instant remedies. Even if all goes well, today's
decision won't afford opportunities until 2010 at the earliest. Yet,
right now, we face major challenges bringing affordable, truly-high
speed broadband to all our communities and ensuring that we give our
citizens the same choices and tools that are available to citizens in
the countries that are our leading global competitors. So, we can
certainly ill afford to claim "victory" and sit idly on our hands for
the next two plus years.

While I remain hopeful that such a third channel does emerge, I am
concerned that we haven't done enough here to open up these critical
airwaves to badly needed competition in the broadband space. Those who
argue such measures are not necessary because the wireless market is
already competitive miss the point. The real problem is the lack of
competition in the *broadband* market, where 96 percent of consumers are
served by the incumbent telephone or cable company.

I believe that a truly open wholesale model would stand as a breeding
ground for innovation, for allowing new and diverse competitors to
flourish, and for spurring unparalleled levels of competition into the
broadband marketplace. While this item represents progress for consumers
in terms of new openness for devices and applications, I can only concur
to this portion of the item because we could have done more to promote
open markets by adopting a wholesale model to attract vigorous
competitive alternatives.

We have also lost an opportunity to provide crucial bidding credits to
designated entities that wholesale fully built-out network services. I
think it is essential that we revisit our policies in this respect to
ensure that all bidders have opportunities to bid, particularly where
wholesale service is a compelling option for new and diverse providers.

We have had to strike a compromise -- and while the measures we take
here today are less than what I would have proposed, they are
significant and will serve consumers well. At the end of the day,
though, I am afraid we may have missed a golden opportunity to open that
elusive third channel into the home.

*Band Plan and Service Rules.* I've often talked of "spectrum
facilitation" -- looking at all approaches, technical, economic or
regulatory, to get spectrum into the hands of operators ready to serve
consumers at the most local levels possible. We have a special
responsibility to establish band plans that allow for a diversity of
license sizes and to maximize the level of utilization by giving more
options so that the market can perform most efficiently. I recognize
that many small providers believe that we have failed to provide for
them today. I am somewhat frustrated that the pro-consumer open access
provisions were tied to a large 22 MHz block, and would have been happy
to break that into pieces that could have better accommodated the needs
of a variety of sizes of players. I am also concerned that the reserve
price and second auction requirements set out in this item leave open a
real potential for gaming and may result in unintended consequences.

But I am pleased that we have added a paired Economic Area block in the
lower band to the Cellular Market Area license already set for auction.
And, as discussed below, we have adopted aggressive build-out
requirements to promote network buildout. These are significant changes
that will help provide additional opportunities for small and mid-sized
interests, rural providers, and new entrants.

Our job at the FCC is to do whatever we can to promote spectrum-based
opportunities in the future. To get there, I am continually evaluating
the FCC's service and construction rules to ensure that our policies do
not undercut the ability of wireless innovators to get access to new or
unused spectrum. I have advocated a carrot and stick approach. We want
to promote flexibility and innovation, but since the spectrum is a
finite public resource, we want to see results as well.

In our item today, we adopt some of the strongest performance
requirements in history to ensure that this wireless frontier truly gets
developed. As we did with the homesteaders 150 years ago, we are happy
to get this prime real estate in the hands of those that will use it.
Just like the government required of homesteaders, we want this fertile
soil tilled and put into use, including in rural areas of the country.
Out of this development will sprout the fruits of innovative product and
service offerings to every corner of America.

Regrettably, though, I have long advocated the adoption of a triggered
"keep what you use" approach to spectrum policy, and I am disappointed
that such an approach is not adopted in this item. I am hopeful we can
make progress on this because I think it presents the best vehicle to
ensure that fallow spectrum is either put to use or made available to
other interested parties.

*Public-Private Partnership for Public Safety*. Finally, I'd like to
turn to perhaps the most paramount issue for this Commission: public
safety. The role of communications is so important during emergencies,
whether citizens are trying to find out what is happening with their
families or emergency personnel are responding to an urgent situation.
It is critical that the Commission provide the best leadership possible
to ensure that communications are fully operational during these most
serious events. Indeed, this is one of our core directives under the
Communications Act of 1934, codified in the Act's very first section.

The Commission can and must play a key role in improving our nation's
disaster preparedness, network reliability, and communications among
first responders. This item marks a pivotal step in addressing the needs
of public safety. Six years after the tragedies of 9/11 and three years
after the 9/11 Commission issued its report on terror attacks on the
United States, our country is still without a national interoperable
public safety broadband network. Policymakers all agree that our first
responders need the best technology and communications network possible.
Yet to date, there have been no other viable plans brought forward to
realize the critical need for an interoperable network for public
safety.

The implementation of this shared commercial and public safety network
presents a myriad of complex and novel issues. There is no guarantee
that the model we\'ve created here will nurture a nationwide
interoperable public safety system that is both commercially viable and
technically feasible. And while I would prefer direct Federal funding
for building a national public safety broadband network, it presents the
only option available to us at the Commission. For this reason, I am
happy that this Commission is stepping forward to meet this challenge by
paving the way for a public/private partnership. This may be the only
way to realize the important goal of making a nationwide and
interoperable network truly available to our nation's first responders.

*Conclusion.* There's an old expression that to make an omelet, you have
to break some eggs. Today, we are cooking up a new age of wireless
services. I appreciate the steps we are taking, and am pleased that we
are moving forward in ways that this Commission would have never even
considered a year or two ago. I look forward to a successful auction and
the successful implementation of our exciting new policies.