In Re: )

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WIRELESS BROADBAND FORUM )

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Pages: 1 through 254

Place: Washington, D.C.

Date: May 19, 2004

Before the

FEDERAL COMMUNICATIONS COMMISSION

Washington, D.C. 20554

In Re: )

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WIRELESS BROADBAND FORUM )

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Commission Meeting Room

FCC Building

445 12th Street, S.W.

Washington, D.C.

Wednesday

May 19, 2004

The parties met, pursuant to notice.

BEFORE: HONORABLE MICHAEL POWELL

Chairman

APPEARANCES:

[P R O C E E D I N G S]{.underline}

(9:35 a.m.)

MS. SEIDEL: Good morning. I\'m Cathy Seidel and I\'m the Deputy Chief of
the Wireless Bureau. I\'d like to welcome you all to the Commission\'s
Boardband Forum. Today\'s forum will focus on three critical issues
relating to broadband wireless services. Specifically, we\'ll talk a
little bit about what wireless broadband is, what wireless broadband
will be and, perhaps, most importantly, what wireless broadband should
be. We\'ve brought together business, technology and government leaders
in what is sure to be an open, informative and lively discussion.

As outline in the agenda, today\'s forum will be comprised of four
panels, each of which will be moderated by one of our commissioners,
each of whom has graciously agreed to be a part of this effort. These
panels will explore technological development, consumer demand, barriers
to further success and expectations for the future.

To ensure a healthy discussion, we have set aside time for questions
from the audience at the end of each panel discussion. In addition to
the panels, we will be setting up demonstration rooms from noon to 5:00
p.m. so that everyone can view some of the key technological
developments in the wireless broadband space.

With the recent creation of the Broadband Division within the Wireless
Telecommunications Bureau, under the able leadership of Joel
Taubenblatt, the Commission\'s vision of wireless broadband continues to
develop and sharpen. We believe that this forum today will support and
help inform the work of the division and outline options for the
Commission that will have a positive impact on long-term wireless
broadband development.

This point will be brought home later today by the Wireless Bureau\'s
Chief, John Muleta, who will fight his own unique perspective of the
wireless marketplace and the strives the Bureau is making to promote
wireless broadband.

As many of you are aware, conducting a forum such as this requires a
heavy amount of behind‑the‑scenes work. I\'d like to thank the work of
staff in the Wireless Telecommunications Bureau as well as the Office of
Engineering and Technology for the detailed work that was done to make
this forum a reality. Specifically, I\'d like to thank Chelsea Fallon,
who\'s probably running around here somewhere, who has really been the
primary organizer for today\'s event and really has gone above and
beyond the call of duty to make today\'s event a meaningful experience
for each of its participants.

Before we get started with our panel discussions, Chairman Michael
Powell has agreed to kick off today\'s events by discussing his vision
for wireless broadband. As you know, Chairman Powell has consistently
championed wireless technology and innovative broadband services in
particular as a means to achieve ubiquitous and affordable
telecommunication services nationwide. As chairman of the FCC, he truly
has his finger on the pulse of wireless broadband and is singularly
positioned to help ensure the continued development of wireless
broadband for the benefit of individuals, commercial entities, public
safety entities and the community and beyond. So, without further ado,
please join me in welcoming Chairman Powell.

(Applause.)

CHAIRMAN POWELL: Thank you, Cathy. That was a great introduction. She\'s
not press agent. Very nicely done.

I want to the opportunity today to welcome all of you here to the FCC
for this very important forum on broadband and, particularly, the
promise that wireless holds for bringing the great benefits of broadband
to all Americans. It seemed to me, walking in here today, I don\'t need
any more graphic representation of broadband than looking at our narrow
band security system to get people into this room. So that\'s our own
graphic representation of the value that we\'re here to talk about
today.

We have been talking about, as a community, broadband for years now. The
recognition of the internet, the recognition of the promise that it
holds for America and world citizens everywhere, but, as we move into
this year, we really begin to see the intensifying recognition at all
levels of government the promise that broadband holds for any nation
that hopes to remain competitive and globally significant in the world
of the information age and the world of the future. And that recognition
is punctuated by our leaders increasingly setting out ambitious goals
for this nation to reach.

The President of the United States recently talked about wanting
broadband availability to all Americans by 2007, a truly bold and
ambitious goal that\'s going to be difficult to meet, but we\'re able to
meet. But it only will be met by the use of every possible tool in our
broadband tool kit to get there. And it will be critical that wireless a
major role in our ability to provide these benefits to the American
consumer.

This is, as we often say, the central communication policy objective of
the era. It\'s more than talk now and it\'s time for action and these
forums are unique and important way to bring together critical
communities to identify issues, to develop solutions and highlight
important questions for government as it develops a spectrum policy
that\'s respectful and efficient and productive for the broadband goals
that we hope to achieve.

It is becoming more clearly focused what the benefits to a nation are of
a constructive broadband policy and a broadband success. The American
consumer we have a simple goal. We want to be able to provide this
critical plug into an information appliance in an information age to
every single American no matter where that American chooses to set up
their family and live and to do so at affordable rates so that it is
something that is for all of us regardless of our sociodemographic
class. That issue has always proven to be difficult and sometimes
impenetrable using the technologies of the past. For a hundred years, we
have hauled copper wire over a mountain and through rivers and through
valleys and over poles to try to reach this objective using a single
technology. But that\'s what holds so much promise as we move into the
future. We\'re able to use other technologies that will make that
challenge more addressable.

A satellite cares very little about those demographic difference.
Wireless can bridge distances that wire line functions can\'t. Wireless
has unique opportunities for interactivity and mobility that other
technologies don\'t. So, as we begin to sort of put this together for
consumers, we see wireless as a critical component to that. I think,
also, we begin to recognize anybody who cares about the economic
well-being of their nation has begun to see the critical value of
investing in broadband infrastructure and information technologies.

The United States has been able to steadily increase its global and its
economic productivity almost exclusively because of its continuing
willingness to invest in information technologies. Indeed, last year the
United States had extraordinary productivity growth at the end of the
year attributable directly to our investments in internet and
information technologies of the \'90s. If the United States is going to
maintain its ability grow its economy, I think the continued
proliferation of broadband technologies with wireless playing a critical
part are key to that solution.

Productivity and growth are what we are about to make our generation
better for our children and that\'s how daunting and important that task
will be. And safety and security, as we all have come to be aware, in
the post-911 world, we understand that we\'re vulnerable. We\'re not
blessed as much we once were by geography. We can\'t take for granted
the safety and security that we\'ve come to enjoy in our generation and
we understand that as an economy moves into an information age, its
dependence, its vital dependence on critical information infrastructure
becomes deepened and, as it becomes deepened, indeed, we become both
benefitted but more vulnerable to problems in that network.

We have a historic opportunity as we engineer networks for next great
era of communications to be cognizant of the need for safety and
security at the front end of the engineering problem. It\'s important to
be thinking about first responders and public safety now not later.
It\'s important to be talking about how to secure networks and encrypt
them and protect them from those who would rather do you harm or gain
access to information inappropriately. It\'s important to have that up
front.

To often, I think, in public policy, we often are working on those
things on the back end of a deployment or we\'re bolting them on at the
end. Let\'s be cognizant of them at the front end for the good of our
citizens.

Wireless, again, as I have said, is vital. And I\'ll put it this way, to
me and in my mind, one of the great ways to achieve the benefits that
we\'re talking about is we can\'t rest on any single technology. I will
give anyone a platform who has a broadband platform, who has the
possibility, the opportunity, the entrepreneurial spirit to bring it to
the market and bring it to deploy it to consumers. This is not an agenda
just for a phone company, just for a cable company, just for a big
wireless company. It\'s also a form for entrepreneurs and innovators and
radical creators of new goods and services. And it\'s the Commission\'s
mission to try to drive any platform that can deliver these services and
deliver them effectively.

For 100 years, if I were to characterize the great regulatory
difficulty, it\'s because we always had one wire. We had one wire to the
home and because of that one wire you had enormous difficulties of
monopoly control, bottle-neck facilities, the pricing of those
facilities, how to get that one wire to every home in the United States.
We have a historic opportunity here to not repeat that world. We have
the opportunity for not one. We\'re clearly going to have two, DSL and
KL modem are well on their well, but the holy grail is when you get to
three. Magical things happen in competitive markets when there are
three. Magical things happen when there is real choice and pressures for
innovation. And we are looking. We want your poster up here for the
third great access and, indeed, the fourth or fifth for the American
consumer. And we all know that wireless rest somewhere there in that
solution to bring that competitive world and take pressure off the
regulatory environment for upgrading the market benefits that that
dynamic can produce and we\'re already beginning to see it.

I don\'t need to catalog for this community the explosive growth in
everything from Wi-Fi technologies to wireless internet service
provision that is popping up in rural America, particularly, all over
the country. We\'re beginning to see greater uses of wireless mobile
broadband products such as EVDO coming into the marketplace. This is not
science fiction anymore. These are true commercial applications that are
rapidly spreading throughout the marketplace. But, more exciting, there
are a number of dramatic wireless technologies on the way. We see
creative uses OFDM, wideband CDMA, wi-max, ultra wideband, products that
just a few years ago technologies very few had every heard of now
beginning to work its way through the commercial system and beginning to
produce real products for consumers. So the future is exciting,
innovative and bright and we look forward to wireless as part of that
solution.

The FCC has recognized for years now that spectrum is vital to realizing
this vision and that it had to have a bolder, more enlightened national
spectrum policy. And, from Day 1, we have been working very, very hard
to change the traditional command and control approach that is not
respective of innovation, not respective of the need to move spectrum to
its highest and best uses and to work really, really hard to provide a
spectrum policy that\'s much more facilitating of more platforms, more
broadband platform, more innovation, more choice, more flexibility. Put
simply, our view is that more spectrum more flexibility and more
innovation will equal more broadband and a brighter information
landscape and that\'s the core of our policy.

Just to mention a few of the big items that we\'ve looked at and are
looking at, Advanced Wireless Services, just last year the Commission
allocated an additional 9 megahertz that can be used for Advanced
Wireless Services, MDS and ITFS will begin working very, very hard to
develop new rules that will provide less complicated and more flexible
structures for MDS, ITFS band. We expect to release these rules sometime
this summer.

The 70, 80, 90 gigahertz bands, the Commission has established
innovative framework for allowing commercial use of spectrum in those
bands. 24 gigahertz, the auction of spectrum license and the 24
gigahertz band that can be used to provide a range of fixed broadband
services is going to begin on July 28th. We have promoted the use of
secondary markets for people to have more commercial flexibility in
obtaining spectrum and allocating spectrum.

In our world of important order, we\'re working on specific solutions
for rural America. We\'ve promoted more unlicensed spectrum and
recently, in particular, in the 5 gigahertz band and we\'re working very
aggressively on new technologies like smart radio that will provide
really new and creative technological solutions to spectrum scarcity and
can open up more possibilities.

So the bottom line is all the raw material is there. The recognition is
there. The understanding of its importance has begun to gel. Now all
there is the easy part of actually making it happen and that\'s what
this forum is one small part of to bring the stakeholders together who
know how to make it happen and to leave this room better than we found
it this morning and, hopefully, in a few years, we\'ll be looking back
quite proudly of our accomplishments, knowing that we put the country
and the world on a better, more competitive footing and a world that our
children will enjoy for many years to come and I\'m excited to be a part
of it, excited to have you here and want to thank you for your service.
Thank you very much.

(Applause.)

MS. SEIDEL: Thank you, Chairman Powell.

In a moment, we\'ll get underway with our first panel and I\'d like to
invite the first panelist to come on ahead and take a seat here. And,
while you do that, I\'ll mention just a couple of housekeeping items.

First of all, and, perhaps, most importantly, there is an overflow room
which is in TWC488 and I think there are signs outside that point you in
that direction for folks that may be standing or may not have a seat.

The format for the panels today is that the moderator will give each
panelist five minutes to introduce themselves and their company or
organization that they represent. Following the introductions, there
will be an informal, moderator-led question and answer session for
approximately 30 minutes. Following that, the floor will be opened up
for 10 to 15 minutes of questions from the audience and there are
speakers placed throughout the room for that purpose.

With that, I\'d like to welcome Commissioner Abernathy and our first set
of panelists. Thank you.

COMMISSIONER ABERNATHY: Thank you very much. As the Chairman spoke so
eloquently this morning, this is an opportunity for us to learn even
more about wireless broadband services, what\'s going out there, what
technology is doing and what we should be doing better. But, first, I
want to thank everyone for attending today\'s forum, both the speakers
and the folks in the audience. It\'s just another mechanism for us to
try and figure out how we regulate a technology that\'s head and
shoulders above how fast the government can act.

So what we\'re trying to do is get a handle on that and understand where
we can add value, where we would simply be standing in the way and we
should step back. This first panel on wireless broadband technology, it
serves as a baseline for all of our further discussions that we will be
having throughout today\'s forum and this is because technology and
consumer demand, not regulatory policies, should be what drives the
marketplace. And I\'m excited about the innovative technologies that are
appearing in the market. I\'m hopeful that we can craft a regulatory
framework, continue to work on a regulatory framework that will incent
further development and deployment of broadband wireless services to
American consumers.

So far, what we\'ve been able to do, as outlined by the Chairman, is
we\'ve embraced broadband wireless by making additional unlicensed
spectrum available for unlicensed devices, allowing more flexibility for
licenses and the types of services that they can provide, initiating a
proceeding to create rules for broadband over powerline and examining
rules that would allow more efficient use of the spectrum resource.
These are our first steps.

What I\'m hoping for today is to hear more from our panelists about
their views on where the technology for wireless broadband is taking us,
what consumers expect, what they want that they don\'t know that they
want, and already wireless broadband services is changing our lives by
providing services such as mobile access to medical information by
emergency personnel, any time, any place access to data services and
improved communications for public safety. So we\'re already seeing
significant, dramatic changes in how we live our lives as a result of
broadband wireless services.

So, with that, I thought I\'d go ahead and introduce each of our
panelists and provide them with a few minutes to tell us more about
themselves, what they\'re working on, why they\'ve been involved in this
area and then we\'ll move on to a question and answer session.

So I think down at the very end we have Pierre de Vries of Microsoft.
He\'s the CTO, Chief Technology Officer. They\'ve created this great
microsoft home that I\'ve seen and we\'d love to hear a little bit more
about your background and what you\'re up to.

MR. de VRIES: Commissioner Abernathy, thank you very much.

Good morning ladies and gentlemen. It\'s always an interesting question,
what\'s a software company doing here in our communications environment?
And the vision that we have, the dream that we have is for affordable
connected computing for everybody. And you can see the computing part is
something where we would like to contribute by providing a platform, by
providing applications, but it\'s not something that we can do on our
own by any means.

We work with people who provide the equipment, the hardware. People who
provide other services. People who actually provide the connectivity and
we\'re very excited by the prospects of wireless. It\'s a way of
providing connectivity as the Chairman said. It\'s another choice that
people will have and there have been a lot of investments and a lot
developments in this area, broadly speaking, in three places. The
technology keeps improving. The technologies like OFDM, the improvement
in online sites connectivity for consumer wireless broadband. It has
been very impressive to observe over the last 10 years.

The companies keep investing. There are people who are entrepreneurs who
start new companies. They get funded by people who want to create new
businesses and that is continuing and exciting. And the third thing is
that the regulators, the FCC, is moving aggressively to create the
environment for this and I\'d like to thank the Commission for inviting
us and for setting up this conversation.

Those three things that I mentioned are, I think, the golden triangle of
new innovation, the three things that one has to get right. You have to
get the technology right. You have to get the business right and you
have to get the policy framework right and we need to see investment and
progress in all of those.

Microsoft\'s investments are mainly in the technology space where we\'re
working to create support in our operating systems and applications that
run on top of that use broadband connectivity and make sure that
customers can use new technologies that are emerging. We\'re also
investing time and effort in standards organizations because it\'s very
important to create the environment and the low cost through doing
standards.

If I think about what the future is like for this space, it doesn\'t
feel to me as if we\'ve nailed it yet. In a way, we wouldn\'t be here
today if we\'d nailed broadband, but we\'re moving in a spiral. We keep
improving. When I think about what really remains to be done, I\'m
guided by the entrepreneurs that I\'ve spoken to and the business models
that I\'ve seen. And, when I think about consumer wireless broadband,
there seems to be three things that really drive the models. The first
is the customer\'s premise equipment, the cost of the customer\'s
premises equipment. The second is the subscriber acquisition cost and
the third is the cost of spectrum.

Now, if we think about the customer premises equipment, the cost keeps
coming down thanks to Moore\'s Law and the innovation and the invention
by people who are building things.

Subscriber acquisition cost is a tricky one because that depends on a
variety of factors. How do you get your marketing out? If you send out a
flyer, do you advertise in the city? And you get leads, can you actually
provide service to everybody who picks up the phone and says, yeah, I
want this service? That actually touches on coverage and range. And
another factor in subscriber acquisition cost is, do you need to have a
truck go to the house and install an outside antenna. That adds about
\$250. Again, that\'s a coverage question and that\'s why spectrum is an
important part of this.

I don\'t want to pre-judge the conversation we\'re going to have later.
We only get a five-minute head start before the hounds get released, but
I think some of the issues that are important in my mind for spectrum is
that we need a mix of spectrum in order to bootstrap these businesses.
There needs to be spectrum at 2.5, 3.5. But there also needs to be
spectrum below 2.5 gigahertz in order for companies to get going.

Below 2.5 gigahertz is code. It\'s code for 700 and, therefore, there
needs to be progress \-- and there\'s a lot of work going on in this
building and in many other places about accelerating the transition, the
broadcast spectrum and allowing agile use of radios in that spectrum.
What will we do with that spectrum? I think it\'s good to have a mix of
licensed and unlicensed usages for a variety of reasons.

And, also, last but not least, to make sure that we have global
alignments. The FCC and the NTIA of industry did an amazing job in the
last couple of years with ultra wideband and with the 5 gigahertz
allocation to ensure that the U.S. remains the leader in these
technologies. But one can only do that with a colonization of business,
technology and policy and that\'s what I look to this group to
contribute to. Thank you.

COMMISSIONER ABERNATHY: Thank you very much.

Next we have Guy Kelnhofer, who is the CEO of NextNet Wireless and this
is a company that is an industry leader in broadband wireless access.
Thank you for joining us and we look forward to hearing from you.

MR. KELNHOFER: Thank you, Commissioner Abernathy.

I\'d like to thank John Muleta from the Wireless Bureau for the invite
to speak before you today.

Let me talk about our vision. Imagine getting on a plane in Montreal,
Canada and getting off a plane in Rio de Janeiro and having an device
that fits inside your briefcase that allows you instantaneous voice and
data communications, including video streaming, voice over IP and ASL
and DSL speeds and better? That\'s here today. That is our vision.
That\'s we\'ve created. Imagine like Mr. de Vries said, the need to \--
to eliminate the need for a truck roll, the need for software in your
computer, the need for multiple visits from the cable guy. It\'s here
today.

We\'ve spent four years developing this technology. We\'ve been selected
three times for national employment, including Canada, Mexico and
Brazil. As Chairman Powell said today, the vision for this technology is
the ability to deliver very secure communications at very high speed.
Imagine driving 150 kilometers per hour in your car and being able to
download multiple sessions over the internet. We\'re doing that today.

This gives us the ability to completely change the economics for public
safety 180 degrees. As Chairman Powell indicated, after the changes of
post‑911 that\'s a preeminent that broadband wireless technology find
its nitch within the security applications. We have the ability to
change the economics today. We\'re going from uniband public safety to
broadband public safety. The ability to deliver to police over 9 percent
of the dollars in an actual solution and still spending that money for
software for spoofing compression, TCP application spoofing and
everything that is required by now.

One of the challenges we face as an industry, first and foremost, is the
MPRM that sits before the Commission today and the speedy resolution for
that MPRM. We all are hopeful that the result will relieve enough
channel bandwidth to still be able to deliver broadband services
regardless of modulation techniques we might use, whether that be 4
quam, 16 quam or 64 quam. If the pipe becomes too narrow, the benefits
of broadband are lost. So that is one of the important things that we
need to really focus on today as far as what happens in the imperium.

The second and more important thing is movement with the major spectrum
holders. As we\'ve said, we\'ve managed to be selected now for both
Canada and Brazil. And what\'s happened in the U.S. has been a very
unique situation where, instead of waiting for the 600-pound gorillas to
move, there\'s been a ground swell of small communities, rural
communities that are interested in deploying broadband and they\'re
interested in doing it over a licensed spectrum because of the problems
associated with unlicensed spectrum with the noise floor, interference
\-- potential interference coming on line.

These communities are struggling to keep their economies strong, to keep
their economies vibrant. They\'re struggling with issues like
depopulation. We\'re deployed in six cities today across Iowa. Iowa has
suffered from depopulation. Iowa is looking for any solution to keep
their economies vibrant and strong. We see the same things in New
Mexico, in Michigan, in Minnesota, in Texas, in Arizona, in other states
where it applied today. All communities are looking for a solution.
They\'re looking for leadership. They\'re looking for a way to keep
their population stable and grow. And, for that, they need access to the
internet. They need alternative solutions other than what are available
out there today.

Finally, as we move forward, there\'s the issue of standards. We believe
very strongly in the standards process and we believe that\'s one of the
ways in terms of Moore\'s Law and the economy of skill will be able to
drive pricing down within the marketplace. From that standpoint, we have
driven very, very closely to follow the Wimax standard and ensure we are
going to be interoperable now and in the future and we stack up very
closely today in that.

You can pass the 802.16 or 802.20. We\'re nearly there. We\'re OFDM. Our
air link is TTD. Our capacity is 12 megabytes over the air. We have the
ability now, which is a separate standard from 16, which is actually 20.
So we think standardization is important. We think that\'s another key
driver in this space and we think it\'s imperative that all of the
vendors drive towards interoperability in the future. Thank you very
much.

COMMISSIONER ABERNATHY: Thank you very much and thanks for coming.

Next we\'ll hear from Margaret LaBrecque and the Wimax forum. She\'s
chair of the Regulatory Taskforce. And, in response to some of the
concerns just expressed by Kelnhofer, she\'s been working on
interoperability in standards. So, Margaret, welcome.

MS. LaBRECQUE: Thank you, Kathleen.

Well, from the perspective of Intel, broadband access is without
question the number one driver of demand for our primary product, which
is microprocessors. Therefore, it\'s very natural for us to be
interested in broadband wireless access, broadband access in general.

Certain business are based upon value manufacturing. It costs Intel
upwards of \$40 million to create a single generation of a single chip.
The availability of cost effective production to manufacturers of
broadband wireless access systems has been a huge issue in this
industry. We believe it\'s been the primary \-- one of the primary
issues holding this industry back. If we do some simply math \--
although it may cost Intel \$40 million to develop and market a chip, if
you\'re developing your own chip, you may be able to do it for 15 or
\$20 million if you can only use it yourself void of a global standard
in place.

If you sell 200,000 units of your product in a year, which for this
industry, which has been driven by innovative companies, such as the
ones here today, \$200,000, historically, would have been a good unit
run for a year. Divide \$20 million by 200,000 and you\'ve just added
\$100 to your cost of your system. You know that by the time this system
ends up in the consumers hands, typically, it\'s a two to three X
increase in price. So you just added 250 to \$300 to the price the
consumed system, meaning you have lost the chance for explosive growth
in this industry.

What\'s necessary for Intel to be involved in this market is a global
standard and we see that in IEEE 802.16. Some of you may be familiar
with the IEEE. If you\'re not, some of our favorite technology,
internet, is 802.3. Wi-Fi is 802.11. So, we feel that the IEEE is a very
credible, global standards body to back this effort. But a standard
itself doesn\'t buy you much because any vendor can say they\'re
compliant to the standard and without a body like the Wimax Forum to
actually certify that they are compliant, it won\'t be a benefit for
service providers of the operators actually deploying this equipment.

The key litmus test for compliance to the standard is that you are
actually able to interoperate with another vendor\'s equipment. What
that means for the service provider is that they can mix and match
equipment within their network from different vendors. When you know
that there\'s ability to mix and match standards based technology is
what made the PC industry take off. It\'s what made the internet take
off. It\'s what made Wi-Fi take off and it\'s what will make Wimax take
off.

I\'m pleased to say that the Wimax Forum has over 100 vendors today, 100
members today, which about 40 are system manufacturers. These
manufacturers ship well over 90 percent of all broadband wireless access
equipment that\'s shipped today, of course, this is pre‑standard
broadband wireless access equipment. They have deployments in over 130
countries. So it\'s my belief that we have the question, the momentum
for building the forum to take this industry to the next level.

As we know, anyone involved in hi tech knows that it\'s globally
competitive and it\'s really not possible to survive unless you can
compete on all the relevant vectors and one of those key vectors is the
availability of spectrum, good spectrum. Not all spectrum is equal. The
U.S. has been a progressive leader in the area of license exempt
spectrum and, of course, this is why Wi-Fi is so successful today.

Wimax operates in both licensed and licensed exempt spectrum. And,
therefore, not only are the efforts that have happened to gain more
access to license exempt spectrum very beneficial for us, but, also, the
efforts to gain access to more licensed spectrum for broadband wireless
access, especially, in lower frequency bands, this is a huge benefit. As
an example, 700 megahertz, you may need 1/10th the number of base
stations that you would require at, say, 2.5 gigahertz. This is a huge
cost advantage.

If you\'re going to really roll this broadband wireless access out
globally in a cost effective manner, we must have access to good
spectrum. Thank you.

COMMISSIONER ABERNATHY: Thank you very much, Margaret.

And now we will turn to Brian Markwalter from the Consumer Electronics
Association. He\'s Senior Director of Technology and Standards, which
we\'ve been talking about and he\'s been working in many different
inter-industry venues on behalf of CEA. Thanks for coming today. We look
forward to hearing what you have to say.

MR. MARKWALTER: Thank you.

Well, I\'m happy to be here on behalf of Consumer Electronics
Association. Our mission is very simple. We promote growth to the
consumer technology industry and, as a result of that, we\'ve grown
phenomenally, actually. We have now more than 1500 corporate members
that represent every aspect of consumer technology \-- audio, video. And
the things that are important in this area, both wireless or wire line
communications, information technology, home networking and our
company\'s also sold every part of the food chain of the consumer
technology cycle, the design, development, manufacturing, retail,
service, and installers. We have virtually every part of it.

It\'s a \$90 billion industry in the U.S. and we produce and sponsor the
International CEA. I\'m sure many of you have been to it. It\'s quite a
sight to see and the Commissioner\'s been there. It\'s a very
interesting invent. It\'s eye candy for those who enjoy this kind of
stuff. But, more importantly, the profits that are made from that show
are funded back into work to grow the industry, to fund things like
training, technology and standards, advocacy work and policy work. So,
CEA has had a long history of working with the FCC in many bureaus and
departments. We work with OHE, with Wireless Telecommunications, with
your Consumer and Government Affairs and Strategic Planning and Policy
bureaus. So this is familiar territory for us. I suspect somebody is
over here every week or so dealing with various issues.

Now CEA, in terms of what we do outside of pure regulatory work and
interaction with the FCC, we conduct training. We might get to that
later on, perhaps, in questions. I\'m not sure we\'ve touched on that
subject just yet. We also, somewhat in response to the increased
activity of the FCC, I suppose, in dealing with spectrum issues, we
created a spectrum policy taskforce under our Government Affair Council
that we use to develop our industry position by talking to member
companies and we have since last year added a technical to advise them
so that our filings can have both a technical and a policy component to
them because these are very complex issues we\'re getting into now,
especially, was we try to maximize use of spectrum.

We are, and I\'m actually very happy, so far all three speakers have
mentioned a pro-standard stance. We\'re actually an ANSI accredited
standards organization. I suspect the only one on the sessions today. So
we develop standards. Now we are not a primary developer of wireless
standards. Certainly, OET is imminent in that area in lands and man
technology and others in other areas.

But one of the things we do is take those standards and then apply them
in consumer technology. In fact, we have a program going on now in one
of our groups that \-- it\'s kind of a two-phase program where we\'re
looking at how to compare the various wireless land technologies against
the needs of the consumer electronics industry. So it\'s more of an
analysis and measurement approach.

These technologies are developed and standards are created through a
complex, sometimes difficult, process. But what\'s interesting, seeing
how well they work, particularly, for things like video applications.
You\'ll probably notice we do a pretty good job of IT applications, but
we haven\'t really addressed all the consumers connectivity problems
just yet.

We also, I think, if you look at our industry and how things are done,
and this certainly aligns, I think, with what Pierre and Margaret said.
Our industry is on a constant search for these winners and it\'s an
expensive process for one and one that they undertake in search of
ongoing products to introduce into the market. But what you\'ll see is
that, typically, new technologies emerge as separate devices as you
would notice with wireless land cards. And then you get some integration
in the platform as we\'ve now seen with laptops where it\'s integrated
into the platform. And then, ultimately, you get some what I would call
cross-over integration where you get, for example, cell phones and Wi-Fi
being integrated together and that\'s an interesting phenomenon and one
we see repeated.

Now that does tell us certain things about how we need to think in a
regulatory sense. One is that it\'s increasingly important for us to
consider global aspects. I think this is a point made before that you
have to sell a lot of things and markets are global now, so we need to
think about whether these technologies can be deployed worldwide. It\'s
very important to be able to recoup the cost of the technology and
semiconductor development.

There are many failures and, for the most part, we don\'t hear a lot
about the failures and the companies try a lot of different things
before they get the winners. And, actually, the FCC has done a fantastic
job of creating fertile ground for that experimentation. The unlicensed
devices are allowed to operate on a non-interference basis and the work
that\'s gone on recently is very commendable. It\'s kept us very busy,
but it\'s great for us to see the attempts to really open up spectrum
and make it available for consumer technology devices. Thank you.

COMMISSIONER ABERNATHY: Thank you very much.

Now our last speaker is David Reeder from Airspan Networks. He\'s the
Vice President of Sales and he does broadband wireless access equipment.
It\'s a key part of this entire puzzle. We can have all the research. We
can have all the spectrum. We can have lots of equipment on the shelves
and then it can just sit there. So the next piece is, how do you bring
it to the consumer and how do you make it an integral part of their
daily lives? So thank you very much, David.

MR. REEDER: Thank you, Commissioner.

I appreciate the opportunity to be here, of course. Airspan Networks is
a global supplier of broadband wireless access equipment. We started in
1992, \'93, predominantly dealing in the international markets because,
again, the spectrum question. We have the majority of our products
deployed in the 3 and 1/2 gigahertz internationally with some large
national deployments, mainly, being in the rural markets again, fitting
the need where broadband is not met today in places like Ireland and New
Zealand and Asia Pacific and Africa.

We are excited to see our entire industry grow rather significantly over
the last few years. As a public company, we\'re certainly watching and
waiting for the explosive growth opportunities and I think we\'re
starting to see that now. You know, projections for our company are to
be over 100 percent increase in sales from last year. So we\'re very
pleased to see this growth in our industry now.

The challenge for our company has been, as we\'ve been focusing on
international markets, is how and when to break into the U.S. market?
The challenge of available license spectrum for broadband wireless
access, fixed wireless access has been one that we\'ve been working on
and I applaud the FCC\'s efforts in a couple of key areas. It\'s really
helped us start to break into U.S. One is the secondary market for
spectrum, allowing other folks to get a hold of that spectrum and use it
in the areas that they want. The other idea is to use or lose it so we
don\'t have people just squatting on spectrum. That\'s really initiated
a lot of the efforts that we\'ve been working on deploying equipment
into.

So the challenges that \-- if I agree with all the comments that have
been said here and I don\'t want to repeat. If I bottom line it for
myself, in our company, I see that, again, CPE cost and the spectrum to
work are the issues that we\'re dealing with today as far as seeing this
explosive growth.

We were very pleased to see the 700 megahertz license go to market and
we took a very aggressive stance in getting products to market very,
very quickly. And I would say right now that\'s the largest driver from
a product technology spectrum perspective that Airspan has in the U.S.
right now.

The challenges that we run into when we start talking with operators
about deploying broadband wireless access are the balance between
available spectrum, unlicensed spectrum, say, in the 5.8 gigahertz where
there\'s lots of good spectrum to use. The challenge is being that the
spectrum lends itself very much to a line-of-site application. So the
desire to use some lower than 1 gigahertz, 900 megahertz, for example,
is very, very high. We see a tremendous desire to use that spectrum. We
also see a tremendous amount of interference when we try to start to
deploy in that spectrum. So the 700 megahertz really kind of excites us
and there is the issues of licensed spectrum which the target market for
Airspan, historically, has been the telephone companies, the traditional
ILECS and the CLECS and R box, both here, domestically, and around the
globe. And the challenge, of course, in the unlicensed space is can I
guarantee a long-term service in that unlicensed space and what
protection do I have and the challenge that there are unknowns in terms
of going forward and investing in that infrastructure is hard for these
guys to swallow.

So the idea of opening up more spectrum in the 700 megahertz band, just
from a pure physics point of view, lends itself, again, very well to
very large footprint and also non-line-of-site. Yes, non‑line‑of‑site
can be done in the higher frequencies, but, as we\'ve already discussed,
the challenges increase rather dramatically.

So, anyway, Airspan is pleased to participate in this discussion. We\'re
members of the Wimax Forum. We\'re very much pro-standard. So, Glen, you
can add us to that list of yours that you\'ve got going. And we see that
moving towards 802.16, both the D and E standards, the fixed and the
mobile standards and the Wimax Forum kind of pushing that to market,
we\'ll call it, not just be a technology standard, but also pushing them
to market, helps solve that CPE cost issue and does help drive kind of
the spectrum problem in terms of \-- I think the 802.16 body chose a
very robust technology platform, the OFDM platform that Guy mentioned,
to get as many technologies in the non-line-of-site environment as
possible. And, clearly, we\'re not going to see the real explosive
growth until we see very low cost CPE that\'s in a non-line-of-site
environment as Pierre mentioned as well.

The truck roll is certainly doable and we\'re working with lots of
companies that are deploying that model today. But, in order to get to
the millions of subscribers per network as opposed to tens of thousands
or hundreds of thousands as we have today, I think those are some of the
challenges that we still have to work through.

COMMISSIONER ABERNATHY: Great. That gives us a bit of a background of
what folks seem to be talking about today. It sounds like, if I were to
sum this up a little bit, more spectrum. Although, I\'ve never heard any
demand for less spectrum. So, just understand, that\'s terribly
original, but more spectrum and it sounds like both licensed and
unlicensed, interoperability, meaning global standardization, mix and
match equipment with the recognition that we really are talking about a
global market, particularly, when we\'re trying to drive down the prices
of the equipment so that it\'s available to more people, both urban and
rural.

And then, finally, the cost of the equipment, the CPE. How do you get
the scale and scope and how do you drive the technology in such a way
that you still recover all of the research costs, but then you bring it
down to a point where you can really bring it out to large groups of
users globally?

And I guess the first question I\'d pose to all of you is, how do we
technologically \-- we\'ve been trying to crack this nut for a while and
it sounds like we\'ve jumped some hurdles recently. It sounds like the
equipment is new and we resolved some of the problems where there was an
off-the-shelf equipment for some of the first users. And we saw three
years ago a number of folks headed down this path, a number of them went
under. There didn\'t appear to be the robustness. The equipment didn\'t
appear to be there. What\'s happened over the last two to three years
that\'s made the difference? Where are we when it comes to the
technology, the viability of the technology and the reliability of it
that\'s really changed, it appears to me, maybe over the couple of
years? And I throw that open to anyone.

MR. KELNHOFER: I\'m going to try to answer that. What do carriers want,
and I believe David was addressing some of those issues. But, if we\'re
talking about ILECS or even CLECS, why has the technology changed? It\'s
absolutely mandatory if you\'re going to get this out into a large
consumer market, whether that be Soho or even medium enterprise. But you
have to be able to deliver a non-line-of-site solution.

So what\'s the first key thing that changed in technology? The actual
ability to deliver true, non‑line-of-site, no truck roll, as I said
earlier. This is really ILECS major carriers want to see. They want to
eliminate truck roll. Well, it\'s gone today. The need to have direct
line-of-site, hence, the need to put an antenna on the subscriber
premise. Well, that\'s gone today. That\'s also gone.

Secondly, the ability to deliver fixed service, but the ability to
deliver nomadic portability. The ability to take a device not yet
embedded in the computer, but, hopefully, in the future, as Margaret was
speaking to, that would become reality. But today, they actually take
your device and put it in your car, put it in your briefcase, get in a
plane, fly to another city if that service is available. As I often
remind my team, you can\'t tie your cable modem to your car and down the
road at 175 kilometers per hour. But you certainly can do that with the
technology that\'s available today.

So, from that perspective, I think those are really the key features
that have changed the landscape. Thank you.

COMMISSIONER ABERNATHY: Margaret, maybe you can add to the discussion.
This idea of moving seamlessly, are we there yet? Can we, in fact, move
from, say, a Wi-Fi network to wide area cellular network or wireless to
a wire land platform. I had heard years ago, 10 years ago there is a
vision of a smug phone that would naturally seek out the lowest cost
reading and, if satellite was your only available technology, it would
go satellite. But, if it could go cellular, it would seek out cellular
or land line. Are we there yet and how fast are moving in that
direction?

MS. LaBRECQUE: Well, I would say that we\'re not there yet, but the
efforts are in place to take us there. And, actually, they\'ve been in
place for the last several years. Intel and other companies have been
working to create a seamless infrastructure between Wi-Fi and 3G,
seamless hand-off, a common way to authenticate users. We\'ve been doing
it through a number of global standard bodies, including the ITU and the
ITEF.

Now, when we talk about Wimax, the 3G, often we\'re talking about
what\'s known as the air interface, which in the seven-layer network
model, OSI model, that\'s layers 2 and below. What we\'re talking about
when we\'re talking about a seamless roaming infrastructure is
abstracting layers 3 and above so that any air interface, whether it\'s
Wi-Fi, Wimax, 3G, can bolt into a common infrastructure from roaming and
hand-off.

Now, locally, we saw this work between Wi‑Fi and 3G about three years
ago. So we\'re on the way. And it\'s our expectation that we will be
able to bolt Wimax into that same infrastructure. We certainly wouldn\'t
want a service provider who, perhaps, is a 3G service provider for
mobile voice and wants to add a Wimax network for high-speed data,
assuming you really want them to have to have two billing systems. So I
would say that we\'re a few years off, but we\'re headed in that
direction.

COMMISSIONER ABERNATHY: Okay. Thank you.

Well, then that leads to the next question, I think, for Peter and
probably Brian and I think you brought this up, is we\'ll have this very
smart, very useful equipment and then it won\'t work. So what do we do
about the training or the ability to take this into mass market
deployment to folks who don\'t have the ability to take classes on how
to use it or how to fix it or how to make it work? And how do you
develop it in such a way that it becomes as friendly as, say, a wireless
phone that still today a lot of people just use for voice because they
haven\'t quite cracked the nut about all the other services. And, yet,
you want them to want these other services. You want them to start using
all these other applications, but we need it to work.

MR. de VRIES: Yes. I\'ll leave the training comments to Brian. I think,
in terms of the user experience, the catch phrase that I hear amongst my
company is it just works. That\'s what we have to get to. It\'s actually
very hard to demo when it just works because there\'s nothing to see.
And so I think the reason why we\'re talking about this is we\'re not
there yet. I think there\'s been a lot of work, and, again, 802.11 and
Wi-Fi has been a good test bed for us. If you flip open your laptop
these days, it\'s a lot easier to just associate with the hot spot.

There\'s work being done between service providers and software
providers and hardware people around how you can associate automatically
with the service provider of your choice. So those things, ultimately,
for the consumer, need to be part of a invisible experience.

The other question, though, I think is, in terms of \"it just works\" I
think it touches on the range of devices you mentioned or the uses you
mentioned, Commissioner, was it the diversity that is going to be
important here. One of the questions \-- people say, well, what\'s going
happen with all these standards? The great thing about standards is that
there are so many of them.

(Laughter.)

MR. de VRIES: And I don\'t think that\'s going to change because,
increasingly, as we become more sophisticated, we\'re trying to solve
more and more problems for customers of a whole variety of sorts. But,
at the same time, the requirements, in terms of the spectrum, are
diverse, too. And I think what you may be hearing, at least, on this
panel is that we need a diversity of solutions. 700 is good. It\'s not
the only thing that\'s required. A higher frequency spectrum is good,
too, for consumers because that\'s what you need to get capacity. If you
want to provide really high band width service, you need high
frequencies. But, in the same way that the cellular companies, when they
started years ago, started in lower frequencies with a few towers
serving a few people and then moved to smaller cells, higher
frequencies. We need to do the same things in order to provide
affordable connected computing to everybody.

MR. MARKWALTER: Nobody seems to be taking up training here. And we\'ve,
I guess, just out of need, and this has come up, both in discussions,
particularly, about HDTV and why people don\'t understand it and what\'s
happening to adoption. But we see it in every part of our industry. And
CEA ended up creating online training, a facility called CE Know How.com
and it\'s targeted our retailers to help train sales people to be able
to explain the things they sell. Manufacturers make a valiant attempt at
providing training materials into the retail channel, but it\'s not
sufficient in many cases and the staff in some retail environments \--
you know, there\'s a lot of turnover. There\'s nothing new about it and
the products in technologies are just tremendously complicated. You
can\'t talk about the things that make it all work and the consumer
doesn\'t want to know about it either.

We also do things related to what we call take-home rating programs to
help identify how ready this mainly in the installer and information
technology home networking kind of market, but how ready the home is to
accept broadband and IT services. But, you know, we\'re sometimes our
own worse enemy in this process of searching for winners. We go through
a lot and we may be a little bit of a victim of Moore\'s Law in this
case. We can do many, many things in these platforms and very small
device now and we search around and some companies get it right.

And one of the interesting parts is that manufacturers tend to reserve
that area for themselves and for their differentiation. We\'re full of
contradictions in our industry where we want standards so that we can
get enough volume to make the semi‑connector and deployment sheet, but
we want to be able to differentiate on what\'s left, which is typically
useability and user interface. So it\'s never easy and we have a lot to
do on training and useability. I think our industry works hard at it and
it actually getting better at trying to cooperate on the useability
aspects of it.

MR. REEDER: Just a couple of quick comments on that.

COMMISSIONER ABERNATHY: Sure.

MR. REEDER: As manufacturers, we use forums such as the Wireless
Communication Association where they bring operators and vendors
together to discuss these kind of forums and these type of issues. And,
clearly, as a manufacturer you have to get your hands dirty. You have to
be involved in the deployments over very large scale networks with tens
of thousands of subscribers to understand what those issues are in terms
of, okay, when this shows up in one\'s home, how do they turn it on,
plug it, use it? And so, the push back from us I think very good. The
communications that we\'re getting back from the operators saying this
is what we need. We need your help to get there. We\'re working on our
part on the manufacturing side to do that as well.

COMMISSIONER ABERNATHY: That\'s great. And this then leads me to
believe, based on everything you\'re saying, we\'re working on
standards. We\'re working on equipment. We\'re getting spectrum out
there, yet, we continue read that, according to various studies, that
the U.S. is ranked relatively low compared to other countries when it
comes to certain measures of international broadband availability.

David, I know that you mentioned you\'ve gone into other countries and
have only recently entered the U.S. market, too. So how are we doing?
Are we really behind or are the measures just different for the U.S. as
compared to other countries? And, if we are behind, what more can we do
short of making it free to everyone. Short of that, what more can we do?

David, why don\'t you start with that and then I\'d be happy to have
anyone else jump in.

MR. REEDER: Sure. I mentioned we\'ve been kind of waiting to get in the
U.S. market until about a year and a half ago and some of the challenges
were spectrum. Some were technology. The U.S. market for us, when we
look globally, is so very unique in terms of the customers. The networks
need to be very particular. They need to be very stable. We\'re dealing
in networks in locations in Africa, for example, where there is not
existing service at all. So the quality of service or the need to have
very low priced communications to match DSL offering isn\'t there. So
we\'re bringing the very first communications into some of these markets
and the demand and the appetite, frankly, for broadband is rather
overwhelming in those locations.

And so what we see in the U.S. is that the rural markets are Airspan\'s
focus for the U.S. The rural markets also have this demand. I mean, Guy
talked about the issues in Iowa, for example, that his company and their
deployments are helping to address. But we see the demand in those areas
is very high. But we also see that the expectations are very high in
terms of what type of service they get and how it matches up with maybe
some other competitive offerings.

The economics here in the U.S. are very unique as well compared to many
other places in the world in that, truck roll installation labor is
extremely high. It other places it\'s extremely low. And, in fact, some
operators prefer to roll a truck because they get to go touch the
customer and they get involved there and it\'s really \-- it doesn\'t
add a whole lot their total subscriber addition cost. But, in the U.S.
market, it\'s different from that perspective as well.

What we\'re focusing on to help address this problem is clearly through
\-- I don\'t want to beat this drum too much, but, clearly, through the
standards process and seeing our products interoperate with companies
like NextNet and others that we can drive cost down and we can see very
flexible networks.

The other thing that we see is, from a network perspective, people are
choosing one frequency and deploying there. They\'re taking platforms
that operate in multiple frequencies and using that flexibility as much
as possible. So now that we have technology that can help address some
of those problems, I think we\'re starting to see that improve. But,
again, we still have these nuances of DSL prices jumping between 30 and
\$50 a month and the challenge to deploy a fresh network from the ground
up is hard to address in those kind of markets.

COMMISSIONER ABERNATHY: Can you talk a little bit about some of the
price plans that you\'ve seen globally as compared to what \-- we know
what it is here in the U.S.

MR. REEDER: Well, it\'s hard to say. We have some markets in Japan, for
example, where they\'re offering pretty close to a megabyte per second
service, close to a T1 service for around \$30 a month. And we\'ve heard
that there\'s government initiatives in some countries to even subsidize
the cost of these networks to get things rolling. So we, as vendors, are
taking advantage of some of that and helping us get to market and get
some of our scale and get access to large networks. But we see that \--
it varies rather significantly.

COMMISSIONER ABERNATHY: Would anyone else like to comment a little bit
about the U.S. versus deployment in other countries?

MR. de VRIES: A few observations from conversations that I\'ve had. One
of them is that, as David pointed out, the U.S. has some geographic and
demographic peculiarities. Although, in other ways it\'s similar to
rural deployments everywhere. It doesn\'t surprise that others have come
into the market, narrowing the U.S., once we have 700 megahertz to
operate. And, to your point, Commissioner, nobody ever wants less
spectrum.

If you offered me a trade between 10 megahertz at 700 versus a gigahertz
at 60 gigahertz, guess what I\'d take? And so it\'s a question of what
the appropriate spectrum is. The other points, which I think, perhaps,
relates to this and it will be interesting to hear what other companies
have seen, is the cost of back haul is sometimes an issue in rural
areas. That\'s something where wireless helps, too. Now you can see that
you have a combination of, let\'s say, 5.8 unlicensed to back haul with
700 licensed of four of the last mile is also something that will help
kick start this market.

COMMISSIONER ABERNATHY: Great. Thanks.

Anyone else want to chime in before we leave this.

MR. KELNHOFER: I think that David covered it very well. I mean, we\'re
also deployed in a lot of the same markets that Airspan is also in. I
would say this, there has been a lot of discussion \-- obviously,
there\'s been a great deal of effort in the U.S. to create a national
broadband policy. In some respects, I think we are a little bit behind
other parts of the world, including places that are even less developed
than we are.

I\'ve actually, and I think David can confirm this, I mean, we have
been, as I said, selected for national employment now three times. And,
on a comparable scale, if you don\'t get GDP, just any demographic
factors you want to look at, obviously, the U.S. is somewhat ahead in
both Mexico and Brazil. But both of them seem really driving the
national policy at a faster rate than we are here and that\'s not a
criticism. I mean, we have a lot of challenges and, as Pierre said, we
also have some very big peculiarities based on our overall geographic
size and so forth.

I think that the most important thing for us is, again, access to
spectrum. And I have very strong concerns about unlicensed spectrum. We
specifically don\'t play there and Airspan doesn\'t play there either.
And, if you talk to people who have been in the industry a long time and
you really understand \-- and really are RF junkies, so to speak, the
issues with having unlicensed spectrum permeate more problems than they
really create good service to the consumer. It\'s like having no rules
on the highway.

COMMISSIONER ABERNATHY: Although, what we\'ve heard is that there are
parts of the unlicensed uses that have clearly added value and that they
can be a piece of the solution, but maybe not the only solution. And
you\'re saying that you never see it as a valuable way to allocate
spectrum for the U.S. or, given your business plan, you prefer license?

MR. KELNHOFER: Well, no. You\'re right. Must be careful about
generalizations. If you talk about Wi-Fi or 802, that\'s a real success
one, but you\'re talking about a rather small sale radius. And, if you
try to expand that sale radius, then you\'re really not delivering the
non-line-of-site anymore. If you\'re using 5.7 and 5.8 for back haul as
part of your solution to lower your back haul cost, that\'s an excellent
choice. If you\'re talking about going up about 5.7 or 5.8 or anything
really above 3.5 and try to play a non-line-site solution over a wide
area, over a man, then you\'re talking about some pretty severe economic
penalties and some pretty severe lost characteristics at that frequency
range.

COMMISSIONER ABERNATHY: Okay.

MR. REEDER: Can I just make one other comment here?

COMMISSIONER ABERNATHY: Sure.

MR. REEDER: We are seeing very successful unlicensed networks being
deployed, too, as well. So I agree, clearly, the operators always prefer
licensed spectrum if they can it and if they can get at the right price.
But the good news is that we\'re seeing, again, a variety of frequencies
used, whether it\'s unlicensed for back haul or even, say, unlicensed
for data applications and use your licensed spectrum for that higher,
sensitive communications like voice applications or security
applications. I don\'t want to, certainly, short change the hundreds of
networks out there deployed in the unlicensed band.

COMMISSIONER ABERNATHY: Okay.

MR. de VRIES: I\'d like to echo that comment because it seems to us as
if unlicensed can be an interesting lever. It allows people who are
trying to deploy to operate in both licensed and unlicensed, obviously,
the trade off that you have is that in unlicensed you have interference
protection, but no more barriers to entry. On the other hand, if you go
licensed, you have much better protection, but you have to fork out up
front for the spectrum. And so, again, the mix of the regimes seems to
us to be very useful.

It\'s interesting that people who are actually offering a service in
license can use unlicensed as well as anybody and probably better. Now
there is the issue that Guy raised about interference. And I think that
one looks at the rules that we have and will continue to have in 2.4 and
in 5 and so on, there are issues with interference. There are activities
going on in various standards organizations, industry organizations,
looking at coexistence between various different systems that are
operating in unlicensed bans.

And, if we\'re looking at low frequency uses, let\'s say 700 with
unlicensed, it\'s going to be necessary to have spectrum rules showing
etiquettes, for example, that allows systems to coexist without
prejudging what the technology is that people want to build and
implement.

COMMISSIONER ABERNATHY: Well, that\'s the perfect opportunity to segue
into some of the challenges on the standards front. But, before I move
in that direction, I wanted to see if there\'s anyone from the audience
who\'d like to ask some questions of our panelist?

Please go over to a microphone. I think this is being streamed.

AUDIENCE MEMBER: Thank you, Commissioner Abernathy. Thank you,
panelists.

The first thing I want to do is take just a second to thank all of the
panelists on behalf of my colleagues on the executive committee of IEEE
802 for the wonderful pitch for our standards that they\'ve made here
today and the value that they provide.

I also wanted to just mention that we\'re looking at a new standard
related to the IMRM that the Commission just adopted last Thursday for
the sharing in the T.V. band, using cognitive technologies for regional
area networks. And the question that I have is sort of twofold.

One is, you know, there\'s mention of the interference issues if you\'re
operating in the unlicensed mode and that, to me, sort of begs the
question of what about the concept of some unlicensed spectrum for
certain uses that doesn\'t become a food fight, as it were, amongst all
sorts of different applications and still reduces the cost of entry for
people that want to provide broadband services?

So I\'d just like to kind throw that one out for comment from the
panelists in terms of whether unlicensed with some limited set of
applications permitted in that spectrum, encouraging standards for
interoperability and coexistence. Would that be a better play in the
view of the panelists for some of these applications?

COMMISSIONER ABERNATHY: Margaret?

MS. LaBRECQUE: Well, recently, in the Wimax Forum, we\'ve gone around
the globe speaking with regulators and some of them like to use the term
\"light licensing\" to refer to, I believe, what the gentleman has
brought out. And where there is a strategic need, say, to deploy
broadband access in low population density areas, rural areas, if
that\'s really a strategic objective for the regulator, then this might
justify this form of light licensing.

MR. MARKWALTER: I\'d like to comment. We\'ve looked at that. We looked
very carefully at a lot of the activities coming out your spectrum
taskforce here at the FCC and, in our mind, it\'s way hard to prejudge
applications and even technologies. Hardly anybody gets it right the
first time and that\'s what\'s been so economically productive about
unlicensed is that it\'s brutally efficient at searching for the best
users and best technologies.

So we are \-- I guess, the way we\'ve put it is that if there are rules
that are necessary to get access to spectrum that we otherwise would not
have gotten because you need to protect some existing services, that
makes sense. And, beyond that, it\'s difficult to see that it\'s helpful
to try to guess what applications are going to be winners.

And, to be honest, there\'s not been that much of a tragedy of commons,
I think. I think we\'re still somewhat self-healing because as uses go
up, people can pour money back into the technology and more efficient
protocols and more efficient implementations. So we\'re a little bit
hesitate to prejudge and say there need to be certain rules to allow use
of spectrum.

MR. de VRIES: The uh \--

COMMISSIONER ABERNATHY: Go ahead. You want to go ahead and walk up to
the microphone while Pierre\'s speaking? Good.

MR. de VRIES: The regulators, I think, are most effective when they
focus on ends and not means. And the FCC, this Commission, I think, has
been very cognizant of the fact that the requirement is to look at what
the outcomes are rather than specifying the way in which the outcome is
achieved. So, when there\'s a suggestion of saying, well, we need to
have particular services optimized for unlicensed or license exempt, I
get a bit nervous because it begins to smack a bit of command and
control to me.

However, I can see a case that one could say there\'s a category or a
set of things which, at this moment, we believe is important. So, for
example, let\'s say wireless, two-way data services, which doesn\'t
prejudge the kind of service. But, it can well, let\'s say, well, if
we\'re going to have these wireless, two-way data services at low power
where there\'s not a lot of spectrum and it will propagate, what are the
kinds of rules that one needs.

I believe that one can actually get to an outcome which is light enough
to allow innovation, but strong enough to actually give users of the
technology some guarantee of a liability.

COMMISSIONER ABERNATHY: Yes, sir.

MR. KLANSI: Good morning. I\'m Andy Klansi. I want to shift gears for a
second and ask about training. One of the things I\'ve noticed in this
Commission is the lack of some representation from universities and
academia. And, speaking about training, I can remember back a few years
ago the adage that, in the cellular industry, they had difficulty
because no one knew RF. And I think the comment was there was no formal
training in RF in any colleges in North America or very few. I think
there were a couple of college in Canada.

So what do you say on the panel about bringing the technology forth, but
also bringing the academics and bringing the universities in to train
people. Train people in the truck rolls. Train people on how to use
spectrum. I mean, how many people \-- I\'ll just ask about training. How
many people\'s VCRs and DVDs still flash 12:00? Think about for a
second. Now that\'s a technology that we all have and use, but we use
it.

But, taking it further, what\'s going on, on the university side, to
train, to teach the technology and to then drive the technology forward?

MR. KELNHOFER: I can tell you some of the things that we\'re trying to
do. I mean, we\'ve actually instituted them. You\'re right. There\'s a
bit of a dearth in terms of good universities turning out topnotch RF
engineers. You\'d be surprised. They\'re not the better known schools
that are actually today turning out the best RF engineers.

Network engineers, no disrespect to the software people, but network
engineers are more prevalent. I\'ll just leave it at that.

One of the things that we\'re doing \-- I want to answer your question
\-- at least, one part of your question in terms of how do you track
good talent is we actually initiated a scholarship program with one of
the universities. And what we specifically do is we call it a Grow Your
Own Program. What we specifically do is we go out and we look for
talent, usually in the junior year, and we offer them a scholarship,
plus an internship over the summer that is actually sufficiently, not
only to pay their tuition and books, but to give them a bit of extra
funds so they can focus completely on their engineering program. And
that goal is that we nurture them into our organization and into our
specific needs. And, at the end of that, I\'ve always said, yes, as far
as taking a job. So that\'s what we doing, at least, in that respect.

MR. REEDER: I know there\'s several programs. The University of
Colorado, for example, has a very good telecommunications program.
Virginia Tech, as well, I believe. So I know there are some programs
there. I can speak a little more directly of the University of Colorado.
I\'m a graduate of the Masters Telecom program several years ago and I
know the challenge has been placing graduates into telecom companies. I
mean, the last few years has been rather tough, so they are focused, I
think. I think there needs to be more dialogue with industry, saying,
here\'s where we\'re \-- the direction we\'re headed and make sure the
programs are oriented towards that and not necessarily just catching up.

COMMISSIONER ABERNATHY: Okay. Why don\'t we take one more question from
the audience.

AUDIENCE MEMBER: Steve Stroud. I\'m curious, Mr. Kelnhofer, that
there\'s been a number of metropolitan area deployments, entire zones of
unlicensed wireless and entire cities are spending their budgets wiring
their cities as an economic development measure and, yet, they\'re
choosing to use license exempt spectrum.

My observation is largely they\'re doing that because they can\'t get
licensed spectrum. They can\'t get access to licensed spectrum. It\'s
yet another license spectrum. It\'s yet another \"Mother, may I\" with
\"would you please deploy in our area.\" And, well, we\'ll get to it
when we can when decide you\'re an important enough market just like the
cable companies and the telephone companies have done.

So they\'re choosing to take their destiny into their own hands because
they can with licensed exempts. They don\'t have to get permission. They
can go and do. I\'d like to get the panel\'s impressions on that.

MS. LaBRECQUE: I wanted to comment earlier that, in fact, I think the
U.S. has been a leader in speaking with system manufacturers, the
overwhelming majority of equipment license of sound is in the U.S. I
don\'t know the exact number. I\'ve seen one of the leading wireless
ISPs in the audience here and probably others. But I know that there
were over 2500 wireless ISPs in the U.S. serving over 6000 markets. So,
in theirs, we believe that getting the portable cell phones to all is
extremely important to expressing growth and getting it into this laptop
is the next step after that.

I spoken with retailers who have said to, you know, Margaret, we deploy
satellite dishes all day long \-- you know, the outdoor subscriber
station is not a problem for us. And what you\'re telling me, in
addition, is that it\'s more expensive. It increases their revenue. I
mean, that\'s not a benefit for the consumer but for the retailer and
they can charge more on a monthly basis because the outdoor subscriber
station will get better, in general, then an indoor subscriber station
and that\'s why it can be used for a business back haul, for example,
back haul enterprise of a thousand users or an entire area full of hot
spots.

So, I guess, to Steve\'s comment, I would say I believe it viable for
deploying broadband access. And I believe this fulfills our vision of
ways of being able to be anywhere and to get connectivity.

MR. REEDER: A quick comment. Somewhere around 80 percent of our revenue
in the U.S. this last year was in the license exempt band space and we
also have examples outside the U.S. In the 2.4 gigahertz band we have
network deployed of about 30,000 subscribers in an urban deployment all
in the unlicensed band, so it can work.

COMMISSIONER ABERNATHY: I\'m going to go ahead. We\'re going to have to
bring this to a close. I want to thank all of our panelist as well as
all the people in the audience for participating. And, more
specifically, I want to thank Joe Muleta and his team in the Wireless
Bureau for putting together this forum. For those of you who have ever
tried to assemble folks for something like this, it\'s a huge task. It
requires a lot of flexibility. It turned out great and I want to thank
them and all of you.

(Applause.)

MS. SEIDEL: Thank you, Commissioner Abernathy and thanks to each of our
panelists for such an interesting discussion and also just for taking
the time to be here with us today. We know you are all very busy, so
thank you.

We have time now for about a 10-minute break if everyone would just be
back in their seats at 11:15 that would great and we\'ll start with our
second panel. So thanks to everyone.

(Recess.)

MS. SEIDEL: We\'re begin with our second panel.

I\'d like to introduce Commissioner Jonathan Adelstein, who will be
moderating the panel and I would like to welcome each of our second
panelists. Thanks.

COMMISSIONER ADELSTEIN: Thanks. I hate to interrupt all the great
networking going on up there. That\'s probably more valuable. There was
a great buzz in this room. We have, obviously, hit upon an issue of huge
important by recognizing the turnout that we have here and the level of
interest and the great participation that we had in the first panel. So
thank you all for coming to participate. This is great and thank you for
the introduction.

We have an outstanding list of panelists there today that are going to
tell us about these business strategies for getting this wireless
broadband going. It\'s a real exciting panel I think.

I think accelerating deployment of broadband services has been a real
focus of this Commission and certainly a focus of mine since I got here.
I personally believe that broadband services had the potential to
transform people\'s lives, to transform communities and there\'s such a
huge difference, especially, in rural areas, but in all parts of the
country to provide an alternative and competition. And we\'re seeing
just the tip of the iceberg in the explosion of services that\'s going
to be revolutionizing how we look at broadband, I think, based on what
we\'re learning here today and we\'re hearing some great stories.

The Commission is going to do its best to extent these wireless
technologies, both licensed and unlicensed to Americans, whether they
live in urban areas or rural areas. We want to get as much information
flowing over the airwaves, as much data flowing over the airwaves as
possible. I think that\'s our mission here at the FCC.

What a really diverse group of panelists, but one thing that they have
in common is that they\'ve been successful in deploying wireless
broadband networks, at least, they\'ve found a successful strategy for
offering wireless broadband. So let\'s learn what lead to their success,
maybe what some of the pitfalls might be along the way and we also want
to hear from the panelists on the current state of wireless broadband
and what they see in the future for both licensed and unlicensed to our
wireless broadband services.

So I\'m going to first introduce the panelists. We\'re going to give you
each about five minutes to give your prospective on the wireless
broadband industry. And, after the final presentation, we\'ll open the
floor to questions. I can read off some questions now, but I want to
encourage everybody to really get involved and to get a good dialogue
going and also have a dialogue amongst the panelists themselves.

So I will introduce everybody randomly and we\'ll start from that end
with your presentations. But I\'ll start introducing from this end, Mike
Anderson, who\'s Chairman of the Part 15.org, Licensed Exempt Internet
Service Providers Organization. Mr. Anderson also serves as the Chief
Information Officer for Prime Directive Quick Link, PDQ Link, and is
responsible for overseeing all wireless technologies deployments for the
West. Mr. Anderson is also the finder of the Wireless Internet Service
Providers Conference or WISPCO.

Paul Berriman is the Senior Vice President of Strategy and Marketing of
PCCW, Ltd., one of Asia\'s leading integrated communications companies.
He leads teams of experts who perform an important role in the strategic
direction and product technology of the company. Most recently, he lead
the fix and wireless broadband projects in Hong Kong and in the U.K.

Our next panelist is from Nextel Communications, Atish Gude. Mr. Gude is
Vice President of Strategic Planning and Corporation Strategy for Nextel
Communications. He\'s responsible for developing strategy and access for
Nextel\'s overall strategic and competitive positioning. Prior to
joining Nextel, he was Senior Manager at the Rice Consulting
Telecommunication Strategy Practice.

Next we have Doug Sobieski from XO Communications. Mr. Sobieski is Vice
President of Broadband Wireless Service at XO Communications. He
oversees the commercialization of the company\'s fixed broadband
wireless services and filing successful trials in early 2004 in southern
California. XO has initiated plans to rent out these services
nationwide.

We have Bill Stone with us from Verizon Wireless. He\'s the Executive
Director of the Network Strategy for Verizon Wireless. Bill is
responsible for advanced technology planning, including the deployment
of the company\'s third generation data and voice networks. Under his
guidance, Verizon Wireless conducted several broadband wireless
technology evaluations, including NDDA technology trials which have
culminated wireland service right here in Washington, D.C. as well as in
San Diego.

We have Richard Wong here from Openwave. Mr. Wong is General Manager of
Openwave, which is the leading independent provider of software products
and services for the communications industry, including wireless
operators, broadband providers and device manufacturers worldwide. Mr.
Wong leads the business direction and management of the messaging and
applications team at Openwave. And we\'re glad to have such a great
group of panelists here. Maybe we\'ll start down there and, if you could
give us that over for five minutes, we\'d appreciate it.

MR. WONG: Good afternoon or good morning, I guess it is still. My name
is Rich Wong. I\'m responsible for a software company called Openwave
where we sell almost exclusively to the service provider community. So
we have people like Verizon wireless, PCCW as customers. So we come out
here, not as much as a service providers, but as one that services
almost substantially a majority of the wireline and wireless players.

At a personal level, before coming to Openwave, I actually did work at a
company called Kodak Communications that many of you know was one of the
larger independent DSL companies. So I have some experience in the
broadband world, at least, from the wireline experience.

Just in terms of some opening comments around the state of wireless
broadband, I would say that we\'re in the very early stages of the
secular growth of wireless broadband, both from a Wi-Fi, Wimax arena as
well as 1X in the case of Verizon and Spring as well as people like
Cingular or T-Mobile renting out GPRS.

For those of you that have studied the broadband industry for a while, I
would analyze it to the broadband DSL industry probably in the 1997,
1997 timeframe. If you think about that timeframe, most of you \-- there
were a few of you back then who had broadband access. You knew they were
very rich because you had a T-1 line or probably had a medium to slowish
ISDN model at the time or you were one of the people first discovering
the internet for AOL or Prodigy.

And so I would submit to you that the state of the industry today in
wireless broadband is in that similar state. You have some regions
around the world who have still actually broad scale access to this. San
Diego, for example, has, through 3G, launched right now. And you have
people like T-Mobile and Starbuck\'s and Red Carpet Clubs around the
country having Wi-Fi capable. So I think there\'s a lot of growth in the
market over the coming few years and I think we\'re just at the early
stages in that.

The primary limiter to growth, in my opinion, of at least the 3G
services and folks like Bill and Atish have a better view than I do, is
about what are the real applications running on wide area 3‑G networks.
Is it photo-messaging? Is it video‑messaging? What are the types of
services? That is the question that is yet to be answered.

COMMISSIONER ADELSTEIN: Thank you.

Bill?

MR. STONE: Thank you, Commissioner Adelstein. I am Bill Stone.
Commissioner Adelstein already gave you the background. I\'m with
Verizon Wireless Service Provider. The largest service provider here in
the U.S. market, currently, providing service to roughly 40 million
customers.

I started in the industry back in 1988. I have held positions in network
engineering, operations, system performance. Currently, I hold a
position in our headquarters organization responsible for long-term
technology planning. Let me just start out by saying that from my
perspective, the existing policy for CMRS, the flexible, exclusive use
licensed policy is one of the drivers \-- there\'s been a lot of talk
about a license today. I\'m certainly not saying that unlicensed
doesn\'t have its place, but the certainty associated with licensed
spectrum is one of the key components driving wireless broadband and
certainly driving Verizon Wireless.

We\'ve had great success. You can\'t argue with the success that the
CRMS industry has had today. Currently, in the U.S. market, we\'re
serving over 125 million customers. We\'re generating tremendous value.
An economic study done by Hazlet & Spitsor indicates that the CRMS
industry is generating over \$80 billion in consumer surplus annually.
So the existing policy works. I think that\'s a key message and it\'s
one of the key drivers and one of the reasons why Verizon Wireless is
moving into to wireless broadband.

In addition, the existing policy provides an economic incentive for us
to use our spectrum very efficiently. We have to pay for spectrum at
auction. We\'re incented to put it to very efficient use. If you look at
the CMRS industry, historically, depending on what study you reference,
spectrum efficiency over the last 10 to 15 years has increased on the
order of 1300 percent. I actually read a CTI report right before I came
up here that indicates that since 1990, on a per megahertz, per square
kilometer basis, the CRMS industry has increased by 70 times the number
of customers we\'re providing service to today. So we are making very
efficient use of our spectrum and we are incented to do so.

In addition, new technology investment or the opportunity to raise
capital \-- that\'s one of the keys here, to raise capital and the
certainty with licensed spectrum enables us to go to the capital markets
and raise the capital we need to move forward with significant
investments in new technology that enable new services to meet customer
demand. So existing policy enable us to react to the demand in the
marketplace and the key linkage here is that it enables us to raise the
funding we need to move forward with wireless broadband technology,
which brings me to EVDO.

Verizon Wireless, as Richard pointed out earlier, offer 3G service today
in San Diego and Washington, D.C. I encourage you to stop by the
demonstration room, check it out. We offer service across a large
geographic area in both Washington and San Diego. We have committed to a
significant investment over the next two years, around a billion
dollars. Actually, we\'ve committed to exactly a billion dollars to
propagate EVDO technology. We market it under the service name Broadband
Access to many more markets across the country.

I\'ll tell you more about EVDO when the panel gets started, but suffice
it to say the existing policy that Commissioner Adelstein and the FCC
has used to date works, allocate spectrum, allocated for licensed,
unlicensed, both. I\'m here to represent the licensed community today as
you can tell, auction it and get out of the way and let the market drive
technology deployment. Thank you.

COMMISSIONER ADELSTEIN: Thank you, Bill.

Mr. Sobieski?

MR. SOBIESKI: Thank you. XO is a national local exchange carrier. As
part of that, we\'re also the largest LNDS or fixed wireless spectrum
holder in the United States. We have over 100 licenses that cover more
than 170 million people. The licenses average about a gigahertz a
spectrum. So we have a lot of spectrum. Those licenses are deployed in
75 FCC defined marked places, which would include 95 percent of the top
30 markets in the United States.

Those license are complimented by the other assets XO brings to the
table. We have approximately 37 metropolitan markets with fiber line
services, both voice and data services as well as robust inner-city
network that provides IP and TTM services.

Deployment of IP enabled broadband wireless its key to our future. So
what are strategies? Providing IP enabled wireless services to provide a
wide range of data services that leverage our assets, provide
competition for the last mile to solve the low speed restrictions where
cooper line services are only available, to partner with carriers to
maximize the consumer value and to partner with manufacturers to expand
the product set available in the spectrum band.

We\'ve had some successful trials. What feedback we\'re getting from
them? The consumer really like the fact that it is true broadband
service. The quality has exceeded their expectations. The deployment
intervals have met or exceeded their expectations and we\'ve seen strong
market demand for the pricing points we\'ve set in mark places. What do
we see out there? We still see competitive services creating downward
price for convention services. We see that IP enabled access networks
are facilitating new services that are creating new values in the
marketplace.

What have we learned? Build it and they will come, obviously, did not
work. Vendor investments and dependencies are not sustainable. We need
to provide the marketplace incentives for manufacturers to create
technology in this spectrum and we encourage use of standards as a way
of encouraging a wide range of manufacturers to be involved.

I think we need to look at the paradigm in which manufacturers and
service providers work with each other. We need to figure out how to
make us both share in the risk and reward of rolling out these kind of
technologies in the spectrum. We believe that the public interest is
best served by partnering and the spectrum we\'ve seen only provides
marginal opportunities.

What do you think we have to do on a going forward basis? I think we
need to form a vision within the industry and in the regulatory bodies
that LNDS is a tremendous opportunity for future IP-based platforms. We
have to make it so that we can line up our spectrum with our operating
units. So that would allow us to exchange spectrum between licenses to
leverage the assets each of the licensees bring to the table.

We need to have access to SUF funds in the rural areas. We cover a
tremendous amount of the rural areas. Wireless is viable alternative to
those areas. We need to have the same access other wireline carriers are
provided and we need to ensure that we have regulations associated with
the wireless environment that are similar to that of the broadband
network providers. Thank you.

COMMISSIONER ADELSTEIN: Well, thank you very much. Atish?

MR. GUDE: Thank you, Commissioner Adelstein.

First of all, let me thank you for the opportunity to be here to learn
from and contribute to this great forum because I think this is a
starting point of a discovery process related to broadband in general
and, specifically, wireless.

My name is Atish Gude and I am the Vice President of Strategic Planning
at Nextel. Let me start out by talking a little bit about Nextel. A lot
of people think that Nextel started on the basis of a fundamental
technology that we called \"push-to-talk.\" Let me put forth a slightly
different suggestion that what Nextel really tried to do was to
understand and serve a specific customer need years ago in the dispatch
community. And, as that customer grew to interconnect services, we
offered interconnect with direct-connect, push-to-talk services and
that\'s fundamentally what Nextel has been built on to really serve a
customer need.

I think that\'s important because, after considerable research and
planning, earlier this we launched a wireless broadband service trial in
Raleigh/Durham, North Carolina for two primary reasons. The first reason
was, obviously, to evaluate this OFDM technology provided to us by a
company called Carion, evaluate the technology. But the more important
reason is, is the second, which is we really wanted to understand
customer demand, customer usage, usage and behavior. And the reason for
that is to develop a well-thought-out, go-to-market model that would
help bring these kinds of new services to the market.

So we\'re on a discovery process. This service is aimed at, not only
business users, but also individual purchase decision-makers, home
users, people who want to use the service on the road, and we are
learning a tremendous amount already, but would not suggest that we\'re
at the end of that learning process.

A couple of things that I would like to suggest from our learning
process. The usual hypothesis or question we had was, wireless
broadband, what\'s the value proposition. And, so far, what we are
finding is that that value proposition is not tremendously different
than the value proposition that wireless, cellular brought to the market
with respect to wireland. Our customers there are telling us that what
they value \-- one of the first things that they value is the ability to
be freed from a specific desktop, freed from time and place. That
concept of mobility rings very well in taking internet access away from
the desktop.

The second value proposition is, again, not unlike what cellular voice
services brought to the market with respect to wireland and that is the
concept of having access to where a wireland has not, could not or,
perhaps, even will not build out to. And then, again, that issue is
related to fundamentally being connected.

And the third value proposition that we are recognizing, based on the
questions that are customers are starting to ask us, is the proposition
of enhanced services, new services that would go hand-in-hand with
broadband and that brings us to a fundamental conclusion, or the start
of one, that I think many people recognizes is that broadband is just a
highway. It\'s a highway for voice, video and data services period.
Wireless is just a mode of transport.

Now one of the hypothesis that we are starting to develop, based on what
our customers are telling us is that there is a requirement for voice.
There\'s a requirement of video. There\'s a requirement for data and all
of the cellular type of services that go hand-in-hand with wireless
service. But, in the same context that wireless and wireland coexist
today in a business as well as in a home, we are starting to build some
thinking that would suggest, while intermodule competition, wireless
broadband and wireland broadband may exist, at some point, the higher
order of value proposition is intermodule services and wireless
broadband just provides a highway for a lot of services and
applications.

I think we still have a lot of research to do, but that is a very
interesting concept that we are starting to learn from, from our
customers and, hopefully, this forum will, perhaps, start to discuss
those kinds of issues of intermodule services rather than just talk
about the intermodule competition. Thank you.

COMMISSIONER ADELSTEIN: Thanks a lot. Paul Berriman?

MR. BERRIMAN: Good morning and thank you, Commissioner.

I guess I\'m more interested in the U.S. at the moment. I\'m just here
because John asked as an old friend if I\'d come and tell you how we\'re
finding it as a new operator overseas.

PCCW is the incumbent fixed operator in Hong Kong. We currently have
about 3 million telephone lines. Because of the small topology of Hong
Kong, we can deliver a 6 megabytes broadband and EDSL to about 91
percent of the lines in Hong Kong. So we\'ve been able to really
experiment with what can be done with demands are for broadband when its
a variable and in sort of dimensions. We did all of that for about \$35
U.S. dollars amongst customers.

The whole thing is a very competitive market. We have five, six mobile
operators, about 15 of these various fixed operators and they are
leaving with our market share. So what we\'ve been doing in Hong Kong is
defend the market there and we have some innovative broadband T.V.
services and are the leading ISP in Hong Kong. So we\'ve had to leave
out of Hong Kong to grow. And, obviously, we didn\'t have any facilities
in the environment in any other places, so we believe that broadband
wireless is ranging for growth for us.

About two years ago we started playing around with the technologies and
we found that the site prototype technologies will rapidly starting to
mature, so we started to look for spectrum around the world and, in that
respect, we were looking for licensed spectrum. I don\'t think we need
to invest or available to invest in unlicensed network unless it\'s
spectrum networks, apart from the hotspots that we have to provide in
Hong Kong. Now we have about 250 hotspots.

So we found the new support regulatory environment, the transparent
regulatory environment, the legal environment and such were most
opportune for us was a 3.4 gigahertz license in the U.K. Now we
recognize that 3.4 is at the upper limit of the non-minus site spectrum,
but, at least, in this particular situation, it\'s a very clean spectrum
and we were able to, I think, catch the market with its trousers down.
We got the national license for \$14 million U.S. in total for about 40
megahertz a spectrum. So, in that respect it was good.

But the main driver is, in fact, as we looked around the world, we were
looking for penetration of broadband and the U.K. is a very good example
where you have 55 percent of household with dial-up internet or access,
but less than 10 percent with broadband access and, even then, the
government there has tried to make it look better by allowing ADSL and
512 to be classed a broadband, which we don\'t, given our situation, we
see that and the competition is pretty poor in reacting to broadband in
the U.K. So we saw that made it vastly for the fact that we were going
to have to put in a lot more cell sites than you would do at 700
megahertz, for instance.

We decided that our major proposition was to go hit ADSL head on with an
online of site proposition. So, once we got the license, we were given
approval to get out there and do a soft launch in the Thames area of the
U.K. and covering about 400,000 houses.

In terms of the technology, as I said, we\'ve been looking at various
types of technology, but we\'re still not satisfied that we have the
standards that we need to warrant how we go forward international roll
out, so we\'re still treading cautiously. We\'ve actually put in a few
different technologies at this point in time. We use IP wireless to get
started. But, in our RFPs for international roll out, we\'re planning
more to providing where we are successful with the initial launch. We
really see some migration capabilities in what we may move towards a
standard and Intel is one of the investors in PPC data and we will
continue to have dialogues about Wimax with them is one potential.

So that\'s really all on the technology, but one of things that is for
sure, for that standard, so we\'ll have to get out there and do
something now and we\'ll go forward with these two technologies and,
hopefully, we launched \-- in about 300,000 homes. The whole cost is
about \$40 million for that. We launched about three weeks ago now and
the results have been pretty good.

In order to facility the fast roll out, we\'ve used all of our network
facilities in Hong Kong, so the billing systems, the customer care
systems, the web platforms, they\'re all based in Hong Kong to give us
another roll out and we\'ve been using companies such as ATM Crown
Castle for the line-of-site acquisition, which is very much the critical
path of the whole project.

And, in terms of selling, we\'re selling to full-party retailers, call
centers and online internet service. I think that\'s 70 percent of all
broadband in the U.K. sold to the internet. The customer proposition is
broadband-to-go and there is some relatively new work. Some of the
propositions that we offer a customer \-- the modem is delivered in 24
hours. I think over the internet or, if not, bought in the shop and they
can be installed in three minutes. It\'s portable within the home. It
doesn\'t need a phone line. We give them a one-month free trial and
it\'s good value for many of the 512 cable service we offer as 18
pounds, which is about \$30 and we think that\'s about 2 pounds than
BT\'s offering and at 28 pounds, roughly, a l megabyte service, which is
about \$50. So we\'re really are not hitting the other side. Because of
the 3.4 megahertz, we\'ve had to design the cell size at about 2
kilometers in radius to get the coverage that we want so that we can
penetrate at least one more into the whole.

We targeted to prove in our initial roll out of about 10 percent of unit
additions in the covered market area to the broadband market and, in the
first few weeks, we began to see that we were exceeding that several
times over. So we\'re very confident that very shortly the board will be
giving us approval to move towards a national network order \-- roll
out.

And, to quote Pierre, it just works. What we\'re finding from the
feedback the number of new members that we\'ve served, at least 95
percent of them were actually online activations within their receipt.
So we were very confident that our predictive tool, which looks at the
current area versus the address of the inquiring potential customer is
giving a high degree of accuracy, so that\'s been a great relief for us.
And the feedbacks have been quite good. There are lot of bulletin boards
and message boards on the internet of some people you can imagine
they\'re quite technical geeks or whatever and the reports on the
performance has been pretty good.

Assuming we do get the approval from our board, we\'ll begin looking to
roll out to about \-- I don\'t know, 75 percent of the population in two
years is our target if we can meet all of the initial performance
indicators that we\'ve been looking for. That\'s about it really and
with the major problems that I would say we\'ve had has not been so much
spectrum. We got it relatively easily and, besides acquisition and
planning approvals have been a major difficulty and don\'t think that
should be underestimated. I think that will become, if a problem in the
U.S., it will become a growing problem from what we\'ve seen in the
U.K., local councils, local groups objecting to the town. This potential
threat of wireless.

And, also, we have to rely, to a large extent, on the incumbent provider
for the back haul capacity from the base stations and that has not been
good. I think it\'s been more corruption rather than conspiracy, but it
hasn\'t been a good experience. That\'s for sure. So we\'re now looking
for the alternatives to provide some ways of mitigating that risk. Thank
you.

COMMISSIONER ADELSTEIN: Well, thank you, David. There\'s a lot we can
learn from that experience.

Now from the unlicensed perspective, we have Mike Anderson from
PART-15.ORG.

MR. ANDERSON: Thank you, Commissioner.

My name is Mike Anderson. I\'m also here wearing two hats, I think,
today. I think is license exempt wireless internet service provider and
just outside of Chicago we have 28 POTs, WIPOTs we call them, wireless
internet point of presence. Out of the 28, I think we pay rent on 2. The
rest of them we either bought our services in exchange for water tower
space or rooftop space to mount our antennas and stuff.

We cover about 900 square miles. We have a little less than 900
subscribers, customers. We have 12 hotspots. Most of our hotspots, we
chose early on not to go the way of charging individual users to use the
hotspot technology. We more elected to either use that hotspot as an
advertising point so when somebody walks in, they open up their laptop,
they try and surf. They have to go to the login page and that\'s where
our advertisement is because we\'re in a small community, rural America,
so it seems to work as a good advertising promotion for us very
inexpensively.

The other hotspots we have, the person who owns the location is the one
who pays for the hotspot technology. Many of the small rural places that
the license exempt guys are going after are the restaurants, businesses,
things like that and those owners, the landlords of the property as a
utility. It\'s something to get. They needed to help the customers come
in and buy their food, beer and wine and stuff like that, so they\'ve
just thrown the cost of the broadband in with the cost of electricity
and gas and the other normal utility bills.

PDQ Link offers services to hospitals and courthouses and everything
broadband is needed for \-- realtors, fire departments, police
departments. We have ambulances that have IP video cameras now in them.
So the hospital can actually watch the EMT doing their thing in the back
of the ambulance on the way to the hospital \-- sheriffs departments. A
lot of people are jumping on the licensed exempt. It\'s very inexpensive
to be a licensed exempt WISP. You can become a WISP for less than
\$5000, which creates its own problems by being so cheap as far as
technologies go because a lot of people in the old days that were in the
good old networking guys now turn to the new wireless side of things and
they\'re not really RF familiar and that causes self-interference issues
actually along with interference with other WISPS. But, for the most
part, it\'s working out extremely well.

Just to make a quick comment, I\'ll put on my other hat of Part 15 here.
There are actually over 8000 licensed exempt WISPS in the United States
actively providing service. PDQ Link is 35 miles outside of Chicago. If
I look out my front door, I\'m in suburban Illinois. If I look out my
back door, there\'s cornfields, so I\'m in rural Illinois. So we cover
both. We didn\'t try to get into the major metropolitan areas, numerous
issues, line-of-site, everything else that\'s associated with the tall
buildings and the massive amounts of movement and people but that\'s
where all the bandwidth is. If you go downtown Chicago, you can buy dark
fiber for \$50 a meg, but I\'m 40 miles out in the boonie, so it cost me
\$600 a meg. So how do we overcome that. So I do have some licensed
spectrum. I don\'t own it. I rent it from a person providing me the back
haul, but I can now buy 250, \$350 a meg bandwidth instead of that
normal hard wired \$600 a meg. That\'s working out excellent. We have,
like I say, 28 WIPOTs. Most of our customers are providing voice over IP
services and packet 8 and things like that, very happy with the
performance of even the Wi-Fi 2.5 customers that we have.

Out of the 28 towers, I just want to make a note \-- out of the 28
towers, not two of them have the same exact equipment on them. This
tower over here might have a 900 megahertz solution and a 5.2 gig back
haul. This one over here will have a Wi-Fi solution for the customer
access and a 5.7 back haul or this old tower over here might not have
any Wi-Fi on it because of the noise flow in that area because maybe in
that area I\'m competing with 15 other WISPS.

Just an antidote, the other day I was driving home from one our POTs and
there\'s a program out there called NextNumber. I don\'t know if many of
you know of it. It searches out access points in the Wi-Fi arena. And,
in that four miles it took me to drive this one straight road in my
service area, using NextNumber, we picked up 111 access points and this
rural America gang. It\'s not like downtown. I would have expected that
leaving the City of Chicago, not out in rural Illinois. Enough about PDQ
Link.

Part 15 is the licensed exempt wireless internet service providers
organization. We have hundreds of members from across the world
actually, major manufacturers, the Motorolas, the Airspans and many of
the manufacturers that are producing the licensed exempt equipment. We
saw the need for the education and to going from the hard wire to the
RAF side. We host a conference called WISP Com. It\'s the wireless
internet service providers conference. It\'s kind of different than a
normal conference. It\'s not your typical conference. It\'s more of an
education type thing. If the speaker says their company name more than
three times, we kind of beat up on them. It\'s not really there for
marketing type things.

Again, there\'s over 8000 WISPS in the U.S. Most of them are providing
support for rural and suburban America. The advantages for licensed
exempt \-- low cost for the spectrum. The disadvantages \-- you\'re
going to deal with interference issues. Most of the interference issues
can be worked out, though. Most WISPS that want to cooperate know
there\'s only so much room in the sandbox and we all need to get along
or none of us are going to go very far. So, so far, even with the
massive growths \-- back in \'98 when I started the transition from
dial-up to wireless, the Wi-Fi card that you can buy for \$39 at Best
Buy now cost me \$167 back then. But the prices keep going down, so more
and more people are getting into wireless. It creates it own problem,
but it\'s not overcomeable. That\'s not a word.

Anyway, I\'d rather get to the questions and answers because I think
that\'s more important than me rambling.

COMMISSIONER ADELSTEIN: Well, thank you.

I\'d actually like to follow-up on that. You\'re kind of outnumbered
here by the licensed operators. You\'re an unlicensed person, but I
wanted to talk a little bit about the relationship between the two,
about what impact services and technologies that operate in the license
bands are having on the deployment of wireless broadband in general.
I\'m kind of curious of what you think. Anyone who wants to respond is
welcome to jump in here, whether or not these services are complimentary
or are they really substitutes for one other? Or are there strategies
for integrating Wi-Fi with wide area wireless networks and what types of
integration strategies are working? Do you think we\'ll ever see sort of
a greater seamless integration between them?

MR. WONG: It doesn\'t do either. Since we serve both. The classic
example of that is T-Mobile. T-Mobile is probably the largest to my
knowledge of the commercial lifetime provider. They have all the
Starbuck\'s and they have a lot of red carpet clubs and admiral clubs as
well. So they obviously are a 2 and 1/2, 3G GPLS provider as well, which
is GS exempt technology. So we do both.

In terms of integration, I would say to you that it\'s not the transport
level for the integration to occur. In most of these cases, the
operators have a better view than I do, perhaps, but it\'s about billing
and customer care integration that\'s sort of job one. And job two, in
my personal opinion, is the applications integration. You have the same
whether it\'s an e-mail account, or photomessaging account or whatever
it is, to work equally well whether you\'re sitting at the Starbuck/s or
plugged into your Fiji card at home. So I think it\'s billing and
applications and I think they\'re fully complimentary.

MR. STONE: Actually, I\'ll try mainly to say I agree with everything
Richard said, especially, the last couple of points about services and
applications being transparent across access technologies \-- billing,
et cetera. We all, in fact, in the CMRS domain, working in industry
standards and moving towards standards that will enable us to evolve our
network infrastructure to support multiple access technologies. So that
is a movement or a process that\'s underway in standards as we speak.

In addition to that, I will say that I believe that the success that
we\'ve seen with Wi-Fi, especially, in the residential and enterprise
domain, not so much in the hotspot domain, but that remains to be seen.
T-Mobile is a good example. But, especially, in the \-- Michael pointed
out the number of residential access points he could pick up. I can give
you an antidote in my neighborhood that there\'s at least six of my
neighbors that have it. And, as a matter of fact, as an RF engineer,
I\'ve already coordinated frequency radios amongst us and I should
charge a fee for that, but haven\'t gotten to that just yet.

(Laughter.)

MR. STONE: But the point is, is that\'s wetting the appetite for
broadband wireless on a larger scale. One of the things that we found in
our broadband trials, similar to Atish, was that the customers want
coverage, ease of use and coverage, which is very similar to the
wireless services we provide today. You turn on your phone. It works.
That\'s another quote that came up today. It just works. That
consistently is the feedback we\'re getting. So, if we\'re going to move
in this direction of integrating access technologies or allowing these
services to work across multiple access technologies, I think the key to
success is that it\'s got to be easy to use.

MR. GUDE: Bill, I think that, you know, one of the things \-- at some
point in time I\'d like to sit next to the Verizon people. I think we\'d
find more things in common.

(Laughter.)

MR. GUDE: I think that we have learned in this industry of licensed
spectrum users is that quality is essential for our customer adoption
and interference is a significant barrier to that quality. We have been
very close to this interference issue. So most of us wireless carriers,
I think, feel very comfortable in a world of delivering quality,
delivering services that customers value in a world of licensed
spectrum, but that doesn\'t mean that unlicensed spectrum cannot
coexist. We\'re already seeing it in the 802.11 world. And, as
technology moves forward, the link between unlicensed and licensed will
become clear because of a point that I was trying to stress earlier is
that we will be in a world \-- we will likely live in a world of
services that will be increasingly more converged and networks that will
be increasingly more converged.

802\. 11 provides a great bridging environment between wireless and
wireline. I mean, it\'s taught us that. We also have, I think, overcome
the hurdle of multi-mode, multi-band. There are devices that exist in
those realms. But IP and SIP are two protocols that get us a lot closer
to integration of technologies such that we\'re not that far away from
integrated billing, integrated customer care because of those protocols.
I wouldn\'t say that we\'re there today. But, in that sense, we\'re
probably very close to a world where licensed and unlicensed can coexist
together and probably customers will require that.

MR. SOBIESKI: Today, most of our partners are operating in the other
bands. Our value proposition we\'re bringing to the table is that we
have a high capacity, ubiquitous IP connection to the PSTN. That\'s what
we provide. LNDS provides that and we provide it to the wireless users.
Right now, it\'s mostly the transport layer. I think that an important
step is that, as the technologies and the standards evolve, is more of
that transparency, because transport only provides \-- can only go so
far before you\'re going to see the kinds of application space that\'s
really going to be available in the future. That information has to be
transported more than just at the protocol level. So I see wideband
spectrum availability being used as an aggregation network today, in the
future. I say let\'s learn from what we learned in the wireless
environment. We started out with very expensive, very few base stations.
We\'re now to quarter miles basing on those mobile technologies. The
higher frequencies play very well in small, dense coverage areas.

So I see the whole industry evolving. I see every one of those service
groups will continue down their path. I think there is a path in which
everybody can provide mobility services across spectrums, so that the
user can benefit with a high flow of application space available to
them.

MR. BERRIMAN: I\'d like to concur with everything that\'s been said. I
think it\'s overview is interference risk and investment risk. 802.11 is
really a world network. It\'s in the hotspot. It\'s not providing less
line. It\'s providing less yard and I think, in Hong Kong, more
broadband customers, we have taken care of getting Wi-Fi hotspots into
the coffee shops, et cetera. And it\'s interesting. I think about our
way back into mobile. We sold our mobile business a few years ago. On
our way back, we\'ve been dealing with handsets where a person is locked
into his home and at this point, which is Wi-Fi compatible.

In that situation, we don\'t have a problem with unlicensed spectrum. We
think it\'s good. But I think for us to go investing the last mile
solutions, using unlicensed, then I think we\'d have a problem. So it\'s
really has to do with investment risk and interference risks.

MR. ANDERSON: Just a quick note, I\'d just like to clarify, I guess. A
lot of people think unlicensed means 802.11 and there\'s so many other
things in the unlicensed that are not 802.11 that are working very
successfully to overcome the interference issues that the people are
concerned with. For example, we have 57 and 58 radios that can detect
another frequency being used in that range of changes and bypass it to
continue providing the service. So there are many other license exempt
bands out there that we are using because of the interference issue. So
I just wanted to make it clear that most people think Wi-Fi 802.11 is
license exempt. Well, it is, but there are so many other things out
there as well.

MR. BERRIMAN: Can I come back on that? Well, I think the only problem
I\'ve got with that is the fact that what can work now? It works now but
you don\'t know what\'s going to come along in the future. We\'ve seen
an influx in Hong Kong with devices from Korea that allow you to connect
your T.V. in the bedroom from your DVD player in the living room and it
uses the 2.5 license spectrum. You turn it on. You get a good picture in
the bedroom, but your Wi-Fi has just died and it what comes on
afterwards, not whether you can make it work now that is the issue with
unlicensed versus a future risk.

MR. ANDERSON: True. Maybe unlicensed is a temporary solution because
it\'s here now and until the Nextels and everybody else comes to north
rural Illinois, I have to do something or I\'m just \-- can I say SOL?

(Laughter.)

COMMISSIONER ADELSTEIN: Now, in terms of business strategies we\'re here
to talk about. I\'m from a rural state, South Dakota, and I think about
the fact that we led the way. I used to be so proud that we had this
company out there and I want to reflect on some tragedies as well as the
benefits. We had a company called Morning Mobile Services that was using
EVDO just like Verizon, only they did before Verizon in the small
markets. I used to say we love the rain in South Dakota because we had
through first in Sioux Falls. Actually, our biggest community and they
were targeting these mid-size communities like Sioux Falls and Duluth,
Minnesota.

They went bankrupt and they\'re out of business and they\'ve shut down
service. So I kind of wanted to think about, in terms of business
strategies, what you\'ve learned from their experience. Were they too
early? Was this something that really doesn\'t work in less populated
markets? What are the most important factors for the plain services? Is
it consumer demand or is it network quality because, certainly, they had
a good quality service? Is it the type of service? EVDO seems like a
wonderful technology. Or was it about price and educating the consumer?
What is it that works? What can we learn from that experience? Anybody
who wants to reflect on that. Obviously, Verizon go first. It\'s used
the same technology.

MR. STONE: I think, in this case, you really have to start with the
business case and network quality, absolutely, is very important. We\'ve
learned that through the years and we focus a lot of time and energy and
investment on providing a high quality network. But, in addition to
network quality, you need customers. I mean, you need revenues to offset
the costs of operating the network and the capital to build out the
network.

And what we\'ve found with experience that works is you target the
metropolitan areas first. You go where the enterprise customers are
located. You go whether there\'s the highest concentration of consumers
and, as you ramp up volume and ramp up skill, you can drive down the
operating cost. The cost to deploy goes down. The device cost goes down
and you prorogate outward from the metropolitan areas. That\'s the
formula that\'s worked over and over again with Verizon Wireless.

We started with analog technology way back when and started in the
metropolitan areas, propagated outward. Did the same thing with our
digital deployment in the mid-\'90s. Most recently, our 1-X technology
we started in the metropolitan areas. And, all of the above, is now in
100 percent of our cell sites. So we\'re starting over again with EVDO.
I expect it to go the exact same way and, all the while, we continue to
add base stations as well. So, in addition to starting with new
technology and building outward, we continue to expand coverage by
investing in most base stations as well.

MR. WONG: I would say, God bless capitalism, basically. The entire
history of telecommunication has never said go after stuff and sometimes
they break out and make it happen and sometimes they don\'t. And, since
the Telecom Act of \'96, whether it\'s Kodak, Rhythms, at home, Arsenio,
you know, every single one of those companies has had its ups and downs
and some of them have survived and some of them haven\'t and that\'s
healthy. That\'s good. That\'s what capitalism is about is trying those
different experiences. So, actually, I view that as a very healthy thing
that there are people that go out there that are mavericks that
experiment and not all of them are going to make it.

The second point I think I\'d make is I believe there are some things
and it turns that EVDO technology, I think, is one of those things where
it just take a greater set of deep pockets to resource to make it
happen. It is just a very expensive process as well as technology
challenges to go after it and I think that it was probably a little bit
ahead of its time in terms of the handsets and the technology really
wasn\'t there to be deployed at that scale, but those are necessarily
bad things. I think experimentation is a healthy thing for the industry
and for, frankly, our economy in my opinion.

COMMISSIONER ADELSTEIN: Is it sort of a bad sign for future deployment
in rural areas? I mean, is it going to be the last place to get this
kind of service because of the small scale?

MR. BERRIMAN: Can I speak from experience? At the moment, one could
believe the technology is available. We\'re not driven by technologies.
We\'re driven by the fact that it\'s a non-line-of-site proposition. So
there\'s all different technologies available. But one of the common
things is that, to make it work, we\'ve got to work with current
projected prices of that equipment at infrastructure costs will allow
you to be viable with something like 79,000 households per cell.

Right now, I\'m sure as you were saying, Bill, the cost will come down,
the standards, with everything else, and then you can start to look out
to the more rural areas. But I mentioned you\'re going to try to do 75
percent of the households within two years. Doing 25 percent, we might
never do this twice because it\'s so spread out and, unless we move to a
line-of-site technology to do it, I can\'t see us doing it unless the
prices come down in the infrastructure.

MR. SOBIESKI: The driver in all of these CP equipment \-- I mean, we
need to get CP equipment used in all these bands. The cost to the
service provider in the few hundred dollar range, not the thousands or
thousands of dollars or 10s of thousands dollar range. As long as that
equipment is at that kind of price point, you\'re going to still have to
service only selected market segments, either geographical or customer
bases. So the only way you\'re going to get that is to kind of economy
to scale for mass production that you\'re seeing in the unlicensed band
because people perceive the spectrum availability opens up the
marketplace.

Our position is we\'re trying to change the paradigm and say that even
licensed space can be available through partnership arrangements to
create that kind of access to the marketplace that will allow people to
produce equipment in that spectrum that gives you that same kind of
price point from a purchase perspective. So it\'s a different paradigm
and we understand that.

COMMISSIONER ADELSTEIN: One more question I just I\'d like to touch on
quickly before we open it up is really is constantly here at the FCC we
hear about working on and contemplating the future of voice-over
internet protocol and the thing that raises this issue for me is, when
do you think we\'ll see mobile phone become commercially available? Is
that a peculiar application here for wireless broadband and would these
device be able to roam, you think, between Wi-Fi hotspots and some of
the networks?

MR. GUDE: Let me see if I can just start off with that. Voice-over IP, I
think everybody understands there are three kinds of voice-over IP.
There\'s voice-over IP in the back haul technology and there\'s been a
lot of progress made in that area. There\'s voice-over IP vantage style
and then there\'s voice-over IP on the air link between some tower and a
mobile phone and, perhaps, there\'s other definitions as well.

We don\'t see voice-over IP as something that we take a very long period
of time to develop. We think that it is relatively close on the horizon.
But I don\'t want to start from the technology first. I really want to
go back to the customer demand issue and talk about a conceptual state
of mind that people always refer to as convergence. In a world of
convergence, we need to talk about network convergence. You can talk
service convergence. You can talk about a lot of different kinds of
convergence, but what broadband allows us to do is to take all of those
service within voice, media or data and put them over the same access
medium.

So the importance of VOIP is that, number one, it allows for enhanced
services to be brought to consumers. And, depending how you look at it,
it also lowers the cost of broadband entry. Let me give you an example.
If you have a customer who is a landline \-- an example, if you have a
customer who is paying for DSL access at \$35 and they\'re paying \$50
for local and LD service, they\'re paying about \$85.

If that customer happens to buy broadband and then starts to go vantage
like, unlimited local and LDs are only \$35. So you\'re now at \$70
total. That savings of \$15 or \$20 effectively lowered the cost of
broadband. So voice-over IP is a very interesting opportunity. It is an
application. It\'s also a means of communication and then you can extend
this to a wireless, but, at the end of the day, what we think is that
voice-over IP is an application that really brings a lot of utility to
customers in enhancing the value proposition.

MR. BERRIMAN: I was just going to say I think it depends on what your
business model is. If you\'re looking to do lower cost long distance,
then voice-over IP there is a market for that. If you have a fixed
network, like we have in Hong Kong, we have so many voice lines already,
we\'re not going to replace voice with voice for new additional revenue.

So, with that end of the spectrum, in the U.K., for our next generation
of modem we\'ll have a built-in voice-over IP software with the
intention of having that capability because it suits us, having an IP
stream as our access mode to have voice-over IP as the means of doing.
So, in Hong Kong, we have voice‑under IP as well voice-over IP where we
have an IP stream as our main access.

MR. STONE: Adding to what Atish said, and I agree with everything,
especially, the consumer demand piece. Just a couple of other comments.
I think I\'m a little more bearish on timing, certainly, I see the
potential, the incentive for a wireless provider, the exist CMRS
providers to move forward with voice-over IP. However, you do need to
keep in mind that today, as we\'ve talked about a lot, our customers
demand high quality service. We, the service providers, are incented to
provide service in a very efficient manner.

And today, voice-over IP, does not accomplish either of those things or
I should say differently. The CDMA circuit switched or the circuit
switched voice call model, in general, has a very rich set of features.
It\'s well optimized and operates very, very efficiently.

So the up side in the near term is the enhanced services, but we also
need to catch up \-- voice-over IP over wireless needs to catch up with
circuited switched voice in terms of efficiency and the set of features
and I think that\'s going to take more time than what people currently
realize. That being said, resources are actively working on it and I\'m
hopeful that it\'ll come to market very quickly and potentially could
even be offered over our EVDO network in the future.

So it\'s certainly promising, but I\'m a little more pessimistic. It\'s
not ready for prime time. And one other thing I\'ll offer is that we do,
in fact, offer services today that are based on voice‑over IP and as
Atish points out, back in the core network, we use voice-over IP as
well, but not for mainstream voice.

MR. SOBIESKI: I guess we have a different perspective. We are using
voice-over IP as part of our core network. They are one of the largest
deployment of soft switches. It works very well. We see that last mile
solutions, using IPed enabled transport is a very natural marriage of
the two technologies. Obviously, our applications are primarily fixed
not mobile. So, in the fixed environment, a high band width last mile
solution tied to IP core provides lots of services and voice-over IP is
just a natural service to be provided over it.

MR. WONG: The one case study I would just add for, I think, everyone
needs to consider is a company called Reliance of India that\'s actually
going to the rural markets. I believe they use the LDS as their wireless
transport method. It may be in MDS, but their primary application to the
market is actually voice because it\'s one of the most efficient ways,
in their view at least, of going to a broad array of smaller towns
within India. So, maybe a case of it in terms of voice over wireless,
actually, and they\'re going to naturally go for it. So we\'ll see how
it goes.

MR. ANDERSON: A lot of the license exempt WISPS are offering voice-over
IP services through partners with the Vontages, the Packet 8s, the
Homebrew. There\'s a Homebrew voice-over IP product out there. One that
comes to mind is Asterisks. It\'s a LINUX takeoff, but you can become
your own linear PBX local long distance type of operator and a lot of
small, rural communities are actually picking up on that and it now
provides another alternative, another type of local and long distance
calls.

There actually are some Wi-Fi enabled voice‑over IP mobile phones. The
gentleman there has one in his hand. I got to touch it last night and
maybe today he\'ll let me play with a little bit. But it\'s coming soon,
I think, very, very soon.

MR. SOBIESKI: I work with a vendor out in California that\'s already has
a set that, when you\'re working within the Wi-Fi sphere, it works off
the Wi‑Fi. When you step out the door, it connects to the traditional
cellular CSTN. So they\'re here today. The price points are still too
high, but it\'s that same argument about everything else, as the
capabilities and consumer see the value propositions, those handsets
will go down just like cellular has over the last 10 years. So it\'s
just a value-added service from a basic broadband. Now we\'ll allow
voice, then we\'ll add video and then we\'ll have this and it just keeps
growing.

MR. SOBIESKI: The important part about it is having the quality network
available. I don\'t think we have a quality aggregation network in place
that recognizes the difference between packets and, if that\'s
prorogated all the way through the network fabric, then many services,
many of them we have not even envisioned here today that are just over
the horizon.

COMMISSIONER ADELSTEIN: So it\'s really not a question of if but when
we\'re going to move in that direction then. I want to thank you. Here
is that level of agreement between Nextel and Verizon. If we just build
on that and a few other little items, there\'s nothing we can\'t do.

(Laughter.)

COMMISSIONER ADELSTEIN: I just have a few minutes left. I\'d like to
know if there are any questions out there? We\'d love to get one from
the audience. Yes, if you would just step up to the microphone and state
your name.

MS. GOLDMAN: I\'m Debbie Goldman. I am sitting listening and I\'m going
to check in with all of you to see if I heard you correctly. I came here
thinking that I was going to learn a lot about how wireless broadband
would be the way to get broadband to the rural areas that now have no
access. And, if I heard you correctly on this panel, that is still a
dream. That the business proposition is still going after the dense
areas and providing mobility and broadband connection. But this is not
yet the way to make money and, therefore, there won\'t be investment in
wireless broadband in the rural areas.

I heard one exception, which was Aurora, and I am a midwesterner and I
know that Aurora is a \-- I would call a small-sized city, not a rural
area. And maybe you can tell us if you\'re serving less dense areas. So
did I hear this correct and then, if so, we have some interesting work
around policy.

COMMISSIONER ADELSTEIN: Great question.

MR. GUDE: If I could just add to that. I think that my interpretation
from listening to this panel is that it\'s not a question of if, again.
It\'s a matter of timing. Similar to wireless voice, we did start
similarly in urban areas where there was demand to understand if
coverage over a larger number of subscribers gives you greater
opportunity to have demand. But, as we became more comfortable with
that, we started to increase the value proposition by increasing
coverage.

Rural \-- I\'m from upstate New York and rural can be defined as Saranec
Lake and I love that place. Or rural be defined as rural New York, which
is also a very small city. But, ultimately, I believe, that there will
be coverage. It\'s a matter of timing. What we\'d encourage, I believe,
faster deployment is not necessarily to rely on one access mechanism.
There are people who have different business cases and different
business models who want to use unlicensed technology. There are others,
like ourselves, who have different business cases and different business
models.

At some point in time, there will be some level of converge. There will
be overlap and the market will detect how the services are broadened and
served. But I think it is a matter of timing rather than if it would
happen.

COMMISSIONER ADELSTEIN: I agree. Anybody else?

MR. ANDERSON: Out of the 8000 licensed exempt guys, I would say more
than 5 to 6000 of those guys are serving real rural. I have a tower that
has two customers on it. I don\'t have to pay rent or anything like
that. It was small investment for the equipment, so, yes, that tower has
two customers and it\'s way out in the boonies. One guy is a farmer who
checks his stock and the price of beans and stuff like that and the
other one is a Mom and Pop flower shop nursery type thing. But, yes, we
are way out in the boonies as compared to even the suburbs.

Like I said, if I look this way, I\'m in the suburbs and, if I look that
way, I see cornfields and most of our equipment is out in the cornfields
because I\'d rather be out there with less interference from other
competitors and things like that. I fully understand why the licensed
guys can\'t go way rural because it\'s just a money thing. If you\'re
going to supply \-- it cost \$5 million to put equipment out there to
service 500 people. What is the return on that investment? So I can see
why a lot a people \-- there\'s money to go here, but maybe that\'s a
future thing.

MS. GOLDMAN: Well, why does the license cover the rural area?

MR. ANDERSON: I\'m sorry?

MS. GOLDMAN: Why does the license cover the rural area if the person who
owns the license is never going to build there?

MR. ANDERSON: I think that\'s what the notice of proposed rulemaking and
things like that are coming up.

AUDIENCE SPEAKER: As far a statement, since you guys were talking about
us, I thought I\'d get up and say something. My name is Rich Kinks and
I\'m former president and chief operating officer of Monet Mobile and
the reason \-- you guys hit on all the reasons why we did fail. The cost
of infrastructure, the cost of CP, the cost of the license in a rural
area just doesn\'t add up to a license spectrum deployment of
technology. At least, today it doesn\'t. At least, for a small
Greenfield startup company, it doesn\'t and I don\'t know when it\'s
going to make sense for even a Verizon or somebody else to go out there
and do it.

And so the answer is, I think, for rural guys is what Mike\'s talking
about and that is unlicensed. We have to get more equipment out there.
We have to make more spectrum available to start competing to make
unlicensed more like licensed spectrum so we can provide the products
and services at the price frame that the consumer requires out in the
marketplace to bring unlicensed spectrum and broadband wireless spectrum
to rural marketplaces. That\'s what we need to do. That\'s what we
learned at Monet. If you guys want to ask me any other questions about
all the horror stories that we learned at Monet, I\'m sitting in the
back.

So we did it. We learned some valuable lessons, some hard lessons, but
we\'ve got to find a way to bring, I believe, unlicensed broadband
wireless to the rural, smaller communities, places like South Dakota. So
thanks.

MR. GUDE: If I could make one quick comment. I think that the
unlicensed/licensed issue is a very important issue to determine cost of
entry, but there are a whole set of other issues and I think Paul here
mentioned the cost of getting access to towers. There are regulatory
hurdles and local issues that consistently \-- issues that we have to
face and increased cost to getting access to build towers to bring
services to markets. All of these things increase the barrier of cost of
entry. We you\'ve increased the cost of entry that way, the business
case gets a little harder. So I think there are other things that can be
contemplated to lower the cost of entry rather than just focusing on
spectrum alone, although that is an issue as well.

MR. BERRIMAN: I have no idea about the U.S. universal service. In the
U.K. what the administration has done is taken a commitment of getting a
broadband 100 percent available to 100 percent of households by 2006.
But it will take about a billion pounds to do that and where that
funding is available is through competitive means via the regional
development agencies in the U.K. So that was really remarkable to get
the funding.

MR. ANDERSON: I think most of the WISPS, the licensed exempt guys, the
smaller, less than 10 employees, 100 miles from any metropolitan area,
those guys, for the most part, started their business because of the
frustration of not having the availability of broadband in their areas,
which makes them either suburban or rural. I think in \'98, \'97, when I
started wireless from ISP, I had the same frustrations. I was paying
\$1700 a month for a T-1 at the office and four blocks away at my home
the best I could hope for was a 288 connection and we went through all
kinds of \-- then we settled on wireless.

But it\'s the same thing with everybody else out in the rural
communities. I think rural \-- to me, rural is 15,000 people or less and
that\'s total people. That\'s not house. Each house has 2. whatever
people. But you can\'t overlook the rural communities and that\'s why
most of us are out there. We are rural. We\'re part of the community. I
don\'t deploy more than 30 miles from my home. Granted, that covers 6 or
7, 10 or 15 different communities, three counties, but I\'m there. I\'m
physically there in the communities with them, most of us are.

COMMISSIONER ADELSTEIN: I think that\'s it for time. I really appreciate
this panel. We\'ve learned a lot about the challenges and opportunities,
but I don\'t want to step into people\'s lunch times. So we have a few
more announcements here. Thank you for coming.

(Applause.)

MS. SEIDEL: Thank you, Commissioner and thanks to each of our panelists.
Some of whom I know traveled an awfully long way to be here and we do
appreciate that. For those of you not familiar with the building, there
are two cafeterias in the building. You just need to take the elevator
to the CY level. Be sure you take your name tag or your badge because
you will need to go through security.

There\'s a cafeteria up 12th Street on the corner. There is the Mandrin
Hotel is from that corner up the street there. There are places on the
waterfront, but, if everyone could just be back by 1:40, we\'ll start
promptly with the next panel. Thank you.

(Whereupon, a lunch recess was taken.)

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[A F T E R N O O N S E S S I O N]{.underline}

(1:41 p.m.)

MR. MULETA: Good afternoon. My name is James Muleta. I\'m Chief of the
Wireless Telecommunications Bureau here at the FCC. I\'m terribly
excited to have you all participate and listen in on the discussion of
bringing wireless broadband to our consumers. I\'m thankful for all the
people that have come out from many places far away, including
California and Hong Kong and England and it\'s exciting to see the
possibilities of wireless and what I think it can do to benefit our
country and our people.

The way we\'re going to start off this afternoon is a couple of folks
are going to talk to you about some activities that are going on at the
Commission, Lauren Van Wazet, who\'s Associate Chief and Officer of
Engineering Technology and also co-head of the Wireless Broadband
Taskforce, which is really an attempt to sort of solicit comment and
input into the framework of both licensed and unlicensed so that we can
bring the benefits of ISP services to the broader parts of America that
are struggling together out there.

She\'s working as co-head on that with John Branscome, one of my legal
advisors. He\'s working with the Spectrum and Competition Policy
Division and they\'re working very hard. And anybody that has input
please realize the FCC process is one in which a letter, a note, let\'s
make sure it\'s not on a napkin, but anything that you can do on a
little bit of a formalistic way to input into our process and give us
your thoughts on what we could do better to bring broadband wireless \--
and you can even put that into both the activities that we do in the
Bureau as well as the Taskforce report.

There\'s also Spectrum Policy Taskforce, which is this overarching issue
about how do we reform spectrum policy and the director of that is Peter
Tahula, one of my deputies. So there\'s lots of opportunities to give us
the feedback. If this issue was easy, we\'d already be there. These are
very complex issues in this country as well as overseas.

Also speaking, before we get to the panelists, is Joel Taubenblatt, who
is the Chief of the Broadband Division and the person responsible for
organizing this forum. Joel has probably one of the greatest jobs, which
is he\'s on the cusp of all great new things that are going to happen
and he has an organization that spans around 60 people. In the Wireless
Bureau, we deal with over 3 million licenses, part of which is part of
his organization.

We have a group of people, some of whom are in the back, from our
Gettysburg office, who are visiting us today that do our licensing work.
So he\'s going to tell you about what the Broadband Division is, what
its mission is, what its activities are and give you depth and give you
some information about how to get in touch with them as we deal with the
rulemakings.

Other things that we\'ve got to go, and I\'m way over my two-minute
limit, but I\'m the chief. Anyway, so next after that there will be two
other panels with Commission Copps and Commissioner Martin and then
we\'ll close off the day.

With that, I want to give you one other piece of information, which is
we have two demonstration rooms in which broadband wireless equipment
and vendors are displaying their wares. It\'s in the back. We have Sky
Pilot. We have Array Com. We have NextNet. We have Reciva. And I\'m
trying to figure if Verizon Wireless is there, Motorola and Airspan. If
I left anybody out, I apologize, but my memory is only so good.

But what I\'ll do now is I\'ll turn it over to Lauren and she\'ll give
you an idea about what we\'re doing in the Wireless Boardband Taskforce.

MS. VAN WAZER: Thank you, John.

I\'ve asked this afternoon to share some of the developments in wireless
broadband from an unlicensed perspective as well as to talk about some
of our activities with the Taskforce and discuss the impacts these
developments are having on the provision of broadband services more
generally and I\'d like to start with a brief overview of the regulatory
lay of the land for unlicensed, Part 15 devices.

All unlicensed devices must be authorized. I like to call this the FCC
goodhousekeeping seal of approval. All of our devices need to be
authorized. For unlicensed devices, spectrum access is free, but it
comes at a cost. They must not cause harmful interference with
authorized services and these devices must accept any interference
received.

With our rules, we like to provide a broad framework for the private
sector to develop detailed standards. I like to call this the \"if you
build it, they will come\" axiom for unlicensed devices and our hope is
to provide the flexibility so these standards will develop. There\'s a
plethora of unlicensed devices and the technologies really range from
cordless telephones and the mundane baby monitors, but essential, to
garage door openers, PDA, wireless local area networks, ultra wide band
devices and RFID systems.

Given the incredible diversity of the technologies available for
unlicensed devices, I don\'t think it\'s an exaggeration to say that the
unlicensed device bands have been real incubators for innovation. I like
to use the very technical term and call it the \"way cool area\" of
spectrum development. The growth in this area has just been explosive.
There are millions of these devices and in operation.

I\'d like to take a moment to highlight two of the areas that have been
of particular interest and high growth. Wireless local area networks,
which we\'ve heard about a bit today already, in the Year 2001, the
equipment sales for these devices exceeded slight \$1 billion. By next
year, it\'s projected that they will exceed \$5 billion and that\'s
billion with a \"B\".

Another area that\'s been of particular interest has been the growth of
wireless internet service providers. I like to call this the
\"grassroots broadband movement.\" Often these small Mom and Pop
companies provide services, using license exempt spectrum to rural and
undeserved areas, but they\'re also regional, also multi-state and in
metropolitan areas as well like Tampa and St. Louis. And what\'s
interesting is these networks aren\'t just last mile. They can be last
30 to 50 miles.

Broadband services using unlicensed devices are on the rise because
there are few barriers to entry. The equipment costs are relatively low.
The equipment is off the shelf or readily available for consumers and
businesses. As I noted, access to spectrum is free because these devices
operate exclusively in unlicensed spectrum. And, significantly, there is
flexibility in our regulations in terms of the types of technologies
required. We just don\'t specify them. We give folks the flexibility to
use what\'s appropriate for the circumstances. We provide the technology
parameters within which they need to operate.

At the FCC, our goal is to continue to foster these developments. FCC
policies directly affect access to spectrum and the degree of
flexibility in our technical regulations.

As I noted, one of the important rules we have is to provide access to
spectrum and the issue for unlicensed devices is whether or not there\'s
sufficient capacity for growth and how the bands that we\'ve made
available are well-tailored for the use by unlicensed broadband
networks. By the way, there\'s a test on all these bands after this and,
when I move to the next slide, I\'ll be asking those questions.

We\'ve got different buckets of rules that are applicable for different
bands. And, as has been noted earlier today, not all spectrum is created
equal. In part, it\'s just the physics that determines what works where
and for what purpose. Say, for example, the 902 to 928 megahertz band
has better foliage in building penetration. At the 5725 to 2850
megahertz band allows those higher powered operations that are permitted
there which may be more suitable for back haul operations.

In terms of the upper millimeter wave bands, we\'ve got big pipes there.
At 58 gigahertz there\'s 7 gigahertz available in terms of band width.
These work well for short distances. I\'d like to say this is akin to
the Goldilocks in terms of, when a service provider is configuring their
network, they need to see what spectrum is suitable and for what
purposes to figure out what\'s just right. They mix and match
accordingly.

In addition to spectrum access, the FCC has been working to increase
flexibility in technical regulations. I like to call this \"regulatory
leveraging\" of the benefits of new technologies so the consumers and
businesses have access to additional services and we\'ve done this in a
couple of areas. We\'re looking at making our equipment authorizations
more modular. Can we move to more of a lego model approach so certain
equipment can be switched out of systems that are certified?

We\'re looking at the area of smart antennas to ensure that our
regulations permit the full deployment of these spectrally-efficient
technologies. Also, we\'ve begun a proceeding in the area of smart
radios or smart or cognitive radios and enabling the use of these
radios. These radios often work effectively as a communications bridge
between multiple technologies and different modulation schemes.

I think with all these smart technologies \-- again, we have smart
antennas, smart radios and, in the RFID systems world, we\'ve got smart
containers and I think we\'re moving to a Garrison Keeler world where
everything is above average, but it\'s true. All the technology is
getting smarter and enabling us to do more things.

At same time, beyond the FCC\'s role, two other factors directly affect
the provision of unlicensed services using unlicensed broadband
services, technology advancement and the continued evolution of industry
standards. As I noted, technology keeps changing and technologies keep
getting smarter and we\'ve had the continued evolution of industry
standards from Wi-Fi to Wimax to Wi-Next. There\'s certain attributes of
Wimax that I\'d like to focus on because I think these attributes show
that it\'s particularly promising in terms of acting as a catalyst for
the future deployment of wireless broadband services.

As has been noted earlier today, 802.16a covers the 2 to 11 gigahertz
region of the spectrum, which covers both licensed and unlicensed band.
Under 802.16a, customer premise equipment is interoperable, which is
extremely important. It can work for both point-to-point situations like
as possible back haul or point-to-multipoint situation as a possible
last mile solution.

And, under 802.16, they\'re even developing a mobile specs, 802.16e,
which promises increasing flexibility with the standard. And I note
they\'re also considering extending the standard below 2 gigahertz into
the beach front region of the spectrum as well. So the flexibility and
the bands covered and the interoperability, I think, will be key factors
in determining the ultimate success of any industry standard.

While I\'m pleased to discuss these developments in terms of unlicensed
wireless broadband, and there\'s a similar parallel story in the
licensed arena as well, which Joel Taubenblatt will be addressing
shortly, but we\'ve moved ahead in spectrum access. In terms of
flexibility in our regulations, there\'s been significant advances in
technology as well as standards. And, ultimately, we\'re moving to a
world of integrated wireless networks, kind of a convergence, if you
will. And it really won\'t be an issue of whether something is licensed
or unlicensed. It\'s an issue of what will fit and where and this
premise extends to the wireline platforms as well.

As Chairman Powell noted this morning, we are continuing to work to add
more tools to the broadband toolbox to enable service providers to
optimize their own networks based on geography, applications, density of
users and other factors.

I\'d like to take a minute to focus on the Wireless Broadband Access
Taskforce. We\'d like to do more to facilitate these developments and
the provisioning of wireless broadband. And, to that end, Chairman
Powell created the Wireless Broadband Access Taskforce to look at how we
can focus on some of these issues, especially, on wireless internet
service providers.

I\'d like to extent an invitation, along with my co-director, John
Branscome, to participate fully in this inquiry so we can make informed
recommendations to the Commission in late October.

I\'d like to leave you with one parting thought, sort of the policy
driver in all of this. And, when I read the following quote by the late
Red Barber about the commercial broadcast industry it reminded me of
some of the issues in our current context today. And I\'m just going to
take a moment and read it.

\"Kids flip on their transistor radios without thinking and take it all
for granted. People who weren\'t around in the \'20s when radio
exploded,\" by the way, I wasn\'t, \"can\'t know what it meant. This
milestone for mankind. Suddenly, with radio, there was instant human
communication. No longer were our homes isolated and lonely and silent.
The world came into our homes for the first time. Music came pouring in.
Laughter came in. News came in. The world shrank with radio.\"

Like radio broadcast services, broadband services have the potential to
bring the world into every home in America. And, with good policies and
continued technological advances, let\'s work to do just that. Thank
you.

(Applause.)

MR. TAUBENBLATT: Hi, I\'m Joel Taubenblatt. As John said, Chief of the
Wireless Bureau\'s Broadband Division and John had indicated that I have
a cool job and I think that\'s true and one only rivaled by my night and
weekend job, which as father to a two-month old infant girl.

I will try to walk through the slides fairly quickly and I would walk
through a little bit about the licensed activities that are going on at
the Commission and a little bit about my division. I think there are
really three primary ways that we are trying to facilitate wireless
broadband networks. One is through a variety of different policies and
rulemakings. Some examples are those listed on the screen and the
Chairman also referenced them this morning.

Certainly, getting out more spectrum for advanced wireless services,
reconfiguring the MDS/ITFS band to allow for more flexible use and
fixing some of the interleaving problems, adopting different licenses
schemes for 70/80/90 gigahertz and trying to provide some flexibility in
terms of the licensing there. We also have auctions coming up,
particularly, 24 gigahertz late in July. And, for those of you who are
interested, there are fact sheets in the back of the room and also
through the Commission\'s secondary markets initiatives to try to get
spectrum flowing and access to spectrum increased.

We also are trying to facilitate wireless broadband through having
fairly high-tech and sophisticated interactive licensing databases and
systems here at the FCC. Some of you, I\'m sure, are familiar with our
universal licensing system which has done great wonders for us in terms
of allowing us to work through a variety of different actions relatively
quickly. In the Bureau, we administer some 3 million license, a
staggering number, and take about 500,000 actions a day \-- rather, I\'m
sorry, a year. And we are constantly looking for ways to modify the
universal licensing system to make it more accessible to take into
account new initiatives such as secondary markets and 70/80/90
gigahertz. And, as John mentioned, all my licensing staff from
Gettysburg is here as well today.

The third way really is by reaching out for stakeholder input.
Certainly, this forum is a means of doing that and we very much
appreciate everyone\'s participation in it. I think, also, the
Commission tries to gather information for a variety of different
reports and I just wanted to give applause for our Section 706 report,
the comment period is running. I believe the replies are due on Monday
and we certainly would welcome any input from the wireless industry in
terms of the types of things that are being done, the types of services,
capabilities and things like that. Also, as Lauren mentioned, through
the Taskforce, there will be quite a few outreach activities, I think,
going on the rest of the year.

Just a brief word about my division, and I think there are pamphlets, or
at least there were, in the back. But the Bureau itself is relatively
large. There\'s about 300 folks. Back in December, the Chairman and John
created a Broadband Division to emphasize a facilitation of wireless
broadband and I also wanted to give a plug for other divisions as well
which are focused on very related policies of spectrum and competition
policy, auctions, public safety, information technology and mobility.

Lastly, I just wanted to leave you with the idea that I think wireless
has had an incredible potential to increase the market for voice
communication services over the last several years. And I think the
exciting today is that it\'s got the potential, in many ways is doing it
now, to increase or broaden the market for internet, for media and
entertainment services. So I hope the future is bright.

And, with that, I will turn it back to John to introduce the next panel.

(Applause.)

MR. MULETA: Thank you, Joel. It\'s a great honor to, first of all,
introduce Commissioner Martin, who will be heading up the panel.

Commissioner Martin, how are you? And, also, all the other folks who are
on the panel, Andy Kreig, Rick Kunze, Ms. Radcliffe from Australia and
Scott Slater and Charlie Townsend. If you could all come up to our
panel, I\'d appreciate it.

One thing I have to tell you is I think the potential for wireless
broadband is great. The instructive lessons are really studied and I
think the U.S. did it right. I spend a lot of time in hotels and one
thing I do remember is when I was in the Wireline Bureau, I used to have
to deal with a lot of complaints that a hotel room phones and whether or
not you had the 10 card and all those kind of things. Today I just use
my cell phone, so we bypass that whole problem. With that, I\'ll turn it
over to Commissioner Martin.

COMMISSIONER MARTIN: Well, thank you. Thanks, John, and thank you all
for being here today. Certainly, everyone\'s attendance here exemplifies
the interest everyone has in this and I\'m excited and pleased to be a
part of the forum today.

Wireless broadband is vitally important. I know that \-- and actually,
John and the Chairman and I had a chance to go visit and see some
demonstrations out in Virginia that were important and we got to see
just how important it was for many of the different rural areas and the
importance that wireless connections can be to people that for their
economy and for the way that they continue living with being able to be
connected to the mainstream of society. And it\'s also important outside
of rural areas in urban areas as well.

And wireless, obviously, provides them the mobility that consumers are
increasingly craving today and that is ultimately going to be one of the
most important competitors to cable and DSL for those last mile
connection.

Bringing that kind of competition to those providers is critical and I
think that one of the challenges that everyone faces is getting pass
those barriers to entry and that\'s why this part of the panel is being
so important. This part of the presentation today is so important and I
want to introduce each of the panelists now and make sure we get right
into the presentation, so I will be brief. And I\'m sure I won\'t do
their bios justice, but let me give everyone a very short introduction.
I\'ll go in alphabetical order. I can\'t actually even see exactly the
order everyone\'s in.

We\'ve got Andrew Kreig with us who\'s the president and CEO of the
Wireless Communications Association. He has lead the WCA\'s transition
into being the premium association focusing on the provision of wireless
broadband services.

We have Rick Kunze, a part of PART-15.ORG and ColusonNET. I\'ve met with
him before and learned about he has done some great things in Coluson
County, California, including single-handedly building 150‑foot tower
that, at least, I\'ve heard about and maybe we\'ll all hear about today.

We have Jeannette Radcliffe of the Australian Communications Authority.
She\'s the manager of the Spectrum Markets Group, which has the
responsibility for developing and implementing market base reforms and
spectrum management.

We have Scott Slater, the co-founder of the Personal Broadband Industry
Association. He has over 25 years in wireless and technology business
development experience and he\'s worked with laser disc technologies,
cellular service, and e-mail technology.

And, finally, Charlie Townsend of Aloha Partners in 700 Megahertz
Advancement Coalition. The manager and general partner of Aloha and
Aloha is the largest owner of the 700 megahertz licenses in the United
States, covering almost half of the United States population. And, with
that, I will now turn it over to our panelists and we\'ll start here and
work our way through.

MR. KREIG: Thank you. And, on behalf of WCA, I\'d first like to thank
the Taskforce for this great opportunity to share some thoughts today.
And, from England, it\'s probably that, clearly, wireless broadband has
come a long way and is rapidly gaining ground on its tettered
competition.

We\'re on the verge of a major breakthrough in the United States in our
belief. The Commission\'s efforts have much to do with that and we\'re
going to provide some background where we think we\'re going with that.

To set back a bit, WCA is the nation\'s oldest and largest trade
association focused on wireless broadband. We are wireless broadband\'s
primary voice in Washington on regulatory and policy matters and have
participated in virtually every FCC proceeding effecting this industry.
We\'re also active internationally, at the states and in Congress and
last fall, for example, we helped lead the fight to preserve the primary
federal broadband loan program for rural Americans.

Our tent is large and getting larger every day with approximately 260
mobile companies on six continents. Our numbers include most of wireless
broadband\'s leading carriers, vendors and consultants who utilize all
spectrum bands available for fixed and mobile wireless broadband
services. This ranges from 700 megahertz as represented by our member
and distinguished co-panelist, Charles Townsend, to 70 and even 80 plus
gigahertz.

All of this comes together, I might add, in the industry\'s major annual
convention, which is two weeks in Washington, 150 speakers. There\'s
information about it up at the front desk. Also, we were asked to just
spend five minutes in opening presentations. So rather than hog too much
time, I\'m also going to point to that front desk where we have a
written statement that I won\'t read to you entirely right now, but
representing such a diverse constituency many of them have many, many
concerns and I\'ve attempted to summarize those in the overall statement
addressing the general topic of the panel, but, inevitably, there\'s not
going to be time to do more than touch on just a few of them in the rest
of my statement.

For a little bit more background, though, I\'ll say that WCA\'s origins
are in the licensed bands. We anticipated the growth of unlicensed
services and in 1999 created the License Exempt Alliance or LEA that is
a leading voice of carriers. And, in fact, here today are the president
of that group, Douglas Kimball of AMA Textile and the president-elect of
that group, Neil Mohalland of Prairie Internet. And this represents, as
you\'ve heard so often today, a growing and important constituency for
wireless broadband throughout the country.

In touching on some of the regulatory barriers and topics that are the
focus of this particular panel, I\'d like to highlight out of my
statement a few of the most important points. The main one, I would say,
is that the best course for the Commission is to establish as few ground
rules as are necessary to provide operators with an environment of
regulatory certainty and then let the marketplace take its course.

History has taught us the adverse consequences of doing otherwise and we
take, as one example, the licensed MDS/ITFS spectrum that the Commission
itself has identified an ideal vehicle for wireless broadband. Without
going through the whole history of that band, I\'ll say that it\'s gone
through many transformation, it\'s undervalued and underused, but, in
large part, that\'s because of problems that could be readily
anticipated in which our organization, in conjunction with the other two
major organizations, both as educators, has sought to rectify with a
filing in 2002 to reform that band to meet modern conditions of use. And
we\'re very excited, as Chairman Powell said earlier today, that the
Commission is on the verge of undertaking a historic transformation of
that band. Hopefully, congruent with the proposal that the three major
organizations have proposed after a long, long study of the varied
constituencies.

To wrap up and hit a couple of the highlights of the rest of my
presentation, I\'ll say that the lessons of this MDS/ITFS proceeding are
lessons that we think carryover to many, if not all, of the bands that
we work with and that are the subject of the FCC\'s Taskforce. And, to
take maybe one sentence out of each paragraph, we would say that
regardless of the spectrum at issue, the FCC should remain focused on
the core principle of flexible use, letting the marketplace issue
regulation determine how, when and where these services will be
introduced to consumers.

Another item is that new services and technologies must be sustainable
financially. Forced deployments by regulators of broad economics is a
recipe for disaster. Again, we have specifics in our prepared statement.

Third, the FCC can and should encourage robust secondary markets for
licensed spectrum. And, here again, the experience of MDS and ITFS is
helpful. They\'ve been operating in the secondary markets for 20 years,
demonstrating that licensees will make access spectrum available if
given the flexibility to negotiate the terms.

Finally, application processes where necessary should be streamlined and
adapted as necessary to the specific characteristics of the spectrum
band. And, in this case, if we go all the way up the spectrum charts to
our initiative in the 70 to 90 gigahertz band, you\'ll see, again, as
the Chairman mentioned earlier today, that he put this proceeding, along
with the rest of the Commission, on a fast and innovative track to
create new spectrum rules that all of the licensees and \-- they were
prospective providers at that point, which came together under the WCA
banner were very happy with. It was a very creative solution that the
Commission reached and I think is an example of flexibility that is
going to serve the public.

So I\'m going to conclude at this point by saying that this is the time
of great opportunities and changes for both the FCC, the consumers and
the industry who have much to gain, but much remains on their plate. As
always, we and our members will attempt to help the Commission do
what\'s necessary to complete its agenda and achieve all the unique
advantages wireless broadband can bring to the consumer plate. Thank you
very much.

COMMISSIONER MARTIN: Thank you, Andrew.

MR. KUNZE: My name is Rick Kunze. I represent a ISP I founded in a rural
area of northern California called Coluson County. Coluson County is
about 60 miles north of Sacramento. Had I known what I was going to be
faced with when I originally moved there I probably wouldn\'t have. That
being a very expensive telecommunication services, absolutely no
internet service and an uphill battle on a lot of it.

So my claim to fame, so to speak, is that I\'m one of the people that\'s
doing all of this in the trenches, not to be confused with knowing it
all. And some of the hurdles that I\'ve run into are very typical in
what\'s happening with WISPS around the country or around the world
even. For those of you who were here for the first half of the day, a
lot of it sounded probably rather \-- I overheard some conversations
that, obviously, went away from it thinking that this wireless stuff
isn\'t really going to be able to serve their area, but I don\'t agree
with that at all. It\'s exploding in our faces and there are people like
me showing up at these WISPS conferences that Part 15 puts on every six
months. I haven\'t seen this much new activity in the industry since the
late \'90s.

There\'s a whole new set of faces at these conferences every time, along
with a group of core \-- the core group of individuals that comes back
each time, but these are not people that were ISPs before. These are new
people entering the industry and probably the biggest sign that things
are turning around is that money is starting to pour into it. A year and
a half ago, when I started doing this wireless stuff \-- and I really
haven\'t even solicited VC money, but a year and a half a go or so,
there really wasn\'t much VC money being offered to the internet
community. Those offers dried up in the late \'90s and 2000 and so forth
when the bubble crashed, but that\'s all changing now, too.

I mean, quite literally, in the last week, I think I\'ve had five offers
from local individuals to borrow their money instead of the money I\'m
about to borrow from somebody else. So it is very alive. It is very
rapidly growing and the people, like myself, that are actually doing it
are doing remarkable things with the equipment that they have available.
In some cases, inventing the equipment as they go.

The power over eithernet thing is a good example. That came out of guys
that were taking stuff apart and creating power of eithernet when none
existed. Now, of course, it\'s the standard. I had to laugh at the close
of Lauren\'s presentation. I\'ve been an amateur radio hobbyist all my
life, which also had to be when the wireless thing fell out of the sky,
but they reference to radio exploding in the \'20s, the other side to
that is that a lot of radios in the \'20s exploded.

(Laughter.)

MR. KUNZE: But the point she was making, of course, was that the kids
just turn them on now. Nobody even thinks about it, so, in this little
area where I live, Coluson County is a very productive agricultural
area, most of your rice and tomatoes are grown there and that also means
that it has, typically, the highest unemployment in the State of
California. It\'s a very old town, a lot of heritage. It\'s actually, I
believe, and I could be wrong, but I\'m pretty sure that it was the
second functioning courthouse in the State of California. But the annual
unemployment rate is about 18.9 percent and we\'re often at the top of
the list for about two or three months out of the year.

I\'m on the board of a local economic development corporation and we
oftentimes are approached for relocation for some very large projects,
actually \-- million square-foot warehouse, things of that nature and,
oftentimes, we fall short of meeting their requirements because of the
horrifically bad telecommunications infrastructure. The only way that I
was able to help this a little bit was a couple of years ago I need \--
I saw the wireless potential, obviously, so there was a mountaintop
nearby that I was going to try to deploy from, but it was about 10 miles
away and it was managed by one of the large tower management firms. And,
after about six months of trying to get a contract out of them, I threw
in the towel, and as Commissioner Martin mentioned, I pretty much
entirely by myself erected a 150-foot self-supporting tower on the
property right next to my building. So, in this rural town, we\'re now
providing megabyte symmetrical broadband wireless. And, within the next
two or three months, the footprint will be expanded to about several
hundred square miles in the area. So people are eating it up. There\'s
no question about it, even in a rural area like that. There\'s no
shortage of demand for it.

When I was \-- back in around \'97, \'98 when DSL was starting to
explode, back then you could still get cooper pairs and I bought a DSL
chassis, a D-slam, which is still in my building. I\'m one of the lucky
few who can still get pairs. But it probably took me a year before I
could even sell a DSL circuit to anybody because nobody knew what it
was. They didn\'t understand why they needed anything faster than
dial‑up, which, of course, has changed considerably since then.

So my claim to fame, other than the trench warfare, is the tower
project, which is do‑yourself‑tower.com, if you\'re at all interested in
seeing how to put one up yourself. That\'s all with hyphens, by the way.
Other than some other notes that I\'ll probably fire off in a little
bit, that\'s my introduction.

COMMISSIONER MARTIN: Jeanette?

MS. RADCLIFFE: It\'s really humbling sitting here listening to so much
innovation and it just underlines to me that we often joke, with
wonderful humor. Someone actually said today that our job is just to get
the hell out of the way.

In preparing to come here, and I\'m really delighted to have this
opportunity to participate in this forum. That in preparing to come here
I\'ve put together a little snapshot just to show you how different
things were in Australia, but I\'ve rethought that sitting here this
morning. I\'m really struck by how many similarities there are on so
many levels and how we are, as regulators, looking at a very similar
range of issues and we probably have very similar goals I\'m pleased to
say.

If flexibility in regulation and facilitating access to spectrum and
providing a regulatory environment that\'s conducive to innovation are
important in the U.S., they\'re vital in Australia. Like the U.S.,
Australia has a very challenging geography. We have a very large land
mass and we have a very highly urbanized population. Ninety percent of
our population lives in our urban environment. Our cellular service
providers are able to cover about 92 percent of the population, while
only covering about 3 percent of the land mass and this has advantages
and disadvantages. Advantages if you\'re trying to roll out a service
because you can get pretty good coverage without having to have
extensive infrastructure necessarily and disadvantages because that
leaves a small part of our population highly dispersed and faced with
high costs if they\'re going to get delivery of services like \-- well,
they\'re certainly not going to get a lot of wire services and broadband
wireless is difficult to get to them, too.

Like the U.S., Australia is rural and, in my population, have very high
expectations. They don\'t just expect a basic level of communications
infrastructure. They expect to have access to quality broadband wireless
services and at a cost that\'s comparable to their urban counterparts.
And a recent OECD report I noticed actually said that concerns about
price and quality of service in our rural and remote communities is
actually in why broadband wireless isn\'t necessarily taking off in some
places where we thought it might.

Also, like the U.S., Australia has allocated a lot of spectrum that\'s
suitable for broadband wireless access and we have both licensed bands
and unlicensed bands. We have unlicensed spectrum at 2.4 and 5.8
gigahertz and licensed spectrum at 1.9, 2.3, 3.4, 27, 28 and we\'re
looking to allocate more around 2 gig at 20.10 to 20.25 and possibly the
midband gap in the 1.8 gigahertz band. The question for us now really
is, have we allocated too much, is it being used efficiently and what
should we do or what could do as a regulator if we think that that\'s
the case?

So we find ourselves in a situation, and I guess you are too, listening
to what happening within the Wireless Bureau at the moment, we\'re
looking at our regulatory approach constantly to try and see where we
can make it flexible enough to embrace the new technologies that are
just bombarding us.

And, like the U.S., these are really exciting times in our
communications sector in Australia. Once again, the communications
sector is growing faster than our overall economy and we\'re seeing
innovation and investment right across the board in the range of bands.
We\'ve got people using a range of spectrum, deploying a range of
systems. We have private companies. We\'ve got government involvement.
We\'ve got things happening at a community level and then happening on a
large scale level, so there\'s a lot going on.

It\'s very early days. The government is strongly committed to seeing
broadband wireless rolled out in Australia and is doing some things, in
terms of incentives, to try and encourage deployment of the
infrastructure. But the enormity of the task, even with all this
development and growth, is just mindblowing.

And it\'s interesting, just listening to the industry representatives in
this room \-- I mean, no surprises that everybody wants more spectrum.
Not so surprising, too, but comforting to hear that having a range of
license types and the ability to mix and match spectrum and license
types is important. As I\'ve said, interesting to know that as our role
as government is to get the hell out of the way. And, also, our role as
government is to focus on the ends not the means. And I would say
that\'s what we think we\'re trying to do at the Australian
Communications Authority. We strive to be consultative. We try to be
responsive to demand within the industry. I\'ve said that we\'re working
on trying to achieve the greatest degree of flexibility in our
regulations that we can. We strive to be technologically neutral and we
don\'t believe in roll out requirements or anything like that that might
stifle innovation because we think that, for a country like Australia,
innovation is going to be the key.

Speaking of innovation, it\'s just been wonderful to see Array.com here
today who, of course, is one of our big success story and I think,
perhaps, a good example of what it is governments can do to facilitate
roll out of broadband wireless access. Thanks.

COMMISSIONER MARTIN: Thank you. Scott?

MR. SLATER: Thank you. So our thanks to the FCC for their invitation
today.

Barriers and risks are relative and they are greatest when a market
lacks a clear consensus. One of the biggest challenges we have ahead is
to inspire a capital market to see this new opportunity that many of us
believe in. So we\'re here today to propose a unifying framework that
defines the market and the opportunity that we\'re discussing.

Wireless broadband describes a technology. Personal broadband describes
the market. A market that can be understood by all and that embraces the
broad assets of various networks and that has paradigm shifted the
internet. So this is a framework that can inspire the capital market\'s
understanding and enthusiasm. We\'re not advocating one network over
another nor one piece of spectrum over another. We\'re proposing the big
picture so that all boats rise.

We all seem to agree that there\'s a paradigm shift afoot, hence, we
should be able to define what this paradigm looks like. Wireless and
broadband represent ideas that are no longer limited by the physical and
regulated pipes which defined the capital market used today. So it\'s
helpful to take a look at the big picture.

Many see the communications industry as a commoditized marketplace. A
marketplace which is fighting amongst itself for limited spectrum and
resources. We started the PBIA because there are too many sources of
disparate or incomplete information and, unfortunately, no clear view to
where all of this is going. To illustrate the market problem that
misinformation creates, does anybody here know the difference between a
used car salesperson and a wireless phone sales person? A used car sales
person knows when they\'re lying to you.

(Laughter.)

MR. SLATER: So we\'ve been working with the support and guidance of
IXEs, carriers, cable companies, ISPs, wireless carriers and companies,
technology firms, and interfinance personal broadband startup pioneers,
other global industry associations as well as distinguished market
voices. We\'re focused on educating the global market and to provide a
unified industry voice and understanding to educate, promote and support
the global market for affordable, ubiquitous broadband technologies and
services.

The questions we are focused on are, how big is the market for
affordable, ubiquitous broadband? What are the metrics we should use?
What principles maximizes opportunity? Wireless broadband is an
ingredient, an important ingredient for much more than the wireless
industry today. We chose the term \"personal broadband\" because it
provides a unifying framework for guiding policy, discourse and capital
and a clarifying definition for what we\'re already seeing in the
market. So what we know is that personal broadband is software driven,
broadband connectivity that is convenient, more affordable as these
technologies fundamentally reduce the cost of access and always there.

Personal broadband is a market definition of the future reach of the
internet and digital media. And, most importantly, personal broadband
represent a new market, which is worth \$500 billion annually.

So, to better understand where we are going, it helps to look at what
we\'ve learned. Let\'s take a look at how the shift from fixed analog to
personal communications impacted economics and behavior. Let\'s look at
an average day 10 years ago. Most of us had POTs, plain old telephone
service at home. We might have stopped along the way to work and used a
pay phone to make a call. When we got to the office, we used centrex or
PBX. In a meeting, we were also reached via the centrex or PBX and we
might have paid for a call from cellular in our car on the way home
because we might be late due to traffic.

Today the shift in behavior and market is understood. The primary access
method is the phone we carry in our bags or on our person. Interesting
to note, that for most of us this has not replaced the phone at home nor
the phone at our desk at work. But personal communications has become
the primary method of communicating.

So the shift from fixed communication to personal communication expanded
the market to individual users, not homes or buildings. The resulting
transformation of personal communications caused a new way of using and
thinking about communication, new ways to think about an increased
productivity, new employment opportunities and new industries. And,
importantly, wireless technology was the glue that increased both the
reach of the network and the availability of communication. Because we
knew were connected wherever we went, it transformed the way we use
communications.

So let\'s take a look at how most of us access the internet today. At
home, we access via DSL, cable, most of us, 80 percent of America, us
plain old dial-up access. And, on the way to work, we might stop at
Starbuck\'s for a coffee meeting, log on via a Wi-Fi connection. At
work, one\'s connected via T1 or DS3 and some of us might use wireless
or a data application in the car on the way home.

It\'s important to note how many different network operators participate
in providing points of access and value. The personal broadband market
offers primary, always on, flat rate broadband access for everyone. Now
imagine that the cost would be the same as dial-up today. The shifts
from fixed connectivity to personal broadband connectivity significantly
impacts current applications in the industry and will also evolve the
market for other industries such as digital media.

Now PBIA has been working with Artstone Consulting, whose partners have
been leading telecom sourcing practices with Fortune 500 enterprises
over the past decade. We will be releasing their white paper on the
impact of personal broadband on the enterprise market shortly. According
to Artstone Consulting, enterprise spends \$7 billions annually for
personal employee connectivity. Personal broadband technologies can
reduce this cost by 40 percent. This figure does not even capture the
new markets for productivity mobility where these services created.

So, with personal broadband, the broadband connection is no longer to a
house or to a building, but to a person. The digital media industry,
especially, the advertising industry clearly understands the importance
and value of being able to reach you and me interactively and directly.

Each year the digital media industry spends billions of dollars each
month, for example, promoting movies. Movies, as I have learned, are
much more than the business of tickets to a theaters. Movies have become
brands where the brand starts with the movie experience and evolves to
CDs, DVDs, videogames, computer games and ring tones. So media spin is
ultimately about reaching people not houses.

As traditional advertising seeks to create awareness and reach, personal
broadband represents an ability to effectively focus, reach, reduce
certain spin and effectively drives sustainability. So, instead of
spending \$100 million to create an initial awareness, imagine spending
20 percent less in achieving the same market impacts and results?

Personal broadband will prove to be a more cost-effective method than
existing broadcast channels for the digital media industry. Last year,
TNS media intelligence in New York reported that the advertising
industries spent \$128 billion inspiring a GDP of \$10 trillion in the
U.S. So much in the way that personal communications transform and grew
the market for communication, personal broadband will transform and grow
the market for broadband applications. A market that we estimate to be
\$500 billion per year. And a wireless broadband is the glue that will
leverage existing broadband infrastructure and make this transformation
possible.

So tomorrow\'s new digital media market depends upon current providers
working together and supporting this personal broadband vision. This is
a structure that illustrates a much larger market ahead for all. This
framework is best understood as a layered approach to creating value. It
is clearly difficult to reconcile the fighting that is occurring between
traditional silos of communication providers from limited assets.
Technology innovation without market insight is doomed. This layered
paradigm illustrates the huge value creation opportunity for all sources
of data in digital media.

Policy and market thinking about spectrum and capital needs to recognize
this untapped potential. Digital media is the driver for an unregulated
market for transaction and application. The future that leverages
existing assets of all is a vision that is compelling and attractive for
all. Now this is a vision that is being adopted around the world. We\'ve
heard about many innovators and pioneers today.

In Australia this year, we\'ve learned that Sydney is the first major
city in the world to deploy personal broadband network. And what\'s
interesting about this development is that this effort coordinated by
Vodafone and MIC, Crown\'s Castle and Mitsubishi supports a wholesale
distribution model with multiple distributors. This is a model that
can\'t be supported by current broadband solutions today.

Imagine the opportunity \-- pardon me. The economics here indicate that
there can be dozens of personal broadband networks in any market. This
is the ultimate opportunity for a competitive marketplace. Imagine the
opportunity, not one or two, but dozens of new interactive business,
each customized and energizing entire market segments \-- consumer
enterprise, homeland defense, government agencies, libraries, schools,
disabled and nonprofits.

We\'ve been working with RHK Consulting to additional insights into
these markets. The U.S. is not a leader in broadband today. The new wave
of personal broadband provides the United States an opportunity to
dramatically expand our economy and regain the leadership position.
Personal broadband is already being deployed in Korea and Australia. We
must focus our efforts and work together if we hope to emerge the global
leader in personal broadband.

To summarize, to move this market pass barriers and risks, the
communications industry needs a unifying vision and framework that
resonates for all. We applaud the initiatives and objectives of this FCC
forum. There is a reason path forward for all and while different
business motivations vary and while this shift will not be easy, with
the innovation, intelligence and inspiration of the people in this room
and in this industry, the opportunity ahead is clear. The FCC knows and
the U.S. economy needs to overcome current barriers in thinking. The
whole is much bigger than the sum of its parts and to inspire economic
growth, new jobs and to ensure the U.S. emerges as a global leader in
wireless broadband, we propose (a) adopting personal broadband as a
unifying framework for guiding policy, discourse and capital, allocate
more spectrum as we work together to promote this clarifying definition
of what we\'re already seeing in the market and use these ideas as a
catalyst for discussion and growth to the U.S. economy. I thank you very
much.

COMMISSIONER MARTIN: Thank you, Scott. Our final panelist, Charles
Townsend.

MR. TOWNSEND: Thank you.

You\'ve heard comments, I think, earlier this morning about the
potential for 700 megahertz and I\'m going to give you a little update
on where it is and, I think, where it can go.

First of all, just a personal note, this forum has been one of the most
interesting ones I\'ve been to in the last two years. So I thank John
Muleta and his team. Good job.

As Commissioner Martin said, Aloha Partners is the largest owner of 700
megahertz spectrum in the United States, over 167 licenses. We cover 135
million people, which is a little under 50 percent of the country and we
cover 26 of the top 50 markets. The 700 Megahertz Coalition which covers
almost all of the operators of 700 neighbors and practically the entire
country. So there\'s a group of organized people who have 700 megahertz
spectrum.

President Bush has set an ambitious objective of having universal
broadband service by the end of 2007. The question is where are we today
and what do we need to reach that objective? It\'s going to surprise
you, the answer to that, because it is not something that is easily
quantified. The Pugh Charitable Trust is a group that tracks internet
usage and they do a terrific tracking study every two or three times a
year and they came out with their February survey just a month ago. And
what they indicated was that in urban areas 7 percent of the homes
don\'t have any broadband service. That\'s pretty good. We\'re
practically there in urban areas, not so in rural markets. Forty-two
percent of rural household don\'t have any broadband today.

What\'s even more dramatic is that if you look at how many rural homes
have just one provider or no providers is 70 percent. So 7 out of every
10 rural homes either have one or less rural broadband providers. To
look at a comparable number for the urban areas, it\'s only 1 out of 5,
so less than 20 percent.

What the Pugh Trust has concluded as to why this exist shouldn\'t be any
surprise to anybody that was here this morning. The cost and deployment
is the single biggest barrier to rural broadband today. The dilemma is
that neither cable or DSL is cost-effective in rural markets because of
the low density. We simply can\'t put these large wires in low density
areas. Wireless is the obvious solutions, which I\'m sure everybody here
thinks.

The problem that was articulated earlier by Lauren is that in
frequencies over 1000 megahertz or 1 gigahertz, they don\'t propagate
very well. They have difficulty through a terrain. They can be deflected
by foliage or trees. So the frequency is, I think, most efficient to
deliver broadband to rural communities is 700 megahertz, which is why we
bought all the licenses.

We have been diligently working on a solution here, as I don\'t know how
many of you are familiar with it, but the broadcasters currently occupy
a number of these licenses, which is why nobody can use them. And I
think the FCC has made some pretty good progress on potentially getting
these guys to do some moving, but it\'s a big task. So we have been
working on an interim solution that would potentially free up many of
these licenses right now.

And the current rules for 700 megahertz prohibit us from transmitting on
the channels that we currently own, which are channels 54, 55, and 59.
The complicated factor is that it also prohibits us from transmitting on
the adjacent channels, which would be in this case 53, 55, 58 and 60.
So, really, if there\'s one of six television stations in one of our
markets, we can\'t use it.

Having come out of the cellular telephone business, I recognized that
there were other ways to cope with interference and what we concluded
was that because we were transmitting at such low power from our high
speed realm internet access the chances were that we were not going to
be an interferer with the adjacent broadcasters.

We have done a number of studies which confirmed that guess and, in the
next month, we will be submitting to the Commission a request to operate
on a channel adjacent to broadcasters. You might say, so what\'s the
significance of that? The significance is that if this approach is
approved by the Commission over 50 percent of the United States can be
served by 700 megahertz right now. So the need for the digital
transition, while important, isn\'t critical.

I think that the wireless broadband business is going to explode in the
next two to three years. We\'re just seeing the inklings of what\'s
about to happen with Nextel\'s deployment in Raleigh/Durham and
Verizon\'s deployment in Washington and San Diego. The dilemma, as they
both articulated this morning, they don\'t want to go to the rural areas
because it\'s too expensive. We can provide service to rural markets at
one third to one half less than the large companies can because of the
propagation characteristics of 700 megahertz.

Verizon and Nextel both transmit at 1900 and above and you need half as
cell sites. So, assuming you can get the equipment for the same price,
you can cut your cost in half. So we think the 700 megahertz is a very
cost-effective way to get the rural markets.

COMMISSIONER MARTIN: Thank you. I thank all the panelists for their
introductory remarks.

I do what to have the chance at the end to make sure and open up the
floor to questions, but I did want to try to have a few questions for
each of the panelists before we did that.

Andrew, you mentioned, I think, in the beginning, that you\'re first
principle was that we should have as few rules as necessary. Believe it
or not, that\'s what the Commission tries to do, even though, I\'m sure
that a lot people don\'t always agree that that\'s what we accomplish.
But I thought that it was instructive, Jeanette was talking about the
difficulty they have and that maybe they\'ve allocated too much to the
unlicensed band and I was going to ask you and any of the other
panelists if they had comments on how we try to find a proper mix of
licensed and unlicensed. I know you said that you\'d anticipated us
doing more unlicensed, but how do we try to do that and find that
balance as we proceed?

MS. RADCLIFFE: Just before they do, though, our balance \-- we were
thinking have we allocated too much licensed spectrum.

COMMISSIONER MARTIN: I\'m sorry. I thought I had heard that wrong
because I was surprised when you said there would be too much
unlicensed.

MS. RADCLIFFE: I would hate anyone in Australia to think I said that
because we are under pressure to, perhaps, get more unlicensed spectrum
as well.

COMMISSIONER MARTIN: Well, you distracted me with the \"get the hell out
of the way.\" I wasn\'t sure if they informed you about our recent
efforts on indecency and I was going to go get David Solomon, but that
probably distracted me. So I\'m glad you clarified that. No, I\'m just
kidding.

MR. KREIG: I\'ll try to answer, anyway, from a big picture perspective,
again, I guess, I would suggest returning to the market, see what people
want. See what people are asking the Commission, particularly, the
stakeholders who have had experience across the board in trying to build
systems. And what we try to do, representing both categories, is tee
things up for the Commission. And so the bottom line question is, I
would say there is a number of statements in different filings that
point to some answers. And one answer may be that it shouldn\'t ought to
be about how much spectrum does each group have, but is it being
regulated in an efficient way.

So, for many of our licensed members, they would say the big issue that
how much spectrum, in some ways, but can the regulation be cleaned up in
the case MDS and ITFS. They\'re not asking for more spectrum. They\'re
asking the Commission to, in a timely way, help them make the spectrum
they have be useable. That said, there are, again, pointing to surveys
that are done and from filings indications that more spectrum would be
helpful in license exempted services in the 3600 megahertz proceeding,
in the TD proceeding that the Commission has underway are excellent
first steps and directions we would suggest.

COMMISSIONER MARTIN: Rick?

MR. KUNZE: The spectrum issue is, obviously, a hot topic. But, if you
want to use a case example, right now I\'m spreading our wireless
footprint out for probably 50 miles in each direction from a central
tower, so it\'s a hub and spoke arrangement in to other tower sites.
Now, if I wanted place some 2.4 and some 5.8 OFDM stuff or something
like that, in 2.4, you\'ve only got three overlapping channels that you
know and you\'ve got two polarities. Well, it just so happens right down
the street I\'ve got somebody running a link up to the top of a
mountain. So vertical in that direction is shot. So that takes vertical
out of the loop for me in that direction. So, if you do the math,
you\'re down to less than a handful of available channels.

So, if I throw up four 90 degree sectors and use, say, 1, 4, 8 and 11 on
2.4, I\'m out channels on 2.4. If I wanted to place them 5.8, that uses
up 5.8. I have nothing for back hauls within reason. I mean, there are
others \-- I don\'t have any WISP competition to speak of. I\'ve just
got some use of a band, but you start running out of available channels,
if you will, fairly rapidly.

So that\'s why more spectrum would be, from my perspective, because I\'m
sitting here with all these other sketches that I\'ve got in this
notebook. I\'ve been trying to brainstorm exactly how I\'m going to lay
this out and there\'s a real shortage of available frequencies for me to
use because of overlapping and things like that.

The only other thing I was going to mention, though, is if, you remember
when we met a month ago, I mentioned that OTARD water tower comparison.
If we could maybe carry that one step further to \-- somebody mentioned,
I think this morning, but if the Commission could come up with some kind
of a template.

COMMISSIONER MARTIN: I\'m sorry. We talked about \--

MR. KUNZE: OTARD is an acronym, On the Roof Access Devices, I believe.
It\'s an FCC documents that preempts homeowner subdivision covenants
from making antennas on the roof illegal. So one of the obstacles I\'ve
had that have consumed the better part of the last eight months really
is trying to explain exactly what it is I\'m doing. When I approach,
whether it\'s a city or a private owner of a grain elevator or whatever,
when I approach them and ask them to enter into an agreement with me so
that I can put an antenna up there to serve another cell site, I\'m
inevitably left with the deer in the headlights look and they think I\'m
a telephone company. So suddenly I\'ve got deep pockets. That type of a
problem.

So I suggested that, perhaps, the Commission might look at something as
OTARD is to homeowner subdivision problems with the antennas. If the
Commission could come up with some kind of a framework whereby city
managers who don\'t understand this stuff, city councils, boards of
supervisors, things of that nature, they\'d have something to hang their
hat on. There would be an official template or guideline, maybe to
follow, to move forward. That could maybe even be carried one step
further to include a typical model of a network, maybe. I mean, maybe
not down to types of equipment, but how it looks so that cities could
have more to help them understand what it is that\'s about to happen.

Like I said earlier, it took me a long time to convince the customers
that broadband was something that was going to be important and it\'s
expedientially difficult to try to get a building permit to put 150‑foot
tower when you need a zoning variance to do so and you\'re talking to a
planning commission that hasn\'t got a clue what you\'re talking about.

COMMISSIONER MARTIN: Jean, I was going to ask you whether or not,
following up on Rick\'s points, whether or not you all try to address
the access to rights-of-way of property owners or how do you try to
address those issues when you trying out deployment?

MS. RADCLIFFE: The ACA doesn\'t get involved in that aspect. We try to
those sorts of things to industry to resolve itself. We do, from time to
time, hear, when we\'re talking to people in the industry, similar sorts
of experiences as you were saying. It depends, I guess, where you are
though. In our rural and regional areas, councils are very supportive of
broadband wireless roll out and are actually working in partnership in a
number of instances to actually roll systems out using licensed and
unlicensed spectrum and work with private companies \-- consortiums with
private companies and also using some federal financial assistance to do
that. But it\'s not something that the ACA does.

MR. KREIG: Can I pass along a compliment to the FCC that, in limited
instances, they have taken initiatives, including in this OTARD rule,
which helped give local providers a tool to use against unreasonable
local restrictions preventing the spread of internet access and we\'re
very pleased to have taken a lead from the industry side in working with
the Commission, in which about three years ago did create an important
advance in the United States against unreasonable antenna restrictions.
So it\'s a model that sometimes U.S. uses, but it\'s potentially very
important.

COMMISSIONER MARTIN: And I think what Rick was hoping for was to have
even more aggressive an extension into other areas beyond the local
zoning, but I appreciate the comments about the efforts we have made.

Scott, I know you talked about the key to points of more spectrum, and I
didn\'t know if you had any thoughts on how we balance licensed and
unlicensed, particularly, going forward.

MR. SLATER: I\'m not sure anybody has the answer, but there are two
other elements that are worth considering and one is bites for hertz for
second for user and the cost for megabyte. So you\'ve got to get over
the context of what the current market is capable of delivering and what
limits the growth of that marketplace.

COMMISSIONER MARTIN: Charles, I was going to ask you, you mentioned the
proposal or approach you might have soon of availing about ways to try
to take more advantage of 700 megahertz and the work that you all have
done to try to ensure that it wouldn\'t end up creating interference and
be able to have much more efficient uses of it today. I was wondering if
you could give us a little more insight into that and talk about whether
it was going to be a widespread proposal, whether it was going to be in
test markets, for example, and give us some insight, whatever you\'re
comfortable talking about at this table.

MR. TOWNSEND: Sure. I think our feeling is that we will take an
individual market and we will use it as like a test case to show what
the interference potential is so you can go and measure after we\'ve
done the test to confirm what our suspicions are. If that proves to be
as successful as I hope, we would then either ask for a broader ruling
or just add more markets.

I had one other comment on your license spectrum and maybe it\'s too
simplistic. But it seemed to me that the unlicensed spectrum makes the
most sense for indoor applications. It\'s contained. It\'s low power and
the licensed spectrum makes the most sense for outdoor application
because you want distance and building penetration. If you kind of use
those to run a metric, you would then say that, generally, unlicensed
spectrum should be over 3 gigahertz and licensed spectrum should be
under 3 gigahertz and that\'s because of the propagation characteristics
at that point. Obviously, the lower you go down on the spectrum totem
pole, the better it propagates. That would be what I would do if I were
in your shoes.

COMMISSIONER MARTIN: There\'s about 10 minutes left, so I did want to
make sure we opened up the floor to questions from anyone in the
audience, but, while anybody was thinking about their questions, they
can approach either of the microphones. But I also did want to make sure
I got the chance to ask if any of the panelists have any views of the
Homeland security issues that are raised in this and how the industry
views its role in supporting critical infrastructure and/or the Homeland
security efforts that are going on.

MR. KREIG: Well, within WCA, immediately after 9/11 I found myself on
the phone with one major provider wanting to donate equipment and the
phone rang and another major provider, they were Excel and Winstar, they
wanted to hope and, in fact, they did help a lot and just underscored to
me how wireless is as a critical part of this, both in public safety,
border patrol and military uses as well as disaster recovery. And so we
organized this phone tag into some immediate communications helping
situations, but in an ongoing effort.

And, in fact, at our convention two weeks from now for the third time in
a row, we\'re co-committing with the Homeland Defense Journal because,
basically, wireless broadband is such a key part of what government
procurement agents need that were bringing the communities together. So
there\'s lots going on and it\'s right on point with your question.

MR. TOWNSEND: One additional comment on this interference issue that I
earlier brought up. As most of you know, the Blue Book safety groups
have spectrum at 700 megahertz and it\'s also incumbent by broadcasters.
If the Commission were to permit adjacent channel operation on channels
above Channel 51 where we operate, 80 percent of the country could be
clear in at least 12 megahertz of spectrum. So public safety could get
on the air really quick if we\'re able to work this interference issue.

MR. KLANSI: Andy Klansi. It\'s a question of policy or some thoughts
towards policy. And, if we think about the way the current
infrastructure was built over the past 100 years and it basically was
built on kind of a regulatory environment that promoted risk adverse
because, basically, it was a business model that said you\'ve got a
certain hour life of providing universal service. And, if I listen to
some of the arguments about going with license spectrum, it sounds like
that\'s a risk adverse model and some of the bigger carriers and some of
the people that are used to that kind of model like that.

I hear the riskier side as being unlicensed spectrum, which a lower cost
entry, has some risks to it and, to me, from a policy, do we still look
at that basic, well, this is the way we\'ve done it in the past and
licensed is the best way to go and that\'s the way we do it. Or do we
take a step back and say let\'s find a balance between the two? And, I
think, Charles, you started to say even a simple template, fill the
boxes. Now I think though that template isn\'t really two dimensional.
It\'s three dimensional. Now you\'ve got to put the economic factors in,
but just a thought in terms of listening to licensed and unlicensed and
finding a balance because I think if you go to licensed, I think the
rural communities get left out.

If you go too much with the unlicensed, I think there\'s a lot of
technical problems with interferences and then you\'ve got to set some
rules, maybe standards committees could help make those rules better,
but then you\'ve got a problem with how long it\'s going to take the
standards committee to get through those rules. So just some thoughts.
I\'d like to hear your comments on that.

MS. RADCLIFFE: That\'s a balance that we grapple with or we\'re
grappling with it in Australia, which is how do we address the
particular needs of our rule in the rural communities and, at the same
time, preserve the kinds of arrangements that we feel work best for our
urban communities. I guess we\'re not thinking of it so much in terms of
risks, although that\'s an interesting perspective. But we\'re thinking
of enabling people to mix and match, depending on different systems or
different stages in their deployment. For example, on wired in
Australia, we tend to roll out first in unlicensed spectrum, but they
have licensed spectrum and that is part of their deployment plan and
they will get to that, but it\'s just not, at this point.

So I think, for us as a regulator, we\'re trying to look at what do we
need to do in both licensed and our unlicensed spectrum in the rural
areas to get out of the way, if you like, to make it possible for people
to deploy there. We\'ve looking at something that you\'ve done here,
which is relaxing power limits possibly in some of our licensed bands
because we\'re listening to what people are saying about the importance
of those for back haul.

I think it\'s horses for courses. We need to think of what each setting
was and then come up with regulations that are sensible in the current
settings.

COMMISSIONER MARTIN: Anybody else have any comments they want to make? I
see another question.

AUDIENCE SPEAKER: I\'ve heard a lot today about the value of goal, of
spectrum flexibility and market-based allocation of spectrum, but I\'m
really confused about what that means, not the abstract, but the
implementation details. And, in particular, does site-base licensing \--
the regulators knows that site‑based licensing with significant
technological restrictions qualify as a market-based strategy to
spectrum allocation? For example, two of the bands we\'ve had
highlighted today are the MDS/ITFS band and the 71 gigahertz band.

Now with the MDS/ITFS folks, they\'ve argued that site-based licensing
is terrible. We need geographic service area licensing and that\'s what
it means to have market-based flexibility. But, up at 71 gigahertz, the
13 gigahertz the FCC just allocated, they\'re we gone into an
extraordinarily narrow site‑based licensing approach where everybody
gets two spots and a connection. And there, that band that\'s the height
of market-based flexibility. So we have two completely different
systems.

On the surface, when you read most of the FCC procedures, you would
think up at 71 gigahertz, we\'re going back 50 years to command and
control. So I\'m just utterly baffled. I\'m not saying one is better
than the other, but there seems to be a radical inconsistent use of this
language of market-based in flexibility and I\'m wondering if somebody
can clarify what appears to be quite a discrepant use of that language.
Thank you.

COMMISSIONER MARTIN: Why is everybody looking at me? I\'m just the
moderator here.

(Laughter.)

MS. RADCLIFFE: I can have a go from out context.

COMMISSIONER MARTIN: I think the Commission has been struggling
valiantly trying to find the right balance when we\'re talking about
unlicensed and licensed usages, but what actually does it mean to
provide additional flexibility and trying to respond to those who are
trying to come up with innovative ways to use different pieces of
spectrum, but I hear what you\'re saying about the potential
inconsistencies in the approach.

MR. KREIG: Well, since we\'re a major proponent, probably the major
proponent to both of these cases, I\'m going to take a quick stab at
showing the actually consistency of that. In both instances, virtually
all of the people who are involved want the Commission to do what \-- in
the case of 80 gigahertz did and, also, in the case of MDS and ITFS,
having unified filing of the major stakeholders. And I think what that
illustrates is that this is not a kind of academic let\'s imagine how it
should be, but people of real world who are trying to make things work
will when, frankly, a lot of things have not worked and have gone very
badly because of theoretical constructs that somebody had an idea of and
it seemed very logical at the time.

I\'ll just take one example. Why not hand out licenses by lottery? It
seemed very fair at the time, but it created a black market. It created
chaos in the areas and some people went to prison over it because it
created incentives for illegal scheming behavior and, in these
instances, people are build successful networks and have come together
because of the different needs, the different markets of those bands.
They\'re totally different markets and customers and they have totally
different constraints. In the case of 80 gigahertz, this part I\'ll say,
is the U.S. Department of Defense shares of those spectrum bands and so
that was one of the major reasons for that licensing scheme that in the
time of war the U.S. Department of Defense has some concerns that
policymakers in the business community have to listen to it. So, again,
it\'s not only an exercise, it\'s what\'s possible.

AUDIENCE SPEAKER: You\'re not disagreeing that that does look like
command and control up at 71 gigahertz and there\'s certainly a lot of
reconsideration and requests that modify the rules which is a command
and control type of follow-up on the allocation. That was the question I
had.

COMMISSIONER MARTIN: Thank you. We can get two more questions, I think,
before our time is about out.

AUDIENCE SPEAKER: Commissioner, Rick, and Michael Anderson earlier, are
only two examples of what are thousands of wireless IPSs who have chosen
to take the risk and service areas where the big guys won\'t go and have
ample opportunity. One of the things that frustrates them the most is
that they\'re willing to get a risk example of having a limited amount
of spectrum available to him on an licensed exempt basis so he can
service those customers. And, yet, he\'s trying make a very effective us
of the 83.5 megahertz or 2.4 gigahertz, when just above there it\'s 190
megahertz, two times as much for him that\'s going completely unused in
his service. Yet, someone is holding a license for that, which,
apparently, has no intention of deploying its service.

If they had intended in deployed service base, they would have done it.
They would have started to realize the revenue. There\'s essentially no
penalty for spectrum squatting now. There\'s no, Andy referred to a
forced build out, but isn\'t there \-- doesn\'t it make sense that there
is some penalty for essentially spectrum squatting where you buy a
license for a spectrum on the premise that you would build out the world
for PCS as it exist.

COMMISSIONER MARTIN: The Commissioner has in the past had \"use or lose
it\" type of policies where they expect people to end up building them
and it\'s always a balance that the Commission is trying to strike at
what we should be trying to do in our policies.

AUDIENCE SPEAKER: I would suggest that the Commission consider some kind
of a petition arrangement where an operator like Rick could say, the
license is sitting there doing absolutely nothing. It\'s not servicing
the public good. I can take that license and get equipment. I can deploy
services. I\'m in the area. I\'ve got the financial backing. Why can\'t
I go and start using that spectrum since they\'ve essentially abandoned
it?

COMMISSIONER MARTIN: Thanks. The last question.

AUDIENCE SPEAKER: Thank you. For the gentleman that\'s fortunate enough
to hold all of the 700 megahertz licenses \--

(Laughter.)

AUDIENCE SPEAKER: I take a little exception, by the way my name is Carl
Stevenson, and I\'m speaking personally. I\'m not speaking for any of
the constituencies that I normally represent. I take a little exception
with your premise that unlicensed should be relegated up to into the
regions of the spectrum where it won\'t propagate very far and this goes
back to the WISPS and so forth. Where spectrum can be used I\'m sure
these guys would be able to provide even more economical service to
their customers in the areas where they\'re essentially the only game in
town if they had access to spectrum, which didn\'t cost them a fortune
to get into an auction that would propagate far enough if the cost was
low, 2.4 is a fair distance in certain types of terrain and other types
of terrain it\'s fairly limited and the lower spectrum like the
Commission is talking about where immediately relating the text of the
MPRM on this T.V. band sharing thing with a little bit of cognitive
radio technique. There\'s some spectrum there that could be very useful
for the rural areas. So, again, I take some exception with your concept
that everything below here where it propagates nicely should be licensed
and everything above should be unlicensed. I think it\'s another
question of balancing the interest.

So, if you want to react to that.

MR. TOWNSEND: Well, I can appreciate what you are saying. I mean,
historically, as you know, the rural area is the last areas to get any
type of technology innovation and the reason is because it\'s so costly
effective to do it. And, yet, there are people like Rick who are out
there right now doing it way before anybody else. So that\'s a balance.
I\'m with you. I don\'t think it\'s as black and white as I painted it.

AUDIENCE SPEAKER: Well, thanks for clarifying that.

COMMISSIONER MARTIN: Please join me in thanking all the panelists.

(Applause.)

MS. SEIDEL: Thank you, Commissioner Martin and thanks to each of you.

We\'ll have a break until about 3:30. So, if you\'ll come back at 3:30,
we\'ll begin. Also, the technology demonstration room will be opened
until 5:00 for those you that want to stop by between now and then.
Thanks.

(Whereupon, a short recess was taken.)

MS. SEIDEL: Folks, if you want to take your seats, please, we\'ll get
started.

COMMISSIONER COPPS: Thank you very much. Good afternoon. I\'m pleased to
welcome you all here today. I understand that today\'s conference has
already been an interesting one and a productive one, but I\'m happy to
tell you that we have saved the very best for last. Our final panel of
the day is entitled \"Looking to the Future\" and that\'s always more
fun.

Most of what you\'ve heard today is about what wireless broadband could
be, the potential of the technology and we all have high hopes in the
future this technology may bring some much needed competition to areas
where broadband is currently offered on a monopoly basis or maybe, if
we\'re lucky, on a duopoly basis. In the future, it could even bring
broadband to the huge floss of our country and to the millions of our
citizens who currently have no broadband at all.

In the future, we may no longer have to choose between mobility and
through put. Instead, maybe we can have both. So, like each of you, I am
intrigued and excited by the possibilities but what is going to happen.
So what I hope we can do with this panel is to kind of test the
potential that you all have been talking about today against this
panel\'s view of what is really feasible, what\'s doable and, also,
maybe what needs to be done to realize that potential. What does the
future really hold for wireless broadband? For example, while this
technology may some day provide substantial competition to DSL and to
cable, it\'s not doing so today. So we\'ll need to determine what needs
to happen that wireless broadband can maybe be an equal competitor to
these more established technologies.

The possibility that the same companies that dominate DSL and cable
today may end up dominating wireless broadband is also something real
and something that we need to confront. We need to understand the impact
that would have on deployment and innovation of wireless broadband.

Furthermore, our panel will discuss the applications that wireless
broadband innovators believe are most likely to drive deployment. In
addition, we have to understand the spectrum needs of the future, which
is an important part of any discussion. We must determine how to find
the path that gives innovators and consumers and entrepreneurs the
spectrum resources they need going into the future because if we fail on
that one, obviously, we run out of room or else we\'ll be left with
bands that are so crowded that interference will degrade reliability and
that will be that. So we have to succeed.

These are all tough issues, but luckily we have a diverse set of
industry experts here to guide us. We have six experts to serve as our
prognosticators this afternoon.

Martin Cooper of ArrayComm, Duncan Davidson of Sky Pilot Network; Gary
Grube of Motorola; Valerie Holt of Reciva; Jose Rodriguez of the
Hispanic Information Television Network and Sai Subramanian of Navini
Networks. Each speaker will have five minutes. At the end of the last
speaker\'s remarks, I\'ll ask a few questions and then we\'ll turn to
the audience. So I trust you all will have some questions ready.

Let me just introduce each panelist right before they speak and we\'ll
start with Martin Cooper, the Chairman of ArrayComm. I think you know in
the wireless communications industry. In fact, he conceived the first
portable cellular phone in 1973 and lead the 10-year process of bringing
it to market. During 29 years with Motorola, Mr. Cooper built and
managed both its paging and cellular businesses and served as corporate
director of Research and Development.

Upon leaving Motorola, he co-founded Cellular Business Systems, Inc. and
today he runs ArrayComm. Welcome, Mr. Cooper and you have five minutes
to get us started and sailing in the right direction.

MR. COOPER: Well, thank you, Commissioner.

And you\'re quite right. Wireless does not yet have a significant share
of the broadband marketplace, but Wi-Fi and Cellular Data have given us
a little bit of a taste of what it\'s like to get a broadband signal
with the freedom of being unleashed from our desks and from the wall.
And, as your previous speaker mentioned, in Sydney today, there is
actually the full wireless broadband at where people can take a PC card,
plug it into a notebook computer and literally move about the city
always being connected with broadband and at very, very low cost and
that is the image that we have for the long-range future because we
believe that people are fundamentally mobile.

People start moving when they wake up in the morning and they keep
moving all day long until they go to bed at night and some of them keep
moving even thereafter. So I do take issue with the very first comment
that I read in the questions that were postulated for this group that
broadband wireless is an alternate technology. It really isn\'t. It is
the basic technology. We prove that 30 years ago when we introduced
cellular. Half the telephone lines in the world today are, in fact,
wireless. So there\'s no question any more that being used to the wall
\-- the only people that believe that you have to be are those that can
only provide you that service.

But even cellular is not finished yet because, even though half the
lines are wireless, most of the phone calls in the world today are still
made over wires. Somehow we\'ve got to fix that and there\'s still a lot
of penetration to happen. And then we have this new service that\'s come
along that\'s called the internet and the same thing is exactly true as
was true for voice some 30 years ago. There absolutely no reason why
somebody should be leashed to a wall to get internet service, just as
there was not reason for them to be leashed to a wall to get voice. Some
how or other we have to give people the freedom to use the internet
without being plugged in.

And, when that happens, when you can do that with very low costs and,
when you can do it with broadband always on service, we\'ll find that
there are a huge number of applications because the internet, we already
know, has the ability to educate people, to improve productivity, to
entertain them, to improve their safety, to improve convenience. But it
has to be a low-cost system and, above all, it has be spectrally
efficient. Because the fact is that if you look at all the potential
applications, namely, finishing the job of cellular, introducing all of
these new services that the internet offers, plus a whole bunch of other
ones in public safety and other areas and you use the existing
technologies, you discover an amazing thing. There is not enough
spectrum, even if you took all the defense spectrum and all of the
spectrum away from the T.V. broadcasters, and, of course, we\'ll never
see that, you still would not have enough spectrum to perform all these
services. So something has got to change and that change is a better use
of the spectrum and this is a major challenge for the Commission and for
the Senate because there are two real serious problems. One is spectrum
hording. There are all kinds of people that own spectrum now that hold
on to it waiting for the spectrum to become more valuable or waiting for
some use that they might want to put it for or maybe just keeping it
just to keep other people from getting it.

And the second one is there must be a way that the Commission can
require people to use the spectrum efficiently. The fact is that
technology has improved the ability to extract value out of the
spectrum, improve the ability to conduct the increasing numbers of
telephone calls, increasing amounts of data by a factor of every two and
a half years for over 100 years. And those of you that are
mathematically inclined can work that out and it turns out to be a
trillion times improvement for some services in the ability to use the
spectrum over the last 200 years.

And then we take a look at some services, and I guess I have to identify
the broadcast industry. It went for a period of 50 years with no
improvement whatever. There must be a way that the Commission can take
this extraordinary public resource, the spectrum, and get control over
it so that we, the public, can benefit from it. So I think I\'ve used my
five minutes and thank you very much, Commissioner.

COMMISSIONER COPPS: I think you\'ve opened up some good areas for
questions that we\'ll return to. I\'ll have a few and I\'m sure there\'s
many more from our audience here. Thank you very much.

Our second presenter is Duncan Davidson, the venture partner of Vantage
Point Venture Partners. Previously, he was the founder and senior
executive at several startups, including Sky Pilot Network where he is
chairman, Intertrust Technologies and Covac Communications. Sky Pilot
Network, as many of you know, provides broadband wireless access
systems. We\'ve very glad to have you here, too. Thank you.

MR. DAVIDSON: Thank you. And I must say I was thrilled to here Chairman
Powell\'s opening remarks. He hit the nail on the head. The problem is
creating a third pipe or a fourth or fifth pipe. I\'ve spent most of the
last 15 years working on the problem of a third pipe. I worked with five
phone companies in Disney trying to create Americast, which was an
attempt to create a broadband system replacing copper that fizzled. I
worked with Hughes after direct T.V. on Spaceway, a two-way satellite
system which they haven\'t launched.

I worked with a group at AT&T, which is now a part of Lucent, on what
should they sell to local phone companies in the future? What\'s the
future network and we came up with a wonderful approach, you might think
of as deep fiber. It wasn\'t bought. I was giddy with delight when the
\'96 Act came down. So thank you for the people here that contributed to
that and started Covac. And Covac went a long distance but that, too,
didn\'t every achieve the goal of becoming a third pipe.

So, in 2000, I set down with some people and took a new look at this.
What would be the requirements to get there. What would the third part
look like. So this is what we found out. First of all, it would be
wireless and the most obvious reason is economics, but the second reason
we\'ve heard today from several people, including Marty, consumers
treasure mobility.

Now the great insight here is that, if you think about the cell phone
\-- you\'re all cell phone users. It turns out, statistically, 25
percent of the time you\'re in an office next to a wireline phone.
Thirty-five percent of the time you\'re home next to your phone. Sixty
percent of your usage is next to a wireline phone, but you like this
better. Of the remaining 40 percent, 20 percent is in a venue somewhere,
an airport, for example where you\'re walking and not in the car.

So we then decided the second part of this is the fixed wireless system
we need to build must cover both fixed and mobile uses, but mobile is
nomadic. We don\'t have to build a system to cover people driving a car
80 miles an hour. Because, when you do that, the tradeoffs you create
orphan or create the fixed side of the service.

The problem we looked at is energy dynamics and there\'s been talking
about this today. If you look at the fixed wireless license bands, the
L&DS bands, all the major carriers went bankrupt. All the major
suppliers either are crippled or they also went under. You look at the
MMDS bands. We\'ve heard talk about this. It basically lies fallow.
It\'s not being used. I\'m delighted that Nextel found a way to buy
about half of it and is going to look at Clarion, but it\'s basically
empty spectrum at the moment.

When you look deeper into it, you also find another problem. This is me
talking from a venture capital point of view. If you create a new
service to go through a carrier, take the carrier selling data services
here, it\'s difficult. You have to go to every one. Every one puts you
through a number of paces. Every time you end up with it, you have
something tweaked and fussed for that particular carrier. If you try to
launch something worldwide at scale, it difficult to coordinate over all
the people you\'re dealing with.

To put it a different way, coming from the Silicon Valley point of view,
the carriers tend to build prodigy. They tend to build a wall garden and
we saw with the internet that when the world wide web occurred and we
opened up the standards, that\'s when the wealth creation actually
occurred. So the requirements we ended up with were a wireless system
that would handle fixed and nomadic, but compete with fixed. That would
be in an ecosystem that which supported the internet type of ethic as
opposed to a traditional carrier ethics.

Now it turned out that ecosystem was evolving at this very moment, 2000,
which was called Wi-Fi. So we started Sky Pilot to see if we could
actually build what a lot of people in this room probably believe is
infeasible, a carrier grade system, a third pipe outdoors, using \$5
chips, the ecosystem of Silicon Valley using Wi-Fi. We concluded that
there was a fourth element to make this work and it\'s a different
topology. The topology that Marty pioneered in the cell industry and is
working on with ArrayComm is point-to-multipoint, big base station, a
lot of people around it. That is risky in unlicensed bands because of
interference.

So we looked into this and decided that a meshed topology is much
better. In fact, a mesh is the right topology for unlicensed just as
point‑to‑multipoint is the right topology for cellular use. In a mesh
system, all the major units talk to all the other major units. You have
multiple pathways in and out of the unit. Now, as a consequence, if any
particular direction is blocked because of interference, you can always
route around it.

And it has another wonderful attribute, in that, if you design a mesh
correct, as you scale the density, you can decrease the size of coverage
of each one of the little mesh units. As a consequence, it organically
scales to very high levels of density by creating, in effect, pico
cells, and it solves the problem Marty said is how do you use a
spectrum. We\'re going to use it all up if we try to put people in it.
Well, you can reuse the spectrum if you shrink the size of the
interference or the signal you\'re dealing with.

So, at the moment, Sky Pilot is about to launch equipment. It\'s been
doing data testing and the good news is it appears to be achieving the
goals we\'ve set out. It\'s targeting 3 megabytes and up service per
users. So it\'s above where DSL and cable are right now. It\'s got price
points that are very low, under \$10,000 a square mile to start ramping
up a city or an area. It\'s able to go non-line-of-site a fairly long
distance even before you add in the hopping. And, with hopping, you can
go a long ways non-line-of-site because you simply hop, hop, hop through
the units.

The company\'s getting somewhere between two or three, even four miles
in some places through clutter and, in tree lands, suburbs where most of
us live, it\'s getting half a mile to well over a mile going through
trees, using extremely inexpensive equipment. So my recommendation to
the Commission or the policymakers here is this experiment that was
started, unlicensed bands, let it continue. Don\'t change the rules. Sky
Pilot and others will give you an example. We will try to show whether
you can actually trade a scalable carry rate systems on licensed band
and change the dynamic of the industry. Thank you.

COMMISSIONER COPPS: Thank you. Appreciate it. Our next speaker is Gary
Grube and I apologize for the misstatement of your first name on the
card there, but I think most people here know who you are.

Gary is a corporate vice president of Motorola. He\'s the chief
technology office at Motorola\'s Commercial Government and Industrial
Solutions Sector. In that role, he directs research, early development
and business strategy formulation with a focus on advanced Homeland
security communications and information solutions. He\'s a board member
of the Motorola Science Advisory Board. In 1994, he was named a Dan
Noble Fellow, which is, as many of you may know, is Motorola\'s highest
award for technical achievement. He\'s authored more than 100 technical
papers and he holds a lot of patents and we\'re delighted to have him
here with us this afternoon.

MR. GRUBE: Thank you, Commissioner. It\'s a pleasure for me to be here
and to represent Motorola in this discussion. As you know, we\'re both
an equipment provider and a solutions provider in a lot of areas,
including today\'s cellular and also broadband and some of the emerging
technologies.

I\'d like to make two major points. The first one is about technology
and the next one is about some actions to go forward. The first
category, we\'re really on this cusp of a see change in terms of
technology that will enable pervasive broadband to the individual and
that\'s a common theme that\'s been coming up there today that I think
is very important. It\'s not just fiber. Yes, we need that that. It\'s
not just 3G. Yes, that has a place. And it\'s not just Wi-Fi. But really
can wireless, the challenge for wireless and for the technology is can
it address what we call the triple play in the industry \-- voice,
internet access and entertainment? The answer is yes. The technologies
are here now.

We really want to focus this wireless solution, not only fixed but at
mobile and portable, nomadic and truly mobile over time. And I
understand the comments about do we need, and I\'ve asked this question
every time I\'ve talked to customers and carriers, is what\'s the
business case for the family to receive a megabyte while they\'re
driving down the road on the expressway? That\'s a tough one to find. I
think in the area that I focus my day job on in terms of public safety
there is a use case there. There is motivation to have that kind of
service and we\'ve always been a leading indicator of some of the
heavyduty services. Push-to-talk has been around for 60 years or
something like that as a service.

Just recently in the last 10 and now just the last couple of years,
it\'s really becoming very a popular service on carrier networks. So the
applications that we see in public safety in the trials that we have
done there really indicate that pervasive multimedia broadband to the
person, to the individual, even in a car at 60 miles an hour, is just
going to be a matter of time.

You know there are relevant standards that are emerging and technologies
that come with them like 802.16 that\'s been mentioned, 802.20, 802.11
and I think that it\'s really not so much a question of which one of
these is going to win or is the right one. There\'s no silver bullet.
It\'s really going to be a hybrid of these things and it\'s going to be
a hybrid of these emerging technologies in conjunction with the stuff
that we have today. We have a lot of capital. We\'ve got a lot of things
deployed today in our 2G and 3G networks. So the real innovative
operators and private entities are going to find combinations of these.
They make a lot of sense.

When I think about the enablers for this space and for the mobile
broadband and getting to the person, it\'s cost-effective spectrum.
It\'s the emerging standards so that we have an ecosystem and it\'s
smart technologies. We heard that term mentioned earlier today, the
adaptive modulations, the smart antennas, absolutely, seamless mobility
is a term that\'s used in conjunction with moving between multiple
networks. Software defined radio, in the beginning at least, offering a
hardware platform so that handsets and solutions can access multiple
bands and multiple access technologies. In time, we\'ll get to the
cognitive \-- our view, cognitive radio, which is on top of that
software to find platform. You will be able to smartly pick which
network that you use, maybe even negotiate the best way to spot when you
push the button.

Ad hoc and mesh architectures absolutely are very important as well and
they will have their place in the ecosystem under certain circumstances
to get broadband out to the individual. And then new business models.
We\'re certainly hearing a lot about that today and I think for a lot of
people their eyes are opened in terms of there are places to make money
in this business were there aren\'t a lot of people and it takes a lot
of innovation and guts to go do that. So that\'s really the technology
statement that I have.

And then, number two, in terms of how we can go forward. I think the
goal really, and since this panel is talking about the future, we really
ought to have some goals that say how do we supercharge U.S. economy by
using broadband to the person and I think there\'s absolutely a link
between those two things. And so, remember, focus to the person no
matter where they\'re at. It requires many technologies and it
absolutely requires wireless because that\'s the only way to get to the
person.

There\'s a lot of new competitive categories like voice-over IP. In some
cases, they\'re going to find new customers for the incumbents that
aren\'t deploying it right away.

In terms of spectrum, I do have a couple of comments about that. We do
need to balance the unlicensed allocations with more, in general, would
be my observation, with licensed segments to promote kind of the carrier
grade services to provide many segments and including public safety.
This one has not been mentioned, as far as I know today, with much
needed spectrum that they need for many reasons.

The U.S. is actually a leader in allocations for public safety, spectrum
allocation. They should be proud of that. The most recent is at the 4.9
gigahertz band. 4.9 gigahertz, we know, is kind of a local area
solution. It\'s broadband for sure and it will reuse technology from the
nearby 5 gigahertz spectrum to make it economical. But there\'s really
no wide area broadband allocation for public safety yet. There is some
allocation at 700 megahertz for what we call high speed data or wide
band data, but it\'s really not broadband and it\'s incumbered by the
T.V. stations. As a matter of fact, if we do the math on those
allocations for public safety, that 24 megahertz, 5 percent of the
nation\'s T.V. stations are blocking use of those channels where 54
percent of the population is and there are a lot of public safety
agencies that want to get their hands on that just move their systems
forward for voice and some high speed data.

But, in addition to that, I would add some more concrete goals in terms
of what we should do for spectrum and to have a voice for public safety
in this discussion as well. And that is, we should look to \-- and,
again, we\'re the future panel, clear the entire 700 megahertz band. Let
me start with that. With an immediate emphasis on that 24 megahertz that
was allocated back in 1997 for public safety, but not cleared. We need a
date certain resolution to effect that and we need legislation to help
that.

Point no. 2, we need to allocate and then clear an additional 30
megahertz in the 700 megahertz band to provide protected spectrum for
wide area public safety broadband. Yes, absolutely, 700 megahertz has
been mentioned several times as kind of sweet spot for propagation. It
sure is and, for public safety, it makes a lot of economic sense, too,
because at that band they can afford to deploy a network that meets
their needs. One of the things we always talk about is should public
safety use public networks, the carrier networks and they do sometimes.

If you\'re talking about day-to-day, mission‑critical operation, they
have proven time and time again that the best way to do that is on their
own private network because they can tailor the coverage and they can
put the features and access controls and reliability in it that they
need.

If you take a look last year when we had the unfortunate blackout in the
eastern United States, something around 50 percent for a rough number of
the carrier sites were down. That\'s not a real good solution for public
safety, especially, at those times. Economics just don\'t justify having
the type of network for the average consumer to meet the occasional
needs of the public safety users. So private spectrum for private
networks really go hand‑in‑hand. And then I think that there is also
room \-- point no. 3, expect them to allocate additional licensed
spectrum for the broadband service providers. They really do, in some
case, absolutely can enjoy unlicensed spectrum and that makes a lot of
sense. But, when quality service is on the line and you\'re in the urban
jungle and you\'ve got a lot of users and we\'ve looked at a lot of
users using 2.4 gigahertz and every week they\'ve got to turn an antenna
or this or that and licensed certainly is a way to go.

Then I\'ll wrap up with why don\'t we look for ways to have some
partnerships with government and industry to do some major trials to
really bring some of this under focus. I can think of four ideas. One is
the broadband neighborhood for the consumer in the small enterprise; no.
2, the broadband enabled public safety first responder being transformed
with broadband into the first preventor; point no. 3, broadband enabled
highway system and intelligent transportation.

While we\'ve had a chicken and egg problem with ITS for quite a while
and I think that if we look at broadband as something that can really
unleash the power of what we could do with our highway systems to
improve safety and to improve the GDP once again of less time spent in
cars. No. 4 then and the final point, the broadband enabled wireless
workers. So I want to thank the Commission for this opportunity and I
look forward to the panel discussion.

COMMISSIONER COPPS: Thank you. Very interesting.

Valerie Holt is next. From 1995 to 2000, she was managing director of
PSI Net U.K. Prior to joining PSI, she worked for I2 Limited, which was
a Cambridge startup company producing investigative software for police
and customers and forensic accounting. Today she\'s a consultant,
advisor to the internet in a number of high tech companies. Currently,
her principal interest is, I think, Resolvable Aluminum, which is a
startup company that develops internet radio technology.

MS. HOLT: Thank you. Yes, and continues the tradition started in the
\'20s of radio. I must be careful not to call it wireless. Radio that
was developed, first of all, by Thorne and Cambridge. I feel a little
bit similar now. I don\'t know how I felt in the mid-\'90s when the
internet was really just beginning in the U.K. and it seems a little bit
as if wireless broadband is doing the same now for the internet that the
internet did for the telecaves in the \'90s.

I think the difference that will protect our futures is that the
mistakes that we made in the financial days, I don\'t will repeat
themselves this time around because I think the financial and economic
maturity of our whole industry will protect us.

What I think we\'re still weak on is understanding exactly why,
certainly, in the U.K., 50 percent of the population still is not
internet‑enabled. Now I think Paul Berriman earlier on gave you the
figures that 55 percent of the U.K. population is enabled to the
internet, but only 10 percent of it is broadband enabled. And what we at
Reciva have been thinking about really was, what about the other 45
percent or, indeed, what about the other 90 percent? Why has it not been
appealing enough or attractive enough to draw in subscribers, even if
they could be connected? And we came up with a fairly simple analysis
which pointed out that the applications that were available were neither
relevant nor inclusive to the people who hadn\'t taken up the
prescriptions.

And so we then started to look at these groups of people and asked
ourselves why? Well, essentially, a large number of them were too far
away and wireless broadband will certainly enable us to address that
sector. It was too expensive for others and I think our fears are
probably in pounds as yours are in dollars and the utility of our income
is somewhat different to yours because you tend to have more \-- a
higher percentage of your income is disposable, is disposable at your
discretion where a much lower proportion of ours is at our discretion
and the cost is huge.

And, again, if we do have competition with the wireless broadband
providers, certainly, as Paul postulated this morning, that will drive
the price down so that the price becomes within the range of the people
who are currently outside. So, if you\'re in an urban area and having
broadband, you\'re probably paying about a third of what you would pay
in a rural area and that, of course, makes it an uneconomic proposition
for most people.

The other group that we discovered in the U.K. that had been largely
untouched, as it were, were what we called displaced persons. Within the
U.K., a population shall we say of around 55 million, somewhere around 5
million are people whose native language is not English and who hasn\'t
got a permanent abode so that they\'re not having a subscription in
their native language. Equally, about 10 percent of our U.K. population
is currently permanently or semi‑permanently overseas. So that gives you
10 percent of the population, possibly, that we could address if we were
in a position to find an application which would appeal to displaced
persons.

So we have identified displaced persons, we have identified people who
were too far away and we also identified, sadly, the sector of the
population which Tom Peters amusingly calls the sector of the population
that are interested in the color of cars.

(Pause.)

MS. HOLT: In 1998, I went to Tom Peters presentation and he spent 20
minutes outlining the socioeconomic group who were impressed with the
color or cars and who decided 54 percent of the decisions with regard to
the purchase of cars. He then went on to discuss a large number of other
things that they controlled and nobody in the room guessed that this
was, in fact, women over 45.

Ladies, I\'m here to tell you wireless broadband and the kind of
applications that we\'re looking at are directed towards women and they
are easy to use. They\'re user friendly and they allow you to do what
you want to do where you want to do it. So I absolutely agree with the
notion that the applications that will gather momentum as we go forward
will be applications that are mobile enabled. Again, it\'s greatly
facilitated by wireless broadband.

So, by turning the economic model on its head somewhat and asking
ourselves why do the people who are not connected, why are they not
connected, we actually came up with a product that is actually an
internet radio, which is easy to use and it address the mobile issue. It
address the language issue. If you happen to French, you can listen to
French radio wherever you are in the world and that\'s the kind of
application that we are hoping to develop and that we see markets for
with the help of wireless broadband. Thank you.

COMMISSIONER COPPS: Thank you very much.

Jose Rodriguez is the founder and chief executive officer of the
Hispanic Information and Telecommunications Network, which is the first
and only Spanish language public television network in the United
States. Established in 1981, HITM is a private, nonprofit organization
and it has three major operating divisions. HITM T.V., the only 24/7
Spanish language channel that educates and empowers and enriches
Latinos. HITM, the provider of broadband internet access services
through satellite and wireless telecommunications and the HITM Spectrum,
the largest holder of ITFS instructional television fixed service
spectrum.

Mr. Rodriguez\'s work is aimed toward creating a national
telecommunications network that will fill the growing need for
educational, instructional information and cultural programming for the
Hispanic community.

MR. RODRIGUEZ: Thank you for providing me the opportunity to participate
here today in this forum.

My name is Jose Rodriguez. I\'m the president of HITM. HITM is a
nonprofit organization whose mission is to advance the social, economic
educational aspirations of Hispanics in the United States and Puerto
Rico. As Commissioner Copps, indicated, we are the largest licensed IT
holder in the country and thanks to sound FCC policy and technology we
have been able to create the first PDS like Spanish language network to
other countries as of June of \-- next June 1st, we will be reaching,
hopefully, about 35 million households throughout the United States,
making us the largest cable network in Spanish in the United States.

It is a pleasure for me to be here today to discuss how HIP and other
ITFS licenses can play a part in the roll out of wireless broadband
services in this country, especially, to underserved populations and
meeting those educational needs. I have been involved in the
telecommunications industry for more than two decades, since 1983, when
we first applied for our first ITFS frequency.

HITM has committed substantial resources and time over the years to make
sure that educational spectrum is preserved for educators and to create
and promote the educational usage of this spectrum. HITN has been a
leader in developing ITFS for broadband educational usage. In January
\'03, HITN, in conjunction with its commercial partner, Clear Wire,
rolled out a broadband wireless trial in Jacksonville, Florida. This
system is operating on two ITFS channel groups licensed to HITN and to
the Duvall School, respectively, in that market.

We\'re excited for Clear Wire to complete plans to scale that trial to a
full marketwide deployment so HITN may begin to serve in the educational
and larger nonprofit community in Jacksonville and we are aggressively
moving into new markets. In fact, today HITN is filing with the
Commission a request for a special temporary authority to construct a
system in Four River area of Providence, Rhode Island to test and
promote to the educational community the next generation of wireless
services.

We have received significant interest from educational institutions in
Providence for the problem‑plagued portable broadband wireless internet
access that HITM would be providing there, including other services. We
expect to have service up and running before the next school year begins
so the schools in Four River may be some of the first in the United
States to enjoy and appreciate these new services.

My message to the Commission today is that HITM is fulfilling the
mission of addressing the educational needs of Spanish-speaking
Americans and delivering the reality of broadband, using the spectrum to
serve the underserved populations, many underserved populations in this
country. The 2.4 gigahertz spectrum that HITM utilizes can be a fertile
ground to the deploy wireless services and achieve universal broadband
and also a competitive environment. For this to occur, it is imperative
that the Commission do the following: first, it must continue to
permitting flexible use for assisting licensees to utilize new
technologies and to establish partnerships to utilize these spectrum for
broadband deployment; number two, provide licensees an opportunity to
deploy new broadband uses on spectrum not effectively used under the old
rules; third, minimize the ability of some licensees to delay the
introduction of new services by other licensees through regulatory
gainsmanship; and four, and last, not to permit this spectrum to become
embroiled in litigation and delays that will impede the deployment of
much needed broadband services. Restricting existing license holders
from utilizing new technologies or reclaiming the spectrum for a later
auction would thwart and undermine the potential of the ITFS spectrum
for wireless broadband services.

Auction of ITFS spectrum should only be conducted to dispose of mutually
exclusive application and participation should be restricted to the
regional ITFS applicants.

As the Commission continues its evaluation of the 2.5 gigahertz band in
their RNPRM, I hope that the Commission appreciates the contributions
that ITFS licensees can provide to roll out wireless broadband services
in the future. Communications policy in our country has always
maintained a commitment to serve education and the public interest. We
hope that this Commission adheres to these principles.

I would like finalize by saying that if we get flexible use \-- we
aren\'t allowed to provide flexible use in this spectrum. That\'s one of
the things we want. We don\'t want auctions because that will certainly,
most likely, create litigation. We want to provide services immediately.
The technology is here. We want to have an opportunity \-- this spectrum
could be part of that third wire that we\'ve been talking about.
Educators in this country, like us, no commercial educators, we like to
participate and we are ready and willing to do it and we would like for
the Commission to help us do it as quickly as possible. Thank you.

COMMISSIONER COPPS: Sai Subramanian is next. He is the Vice President of
Product Management and Strategic Marketing at Navini Networks. He
previously worked at Nortel Networks in areas including technology,
development and marketing and business strategy, network evolution and
customer planning and Sai currently serves on the board of directors of
the Wireless Communications Association. Pleased to have you here.

MR. SUBRAMANIAN: Thank you, Commissioner.

As the last speaker, I can either try to be captivating or brief. I will
chose the latter.

(Laughter.)

MR. SUBRAMANIAN: I don\'t think I have tremendous amount of sage advice
that is has not already been dispensed of some fantastic new insight
into what will make wireless broadband in the future. I, like most of
the other panelists, believe that that is, indeed, the future. So the
few minutes I have I\'ll take in describing how it is now for us at
Navini.

We\'re a four-year old startup up in Texas and, for me, the journey
started in late \'99, early 2000, when a VC friend of mine from Austin
Ventures asked me, hey, I\'ve got this crazy professor out of U.T.
Austin who claims all kinds of crazy things. You want to go check it
out? So this is the middle of summer in \'99 when I went down to Austin
in a wild ride in a camry and a bunch of chigger bites later I was
holding a laptop in a car that said we\'re eight miles away from the
tower and I got all this crazy technology, smart antennas, TDD, this,
that and the other and you can get broadband wherever you go. So I said
this is kind of cool and I did a little bit more investigation and
decided to sign on.

And starting from an office that had only one cordless phone and we had
a two-hour debate over whether we should buy another cordless phone to
where now we\'re a company with about 115 employees with offices in a
bunch of different places, Asia, Europe and equipment in 25 countries.
We\'ve quadruples shipments from 2003 to 2004 and I\'ve seen some pretty
amazing things. When one of our customers rolls out a network in
Holland, they had people waiting outside at night to get the service the
next morning. They put up one base station and in one hour they had 400
subscribers, one hour. That\'s a part of wireless broadband that\'s plug
and play, mobile, portable, doesn\'t require anybody to go do
installations, et cetera. So that\'s what we\'re seeing.

We have national networks roll out by customers, starting in Australia.
If you go to Panama City now, you can get NUF. In Holland, you can get

broadband, a number of places in the U.S., both in unlicensed and
licensed bands, using Navini. There\'s a lot of standardization activity
starting in Wimax and industry standards where we\'ve already
standardized some of the stuff. So this is very, very exciting for us
and for the industry. As always, there are some fundamental technologies
that are at the core of this and some of the FCC folks have talked about
\"way cool\" and \"interesting\" alternative technologies, smart radios,
et cetera. So, obviously, CTO at our forum and a number of other forum
have done some tremendous advances and the technology we believe is here
and we are seeing that in commercial attraction now and we have an
interesting experience with FCC in certifying our gear in the unlicensed
band. It was very educational, very rewarding and took a while. It two
years for us to get out of Code and Certified, but it was a very
educational experience. I believe, actually, this thing in the United
States for the sort of advances in how the regulations get applied, how
spectrum policy gets decided is necessary. But one thing is certain this
is happening and one way or the other this is happening and we\'re
seeing it everyday. Thank you.

COMMISSIONER COPPS: Thank you.

Let me just start off. We\'ve heard, I think, several recommendations of
what needs to happen to make this a reality. But we have a hard time
around here doing one thing at a time sometimes, leave alone all these
multiple things. If you folks had to choose one factor that really would
be the most important to the successful deployment of wireless
broadband, what would that be and let\'s not limit it just to the
regulatory, but just economic or technological or regulatory, just help
me get a sense of priorities for I need to view what needs to be done.
We\'ll start with Martin.

MR. COOPER: The biggest challenge, even though you told us not to start
with regulatory, is spectrum and the nature of the way in which the FCC
allocates spectrum always has the spectrum going to people who have a
lot of money. And, generally, this turns out to be the establishment.
Some how or another, there must be a way to get some segments of the
spectrum available to innovative applications, innovative technologies,
different ways of doing things. Because we to be lot of spectrum because
one of the issues that several of us have brought up is spectral
efficiency and, if you are spectral efficient, you can get a lot out of
a little bit of spectrum. But some how or another, there has to be
spectrum available for these innovative approached.

COMMISSIONER COPPS: Duncan?

MR. DAVIDSON: I would say keep the unlicensed experiment going. Don\'t
change the rules. Let it play out and let\'s see where it goes.

COMMISSIONER COPPS: Okay. Gary, also known sometimes as Greg.

MR. GRUBE: Yes. That\'s my brother. I\'ve got to come back to spectrum.
I think I made a pretty strong point about that for public safety and
they deserve, don\'t have, wide area of broadband spectrum. We\'ve done
some trials with them. I think they can show the rest of the nation.
They can show consumers, carriers what the power of broadband out to the
person can be. We\'ve seen it and we\'ve done the trials with them and,
once they get a taste of it, they don\'t want to go back. But there
really isn\'t the key ingredient there yet to do that. So, when I
mentioned a 30 megahertz block, that was, in part, for broadband and, in
part, for interoperability, federal, state and local. But a lot of these
new technologies, they require 5 megahertz channels and that is a
foreign language to public safety today. So it really does take
something new. But I think that they can show the nation what can be
done with that.

And, as well, they\'ve a tendency to buy emerging technology, reachout
technology and at a premium to get the features that they need. So I
think that while the industry may be higher on the cost curves right now
with a lot of things pegged into it, that\'s a space that can help move
it along.

COMMISSIONER COPPS: Good. Thanks. Valerie?

MS. HOLT: Well, I think it\'s important to stay aware and wait through
things that are new and possibly look a little bit wacky, if that\'s an
expression that I can use, so that you can include other groups that may
otherwise may be ignored or that haven\'t got a voice. So I think trying
to stay aware of niche groups that are, perhaps, niched within a
country, but not be nished in a global base.

COMMISSIONER COPPS: Who are some of these groups?

MS. HOLT: Well, I\'m thinking particularly of the group that we
discovered almost by accident. The people who are constantly on the move
and, as such, normally disenfranchised because they normally aren\'t
there long enough to vote and they possibly speak a foreign language.
And it also verges on some of the things that you\'re talking about. But
the reality is that our populations are not homogenous and we can\'t \--
I mean, certainly, even in the U.K. we tend to think about population as
a homogenous group and we look at the U.S. with what we thought was a
homogenous group 10 times bigger. But the population is not homogenous
and those small groups cannot justify financially the kind of services
that they want. So I think staying aware is good.

COMMISSIONER COPPS: Thank you. Jose?

MR. RODRIGUEZ: I wear two hats here. One as an educator and one as an
Hispanic American and I would like to say that, as an educator, we need
for the Commission to continue having educators the run of their own
spectrum. We cannot have this spectrum to be reallocated or auction away
because that would invite, immediately, litigation and that will delay
the broadband development, which is the main thing that we want. We
believe that by having the broadband capacity to bring new services, not
only the educational system will benefit, but also underserved groups as
my colleague here very well mentioned, will be able to use this
technology to address some services.

Let me give you an example, for instance, when you look at the wire
industry, it has been very easy to redlight a number of areas,
especially, in the urban market. Wireless, if anything, provides an
opportunity for the spectrum to get everywhere. Redlighting is not
possible and we\'re looking already at ways to reach unreachable
segments of our community as Hispanic Americans that we have not been
able to reach before so that we\'re reaching for it, at least, other
traditional technologies. So now is the opportunity to do it quickly
because the opportunity is here. The technology is here. So the
Commission to deliver the policy and do it quickly is something that
will help us a great, great deal.

COMMISSIONER COPPS: Thank you. Sai?

MR. SUBRAMANIAN: I\'ll start at the economics. At the end of the day,
there is a consumer that has a certain amount of discretion of the
income. He or she does not care if it\'s wireless or a bunch of donkeys.
They have broadband. So, if you look at wireless broadband or any other
means of delivering broadband or any other services, you have three
things you\'re looking at \-- convenience, price and quality. You have
to find the right point in that triangle. As long a wireless broadband
delivers like \$90 a month only 5 megahertz or two cents a megabyte,
whatever, it will remain in these technology.

Now a whole bunch of things contribute to that. Some of it is
technology. Some of it is regulation. We believe that the technology
piece of the puzzle has been fundamentally solved by a number startup
companies, ourselves and a bunch of new innovators. Now the next
question is how do you unleash that? What we have seen, at least, in a
number of countries outside right now is as soon as some rationalization
of spectrum happened, we were able to unleash it immediately. In the 3.5
gigahertz spectrum, for example, there are efforts underway now in the
U.K. There are efforts now underway in Australia for wireless broadband
networks that could very well be national in scope and, at least,
starting as regional networks.

In the U.S., the innovation has been around unlicensed bands. Typically,
by nature, there\'s this sort of regional networks or small communities,
what have you. From a national network basis, more than likely, it\'s
going to be in the licensed band, just because of the economics and that
would require some level of spectrum rationalization, what is happening
to the MDS/ITFS band as to how that gets applied. What may happen to the
3.5 band, cellular, all of these things.

COMMISSIONER COPPS: It\'s interesting that a number of the people
responding to this talked about the regulatory or the rule of government
and I\'d like to expand on that a little bit and see what is the role of
government your analysis in the spreading the deployment of wireless
broadband. We\'ve already talked, a number of you, getting our spectrum
act together here at the FCC and making sure that the unlicensed
experiment continues, so and so forth. Is that about the end role of
government here or is there a larger role in this deployment? I spent a
lot of time in the last couple years whenever a CEO comes through my
office, asking what does government need to do to encourage the
deployment of broadband? Can the market do it itself and the answer I
usually get from a lot of these CEOs is, well, for the last 10 or 15
percent of Americans maybe not, maybe there\'s a more active role for
government. Maybe the appearance now of wireless changes that or makes
it different.

Let me ask Gary because you mentioned some kind of in between. You were
talking about public/private partnerships, things that we could do with
industry. So help me get a fix on how should I look at government\'s
role, not just as regulator, but just government generally. What
government can do in the deployment of wireless broadband.

MR. GRUBE: Yes. That\'s a wonderful area to dive into. I think there\'s
different levels. At the state and local level, we\'ve seen a lot of
examples where cities have said, you know, it will help the economic
development of our downtown area, et cetera, et cetera, if we help just
get this going by putting in Wi-Fi hotspots and those have been used by
the public and by enterprise workers. I think that kind of seeds and
sets the taste out there.

But I think that over time people will want a richer experience. They
want to get into, well, you know, I went down in this building or this
store and I couldn\'t get access. That\'s something that a carrier will
come into with a mentality of I want to cover all of those areas, not
just a few hotspots. So I think state and local can \-- we\'ve seen a
lot of examples where they\'re doing that, downtown areas, major
airports where there may not be a carrier already, some of those state
and locals have got involved in that.

And, then, turning to the federal level, you look years ago when the
U.S. invented the super highway system. We have the internet and
there\'s internet II and what\'s the other super highway system. I think
there\'s a information highway system that we can help and the highway
system that we have today and the wireless broadband that we\'ve been
talking about, there\'s a really neat marriage that\'s waiting there
which is intelligent transportation system, ITS, that whole area is just
ripe to go use broadband and that\'s a way to start getting it into the
consumer because they\'ll see value having simple things like common
means to pay for toll collection because there are multiple standards
and protocols in the licenses out there today.

But, getting, more importantly, information about roads. And, at some
point, actually, having collision avoidance systems. Those are the
things that people are working on right now. So I think some trials and
I know that there are some trials being talked about, actually, in
Michigan with some federal help. They\'re thinking about something over
there, not surprising with Detroit and ITS. So I think that would be a
wonderful one for the federal government to look at. It\'s been this
chicken and egg. If we could just see some broadband access along some
of the super highways and it\'s just one little area to start.

COMMISSIONER COPPS: Good anybody else want to comment on that?

MR. COOPER: I guess there are two steps. Step no. 1 is should the
government care? Should the government care that the United States has
an adoption rate that is a 10th of the world compared to countries that
ostensively has less capabilities. When there\'s availability to 80 or
90 percent of our population, should the government care that countries
like Australia have two commercial systems running now, maybe more and
the United States, to my knowledge has none, in the mobile broadband
area. And I want to postulate that, yes, the government should care a
lot and should really worry about the fact that the internet alone has
the ability to improve the productivity of a nation and to improve the
level of education of people and a whole bunch of things that, if we
don\'t pay attention to it, I think we\'re going to be in trouble.

COMMISSIONER COPPS: Go ahead.

MS. HOLT: I absolutely endorse that and I know that there\'s a project
going on in Virginia where they\'ve taken the internet, they\'ve enabled
the whole village. They\'ve enabled the whole area and they have
measured exactly the impact that that has on the community.

In terms of the rural community it has, I think, three major benefits.
The major one, from my point of view, is keeping the local kids local
for long enough for them to understand and appreciate the benefits of
being there and not going to town and causing the kinds of social
problems that they might otherwise do. So I think that you can\'t just
lift the internet away and say can we do this? The reality is now we
must find ways \-- I mean, the government must think about the cost of
not doing it.

COMMISSIONER COPPS: Whenever we try to figure out how we\'re going to
chart our own way, as a government through this, I think it always
instructive to look at what other countries and other governments are
doing and maybe I\'d ask both Valerie and Sai to comment on how we fair.
Martin mentioned not so well. How we fair against the rest of the world
in deploying wireless broadband and what accounts for the differences. I
know there\'s some lessons out there for us to be of learning that
we\'re not taking cognizance of right now?

MR. SUBRAMANIAN: I just give you from a Navini experience point of view,
what we are seeing is that there is a lot of movement now, especially,
with 3.5 gigahertz band about reopening that up for personal broadband
access. Earlier on in the game, 3.5 was a wireless local low band in
Europe and lots of places and it saw some level of deployment but not
major deployment. In Australia, U.K. and in many other places now, the
governments have sort rationalized this as what you can and cannot
deploy in this. And, in some complex ways, that has unleashed sort of
innovation from the operator side as to \-- for example, in Australia,
one of our customers, Wireless Australia has essentially launched the
company on the premise of providing wireless broadband across the
nation. They went public on this premise and they\'re launching in that
work all across Sydney, starting all across Sydney. And, obviously,
ArrayComm has something ongoing in Australia as well. Similar things are
afoot in the U.K.

In the U.S., what we\'ve seen is we\'ve seen an enormous interest in the
products we have in the unlicensed band, in the 2.4 gigahertz band, and
lots of people are deploying and that\'s a very interesting portion of
our business. In the licensed band, we have not seen as much movement in
the U.S. and some of that is related to what some of the large
established players, where they are economically in terms when they may
or may not want to make a move. But some of that is related to spectrum
rules, especially, in the 2.4, 2.6 band.

Some of our customers find it tremendously hard to go through getting
all the regulatory approvals to deploy in terms of side-by-side
licensing and so on and so forth.

The one thing I will close is sort of we need to make happen in the
broadband industry what we saw happen in the wireless communications
industry where before PCS there was AB cellular. It was 30, 40 cents a
minute and that\'s what it was and a few people used to be able to make
cell phone calls and they were only business-types on cell phones. And
then we unleashed competition and things changed overnight almost, not
overnight. It took a few years, but they did change very rapidly.

We have a similar situation in broadband, actually, a little bit worse.
It best we ought to supply the shift to duopoly. At least, when PCS came
on board, pretty much everybody had access to landline telephone, almost
everybody. That is not the case with broadband, so there\'s either no
desire and need for sort innovation and competition in this areas in the
U.S.

COMMISSIONER COPPS: Let me ask one more question before I turn the panel
over to the tender mercies of our audience here. And I\'d like several
of you to comment on this, if you will. What are the chances that the
very companies that dominate DLS and cable broadband are going to end up
dominating wireless broadband and what are the implications of that for
either facilitating or retarding the progress of this promising
technology?

Let me ask Duncan?

MR. DAVIDSON: Well, I think there\'s a tendency here, determinate
tendency politically right now, to fall into the trap that, if only we
can get the phone companies to build out fiber, the broadband problem is
solved, but it won\'t. It just creates a deeper duopoly. The carriers
will certainly do everything they can to protect their franchise and
there\'s no way out of that. Right now, the unlicensed bands in the U.S.
are largely in the hands of a small number of companies. So Nextel has
about half MMDS. Sprint still has about a third and then I think Craig
McCall is picking up the rest of it very quickly.

So, in effect, those three entities will define what\'s going to happen
in MMDS unless they turn it over. And, at the moment, they\'re not
really the classic carriers doing cable or broadband, so we might escape
that particular fate.

In the unlicensed bands, anybody can go in and do it. Now the carriers
will tend not to do it first because they are concerned that it will not
be carried right and it will eventually get in trouble because of
interference. However, they have the resources and the customer base to
want to go buyout companies that might start doing it and then prove it
works and they can then incorporate it up.

Now I think, in a free economy, we\'re not going to be able to stop
that.

COMMISSIONER COPPS: Be able to what?

MR. DAVIDSON: We will not be able to stop that. I mean, you can put in
regulatory barriers of people having too much ownership like we had in
T.V. and radio, but that is probably not the way to solve this problem.
I think the way to solve this problem is to sponsor the ecosystem. We
were talking about sponsoring competition, but, I mean, sponsoring the
ecosystem. If you look at why the cellular industry grew so fast, it\'s
a very interesting story here. People in the U.S. tend to think, why
didn\'t we do GSM? Why do we end up with a competitive world with TDMA
and CDMA and GSM and kind of a mess in terms of standards? But, if you
look at it now, the U.S. has more minutes of usage for user than Europe.
Europe has been very flat. The loudest wonderland has been flat in
growth and the caldron of innovation is moving to the U.S. or to Asia
where you\'re seeing rapid growth of people using this. So the approach
the U.S. took is actually working in that area much better than people
recognize.

So my point is I think the best thing we can do is sponsor the
experiment, promote the ecosystem, get the thing going, in effect, and
not really worry about how the chips may fall. And the way you will stop
that from happening is by being bias to protect the franchise of
existing people prematurely. In effect, let the market just decide this
thing as the systems grow.

COMMISSIONER COPPS: Martin, you look thoughtful over there. You want to
say something?

MR. COOPER: Yes, I do. I happen to agree that the big carriers are not
going to be innovators because they never are, but there\'s a really
important issue here and that is the big carriers come out of the
monopoly culture and their fundamental culture is we own the customer
and they will want to do everything and it\'s just impossible with
broadband wireless. And the reason that it\'s impossible is there are
just many, many applications. These carriers are providing one
application, voice. Maybe they\'ve got one other one, but the internet
fosters lots and lots of different applications and they only business
model that makes sense is a multi-media level like every other business
nonmonopoly business in the world does where you have a bunch of people
who understand the needs of customers and they serve lots of individual
markets and then you\'ve got a guy who provides transport and is very
good at that. And it\'s going to take a long time before these
monopoly-based carriers are going to understand that.

COMMISSIONER COPPS: Thank you. Anybody else want to comment on that?

MR. GRUBE: The standard is IP. And so with that technology base, with IP
technology, you could do internet access and data and voice and the
whole thing, multi-media entertainment. So these disruptive technologies
that are coming in right now, in Clayton as we speak, are certain people
who maybe want to trade one thing for another to get something and I
think that over time a lot of the people that are putting in these
initial networks will be aggregated into the carriers who can, through
synergies and acquisitions, back ends, building systems, et cetera, et
cetera.

But, back to IP, that really enables splitting up the value chain.
There\'s going to be access and maybe there\'s a play for a national
broadband wholesaler here that we didn\'t see with cellular telephony
because it was so tightly bundled the access and the service, which was
a phone call. That\'s undone with IP. So broadband access can really
free up the value chain. So you could have people doing services
applications through the internet like Marty said and maybe the large
carriers with main knowledge will bring along the right applications and
bundle that very nicely with the access that they provide or go to a
wholesale for. So, really, the whole business model can really change a
lot because it\'s IP.

COMMISSIONER COPPS: Let\'s go to the audience and see what questions for
our panelists you might have and ask you to use one of the three
microphones here and identify yourself and the panelist to whom your
inquiry is directed.

MR. KLANSI: Andy Klansi. Unfortunately, I\'m going to put it on the
regulatory side. I\'ve been working with a group and we\'ve been looking
the USDA IUS funding and loan applications for doing broadband access in
underserved rural markets. And one of the things we\'re looking at is
there\'s been talk about licensed spectrum and how some of it is
capture, being squatted. It\'s not really open. Would the FCC look at
possibly offering licensed spectrum to a rural operator sold on some
caveat that they have to show a construction permit or use it and open
up that for those rural markets so you do get better quality? You get
some of the kind of benefits of the licensed spectrum, but offered into
those markets where, typically, you won\'t see the major carriers?

COMMISSIONER COPPS: Well, I can\'t tell you what the FCC would smile on
or support. Obviously, I think we\'re looking for innovative ideas.
Obviously, you identify a terribly important part of what we need to be
focusing on, which is the rural area. So I think nothing should be out
of bounds. We ought to be studying and looking at these things. But as
to where my colleagues would come down on that, I wouldn\'t hesitate to
say.

MR. COATES: I\'m David Coates from Dartmouth College, probably one of
the few academics in the room today. I was actually hoping to hear a
little bit more about what the applications of broadband might be in the
future. At Dartmouth, we have a campus-wide Wi‑Fi network and have for
the last three years and almost 100 percent penetration among the
students and faculty in terms of laptop users. And I\'ve been monitoring
what people do with our wireless network now for three years and there
have been a few surprises. The no. 1 activity on the network, of course,
is web traffic. But the no. 2 is peer‑to‑peer file sharing. Now maybe
that\'s not too surprising in a college and I don\'t even want to know
what they\'re sharing in that, but I\'m actually expecting, if I measure
it again next year, that web will no longer be no. 1, file sharing will
be no. 1 use of broadband bandwidth and then fast and upcoming is worms
and viruses. They\'re taking up a tremendous amount of our bandwidth and
voice-over IP, Dartmouth is committed to replacing all of its phone
technology with voice-over IP in the next two years, starting with the
wired voice and then wireless is catching up as big user of bandwidth as
well. So, anyway, I\'m curious what you think are going to be
applications of broadband beyond telephony.

COMMISSIONER COPPS: Well, let\'s start with Gary here.

MR. GRUBE: What we\'ve seen is what has broadband enabled technically?
Lots of bandwidth but low latency and I was just in Montreal at McGill
University and they\'ve done some fascinating studies where they put
musicians in separate rooms \-- I mean, we\'re talking east coast/west
coast, and when you get the latency down, a phenomenon happens where
they can actually play their instruments together. Okay. And there\'s a
curve, of course, if you have more, you need a better latency. Lower
latency if you have more musicians is one of the other discoveries. And
the other thing they found was if you have a really big screen, you
really think you\'re there with that other musician. So they\'re on to
something and it\'s telepresence. Telepresence can go into all the
segments that people think about from medicine to enterprise, everything
and I think broadband is going to be a key enabler for that.
Telepresence, how can you work that into the enterprise so they can save
money, be more efficient, be a leg up on the competition and things like
that? And then, gaming, of course. Low latency just begs gaming and
that\'s probably a lot of work the university is doing that they\'re
monitoring that they\'re doing better in this area, a couple of ideas.

COMMISSIONER COPPS: Anybody else have anything additional on this? Jose?

MR. RODRIGUEZ: Right now, we\'re doing, for instance, in Puerto Rico,
although we\'re not doing it yet with ITFS, we are going to be doing it
with satellite technology, but definitely to be done with ITFS and
we\'re looking forward to doing it. We provided high speed internet
access distance learning. We look at our security services incorporating
security into that and, especially, being Puerto Rico an island or it\'s
hit by hurricanes or are at least certain to be hit hurricanes two or
three times a year and a lot of the basic infrastructure,
telecommunication infrastructure disappears sometimes for three- or
six-month period when we\'re hit by a hurricane.

We\'re looking at wireless having proven to be more resistant, believe
it or not, than wireland communication to provide the faster kind of
recovery applications. We\'re looking at IP telephony as one that could
be used for disaster purposes. These are applications that are very
critical. We also have been approached \-- as a matter of fact, last
week, to provide context, to repurpose our context to be utilized in
schools targeted to PDAs and laptops and those are definitely
applications that, as you mentioned, we follow people everywhere \-- you
used displaced. Right?

MS. HOLT: Yes.

MR. RODRIGUEZ: Displaced person. Displaced persons or people that are
mobile, we will be able to reach, hopefully, with broadband wireless.

COMMISSIONER COPPS: Anybody else?

MR. DAVIDSON: Dartmouth is doing a very interesting job here because one
of the great advantages of having the outside network be based in the
same technology as the inside, in this case Wi‑Fi, is that the
innovation can occur inside and then go outside. And so what we\'re
seeing, for example, Motorola is launching a dual-mode handset, Wi-Fi
and cell phone, initially, GSM. It\'ll be used inside of enterprises and
inside phone. It will spring over outside. You\'re doing things inside
of Dartmouth. You\'re going to start having toys like this people can
play with where they\'re going to use them inside and then they\'ll
spring over to the outside network. And this is a more likely path, I
think, to get to the type of internet vision that some of us have been
talking about, including Marty, than having a system where the broadband
outside is a whole different technical foundation than the broadband on
the inside.

COMMISSIONER COPPS: Valerie?

MS. HOLT: Yes. I was just going to add to what Jose said. I think there
will be some time-delay services or replaying for listening and
watching. One of the things that we see certainly with our National
Broadcasting Corporation, the BBC, is that there is huge growth in the
use of what I would commercially call our back catalog. People missed
something and it\'s suddenly become either significantly in their social
life or in their educational life and so watching back catalog or
listening to back catalog is becoming very significant now.

MR. SUBRAMANIAN: I\'ll take a slightly different tact on this. For a
while, there used to be this notion of what is the killer wrap. This is
a key term in Silicon Valley and lots of places and, if only you found a
killer wrap, people will start using this by the droves and so on and so
forth. I think broadband is primarily a communications means. It just
happens to be data communication. For the most part, there will be a
whole bunch of basic things that people do today in sort close
environments, wired land environments that will automatically translate
over, getting my e-mail and all of those things. That will be a huge
piece of it.

And the other portion of it we really don\'t know. Nobody really knows.
It\'s sort of worrying about, when you\'re building a highway, what kind
of cars people will drive on it. You know people think of all kinds of
cars on the highway. Your job is to build a good highway. That\'s sort
of my belief anyhow.

COMMISSIONER COPPS: It is really is interesting. Everybody does talk
about the killer wrap and all you have to do is be deprived of this
stuff for a day or two and you really the killer wrap is here right now
and the only killer wrap I can think of maybe is to lower the cost so
more people can afford it and then we\'ll have it.

I think we\'re probably beyond our time and our distinguished chief of
our Wireless Telecommunications Bureau, John Muleta is going to wind
this up, but first I\'d like you all to join me in giving a round of
applause to this panel.

(Applause.)

MR. MULETA: I\'d like to thank Commissioner Copps and the panelists for
this very interesting presentation. I\'m going to show this. I don\'t
know if this is visible to the folks out there, but this is Circa 1993,
a cell phone, okay, and this is portable. So I put this in my pocket and
I walk around.

I think when Marty was first working on this stuff, he probably had a
backpack and I believe, in Washington, D.C., they have to walk around
with the backpacks sort of calling each other. The relative difference I
carry two telephones because I\'m a big guy and I\'ve got enough
pockets. So this is sort of the alternative.

In the cellular world, you have a difference in 10 years in the sort the
CPE. You\'ve got to remember this is just a phone, all right. This
little sucker that I have is actually a computer and it is more than
just a phone. The reason that I bring this is, is because I think it
shows you how far technology could come if the right incentives are put
in place. And what I also want to talk to you about is a couple of
seminal events that happened for me that I thought were very
instructive.

I think I was working with Paul Berriman in Hong Kong in 1999. It was a
really momentous occasion for me because it was April 14th and guess
what April 15th is the United States. It\'s tax day. I had not done my
takes because I was busting my tail on a project that I was working with
Paul. So I remember sitting in my room in Hong Kong, logging on and
finished my taxes, sent them over, and I was getting a refund, so it was
sort of a good moment. So it was all the positive extranalities that you
can think of were happening, right. And I was like, wow, this is
incredible. I am so far away and, yet, I\'m able to meet my obligation
to pay taxes. And, for those of you that don\'t meet your obligations,
there\'s still time, I think, this year so long as you put the right
paperwork in. But that was phenomenal because I had logged on, got on
the application, I did. Now I was constrained by a wired access, so I
was doing it and the amount of communications I could was limited
because I was in a room and the hotel, at that point, had brought in
internet access on its own. Can you imagine if I could have just used my
cell phone? I could have done in OfTel, the Hong Kong regulatory office,
maybe that\'s where we\'re doing our pitch. So that\'s one thing.

The other seminal moment was later in around 2000 when I was with a
company and Val and I were in this business. We had, I think, a million
and a half U.S. wholesale customers for ISP access. We had about 100,000
corporate customers worldwide. And most of our energies, between 1996
and 2000, were spent building a backbone for IP traffic. The reason was
we had drank the Kool-Aid of the 1996 Act and we believed the CLECS was
going to give us an alternative for the local group access because the
basic business depended on that.

The realization in \'98 and \'99, 2000 was it was very difficult
because, not only were the ILECS going to compete with us in the ISP
business, the CLECS was going to compete with us in the ISP business.
And so, as a company, their destiny was, how do we get to this local
leap, this way that we can control our relationship with our customers.
So, worldwide, the solution was to look for wireless solutions. And the
experience was I spent some time with Marty\'s folks at ArrayComm. We
spent some time with people in San Diego. Some time with people further
up. Some people in Bed Minister in New Jersey and some people in San
Jose. I mean, the spectrum was there. It was called 700 megahertz where
we thought it was coming. But the problem was it was a gear. There
wasn\'t anything available and we\'re talking base stations and handsets
and everything. So the capital that was willing to invest needed a whole
bunch of other things to come into place.

So the basic message here today is, given what my experience in 1999,
and what we\'ve heard today, whether it\'s the broadband services
through the 24 gigahertz line-of-site stuff or it\'s 2.5 or 3.6 or 2.1
or 1.9. The technologies and the capabilities are all there for this to
take off. Not only that, it\'s with complimentary services on the low
power, unlicensed devices which really seed the market and the appetite
for broadband.

So the last thing that happened to me, as from a personal experience, I
think in 2000 \-- sometime in between \'99 and 2000, I finally got sort
of high speed data in my house. The result in the last four years has
been significant within my households. I went from having one computer
in my office to having four computers in my house and one dedicated. One
of the four is dedicated to my four‑year old twins. It\'s there machine,
not mom\'s, not dad\'s. It\'s their machine. We have another one for the
grandparents that occasionally drop by.

But, anyway, what we\'ve done, though, is we\'ve gotten this huge
appetite for broadband, the access that we can get out of that.

I\'m going to close by kind of reviewing with you very quickly some of
the things that are fundamental. And, for those of you that are not
familiar with the FCC or are not here from the FCC, I want to talk about
some of the things that we\'re trying to achieve there through the forum
and through our day-to-day activities.

Folks, you\'ve got to understand, the FCC is the spectrum manager for
the United States for commercial and public safety licensees. That\'s a
vast universe and MTIA does it for the federal users. The spectrum is
split between these two areas.

I think, as a regulator and, as a person who has been on the outside and
on the inside. I used to do wireline stuff. I came back now doing
wireless. But, as a regulator, the things that I believe the overarching
goals are to be transparent, to be as efficient as possible in what we
do and to be reliable in our processes in what we achieve. So, part of
it is, if you\'re making an investment, you want to know that it is
reliable. That things won\'t change as you put your hard-earned capital
into the process. A lot of what we heard today was about can I take away
the investment risk because I know the investment environment or the
spectrum environment is going to be reliable. And I don\'t think this is
a choice between unlicensed and licensed. It\'s about whether we are
reliable in what do as we think about these things.

The bullet points that are in the chart are about the sort of statutory
goals that we have to live with, highest and best use of the spectrum,
advanced spectrum reform by developing innovative ways of assigning and
allocating harmful interference, which is the basis of all theology in
the United States. And then we also need to address the needs of public
safety, rural areas, educational groups and things like that. So those
are sort of inherent in our statutory bases.

I\'ve spent a lot of time in the Bureau trying to come up with what is
it that we\'re trying to do? And everybody talks about flexibility and I
think, if you look at the model that we\'re looking at that we\'ve been
very successful with, which is we went from 1993 from about 60 million
subscribers to 160 million today in the cellular and PCS business.

There are three things that we did. We did provide flexibility and those
flexibility were technical and operational autonomy for the licenses. So
every time you needed to add a site you didn\'t have to come to the
Commission. Those are great things. Also, the ability for people to
aggregate or disaggregate their licenses. That was actually very helpful
in the 10 years after the deployment of cellular.

Remember, the duopoly started in 1994 and \-- we went to a very
competitive model with many licensees and these flexibility do matter.
But I think a couple of other conditions are necessary. One is it\'s got
to be in a competitive environment and part of what I mean by
competitive environment is that there\'s got to be somebody nipping at
your heels to make you use this very valuable resource efficiently and
the way that happens is when you have competitors. And we used to think
about just voice competition. I think we have to about it\'s a different
kind of world we\'re moving to.

Paul and Scott Slater mentioned things that really are about mass media
alternatives. That\'s a type of competition we\'re moving to. In terms
of our policies, we\'ve implemented a whole bunch of other things that
are creating competition for existing spectrum users, both intermodule
and intramodule.

The last and important part of our policy goal has always been, I think,
to get it right. It has been to enforce the opportunity cost of using
the spectrum. So it\'s not about your relative rights in the spectrum.
It\'s about making sure whether through auctions or through secondary
markets, if you\'re incented to use the spectrum to make the investment
to get that return on capital that has already been put down.

One chart that I have \-- I just want of sort of very quickly \--
there\'s an important rulemaking that\'s coming up and many of the folks
today had mentioned this. We have two bands. One is in cellular and what
we had is in 1993. This is illustrative, so don\'t hold me to the
numbers, the exact numbers. In cellular, PCS, in 1984, we just stated
the service then. We had only about 25 \-- I\'m sorry, in 1984, we only
had 25 megahertz. In 1993, in cellular and PCS, it went to an additional
190 megahertz, 180 megahertz, depending on how you count it.

The other band is MDS/ITFS, which has been around for 40 years and has
been allocated incrementally over the years above the types we services
we allow on it. The difference is a scale of opportunities in the two
bands. What is taken place. The opportunity we have now, hopefully, in
the rulemaking is to provide flexible use and let broadband wireless
potentially take root in these bands. But you do see dogmatic
implications, based on the kind of policy choices the Commission makes.

So I think that I wanted to pointed out in this slide is a whole bunch
of bands that we have that could be used for broadband of different
starts. If you\'ll look at the bottom, we\'ve done MDS/ITFS. We went to
auction, 70/80/90, which is a hybrid. You see fans that we have. And
what I did in there is I just asked the question, is there a
flexibility? Yes. Is there competition? Yes. Is there opportunity cost
for using spectrum? I think those are the types of questions we need to
answer and I think the kind of questions that Marty\'s been asking about
all relevant as we think about these issues.

Well, that\'s it. It\'s a good thing that I ended on that. The main
point is that we have a lot spectrum in the 3G area that\'s coming up,
whether it\'s 90 megahertz that we claim from the federal users.
There\'s PCS spectrum still available and the tremendous opportunity for
deployment of broadband services. Spectrum, I don\'t think is as a great
a constraint, 2.5 megahertz is a great opportunity. I think something
that people should take a look at and I think it\'s an exciting time. I
feel like we\'re on the cusp of something great.

So, with that, I want to extend my great thanks to all the panelists who
have flown from very, very far away or very close, but they\'ve spent
their time to educate us about their opportunities, what they\'re doing.
I want to thank the people in the demo room who have done great work
teaching us about their technologies. I also want to thank, most of all,
my staff who spent hours and hours getting this thing together. And,
finally, I want to thank the Commissioners and the Chairman, whose
leadership in this area is going to be instrumental for this great
opportunity for broadband wireless.

So, with that, I\'d like to close it and thank you very much for your
participation.

(Applause.)

(Whereupon, at 5:04 p.m., the above-entitled matter was concluded.)

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[REPORTER\'S CERTIFICATE]{.underline}

CASE TITLE: Wireless Broadband Forum

HEARING DATE: May 19, 2004

LOCATION: Washington, D.C.

I hereby certify that the proceedings and evidence are contained fully
and accurately on the tapes and notes reported by me at the hearing in
the above case before the United States Federal Communications
Commission.

Date: May 19, 2004

Bernadette Herboso

Official Reporter

Heritage Reporting Corporation

Suite 600

1220 L Street, N.W.

Washington, D.C. 20005-4018