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 SEPARATE  STATEMENT  OF  CHAIRMAN  MICHAEL  K.  POWELL 
 In  the  Matters  of  Auction  of  Licenses  in  the  747-  762  and  777-  792  MHz  Bands  (Auction  No.  31);  Auction  of  Licenses  in  the  698-  746  MHz  Band  (Auction  No.  44);  Cellular 
 Telecommunications  &  Internet  Association  Application  for  Review  (WT  Docket  No.  99-  168,  GN  Docket  No.  01-  74). 

 I  do  not  support  an  open-  ended,  indefinite  delay  of  our  700  MHz  auctions  scheduled  for  June  19,  2002,  as  advocated  in  the  application  for  review  filed  by  the 
 Cellular  Telecommunications  &  Internet  Association  (CTIA)  and  others,  but  I  do  believe  that  there  are  compelling  reasons  to  invoke  a  short  delay,  until  January  14,  2003,  of  the 
 Upper  700  MHz  band  auction.  I  do  not  find  any  compelling  reasons  to  delay  the  Lower  700  MHz  band  auction. 

 I  am  well  aware  that  there  has  been  a  late-  inning  legislative  drive  by  the  industry  to  change  the  law  and  remove  the  dates  that  have  been  leading  us  to  conduct  these 
 auctions  at  this  time.  If  Congress  passes  into  law  such  changes,  the  Commission  will  immediately  and  faithfully  comply.  While  I  respectfully  take  cognizance  of  these 
 Congressional  efforts,  I  cannot  in  good  conscience  sway  from  what  I  believe  to  be  the  right  result  based  primarily  on  the  prospect  of  legislative  change  --  particularly  where 
 Congress  has  already  spoken  definitively  as  to  our  responsibilities.  By  our  actions  today,  we  are  not  trying  to  out-  race  Congressional  efforts  to  change  the  law.  The  Commission 
 has  waited  until  the  last  possible  moment  to  issue  this  decision.  It  must  announce  the  applications  that  have  been  accepted  today,  and  will  begin  accepting  funds  next  week,  if 
 no  action  by  the  Commission  is  taken.  In  other  words,  non-  action  would  keep  both  auctions  moving  forward  and  it  would  be  even  more  difficult  to  reverse  or  delay.  We  are 
 making  an  affirmative  policy  judgment  on  when  to  conduct  these  auctions  under  the  current  circumstances,  while  striking  a  balance  that  is  respectful  of  both  past  and 
 potential  Congressional  action. 

 Indefinite  Delay 
 The  application  for  review  filed  by  the  incumbent  wireless  industry  seeks  an  indefinite  delay  of  two  auctions  that  the  Commission  had  previously  determined  should 
 take  place  at  this  time.  In  reaching  those  timing  decisions,  we  considered  all  the  issues  and  concerns  that  are  presented  now  at  this  very  late  hour,  just  on  the  eve  of  the  start  of 
 the  auctions.  The  salient  point  is  that  there  is  nothing  new  presented  in  this  appeal  that  was  not  fully  considered  by  this  Commission  in  adopting  the  service  rules  and  setting  the 
 dates  for  these  auctions.  Therefore,  I  support  denying  the  CTIA  application  for  reviews  request  for  an  indefinite  delay. 

 The  application  for  review  raises  essentially  two  arguments  for  indefinite  delay.  First,  it  asserts  that  broadcasters  will  not  vacate  until  the  completion  of  the  digital 
 television  transition,  and  thus,  the  uncertainty  of  when  that  spectrum  will  be  cleared 
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 frustrates  its  effective  use.  As  an  initial  matter,  auctioning  encumbered  spectrum  is  not  at  all  unprecedented.  For  example,  the  Commission  auctioned  broadband  PCS  while 
 encumbered  by  fixed  microwave  users  and  even  adjusted  the  relocation  rules  after  the  first  PCS  auction.  It  has  also  auctioned  the  white-  space  surrounding  incumbent 
 licensees  in  the  MDS,  paging,  and  SMR  services.  1  Second,  Congress,  when  it  directed  the  Commission  to  auction  these  bands  by  certain  dates,  was  aware  that  the  spectrum  was 
 encumbered  by  broadcasters  and  would  remain  so  for  a  significant  period  of  time  after  the  auction.  Third,  the  supposed  uselessness  of  these  bands  is  belied  by  the  number  of 
 applications  the  Commission  has  received,  indicating  significant  interest  in  bidding  despite  the  problems  of  incumbency.  Thus,  it  is  not  clear  to  me  why  we  should  delay 
 indefinitely  the  auction  of  this  spectrum  because  of  incumbency,  as  the  parties  urge.  Additionally,  it  is  hard  legally  to  credit  claims  that  Congress  objectives  will  be  frustrated 
 by  this  problem  of  incumbency,  given  that  Congress  set  the  dates  with  full  knowledge  that  the  spectrum  was  encumbered  (having  itself  set  in  motion  the  DTV  transition),  and 
 would  remain  so  long  after  the  dates  it  set  for  licensing  the  spectrum  and  depositing  the  auction  proceeds. 

 More  importantly,  however,  the  problem  of  broadcast  incumbency  is  one  for  which  there  is  no  short  path  to  resolution.  The  transition  to  digital  television  could  take 
 well  over  a  decade.  One  might  argue  that  a  modest  delay  is  warranted,  if  there  were  a  credible  and  imminent  possibility  that  the  bands  at  issue  would  be  unburdened,  but  the 
 proponents  of  delay  do  not  offer  one,  and  I  see  none.  I  am  hesitant  to  keep  spectrum  off  the  market  indefinitely,  awaiting  some  as-  of-  yet  unidentified  solution  that  would  greatly 
 accelerate  the  transition.  Jawboning,  voluntary  agreements  and  hope  can  only  get  us  so  far. 

 The  only  present  possibility  for  clearing  these  bands  is  by  way  of  the  band-clearing  mechanism  established  by  the  Commission  in  the  Upper  700  MHz  band  that 
 might  induce  broadcasters  to  leave  the  spectrum.  Ironically,  substantial  delay  would  actually  frustrate  the  possibility  for  band  clearing  in  the  upper  band.  Those  broadcasters 
 that  occupy  these  bands  will  necessarily  have  to  invest  further  in  building  out  their  digital  stations  and  the  possibility  of  relinquishing  their  extra  6  MHz  licenses  becomes  much 
 less  attractive.  Thus,  substantial  delay  could  create  more  uncertainty  as  to  when  and  how  the  band  might  be  cleared. 

 Additionally,  some  proponents  of  delay  argue  that  even  more  spectrum  in  the  Upper  700  MHz  band  could  be  made  available  for  public  safety  users.  Such  suggestions, 
 however,  are  quite  speculative    though  the  Commission  is  deeply  committed  to 
 1  See,  e.  g.,  Lower  and  Upper  Paging  Bands  Auction  Scheduled  for  June  26,  2001,  DA  01-  850,  Public 
 Notice,  16  FCC  Rcd  7675  (2001)  at  6-  7  (citing  interference  protections  post-  auction  new  licensees  will  owe  incumbent  licensees);  Auction  of  Licenses  for  Fixed  Point-  to-  Point  Microwave  Services  in  the  38.  6  to  40.  0 

 GHz  (39  GHz)  Band,  DA  00-  112,  Public  Notice,  15  FCC  Rcd  850  (2000)  at  9  (same);  Auction  of  800  MHz  Specialized  Mobile  Radio  Service  Licenses,  DA  97-  1672,  Public  Notice,  13  FCC  Rcd  1875  (1997)  at  3-  4 
 (same);  see,  also,  Amendment  of  Parts  21  and  74  of  the  Commissions  Rules  with  regard  to  Filing  Procedures  in  the  Multipoint  Distribution  Service  and  in  the  Instructional  Television  Fixed  Service,  MM 
 Docket  No.  94-  131,  Report  and  Order,  FCC  95-  230,  10  FCC  Rcd  9589  at    56-  58  (rule  making  adopting  interference  protections  for  existing  licensees  with  respect  to  new  MDS  licenses  to  be  auctioned). 
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 improving  spectrum  availability  and  access  for  public  safety  users.  For  one,  the  problem  of  incumbency  exists  for  any  user  of  the  bands.  Public  safety  entities  should  be  no  more 
 enthused  about  being  moved  to  this  spectrum  than  are  the  commercial  providers  that  urge  they  be  put  there.  In  any  event,  there  are  no  specific  proposals  that  are  developed  that 
 have  any  prospect  of  being  realized  any  time  soon. 
 I  also  hear  some  maintain  that  the  problems  associated  with  effective  use  of  these  bands  may  lead  to  a  busted  auction  in  which  few  participate  and  bids  are  low.  It  is 
 important  to  emphasize  (yet  again)  that  good  spectrum  policy  should  not  be  driven  by  trying  to  garner  the  most  dollars  for  the  Treasury.  It  is  such  thinking,  ironically,  that  led 
 to  the  statutory  auction  dates  that  are  now  the  subject  of  criticism  and  debate. 
 I  would  also  note  that  requests  for  postponement  are  inconsistent  with  the  incumbent  wireless  industrys  consistent  demands  for  additional  spectrum.  The  parties 
 seem  to  contend  that  these  bands  are  not  the  spectrum  they  are  really  interested  in  (at  least  for  now),  so  we  should  keep  it  on  the  governments  shelf  (or  in  the  hands  of  analog 
 broadcasters)  until  they  are  ready  to  bid  on  it.  Withholding  spectrum  from  auction  indefinitely  creates  barriers  to  entry  for  new  providers  and  may  artificially  shelter 
 incumbents  from  competition    not  a  result  that  is  in  the  publics  interest. 
 The  fact  that  a  significant  number  of  companies  have  applied  to  bid  for  these  licenses  should  give  pause  in  accepting  too  quickly  the  claims  that  the  spectrum  should 
 not  come  into  the  market.  A  number  of  major  carriers  and  manufacturers  now  would  prefer  that  these  licenses  not  find  their  way  into  the  market,  but  this  should  not 
 overshadow  other  potential  users  who  are  anxious  and  willing  to  acquire  this  spectrum.  2  This  Commission  very  recently  took  conscious  steps  to  make  a  substantial  amount  of  this 
 band  available  for  smaller  and  rural  entities  by  limiting  the  geographic  regions  to  RSAs  and  MSAs  in  the  Lower  700  MHz  band.  We  also  made  a  combination  of  paired  and 
 unpaired  bands  available  for  new  and  innovative  technologies  to  prove  themselves  in  the  market.  This  spectrum  is  allocated  for  flexible  use  and  one  cannot  discount  innovative, 
 and  potentially  competitive  services  that  might  be  built  on  the  foundation  that  these  licenses  provide.  We  should  never  side  with  one  segment  of  an  industry  over  another, 
 and  I  fear  that  accepting  an  indefinite  delay  would  do  just  that. 

 2  I  note  with  interest  that  on  July  20,  2000,  a  number  of  large  industry  players  asked  the  Commission  to 
 delay  the  Upper  700  MHz  auction  (then  scheduled  for  September  6,  2000)  until  June  2001.  See  Letter  to  William  E.  Kennard,  Chairman,  from  the  Cellular  Telecommunications  Industry  Association,  AT&  T 

 Wireless  Services,  Inc.,  BellSouth  Corp.,  Ericsson,  Inc.,  Motorola,  Inc.,  Nextel  Communications,  Inc.,  Qwest  Wireless,  LLC,  SBC  Communications,  Inc.,  Verizon  Wireless,  and  VoiceStream  Wireless.  These 
 players  noted  that  [  b]  ecause  of  its  location  in  the  electromagnetic  spectrum  and  its  excellent  propagation  characteristics,  the  30  MHz  of  spectrum  to  be  auctioned  in  the  700  MHz  band  is  ideally  suited  for  the  next 
 generation  mobile  and  high-  speed  broadband  services.  These  services  will  intensify  competition  for  all  communications  services  and  yield  tremendous  benefit  to  the  public.  Id.  at  1.  In  light  of  pending 
 rulemaking  proceedings  involving  the  band  clearing  process,  they  urged  the  Commission  to  work  with  Congress  as  necessary  to  permit  a  postponement  of  the  [Upper]  700  MHz  auction  until  June  2001.  Id.  at  3- 
 4. 
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 Perhaps  most  importantly,  appeals  for  the  Commission  to  indefinitely  put  off  the  auction  are  further  blunted  by  the  fact  that  Congress  has  passed  a  statute    and  signed  into 
 law  by  the  President    that  directs  this  agency  to  auction  this  spectrum  by  specific  dates  and  for  specific  purposes.  I  recognize  fully  that  the  law  affords  some  flexibility  to  miss 
 statutory  deadlines  (we  have  done  so  several  times  with  the  Upper  700  MHz  band),  but  those  instances  are  rightfully  narrow,  and  not  a  basis  for  indefinite  disregard.  A  law 
 passed  by  two  houses  of  the  U.  S.  Congress  and  signed  by  the  President  expresses  the  will  of  the  people.  Unelected  members  of  an  administrative  agency,  as  Congress  regularly 
 reminds  us,  are  duty  bound  to  follow  the  law,  no  matter  what  our  preferences  might  be  otherwise.  It  should  be  above  question  that  we  should  be  conservative  when  being  urged 
 to  push  the  envelope  of  the  law,  lest  it  contravene  the  will  of  Congress. 
 As  I  noted  above,  there  have  been  aggressive  attempts  to  change  the  law  and  remove  (or  modify)  the  current  dates.  But  it  is  hazardous  for  an  agency  to  take  actions 
 that  contravene  the  law  based  only  on  the  fact  that  there  are  efforts  afoot  to  change  that  law.  It  is  difficult  and  ill-  advised  to  try  and  give  odds  on  the  chance  of  a  given  bill 
 becoming  law  and  to  implement  its  terms  before  it  does  so.  There  have  been  several  legislative  proposals  to  alter  the  auction  dates  over  the  last  several  years  (the  same 
 reasons  were  urged  then  as  well),  yet  those  efforts  failed.  Again,  if  Congress  passes  into  law  such  changes,  at  any  time,  the  Commission  will  immediately  and  faithfully 
 implement  its  directives.  In  fact,  I  would  encourage  Congress  to  grant  this  agency  the  flexibility  and  discretion  it  needs  for  scheduling  all  auctions,  not  just  these. 

 Upper  700  MHz  Auction  Delay 
 With  all  that  said  about  an  indefinite  delay,  I  have  reluctantly  concluded  that  the  best  course  is  for  the  Commission  to  temporarily  delay  the  auction  of  the  Upper  700  MHz 
 band  until  January  14,  2003.  While  we  cannot  be  sure  of  the  ultimate  outcome,  the  potentially  imminent  prospect  that  Congress  may  wish  to  change  its  policy  gives  me 
 pause.  While  this  legislative  activity  alone  would  not  be  enough,  a  number  of  technical  questions  and  must  carry  issues  remain  outstanding  that  could  affect  the  prospects  for 
 clearing  the  Upper  700  MHz  band  for  new  commercial  and  public  safety  users  and  they  should  be  resolved. 

 It  bears  repeating  that,  with  this  temporary  delay,  we  are  not  imposing  a  deadline  on  Congress.  Instead,  we  are  making  an  affirmative  policy  judgment  to  move  the  auction 
 to  a  date  of  our  choosing.  The  Commission  and  its  auctions  staff  have  been  planning  for  a  long  time  to  conduct  these  auctions  (pursuant  to  Congressional  direction)  in  a  fair  and 
 efficient  manner.  Congress  set  out  both  the  timing  of  such  auctions  and  the  purposes  to  which  the  spectrum  should  be  put.  There  is  a  substantial  effort  underway  in  Congress  to 
 possibly  change  aspects  of  that  policy.  However,  the  fact  that  legislation  has  passed  the  House  and  that  there  are  serious  efforts  to  pass  legislation  quickly  raises  concerns  in  my 
 mind  about  the  destabilizing  effect  on  the  auction.  Proceeding  under  this  additional  cloud  of  uncertainty  could  affect  financing  decisions  and  bidding  behavior,  thereby 
 compromising  the  integrity  of  the  auction.  But  I  also  note  that  just  because  the 
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 Commission  delayed  this  particular  auction  before,  it  cannot  stand  for  the  proposition  that  it  can  delay  whenever  and  for  as  long  as  it  wishes.  That  would  make  a  mockery  of  the 
 laws  enacted  by  Congress  and  set  a  troubling  precedent  for  an  administrative  agency. 

 Lower  700  MHz  Auction  on  Schedule 
 With  regard  to  the  Lower  700  MHz  band,  I  am  pleased  that  two  of  my  colleagues  have  supported  the  effort  to  keep  on  schedule  with  that  auction.  There  is  a  clear 
 Congressional  directive  that  requires  the  Commission  to  put  money  in  the  Treasury  by  the  end  of  September  for  this  spectrum  to  be  reclaimed  from  analog  broadcasters.  Time 
 remains  for  the  Commission  to  comply  with  the  current  statutory  date,  and  it  should  endeavor  to  do  so  absent  compelling  circumstances  or  other  serious  outstanding  issues. 
 Such  circumstances  or  issues,  to  my  mind,  have  not  been  presented  by  the  proponents  of  delay.  Moreover,  there  are  unique  public  interest  benefits  to  putting  this  spectrum  in  the 
 market  that  tip  in  favor  of  proceeding.  For  example,  the  Commission  has  created  licensing  rules  that  will  provide  unique  opportunities  for  rural  and  small  interests  to 
 obtain  licenses  --  one  of  the  public  interest  objectives  of  Section  309(  j)  of  the  Communications  Act.  Additionally,  the  application  filings  show  substantial  interest  in 
 this  particular  auction. 
 Of  course,  many  of  the  arguments  for  temporarily  delaying  the  Upper  700  MHz  band  auction  could  be  said  of  the  lower  band  as  well.  However,  I  believe  important 
 distinctions  do  exist.  In  addition  to  the  unique  positive  public  interest  benefits  identified  above,  one  significant  distinction  is  the  fact  that  the  specific  legislative  dates  for  the 
 Upper  700  MHz  band  have  long  passed.  That  auction  was  previously  delayed  past  the  dates  established  in  the  year  2000  Consolidated  Appropriations  Act,  based  on  the  belief 
 that  conflicts  in  separate  and  distinct  legislative  goals  necessitated  additional  time.  We  could  have  easily  chosen  to  schedule  the  auction  a  few  months  from  now  instead  of  the 
 dates  we  did  select.  In  my  view,  we  have  come  close  to  resolving  those  original  concerns,  but  I  believe  we  have  greater  latitude  to  set  that  auction  date,  within  a  very 
 short  realm  of  reasonableness.  Additionally,  in  the  Upper  700  MHz  band,  we  have  established  a  mechanism  that  affords  an  opportunity  to  clear  the  band  of  incumbent 
 broadcasters  to  make  way  for  new  public  safety  and  commercial  services,  but  some  technical  issues  are  outstanding.  We  declined,  however,  to  establish  a  similar  band 
 clearing  mechanism  for  TV  Channels  52-  58  in  the  lower  band  and  thus  no  such  basis  exists  for  further  delay. 
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