Written Statement 
Of 
The Honorable Kevin J. Martin
Chairman
Federal Communications Commission
Before the
Committee on Energy and Commerce
U.S. House of Representatives
April 15, 2008
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Summary
The 700 MHz spectrum auction closed almost one month ago.  It achieved a 
number of significant milestones, including:
 the largest auction in FCC history, raising a record $19.6 billion in bids; 
 advancing new open platform policies; 
 affirming aggressive build-out obligations; 
 creating what will be a new wireless broadband provider to compete with the 
incumbent telephone and cable companies in nearly every home in the U.S.; and 
 providing small businesses, new entrants, rural providers and existing nationwide 
wireless providers with access to additional spectrum needed to deploy the next 
generation of wireless networks.  
All told, 101 bidders won 1090 licenses, over half of whom (56) were small 
businesses taking advantage of the Commissions bidding credits program.  A total of 99 
bidders other than the nationwide wireless incumbents won 754 licenses  representing 
approximately 69 percent of the 1090 licenses sold in the 700 MHz auction.  In the A and 
B blocks alone, small and rural providers won spectrum that covered almost the entire 
country.
The sheer size of this auction is a harbinger of the benefits to come.  The next 
generation of wireless networks to be deployed in the 700 MHz Band will be faster than 
those available today, and will extend to both urban and rural areas of the country.  These 
networks will bring increased competition to a broadband sector currently served 
primarily by DSL and cable providers.  And just like users of those wired networks, 
wireless consumers will now be able to use the wireless devices and applications of their 
choice.  These developments will enable the U.S. to promote broadband deployment and 
spread the benefits of broadband to all consumers.
Of course, one important issue remains from the previous auction  the lack of a 
successful bidder for the D Block of spectrum that was a part of the Public Safety/Private 
Partnership.  Put simply, during a crisis public safety has to be able to communicate, 
regardless of where they are from or the uniform they wear.  In the absence of the 
financial resources for public safety to build out their own network, we should continue 
to try to explore ways in which we can help facilitate using the D Block as a tool to 
achieve a nationwide interoperable public safety network.  I believe that a Public/Private 
Partnership remains a viable means for achieving a nationwide interoperable broadband 
public safety network.  More importantly, I believe it remains the only tool at the 
Commissions disposal to solve the public safety interoperability challenge.  However, 
we will look at all options in considering the appropriate path, and look forward to 
hearing from the members with respect to their views.  
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Good morning Chairman Dingell, Chairman Markey, Ranking Member Barton, 
Ranking Member Stearns, and Members of the Committee.  Thank you for inviting me to 
be here with you today.  
Introduction
The 700 MHz spectrum auction closed almost one month ago.  It achieved a 
number of significant milestones, including:
 the largest auction in FCC history, raising a record $19.6 billion in bids; 
 advancing new open platform policies; 
 affirming aggressive build-out obligations; 
 creating what will be a new wireless broadband provider to compete with the 
incumbent telephone and cable companies in nearly every home in the U.S.; and 
 providing small businesses, new entrants, rural providers and existing nationwide 
wireless providers with access to additional spectrum needed to deploy the next 
generation of wireless networks.  
All told, 101 bidders won 1,090 licenses, over half of whom (56) were small businesses
taking advantage of the Commissions bidding credits program.  A total of 99 bidders 
other than the nationwide wireless incumbents won 754 licenses  representing 
approximately 69 percent of the 1,090 licenses sold in the 700 MHz auction.  In the A 
and B blocks alone, small and rural providers won spectrum that covered almost the 
entire country.
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The sheer size of this auction is a harbinger of the benefits to come.  The next 
generation of wireless networks to be deployed in the 700 MHz Band will be faster than 
those available today, and will extend to both urban and rural areas of the country.  These 
networks will bring increased competition to a broadband sector currently served 
primarily by DSL and cable providers.  And just like users of those wired networks, 
wireless consumers will now be able to use the wireless devices and applications of their 
choice.  These developments will enable the U.S. to promote broadband deployment and 
spread the benefits of broadband to all consumers.
Largest Auction Ever
The 700 MHz auction was the largest auction in FCC history, raising a record 
$19.6 billion in bids.  Even in a difficult economic climate, revenues raised in this auction 
well exceeded congressional estimates  nearly doubling the ten billion dollars Congress
had anticipated would be raised.  The $19.1 billion in winning bids and $19.0 billion in 
net winning bids makes this the largest auction in FCC history even without the sale of 
the D block.  In comparison, the 2006 Advanced Wireless Service (AWS-1) Auction sold 
approximately 50 percent more spectrum (90 MHz compared to 62 MHz in the 700 MHz 
auction), yet generated one-third less revenue (approximately $13.9 billion in winning 
bids and $13.7 billion in net winning bids).  Even with the open platform requirement and 
aggressive build-out obligations, each of these blocks sold for more than AWS-1 blocks 
with comparable bandwidth and license areas.  See Exhibit 1.  All other 68 auctions 
conducted by the FCC in the past 15 years collectively produced a total of only $19.1 
billion in actual receipts.  See Exhibit 2. 
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The Commission made several changes to its rules that helped make this auction a 
record success.  We implemented anonymous bidding for the first time in an auction of 
this size. By foreclosing opportunities for anti-competitive bidding behaviors, 
anonymous bidding increased the efficiency of the auction and helped ensure a fair result.  
Without anonymous bidding, auction revenue would likely have been substantially lower, 
and bidders would have had an opportunity to retaliate against smaller bidders and block 
new entrants.
We also changed the power limits for the A and B blocks, which were not tailored 
to the provision of mobile broadband services. With this modification, those blocks 
became much more suited to the provision of these mobile services. This made a 
significant difference in the attractiveness of these blocks to service providers wanting to 
provide mobile broadband.
Finally, we provided for a new form of combinatorial bidding that allowed 
bidders to bid on packages of licenses without the risk of winning only some of the 
licenses needed to execute their business plan.  Several bidders took advantage of this 
new opportunity by bidding on packages during the auction, with one successfully 
winning a package.
An Open Platform Achieved
While clearly a success in terms of dollars, this auction also attained significant 
public interest objectives that benefit the consumer.  Perhaps the most significant 
achievement of this auction is our new open platform policy.  With the open platform 
requirements on one-third of the spectrum offered in this auction, consumers will be able 
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to use the wireless device of their choice on those networks and download whatever legal 
software or applications they choose onto it.  A network that is more open to devices and 
applications will help foster innovation on the edge of the network, and give consumers 
greater freedom to use the wireless devices and applications of their choice.  Putting these 
choices into the hands of consumers, rather than network operators, will spur the next 
phase of wireless broadband innovation  innovation that can make us more productive, 
keep us entertained, and improve our quality of life.
When adopting the open platform requirement in the 700 MHz band, we saw it as 
a rare chance to promote innovation and consumer choice while writing on a clean slate. 
We targeted only one block of the spectrum.  We did not propose to apply this 
requirement to the entire 700 MHz band or other existing networks.  And we did not 
apply mandatory unbundling or wholesale requirements, which might undermine 
investment incentives.  We achieved a careful balance of spurring innovation and 
consumer choice while encouraging infrastructure investment.  I believe this minimal 
regulatory touch had maximum impact.
The auction had an impact on innovation in the wireless industry even before the 
bidding began.  In less than a year, many wireless providers evolved from vocal 
opponents to vocal proponents, embracing the open platform concept.  Verizon Wireless 
has committed to open its entire network to devices and applications for consumers.  
More and more wireless providers, including T-Mobile and Sprint through their 
participation in the Open Handset Alliance, and AT&T, are also embracing more 
openness in terms of devices and applications.  Less than a month after the auction 
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concluded, this interest now appears to be shared across the industry and has taken hold 
without the FCC imposing retroactive rules on existing investments.
Finally, some have argued that the C block should have been divided into smaller 
areas to ensure that smaller and rural providers could win additional spectrum.  Breaking 
up the C block could have prevented the emergence of a nationwide open platform. The 
economies of scope and scale enabled by this near nationwide open platform will provide 
significantly greater benefits to small businesses and entrepreneurs that design wireless 
handsets and applications than would multiple networks with differing open platform 
specifications.  This was a key advantage to making the C block available in large 
regional license areas with nationwide package bidding.
Most Aggressive Build-Out Policies Ever
To help ensure that rural and underserved areas of the country benefit from the 
new services that this spectrum will facilitate, the Commission adopted the most 
aggressive build-out requirements ever applied to wireless spectrum.  These rules will 
ensure that the spectrum is quickly put to use by all auction winners  no matter who they 
are  to deploy new technologies and offer new services in both urban and rural areas of 
the country.  If auction winners do not put their spectrum to use serving consumers, the 
Commission will reclaim it and make it available to someone else who will.
Small Business Success
Small businesses eligible for bidding credits were very successful in the auction that 
ended last month.  In this auction, 56 (55%) of 101 total winning bidders claimed 
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designated entity bidding credits as small businesses, 49 of whom are also new entrants. 
This is very similar to past auctions.  See Exhibit 3. Small businesses eligible for bidding 
credits won 379 (35%) of 1,090 licenses  which again is similar to past auctions.  See 
Exhibit 4.  These licenses covered a large portion of the country primarily in rural areas. 
See Exhibit 5.  
Bidding credits made a significant difference for these bidders, with designated 
entities winning over half of their licenses by outbidding a non-designated entity that 
placed the second highest bid without a bidding credit.  In all, small businesses claiming 
bidding credits won licenses valued at over half a billion dollars, and had success in this 
auction similar to the success they had in comparable PCS and AWS auctions.  See 
Exhibit 6.  
Opportunities for New Entrants, Small and Rural Providers
The structure of the auction also provided significant opportunities for new 
entrants, rural providers and non-nationwide incumbents. The auction drew wide-ranging 
interest from a number of new players. A bidder other than a nationwide incumbent won 
a license in every market. A total of 99 bidders other than the nationwide wireless 
incumbents won 754 licenses  representing approximately 69 percent of the 1,090 
licenses sold in the 700 MHz auction.
In fact, most auction winners are new entrants.  Of the 101 winning bidders, 72 
are new entrants who won 675 licenses.  In the unpaired E block, new entrant Frontier 
Wireless LLC (Dish Network) won 168 licenses to establish a near nationwide footprint.  
See Exhibit 7.
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Some have argued that small and rural providers were unable to win any 
spectrum.  One recent analyst claimed, Firms that would willingly set up shop in rural 
America were priced out of the market because so few frequencies were made available 
in licenses that only covered smaller communities.1 This is simply not true.  In fact, 
new entrants, small and rural providers did especially well in rural areas.  In the A and B 
blocks alone, small and rural providers won spectrum that covered almost the entire 
country.  See Exhibit 8.  Where they were unsuccessful was not in rural America or even 
in medium size markets but in twenty large metropolitan areas such as New York, Los 
Angeles, Dallas, Chicago and Atlanta. 
In fact, a large portion of the money spent by Verizon and AT&T  approximately 
$8 billion  was used to obtain spectrum in only the top 15 markets in the A and B 
blocks. The small and rural providers won 500 licenses covering almost 60 percent of 
MHz/pops available outside the top 15 markets in the A and B blocks.2 These 500 
licenses outside the top 15 markets sold for an average price of only $0.66 per MHz-pop, 
which is significantly lower than the average price of $1.92 per MHz-pop for all licenses 
in these blocks.  Winners in these smaller and rural markets will provide increased access 
to broadband and greater choice in wireless service for consumers living in rural areas.
Some have argued we should have provided more smaller geographic areas, as we 
did in AWS-1.  However, the percentage of spectrum available in smaller geographic 
areas was very comparable.  See Exhibit 9.  The band plan makes nearly half of the 
spectrum available over smaller and medium-sized geographic areas, about one-third of 
  
1 Coleman Bazelon, The Brattle Group, Broadcasting and Cable 4/7/2008.
2 These providers include all bidders with fewer than one million mobile telephony subscribers, including 
those with no such subscribers (new entrants).
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the spectrum available over larger regional areas, and about one sixth of the spectrum 
available on a nationwide basis that will be used exclusively as part of a 
public/partnership with a national public safety licensee.  This distribution is very similar 
to the geographic distribution in the AWS-1 Auction from 2006.
Moreover, in these largest markets the geographic size of the license did not seem 
to matter.  The nationwide incumbents need for wireless broadband spectrum in major 
markets drove them to bid substantial amounts for even the smallest urban licenses in the 
B block, where they often were bidding only against one another.  Unless the 
Commission had banned the nationwide incumbents  an idea few advocated  smaller 
and rural providers would likely not have succeeded in the largest markets.    
A Wireless Third Pipe
Significantly, because this spectrum is well-suited for the provision of wireless 
broadband, the auction represents a critical opportunity to continue deploying wireless 
broadband services.  All Americans should enjoy the benefits of broadband competition 
availability, high speeds and low prices.  In much of the country, consumers have a 
choice of only two broadband services: cable or DSL.  Wireless service is fast becoming 
critically important as another platform to provide broadband.  Last summer, I testified 
that one of the most important steps we could take to provide affordable broadband to all 
Americans is to facilitate the deployment of a third pipe into the home. 
Although the Commission adopted a plan urged by a coalition supporting a new 
national wireless broadband alternative (i.e., 11 MHz paired, large geographic areas and 
combinatorial bidding) the auction did not result in a single, nationwide new entrant. 
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While it might have been better if a new nationwide provider had emerged, that does not 
mean that this auction did not ensure that a third provider will be able to use a wireless 
broadband platform to compete against the incumbent telephone and cable companies. 
For example, Verizon, which is not the incumbent DSL or cable provider in Chicago, 
won licenses in that area.  As a result of the auction then, Verizon will be able to provide 
a more robust wireless broadband service to compete with the incumbent telephone and 
cable companies.  The same can be said of Metro PCS winning licenses in Boston and 
AT&T winning licenses in New York City.  In those areas these companies will be 
providing an alternative wireless broadband service in competition with the broadband 
services currently provided by the incumbent telephone and cable companies.3
A bidder other than the incumbent DSL or cable provider won a 700 MHz 
spectrum license in the paired A, B, or C blocks in nearly every area in the country.  See 
Exhibit 10. In most areas, these non-wired bidders include rural and smaller providers 
(including new entrants).  As a result, we have greatly enhanced the potential for an 
additional wireless third-pipe in nearly every home across the country.  In fact, both 
nationwide incumbents that participated in the 700 MHz auction have announced they 
will deploy the very latest generation of wireless broadband services using this spectrum, 
which will operate at speeds competitive with the latest DSL and cable modem services.
  
3 Even where the nationwide incumbents do have wires, any incentives to limit their nationwide wireless 
networks to protect their regional wired revenues appear to have been outweighed by the need to compete 
with other wireless providers and the greater nationwide growth opportunities available in the wireless 
broadband market.  For example, even though Verizon has an extensive wired broadband network, Verizon 
Wireless has historically been the most aggressive nationwide wireless incumbent in rolling out wireless 
broadband service in both Verizons wired and un-wired territories.
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Competitive Impact Going Forward
The impact of this auction on the emerging wireless broadband market cannot be 
measured in isolation.  During my time as Chairman, the Commission has made vast 
amounts of spectrum available for the next generation of innovative wireless services, 
including 90 MHz of spectrum in the Advanced Wireless Service and the 62 MHz of 
spectrum in the 700 MHz band being discussed today.  With this additional spectrum, the 
four nationwide incumbent wireless providers are more equal competitors in terms of 
spectrum ownership in the top 100 markets.  See Exhibit 11.
Including Auction 73, AT&T holds an average of 83 MHz of spectrum in the top 
100 markets post auction, and Verizon Wireless holds an average of 79 MHz of spectrum 
in those markets.  Although Sprint and T-Mobile did not participate in the 700 MHz 
auction, they hold significant amounts of spectrum in other bands, including the 
Broadband Radio Service and Advanced Wireless Services bands.  Sprint currently holds 
an average of 100 MHz of commercial spectrum in the top 100 markets, and T-Mobile 
holds and average of 48 MHz of spectrum in those markets.  Other providers, including 
rural carriers, new entrants, and small businesses, hold significantly more spectrum in the 
top 100 markets than any one of the nationwide incumbents alone and hold even more 
spectrum on average in rural areas.   
Solving the Public Safety Interoperability Crisis
Of course, one important issue remains from the previous auction  the lack of a 
successful bidder for the D Block of spectrum that was a part of the Public Safety/Private 
Partnership.  
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While the results of the last auction will help inform our decision with respect to 
the D Block, our decision must also be informed by the continuing need for a truly 
nationwide interoperable broadband network for public safety agencies to use during 
times of emergency.  Put simply, during a crisis public safety has to be able to 
communicate, regardless of where they are from or the uniform they wear.  
I remain committed to finding a solution that will facilitate a nationwide 
interoperable broadband network for public safety.  It has been more than six years since 
brave police and fire fighters ran into the Twin Towers and the Pentagon without an 
effective emergency communications system.  The Public Safety/Private Partnership was 
intended to ensure that public safety keeps pace with the advances in communications, 
and gives first responders the interoperable broadband communications capabilities they 
need to protect the life and property of the American public.  The Commission could not 
have afforded to let the opportunity that the 700 MHz band offers for public safety pass 
us by. 
My Republican and Democratic colleagues all agreed.  The Commission 
unanimously adopted the Public Safety/Private Partnership approach for the D Block as 
an innovative means to address the critical need for nationwide public safety 
interoperability.  Many national and local public safety organizations also expressed 
support for a public-private partnership approach as their last, best chance to make this 
network a reality.  
While I and some of my colleagues would have preferred for public safety to have 
their own funding to build a network, the simple reality is that funding remains a 
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significant challenge with respect to public safety interoperability.  The Public/Private 
Partnership was designed to address this crucial issue, as the only tool reasonably 
available to the Commission.  In the absence of the financial resources for public safety 
to build out their own network, I believe we should continue to try to explore ways in 
which we can help facilitate using the D Block as a tool to achieve a nationwide 
interoperable public safety network.
The Commission will, however, also need to take into account why the D Block 
did not attract a successful bidder.  For example, the Commission needs to consider 
whether the demands that were being placed on the prospective D Block winner were too 
great.  Were the network expectations reasonable?  Was the build-out requirement 
imposed on the D block winner too ambitious? 
I am aware of allegations made with respect to the Public Safety Spectrum Trust 
and their advisor, and I have asked the Inspector General to look into these claims.  We 
await the results of the Inspector Generals investigation, which will inform our actions 
going forward.  
I also believe that we will need to revisit the obligations of the D Block within the 
partnership, and ensure that there is sufficient certainty in the process.  We will need to 
evaluate ways to restructure the Public Safety/Private Partnership.  With respect to the 
Public Safety Broadband Licensee, we need to be clearer about the role that the public 
safety licensee will play in the day-to-day operations of the network.  For example, I do 
not believe the Commission envisioned that the Public Safety Broadband Licensee would 
function as a commercial reseller of the D Block licensees services, nor did the 
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Commission envision large-scale network operations being undertaken by the public 
safety licensee.  
I believe that a Public/Private Partnership remains a viable means for achieving a 
nationwide interoperable broadband public safety network.  More importantly, I believe it 
remains the only tool at the Commissions disposal to solve the public safety 
interoperability challenge.  However, we will look at all options in considering the 
appropriate path, and look forward to hearing from the members with respect to their 
views.  
Conclusion
This auction stands as the most successful FCC auction ever conducted, but there 
is still more to be done.  We must still find a way to help public safety build a nationwide 
interoperable broadband network, and we must license the D block so that it can be put to 
use as soon as possible after the end of the digital television transition.  I look forward to 
working with this Committee and my colleagues on these difficult issues in the months to 
come.
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EXHIBITS