```

[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]

  U.S. DEPLOYMENT OF THIRD GENERATION WIRELESS SERVICES: WHEN WILL IT 
                    HAPPEN AND WHERE WILL IT HAPPEN?

=======================================================================

                                HEARING

                               before the

          SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET

                                 of the

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 24, 2001

                               __________

                           Serial No. 107-58

                               __________

       Printed for the use of the Committee on Energy and Commerce

 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house

                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
74-845CC                    WASHINGTON : 2001

For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512-1800  
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001
                    ------------------------------  

                    COMMITTEE ON ENERGY AND COMMERCE

               W.J. ``BILLY'' TAUZIN, Louisiana, Chairman

MICHAEL BILIRAKIS, Florida           JOHN D. DINGELL, Michigan
JOE BARTON, Texas                    HENRY A. WAXMAN, California
FRED UPTON, Michigan                 EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida               RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio                RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania     EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California          FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia                 SHERROD BROWN, Ohio
STEVE LARGENT, Oklahoma              BART GORDON, Tennessee
RICHARD BURR, North Carolina         PETER DEUTSCH, Florida
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
GREG GANSKE, Iowa                    ANNA G. ESHOO, California
CHARLIE NORWOOD, Georgia             BART STUPAK, Michigan
BARBARA CUBIN, Wyoming               ELIOT L. ENGEL, New York
JOHN SHIMKUS, Illinois               TOM SAWYER, Ohio
HEATHER WILSON, New Mexico           ALBERT R. WYNN, Maryland
JOHN B. SHADEGG, Arizona             GENE GREEN, Texas
CHARLES ``CHIP'' PICKERING,          KAREN McCARTHY, Missouri
Mississippi                          TED STRICKLAND, Ohio
VITO FOSSELLA, New York              DIANA DeGETTE, Colorado
ROY BLUNT, Missouri                  THOMAS M. BARRETT, Wisconsin
TOM DAVIS, Virginia                  BILL LUTHER, Minnesota
ED BRYANT, Tennessee                 LOIS CAPPS, California
ROBERT L. EHRLICH, Jr., Maryland     MICHAEL F. DOYLE, Pennsylvania
STEVE BUYER, Indiana                 CHRISTOPHER JOHN, Louisiana
GEORGE RADANOVICH, California        JANE HARMAN, California
CHARLES F. BASS, New Hampshire
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska

                  David V. Marventano, Staff Director

                   James D. Barnette, General Counsel

      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

          Subcommittee on Telecommunications and the Internet

                     FRED UPTON, Michigan, Chairman

MICHAEL BILIRAKIS, Florida           EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas                    BART GORDON, Tennessee
CLIFF STEARNS, Florida               BOBBY L. RUSH, Illinois
  Vice Chairman                      ANNA G. ESHOO, California
PAUL E. GILLMOR, Ohio                ELIOT L. ENGEL, New York
CHRISTOPHER COX, California          GENE GREEN, Texas
NATHAN DEAL, Georgia                 KAREN McCARTHY, Missouri
STEVE LARGENT, Oklahoma              BILL LUTHER, Minnesota
BARBARA CUBIN, Wyoming               BART STUPAK, Michigan
JOHN SHIMKUS, Illinois               DIANA DeGETTE, Colorado
HEATHER WILSON, New Mexico           JANE HARMAN, California
CHARLES ``CHIP'' PICKERING,          RICK BOUCHER, Virginia
Mississippi                          SHERROD BROWN, Ohio
VITO FOSSELLA, New York              TOM SAWYER, Ohio
TOM DAVIS, Virginia                  JOHN D. DINGELL, Michigan,
ROY BLUNT, Missouri                    (Ex Officio)
ROBERT L. EHRLICH, Jr., Maryland
LEE TERRY, Nebraska
W.J. ``BILLY'' TAUZIN, Louisiana
  (Ex Officio)

                                  (ii)

                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Dempsey, Michael J., President, The Catholic Television 
      Network....................................................    41
    Hatch, William T., Acting Assistant Secretary of Commerce, 
      Office of Communications and Information, Department of 
      Commerce...................................................    14
    Knapp, Julius P., Deputy Chief, Office of Engineering and 
      Technology, Federal Communications Commission..............    25
    Strigl, Dennis F., Chief Executive Officer, Verizon Wireless.    36
    Wells, Linton, Assistant Secretary of Defense for Command, 
      Department of Defense......................................    18
    Wheeler, Thomas E., President and CEO, Cellular 
      Telecommunications and Internet Association................    31
Material submitted for the record:
    Wells, Linton, Assistant Secretary of Defense for Command, 
      Department of Defense, responses for the record............    67

                                 (iii)

  

 
  U.S. DEPLOYMENT OF THIRD GENERATION WIRELESS SERVICES: WHEN WILL IT 
                    HAPPEN AND WHERE WILL IT HAPPEN?

                              ----------                              

                         TUESDAY, JULY 24, 2001

              House of Representatives,    
              Committee on Energy and Commerce,    
                     Subcommittee on Telecommunications    
                                          and the Internet,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:30 a.m., in 
room 2123, Rayburn House Office Building, Hon. Fred Upton 
(chairman) presiding.
    Members present: Representatives Upton, Stearns, Cox, Deal, 
Largent, Cubin, Shimkus, Wilson, Pickering, Davis, Terry, 
Markey, Gordon, Rush, Eshoo, Engel, Green, McCarthy, Luther, 
Harman, Sawyer, and Dingell (ex officio).
    Staff present: Howard Waltzman, majority counsel; Yong 
Choe, legislative clerk; Andy Levin, minority counsel; and 
Brendan Kelsay, minority professional staff.
    Mr. Upton. I've been told that my colleague, Mr. Markey, is 
running a little bit late, but we're going to get started and I 
would, I guess, before we start, I'm going to ask unanimous 
consent that all members of the subcommittee be allowed to put 
their opening statements into the record, so, without 
objection, that is now done.
    Good morning. Today's hearing is appropriately titled 
``U.S. Deployment of Third Generation Wireless Services: When 
Will It Happen and Where Will It Happen?''
    It is important to note that the title of this hearing is 
not whether this deployment will happen. There is much at stake 
for the economy and competitiveness of our Nation and 
particularly, the United States tech sector, not to mention our 
Nation's consumers. In October 2000, the Council of Economic 
Advisors found that the appropriate allocation of commercial 
spectrum licenses that favor investment have the potential to 
unleash a wave of innovation in 3G applications. The 
President's Council of Economic Advisers concluded that an 
additional 150 megahertz of spectrum could bring an additional 
$35.7 billion of service revenues each year. In addition, 
billions of dollars would be spent on 3G phones and networks. 
The economic growth that would be prompted by an auction of 
spectrum for 3G services is exactly the right medicine for our 
slumping technology sector and the U.S. economy as a whole.
    With so much at stake, to quote the great movie Apollo 13, 
``failure is not an option.'' Does this mean that the 
challenges to make 3G a reality are not daunting? No. Does this 
mean that we do not need to carefully seek consensus among all 
of the affected parties to make it a reality? No. But as 
chairman of this subcommittee, I'm committed to trying to make 
this work.
    I also want to mention that with the concurrence of the 
chairman of the full committee, Mr. Tauzin, I'm working with 
our subcommittee colleague, Mr. Pickering and others, to craft 
bipartisan legislation which will provide a win-win solution 
for our country.
    I am hopeful that we can unveil this legislation some time 
early this fall and begin the legislative process in earnest in 
this subcommittee. As we explore the how to relocated and 
compensate incumbent government users of spectrum to make way 
for 3G, we need to recognize that if this involves the 
Department of Defense, there are critically important national 
security considerations which demand our fullest attention and 
respect.
    Proudly, the U.S. is the world's sole superpower and we 
cannot diminish our military's sophisticated battlefield 
communications nor its training communication needs. Indeed, it 
is our military's superior communications and intelligence 
capabilities which makes its power so awesome and enables our 
Nation to achieve military superiority with a minimum exposure 
of our troops to harm's way.
    However, I would note that under its current spectrum 
allocation, the DOD encounters enormous interference issues in 
parts of the world because our military communications 
equipment is calibrated to frequencies which have crowded 
commercial use. This is not ideal and presumably will only get 
worse as the industrialized world moves toward even more 
wireless use. In this regard, I am reminded of General John 
Herr, Chief of the Calvary when he sat before a Congressional 
Committee in 1941 on the dawn of our Nation's entry into World 
War II and he said, with great confidence, that four mounted 
Cavalrymen spaced 100 yards apart could charge half a mile 
across an open field and destroy an enemy machine gun nest 
without injury to themselves. If the Congress had chosen to not 
even explore the replacement of horses with tanks, where would 
we have been? I do not suggest that the answers in the case of 
3G are simple, but I do believe that we need to continue 
looking to the future and planning accordingly. I am optimistic 
that we will find a win-win for all involved.
    At the outset, I want to highlight my personal view that we 
need to see a solution which ensures that our Nation's 3G 
allocation is harmonized with that of the rest of our major 
trading partners. If not, we will lose the competitive benefits 
in the economy of scale which harmonization would provide.
    So today, I look forward to the testimony our witnesses who 
will help us answer the very difficult, yet hopefully, noble 
questions of when and where we are to deploy 3G in our country 
and I yield to my friend, the ranking member of the 
subcommittee, Mr. Markey from Massachusetts.
    [The prepared statement of Hon. Fred Upton follows:]
   Prepared Statement of Hon. Fred Upton, Chairman, Subcommittee on 
                  Telecommunications and the Internet
    Good morning. Today's hearing is appropriately titled: U.S. 
Deployment of Third Generation Wireless Services: When Will it Happen 
and Where Will it Happen? It is important to note that title of this 
hearing is not ``WHETHER'' this deployment will happen. There is much 
at stake for the economy and competitiveness of our nation and 
particularly the U.S. tech sector--not to mention our nation's 
consumers.
    In October 2000, the Council of Economic Advisers (CEA) found that 
``[a]n appropriate allocation of commercial spectrum licenses that 
favor investment have the potential to unleash a wave of innovation in 
3G applications.'' CEA concluded that ``an additional 150 MHz of 
spectrum could bring an additional $35.7 billion of service revenues 
per year.'' In addition, billions of dollars would be spent on 3G 
phones and networks. The economic growth that would be prompted by an 
auction of spectrum for 3G services is exactly the right medicine for 
our slumping technology sector and the U.S. economy as a whole. With so 
much at stake, to quote the great movie, Apollo 13: ``Failure is not an 
option''.
    Does this mean that the challenges to make 3G a reality are not 
daunting? No. Does this mean that we do not need to carefully seek 
consensus amongst all of the affected parties to make it a reality? No. 
But as Chairman of this Subcommittee, I am committed to rolling-up my 
sleeves and figuring out a way to make this work. I also want to 
mention that, with the concurrence of the Chairman of the full 
Committee, Mr. Tauzin, I am working with our Subcommittee colleague, 
Mr. Pickering, and others, to craft legislation which will provide a 
``win-win'' for our nation. I am hopeful that we can unveil that 
legislation early this Fall and begin the legislative process in 
earnest in this Subcommittee.
    As we explore the how to relocate and compensate incumbent 
government users of spectrum to make way for 3G, we need to recognize 
that, if this involves the Department of Defense, there are critically 
important national security considerations which demand our fullest 
attention and respect. Proudly, the United States is the world's sole 
superpower, and we cannot diminish our military's sophisticated 
battlefield communications, nor its training communications needs. 
Indeed, it is our military's superior communications and intelligence 
capabilities which makes its power so awesome and enables our nation to 
achieve military superiority with a minimum exposure of our troops to 
harm's way.
    However, I would note that under its current spectrum allocation, 
the DoD encounters enormous interference issues in parts of the world 
where our military communications equipment is calibrated to 
frequencies which have crowded commercial use. This is not ideal and 
presumably will only get worse as the industrialized world moves toward 
even more wireless use.
    In this regard, I am reminded of General John Knowles Herr, chief 
of the cavalry, when he sat before a congressional committee in 1941, 
on the dawn of our nation's entry into World War Two, and said with 
great confidence that four mounted cavalrymen, spaced one hundred yards 
apart, could charge half a mile across an open field and destroy an 
enemy machine gun nest without injury to themselves. If the Congress 
had chosen to not even explore the replacement of horses with tanks, 
where would we have been? I do not suggest that the answers in the case 
of 3G are as simple, but I do believe that we need to continue looking 
to the future and planning accordingly. I am optimistic that we can 
find a ``win-win'' for all involved.
    At the outset, I want to highlight my personal view that we need to 
seek a solution which ensures that our nation's 3G allocation is 
harmonized with the rest of our major trading partners--or we will lose 
the competitive benefits and the economies of scale which harmonization 
provides.
    So today I look forward to the testimony of our witnesses who will 
help us answer the very difficult, yet hopefully, knowable questions of 
``when'' and ``where'' we are to deploy 3G in our nation.

    Mr. Markey. I thank the chairman very much and I thank you 
for having this very important hearing. There's no question 
that your military analogy is appropriate because clearly we're 
talking in many instances here about spectrum which is 
controlled the Defense Department. I don't see them as 
witnesses here today, oh, I see, Mr. Wells is here. Good. But 
without question that's an integral part of this entire 
discussion. I remember back now 10 years ago when the General 
in charge of Command Control and Communication of Three Star 
sat here and said that it was impossible to move over 200 
megahertz of spectrum at two separate hearings and it would 
cause serious defense problems for our country. But 
nonetheless, we did it and it created the third, fourth, fifth, 
sixth and seventh cellular phone license in every market in the 
United States. Again, there are tradeoffs in everything that we 
do here and at the end of the day we have to do it 
synchronizing with the government, with the Defense Department 
because clearly there are two very strong competing interests 
at play.
    Since this is the first foray, Mr. Chairman, this year into 
this issue, and because the FCC and the Commerce Department are 
still in the relatively early stages of identifying possible 
frequencies for additional reallocation to the private sector, 
the initial set of questions presented to policymakers is 
fairly general. While it is axiomatic that almost everyone 
wants more spectrum or wants to retain use of that which they 
already utilize, the task before us to gauge how much spectrum 
distinct services actually need in order to flourish. For 
instance, how much spectrum is truly needed for 3G services? Do 
carriers need 20 megahertz, 40 megahertz, 80 megahertz or some 
other amount? We have to know that answer, Mr. Chairman.
    In addition, we need to ascertain how much spectrum is 
required at this time and then estimate or guess how much may 
be needed at later dates to meet demand of ever higher rates.
    There are other key questions that need to be addressed as 
well. How should the government roll out that spectrum and make 
it available? Should it all be reallocated immediately and sold 
as it becomes available, or rather should we proceed under the 
more cautious rollout so that we can assess both the demand 
over time as well as anticipating the inevitable breakthroughs 
in digital technology that may avail carriers of the 
opportunity of doing more with less.
    Will all incumbents be eligible to bid? Will we preserve 
competition with retention of some type of spectrum cap which 
limits total spectrum a carrier can accumulate in individual 
markets? Or will we remove the cap completely and encourage 
consolidation in the wireless marketplace? Indeed, if we are 
able to reallocate more spectrum that the carriers each need 
for 3G services, can the government license new competitors?
    Now I appreciate that the incumbents will not like that 
alternative, yet on the other hand we have seen in recent 
months the contraction of competition in the local loop from 
wireline competitors. Can we hope to license additional 
wireless competitors to challenge wireline services?
    In my view, if we are looking at the last major 
reallocation of the public spectrum resources for a generation, 
we owe it to the public to maximize service and to maximize 
competition. The last thing we want to see in the wireless 
marketplace is the consolidation and rising prices that we 
witnessed in other areas of telecommunications.
    Finally, I want to say a few words on what happens once all 
this difficult work is completed and the auctions are over. 
Many people in recent months have talked about a policy of win-
win in this area. Government can find additional airwaves and 
license it to the wireless industry through auctions, and 
second, the government can use the proceeds from that auction 
to compensate incumbent users primarily the military perhaps 
and assist those entities in obtaining and purchasing new 
equipment to utilize at another frequency.
    What I'd like to suggest is that we strive for a win-win-
win for our subcommittee and the country when we act in this 
area. We can certainly reallocate additional spectrum to assist 
in private sector deployment of 3G services and we can create a 
fund for the military and other users to assist in their 
reallocation and retooling. Yet, we can also achieve another 
policy win by taking additional auction proceeds to foster use 
of educational technology, the deployment of public 
telecommunications infrastructure in needed areas and craft a 
self-sustaining fund for grants to address the digital divide. 
For example, we have a requirement that all television stations 
must convert to digital broadcasting, yet Congress has not been 
forthcoming with funding to assist public stations in that 
conversion.
    Moreover, we have a need in this country to assist in 
teacher training and worker training for the digital economy. 
Grants to support pilot projects could be a use of spectrum 
proceeds as could be the deployment of broadband connections to 
public housing facilities, Headstart facilities, community 
centers and America's most rural areas.
    Let's think creatively about how we can direct efficient 
use of the auction proceeds and I hope that we can work in a 
bipartisan manner to achieve our common high tech and 
educational technology goals for this country.
    Again, Mr. Chairman, I want to commend you for holding this 
very important hearing and I'm looking forward to the process 
as it unfolds.
    Mr. Upton. Thank you. I recognize for an opening the vice 
chairman of the subcommittee, Mr. Stearns from Florida.
    Mr. Stearns. Good morning and thank you, Mr. Chairman, and 
I also want to commend you for this hearing to examine third 
generation wireless services. It's a very competitive market. 
In less than 20 years, the United States wireless industry has 
ballooned to more than 100 million subscribers and it continues 
to grow at the rate of 25 to 30 percent annually. I believe one 
of the more important roles of this committee is to ensure that 
our Nation's spectrum is managed properly, wisely and 
efficiently.
    Unfortunately, for many years, spectrum policy has ridden 
on the back of budgetary needs. As such, one of the top 
priorities of Administrations and Congress needs to be a 
comprehensive plan on spectrum management. For starts, spectrum 
policy must be divorced from the needs of budgetary number 
crunchers. For too long, government has viewed this precious 
resource as nothing more than a means to fulfilling its 
budgetary needs and wants.
    Additionally, sound management of the spectrum is not 
complete without ensuring this resource is available to those 
who need it. As a result, I urge my colleagues to join me in 
supporting legislation that I introduced to repeal the FCC's 
antiquated and obsolete cap on spectrum. Current FCC 
regulations prohibit a single entity's attributable interest in 
the licenses of broadband PCS cellular and specialized mobile 
radio services from cumulatively exceeding more than 45 
megahertz of spectrum within the same geographic area.
    Today, the cap limits competition by denying wireless 
providers access to open markets, also thereby denying 
consumers the benefits that arise from additional competition 
such as lower prices and innovative services.
    Furthermore, wireless providers have limited room for 
advanced services such as data on their networks as they plan 
for 3G services. The lack of spectrum threatens the ability to 
expand current systems and entice new customers. Additionally, 
continuation of the spectrum cap result in the continued lag of 
the United States companies behind Europe, Japan and deployment 
of wireless 3G technologies.
    Legislation I introduced, H.R. 2535, the Spectrum Resource 
Assurance Act, repeals the FCC's spectrum caps.
    Mr. Chairman, the next generation of wireless technology 
will bring broadband to hand held devices, allowing for new 
audio, video and other applications. As such, 3G services 
promises users the ability to use their wireless phones to work 
anywhere in the world, therefore, the development of robust 
third generation advanced mobile services is one of the most 
critical communications and e-commerce issues facing us in this 
country. Regrettably, the figurative spectrum train car 
identified by the International Telecommunications Union for 3G 
advanced mobile service may be derailed by U.S. incumbents 
unwilling to relinquish their spectrum.
    Of particular concern is the Defense Department. They're 
unwilling to relinquish its spectrum by citing relocation as 
extremely costly, technical infeasible and a threat to national 
security. While the Defense Department use of the spectrum of 
such things as combat training, tactical weapons systems and 
tactical radio relay serve in the national interest, I am wary 
of sacrificing American technology and competitive might in the 
telecommunications area to European and Asian competitors 
simply because the Department of Defense is unwilling to even 
give up a part or to work out an arrangement that would occur 
in the near future. I have not given up hope. I commend FCC 
Chairman Powell and Commerce Secretary Evans for seeking relief 
from the deadlines requiring the government to identify 
spectrum by the end of this month and auction licenses by 
September 30, 2002. A time out will allow all the government 
entities responsible for U.S. spectrum management to have 
adequate time to develop a plan to make spectrum available for 
advanced wireless services in the future.
    Quite simply, Mr. Chairman, 3G services like many of the 
issues this committee examines, will not become a reality 
unless all the players are involved, both government and 
private, cooperate and work together toward a common goal. 
After all, at the end of the day we need a rational policy on 
spectrum in order to balance the interests between government 
and industry. Thank you, Mr. Chairman.
    Mr. Upton. Mr. Sawyer from Ohio.
    Mr. Sawyer. Thank you very much, Mr. Chairman. I was 
pleased to hear the way you opened the hearing today, drawing a 
contrast between what the title is and what it might have been 
in terms of when and where rather than whether. I was stunned 
when my staff told me that there are actually pessimists out 
there who believe that third generation is not desired, wanted, 
marketable in the United States. I was flabbergasted at that, 
but I gather that must be true, that there are people who are 
saying such things. I, like you, am an optimist. I don't think 
it's a matter of whether, but when we get there. I think that 
3G will lead the way for wireless Internet to provide the 
competition we've been seeking among the big telecom players, 
wireless guys have generally been pretty good guys, good self-
regulators. They've dealt well with issues of privacy and 
beyond that, it may well be that 3G provides at least a partial 
answer to the digital divide.
    One of the things that I hope we can talk about today a 
little bit is what comes after third generation, what might a 
fourth generation consist of, are we missing an opportunity if 
we don't make space for that now? It's clear that spectrum 
shortage won't go away simply because DOD's decision to make 
more space and it may well be that we're missing an opportunity 
to fix our spectrum problems by looking for a short term 
instead of a longer term solution.
    The current spectrum map makes it very difficult to do any 
future planning in the present dysfunctional allotment system. 
We've outgrown the 1934 scheme. It seems to me, perhaps that 
it's a good time right now to slow down and take a look at the 
range of options, perhaps creating a single organization to 
manage industry and government spectrum and leading to, as 
previous speakers have said, a more coherent policy regarding 
spectrum, one that's more flexible.
    Finally, let me just touch on something we don't talk about 
a great deal and that's the issue of spectrum efficiency. As it 
becomes more of a scarce resource we should find ways to reward 
those who use it more efficiently. We're learning hard lessons 
in that every week in the energy crunch and that is that when 
there's a shortage of resources we must use that resource more 
carefully and more efficiently. I think the same principle 
probably applies to spectrum today.
    I look forward to our witnesses' remarks and thank you, Mr. 
Chairman, for calling the hearing.
    Mr. Upton. Thank you. Mr. Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman. I appreciate this 
hearing today. I see not in the front panel, but in the back 
room, a couple of white suiters and a couple of blue suiters 
and I'd like to welcome my military colleagues here to the 
Commerce Committee and I want to go on the record, Mr. 
Chairman, I'm not a cavalryman, I'm an infantryman so hopefully 
those comments about the cavalrymen will not be held against 
me. In military parlance, especially in the infantry, to move, 
to shoot and to communicate is basic military doctrine and this 
spectrum debate is really about the ability to communicate with 
our military forces around the world. And we have to be very, 
very careful as we do diligence in this debate and ensure that 
if we were to eventually move defense issues to different 
levels that there is quick, rapid deployment in other areas so 
that the national defense, which is the preeminent 
responsibility of Federal Government is defending its citizens, 
make no mistake about it. We can do a lot of things and we 
provide greater services, but if we're not willing to protect 
our citizens, then I really question why we serve in this 
office. But there is also a dilemma in my own congressional 
district being a very large, rural district, 3G services offers 
the ability to connect my rural citizens with increased 
technology that is badly needed, especially when we want to 
keep rural America alive and vibrant. It offers great hope to 
keep people at home and living in the communities they really 
want to live while providing really some high tech work in the 
high tech sector through 3G.
    So we are in for a good hearing. We've got a great panel 
ahead of us. I look forward to hearing their opening statements 
and then responding to questions with them, Mr. Chairman. I 
yield back my time.
    Mr. Upton. Ms. Eshoo.
    Ms. Eshoo. Thank you, Mr. Chairman, for convening this 
hearing and welcome to our guests here this morning that are 
going to testify.
    Third generation wireless services' promise of a wealth of 
new and improved performance capabilities that can have, I 
believe, a really significant effect, not only on our economy, 
but the global economy, but what I think we're going to learn 
today from this hearing is how best to assure that there's a 
successful transition to 3G services and that we have to have a 
comprehensive and efficient spectrum assignment plan for the 
technologies.
    The plan, obviously, has to be developed with a great deal 
of care and input from all the parties that are involved. And I 
think I can't help but think that we can learn something from 
what's transpired overseas. Maybe some of the witnesses can 
speak to that this morning.
    As we've learned from the past years' dot com implosion 
unreasonable expectations, I think, can lead to tremendous 
losses of capital, so what we do we have to do well. We have to 
do carefully. We have to plan it well. There's some indication 
that the winners in the auctions held overseas are longing for 
a return of some of the enormous sums that they invested. Some 
of the companies took on enormous debt in order to purchase the 
spectrum, only to find that they may not have sufficient 
capital to build the networks required for the employment of 
the technology.
    Other headlines, I think, at least give me some pause. 
Singapore has canceled its 3G auction because it's only had 
three bidders for four licenses. Carriers have announced delays 
in their service plans in Europe and Japan and Australia has 
raised just over $1 billion in its 3G auction. Is there 
anything for us to learn from this? Does this have anything to 
say about where we're headed? I'd like the people that are at 
the witness table this morning to spend a moment talking about 
that.
    There's another point that I'd like to make and that is 
while 3G brings with it many promises, there are many 
intricacies that may delay its deployment. I'm concerned that 
its future promise may be diverting the attention of the 
industry from an issue that I've been plugging away at for a 
long, long time and that's from the implementation of life 
saving technologies such as enhanced 911. The resources devoted 
to 911, to E-911 pale in comparison to those invested in what's 
arguably a less precise technology in 3G. Now it may be 
somewhat unfair, I think, for the industry to hear of me 
comparing one to the other, but I still fail to understand why 
we can't get the one done as we move to the other. So I'm 
puzzled as to why the industry fails to move forward with E-911 
deployment with the same vigor as 3G. We know that lives can be 
saved and that we have an excellent panel here today and I hope 
that you will address the point that, the last point that I 
just made as well as the others and if not, fear not, I'll 
question you on it.
    Thank you, Mr. Chairman.
    Mr. Upton. Mr. Terry.
    Mr. Terry. Waive.
    Mr. Upton. Mr. Pickering.
    Mr. Pickering. Mr. Chairman, I want to thank you for 
holding this hearing today and your leadership on this issue. 
This is an extremely important issue, both to our economy and 
to our security and we want to find that balanced path that 
provides the win-win as Mr. Markey was talking about. As Mr. 
Shimkus mentioned, the need to communicate on the battlefield 
or in training is critically important to our national 
security. We want to make sure that we can continue to have 
that capability and that it is compatibility with our 
commercial interest.
    So I want to talk about the three Ps of this effort: the 
process, the proceeds and the goal of prosperity. Process, we 
need to find a way that the current decisionmaking process of 
how we allocate and manage our spectrum is reformed, it is done 
in a way that gives us a more efficient use of our spectrum. It 
is more inclusive for the decisionmakers to reflect the 
realities of the 21st century and the technological needs both 
of our commercial interests, our economic interests and our 
security interests. So the change is necessary of how we make 
our decision, who makes these decisions and then it gets to the 
second point, proceeds. As we make these decisions of 
allocations, as we go forward in a spectrum auction, the 
proceeds to those that are reallocated are possibly moved as a 
result of these decisions, the proceeds to them must be 
guaranteed. In 1993, the last time DOD sacrificed some of their 
spectrum they received no proceeds. It is critically important 
if we are going to displace and disrupt then we must guarantee 
with a mechanism, whether it is a trust fund or whatever the 
mechanism should be, to have the proceeds go to DOD or 
commercial interest or anyone involved that it is assured, it 
is guaranteed that those proceeds will provide for the 
relocation, for the transition and importantly, the 
compensation of the value they have given up.
    And this gets to our third point, prosperity. Estimates 
show about $35 billion if the spectrum could be made available 
to our commercial sector, could be given back into economic 
growth and a prosperity back to those in our government which 
controls spectrum today, if those proceeds go back anywhere 
from $10 to $100 billion, I think are reasonable. A fair 
estimate is in the $35 to $40 billion estimate, could be 
guaranteed back to DOD or others for their modernization or for 
their other objectives that they face today in providing either 
security or services.
    The planets and stars are aligning. The need is great for 
international competitiveness, to harmonize, for security. It 
is critically and vitally important that we as decisionmakers 
step up to the challenge, to the plate, and reform the process, 
guarantee the proceeds and then create a framework where this 
can be used to bring prosperity to our economy and security to 
our people. And with that, I yield back.
    Mr. Upton. Thank you. Ms. Harman.
    Ms. Harman. Thank you, Mr. Chairman, I want to commend your 
choice of hearing topics one more time and to say what a 
pleasure it is to work with you on this subcommittee. I heard 
you say earlier that you may be offering legislation on this 
issue and I would like to offer my support for that and would 
love to work with you on that when you get to that.
    I believe that we have before us a legislator's dream, a 
rare opportunity to benefit several good purposes and to 
generate revenue at the same time. Can that possibly be true? 
Will we take advantage of it? Or will we squander it? I think 
that is the most important question. I want to associate myself 
with many of the questions raised by earlier speakers, 
particularly Mr. Markey. I love listening to him because he is 
the institutional history of this committee. He seems to have 
been here since before the dinosaurs and to remember everything 
that ever happened and it seems time and again that we return 
to the same subjects, hopefully with better answers, but not 
necessarily.
    I think his questions are valid and so are others. I would 
just add a few others to the long list. First, what will new 
technologies do to our decisions about how to allocate this 
spectrum, new compression technologies, for example?
    What about flexibility? It seems to me even if we make 
decisions today that are better than the decisions of 
yesterday, those decisions may have to change in the near term. 
How do we really give value to current funding priorities? 
We've heard numbers of them, rural areas, the digital divide, 
military technologies. I'm a big proponent of investment in 
military technologies and I suggest that the Defense Department 
has priorities in addition to the communication function that 
need urgent funding, but how do we give priority to these 
current and competing funding needs? Those are some of the 
questions.
    Let me also suggest several axioms. First, change will come 
whether we welcome it or not. Second, Congress can easily get 
it wrong or at a minimum make change harder to accept. An 
example is perhaps our rules on digital television which may 
still work out but which in a variety of ways have caused 
consternation out and about and haven't yielded the results we 
anticipated. Third, as you said, I think, Mr. Chairman, and 
several others have said, it's better to be an optimist because 
otherwise this just becomes totally gloomy. Again, I offer my 
services. I hope we get this right. At least I hope we get it 
better.
    Thank you very much.
    Mr. Upton. Thank you. Mr. Davis.
    Mr. Davis. Thank you, Mr. Chairman. We have before us today 
an issue that's as complex as it is controversial. Although the 
spectrum debate has identified the 698 to 960 megahertz and the 
2500 to 2690 megahertz bands as potential locations for 3G 
services, the battle lines appear to center most intensely on 
the 1710 to 1850 megahertz band. A major question that I have 
is are we essentially pitting the continued strength of our 
intelligence and war-fighting capabilities against the future 
prosperity and health of our national economy. Is this really a 
choice between incapacitating our military's ability to defend 
our national interest on a domestic or an international scale 
or weakening our ability to globally compete in the next 
generation of high speed wireless communications?
    At the outset, I'm not convinced that we have a true 
dilemma before us. There is merit to each of the many concerns 
raised by players on all sides of the 3G debate. Our defense 
community needs to be able to maintain the same level of 
operations, security and training throughout any spectrum 
transition. At the same time, we have a bustling global economy 
that has soared as a result of the Internet and the next step 
in this communications evolution is dependent upon the 
availability of spectrum for use by 3G technologies. This is a 
problem in search of a workable solution and I hope that our 
discussion today will focus as equally on that solution as it 
may on the problem. There are funding concerns, timing 
concerns, utilization concerns. Some may be legitimate, others 
may not be as troublesome. I do think that Congress can play a 
constructive role in this debate and I commend you, Mr. 
Chairman, for taking the lead, along with our committee 
chairman in focusing our energies on this subject matter this 
morning. I look forward to hearing from each of our witnesses, 
and thank you all for being here.
    Mr. Upton. Thank you. Mr. Luther.
    Mr. Luther. Thank you, Mr. Chairman, and thank you for 
holding this hearing. I understand the many arguments for 
allocating spectrum, but I do agree with those who have already 
stated that I believe that we should proceed cautiously. I 
believe that giving up too much spectrum now could reduce our 
flexibility for the future and for unanticipated needs. And so 
I think it is important that we look at all the alternatives. I 
believe that's what this hearing is about, that we consider 
them carefully and I look forward to reviewing the record.
    Thank you, Mr. Chairman.
    Mr. Upton. Mr. Largent?
    Mr. Largent. Mr. Chairman, in the interest of time, I'd 
like to submit my entire opening statement for the record and 
just say that I look forward to hearing from our witnesses.
    Mr. Upton. Thank you. So ordered. Mr. Green?
    Mr. Green. Thank you, Mr. Chairman, and I'm sorry Eddie 
Markey left because I've never heard that Eddie was here before 
the dinosaurs, because sometimes in Congress those of us who 
serve a long time are called dinosaurs, but never pre-dinosaur. 
I'm going to put my full statement in the record, Mr. Chairman, 
but listening to my colleagues in their opening statement, I 
think that's what oftentimes I get frustrated when we have our 
witness panel sitting there and they're listening to us instead 
of us listening to you. But on something that's as important as 
3G for the future, I think what's happened this morning is that 
I have listened to my colleagues on where we all come from and 
that helps us build the legislation so oftentimes we don't 
focus on these issues until we're at this hearing and so our 
opening statements actually I feel like are much more 
beneficial than I've had for many years before. But it is 
important what we're doing and I'd like to hear today, like my 
colleagues on how can we work with DOD to make sure that's 
available, how we do not recreate or the problems we've had 
like with high definition television that we do something 
different so we don't have that problem, but also that we make 
sure we are competitive in the world, that we also can 
compensate or work with DOD to make sure that our defense of 
our country is protected.
    Mr. Chairman, I'll submit my total opening statement and 
appreciate the time.
    [Additional statements submitted for the record follow:]
Prepared Statement of Hon. Steve Largent, a Representative in Congress 
                       from the State of Oklahoma
    Mr. Chairman, in the interest of time I'll make my opening 
statement brief. As evidenced by the number of cellular phones, palm 
pilots, pagers, blackberrries, and other miscellaneous wireless devices 
in this hearing room, the use of wireless telecommunications services 
has grown dramatically over the past decade.
    Wireless communication has evolved from analog to digital to the 
next iteration which we know as third generation or 3G.
    It is expected that the development of third generation wireless 
will have a significant impact on the creation of new technologies as 
well as economic development. Last October, the Council of Economic 
Advisors projected that ``an additional 150 megahurtz of spectrum could 
bring an additional $35.7 billion of service revenues per year.''
    However, before industry can move forward with its plans to move 
from second generation wireless technology to the much anticipated 3G, 
we need to examine our current spectrum policy to determine how to 
harmonize the private sector's desire for this valuable resource 
without compromising our national security.
    Mr. Chairman, I suspect this issue will require more than one 
hearing, but I thank you for getting the ball rolling on this very 
important topic. I look forward to hearing from our distinguished panel 
of witnesses.
                                 ______
                                 
 Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee 
                         on Energy and Commerce
    Mr. Chairman, thank you for holding this hearing today, in which we 
will examine what promises to be one of the next big steps in the 
digital revolution we've experienced in recent years.
    We have all witnessed the explosive growth of both the Internet and 
mobile communications. The deployment of third-generation mobile 
wireless services promises to bring the two together--so that consumers 
can have, in the palms of their hands, an exciting new array of digital 
products, including high-speed Internet access, video and other 
informational services, all broadcast over the airwaves.
    Equally important, third-generation wirless promises to provide 
many high-tech and information-service companies with a new avenue for 
innovation and growth.
    But the deployment of third-generation wireless services will not 
happen in the united states until we get our act together.
    It's not that the technology does not exist for 3G services. 
(Although in its infancy, it is developing rapidly.) The problem is the 
federal government lacks a comprehensive, coherent spectrum policy that 
will bring about the swift deployment of 3G services.
    At present, all of the spectrum bands identified by the world radio 
conference last year for global 3G deployment are heavily encumbered in 
the United States. Some segments of these bands are slated to be 
auctioned by the FCC, but such an action would be extremely premature.
    For example, we could auction off part of the 700 mhz band right 
now for 3G services. But this band will not be available until at least 
2006. And, currently, no other country has allocated this for 3G 
services. It makes no sense to commit resources this way at this time.
    We could auction off part of the 1710-1755 mhz segment and couple 
it with the 2210-2150 mhz segment. But doing so could foreclose use of 
the potentially valuable 1755-1850 mhz band for 3G services.
    Simply put: We should not auction some portions of these bands 
until we have a comprehensive policy concerning what we are going to do 
with all of the bands.
    I hope that our administration witnesses today can shed some light 
on when we can expect to have a comprehensive strategy for 3G.
    I was pleased that FCC Chairman Powell delayed the 700 mhz auction. 
And I was also pleased with correspondence between Chairman Powell and 
Commerce Secretary Evans concerning their efforts to work together and 
to avoid a policy of auctioning spectrum in a piecemeal fashion.
    But that leaves us with the question of the Pentagon's role in this 
matter. To date, the Pentagon has not been very cooperative. Instead of 
helping us figure out whether there are viable options for moving its 
operations from the 1755-1850 mhz band, the Pentagon has essentially 
just told us ``no.''
    I hope that changes today. I hope that Dr. Wells will help us 
determine whether there are spectrum bands to which the Pentagon's 
operations can be reallocated. We certainly want the pentagon to have 
comparable spectrum. And we want it to be fully reimbursed for the cost 
of moving to other bands and to be able to purchase state-of-the-art 
communications gear.
    It may even make sense to enable the Pentagon to use the funds 
produced by an auction of its spectrum licenses for other modernization 
purposes as well. (Based on our current budget situation, I am not sure 
where else comparable funds will be found.)
    The bottom line is that we need a new spectrum policy. And we need 
one that reflects how we are going to prepare American consumers for 
the benefits of 21st century advanced wireless technology. We need a 
thorough review of all of our options and honest dialogue with 
incumbent licensees to determine where we should deploy 3G services and 
when we can do so.
    Mr. Chairman, I applaud you for holding this hearing and for your 
leadership on this issue. And I look forward to our witnesses 
testimony.
                                 ______
                                 
 Prepared Statement of Hon. Eliot Engel, a Representative in Congress 
                       from the State of new York
    Mr. Chairman: Thank you for putting this hearing together. I also 
want to thank and commend your staff for the briefings they put 
together for the committee staff. This is a difficult issue in many 
ways to get your arms around. There are numerous competing interests 
for a very valuable and scarce resource--spectrum.
    Essentially, the Defense Department is now occupying prime spectrum 
real estate that has been identified by international agreements for 
development of third generation wireless services. This presents great 
potential for commercial development but also enormous challenges.
    To the Defense Department, I will simply say, that in my mind 
because the rest of the world seems to be moving to using this portion 
of the spectrum and thus in the future it could and most likely 
interfere with DOD activities around the world, it just makes sense to 
find appropriate alternative spectrum for DOD to move to.
    To the wireless industry, I will simply say--and think I speak for 
every Member of Congress--we will do nothing that endangers the 
national security of the United States. We take very seriously the 
concerns and problems presented by the Department of Defense. Just the 
logistics of migrating all these systems to new frequencies is a 
daunting challenge that must be VERY carefully managed.
    That being said, I believe working together we will find a 
solution--a transitional phase-out that is acceptable to all parties. 
We will need to identify specific parts of the spectrum and specific 
DOD systems operating at those spectrums to see if we can move this 
system or that equipment in 3 years, 5 years, or longer.
    I think it is obvious if we all work together--are honest and open 
up front about the challenges we face in this process we will be better 
off. I think it telling that DOD reports that all the Delta rockets 
used to launch satellites are booked through 2004. This isn't just 
small problem, it is a big one. On the other hand, I think US 
leadership on 3G service is key to continuing the United States' 
technological dominance and economic strength.
    We have a lot of smart people working on this issue. I think from 
the outset, we all have to come to the table with a set of reasonable 
expectations and reasonable compromises. We won't succeed tomorrow, but 
I am confident that success is in the near future.

    Mr. Upton. Thank you. With that, we're ready to hear from 
our panel and we are joined today by Mr. William Hatch, Acting 
Assistant Secretary of Commerce, Office of Communications and 
Information at the Department of Commerce; Dr. Linton Wells, 
Assistant Secretary of Defense for Command, Department of 
Defense; Mr. Julius Knapp, Deputy Chief of the Office of 
Engineering and Technology of the FCC; Mr. Thomas Wheeler, 
President and CEO of the Cellular Telecommunications and 
Internet Association; Mr. Denny Strigl, Chief Executive Officer 
of Verizon Wireless; Monsignor Michael Dempsey, President of 
the Catholic Television Network.
    Gentlemen, thank you first of all for submitting your 
testimony in advance. Your statements are made as part of the 
record in their entirety and if you could limit your opening 
statements to about 5 minutes that would be terrific.
    Mr. Hatch, we'll start with you. Thank you.

 STATEMENTS OF WILLIAM T. HATCH, ACTING ASSISTANT SECRETARY OF 
COMMERCE, OFFICE OF COMMUNICATIONS AND INFORMATION, DEPARTMENT 
 OF COMMERCE; LINTON WELLS, ASSISTANT SECRETARY OF DEFENSE FOR 
COMMAND, DEPARTMENT OF DEFENSE; JULIUS P. KNAPP, DEPUTY CHIEF, 
 OFFICE OF ENGINEERING AND TECHNOLOGY, FEDERAL COMMUNICATIONS 
  COMMISSION; THOMAS E. WHEELER, PRESIDENT AND CEO, CELLULAR 
TELECOMMUNICATIONS AND INTERNET ASSOCIATION; DENNIS F. STRIGL, 
   CHIEF EXECUTIVE OFFICER, VERIZON WIRELESS; AND MICHAEL J. 
      DEMPSEY, PRESIDENT, THE CATHOLIC TELEVISION NETWORK

    Mr. Hatch. Thank you, Mr. Chairman.
    Mr. Upton. If you could just pull the mike a little bit 
closer, that would be great. Thank you.
    Mr. Hatch. Mr. Chairman and ranking members and other 
members of this subcommittee, I want to thank you for inviting 
me to testify today on spectrum matters relating to what we 
call accommodation of third generation wireless systems in the 
United States. As you stated, I am Bill Hatch, Acting Assistant 
Secretary for Communications and Information and Acting 
Administrator of the National Telecommunications and 
Information Administration within the Department of Commerce. I 
am also the Associate Administrator in NTIA's Office of 
Spectrum Management.
    If I may, for the record, Mr. Chairman, I found that there 
are two typos in my testimony. One in the Executive Summary and 
one in the body of my testimony where I refer to the frequency 
band 1710 to 1855 megahertz. It should actually be 1710 to 1850 
megahertz, so if you could make that correction I would 
appreciate it.
    As members of the committee know, NTIA serves as the 
spectrum manager for the Federal agencies and as the principal 
advisor to the President on communications and information 
policy. Because of NTIA's unique role, the Agency must balance 
the spectrum interests of the government agencies while also 
advancing policies that promote the benefits of technological 
developments in the United States for all users of the 
telecommunications services.
    Over the past decade there has been tremendous growth, 
worldwide in the use of cellular-based wireless 
telecommunications systems. The Department of Commerce and NTIA 
believes that this global growth will continue. The third 
generation wireless (3G) systems under discussion will provide 
mobile and satellite based broadband capabilities. While 
current cellular and PCS wireless systems are expected to 
evolve to 3G technology over time, there is a strong desire 
from the wireless industry for additional spectrum to establish 
these 3G networks.
    The International Telecommunication Union has been 
fostering the development of the advanced wireless system or 
what's commonly referred to as the international mobile 
telecommunications-2000 or IMT2000, or also referred to here 
today as 3G for a number of years. The ITU World Radio 
Conference (WRC) in 2000 held in Istanbul, Turkey adopted a 
resolution which states that approximately 160 megahertz of 
spectrum will be needed for the projected requirements for 3G 
in high density areas and this would be needed by the year 
2010. At the World Radio Conference there were a number of 
frequency bands that were identified for possible use by IMT200 
or 3G and it was provided that each country may determine which 
of the bands to implement domestically after taking into 
account the impact on incumbent services.
    The WRC decision also provided that 3G services may be 
introduced through evolution of technology and frequency bands 
that are presently used by the mobile services.
    As you know, in the United States we are now in the process 
of deciding which of the various frequency bands is most 
appropriate for the implementation of 3G services and noting 
that our particular domestic requirements may be different from 
other country's national requirements.
    As a result of the cooperation between the Department of 
Commerce, the Department of Defense, the Federal Communications 
Commission and other Federal agencies, the Department of 
Commerce, under guidelines set forth last year, developed an 
ambitious action plan to identify spectrum for 3G services. To 
date, both NTIA and the FCC have completed interim and final 
reports examining the respective bands of 1710 to 1850 and 2500 
to 2690 megahertz. We've conducted industry outreach meetings 
and we've participated in discussions with foreign bodies and 
international bodies. In addition, the FCC has issued a notice 
of proposed rulemaking addressing 3G allocation issues and has 
received comments from the public on the issues raised in that 
NPRM.
    Because of the complex issues surrounding the allocation of 
spectrum for 3G, there's a general agreement among the 
Department of Commerce, the FCC, and the affected Federal 
agencies to continue the efforts that we have been doing, so 
that we may carefully study the various options that have been 
put forward in all of the comments and in the various reports 
that have been done to arrive at the best possible solution.
    In recognition of the work that remains to be done, 
Chairman Powell recently sent a letter to Secretary Evans 
suggesting that additional time to study the auction would be 
desirable, and requesting that the Department work with the FCC 
to come up with a revised allocation plan and auction time 
table. Secretary Evans responded last week by agreeing with the 
Chairman, that continuing these efforts would ensure that the 
final 3G allocation would be the best possible one that we 
could make. He has directed me to work with the FCC and the 
Federal agencies to develop a new plan for the selection of 3G 
spectrum and to consider ways to achieve flexibility on the 
statutory auction date, if such flexibility is needed to 
implement the plan.
    I'm happy to report, Mr. Chairman, that in accordance with 
Secretary Evans' memo, preliminary discussions have been held 
with Federal agencies, including the FCC to discuss the 
establishment of a new plan and timetable for the selection of 
spectrum to accommodate 3G.
    I want to thank you for this opportunity to share these 
views with you and would be pleased to answer any questions 
that you may have.
    [The prepared statement of William T. Hatch follows:]
Prepared Statement of William T. Hatch, Acting Assistant Secretary for 
      Communications and Information, U.S. Department of Commerce
    Mr. Chairman, Ranking Member and other members of this 
subcommittee, I want to thank you for inviting me to testify today on 
spectrum matters relating to the accommodation of third generation (3G) 
wireless systems in the United States. I am William T. Hatch, Acting 
Assistant Secretary for Communications and Information, and Acting 
Administrator of the National Telecommunications and Information 
Administration (NTIA) within the Department of Commerce. I am also the 
Associate Administrator in NTIA's Office of Spectrum Management.
    NTIA serves as the spectrum manager for the Federal agencies and is 
the principal adviser to the President on communications and 
information policy. Because of NTIA's unique role, the agency must 
balance the spectrum interests of the Federal agencies while also 
advancing policies that promote the benefits of technological 
developments in the United States for all users of telecommunications 
services.
    I am pleased that the Subcommittee is looking into the matter of 3G 
wireless services, and would like to begin my remarks today by giving a 
brief background on the efforts to assure adequate and timely 
deployment of 3G services in the United States, our accomplishments to 
date, and our plans for the future.
                               background
    Although in the United States our wireless services are not 
generally distinguished by a ``generation'' label, we might classify 
the early cellular telephones as the ``first generation'' of wireless 
services that brought nationwide mobile telephone services to hundreds 
of thousands of Americans. Building on the success of cellular service, 
the current personal communications services (``PCS'') could constitute 
the ``second generation'' of wireless services. These services bring 
digital voice and messaging services to the nation. In recent years, 
there has been robust competition in the field of wireless services. 
This competition has promoted lower rates, greater customer choice, and 
higher quality of service.
    Over the past decade there has been a tremendous growth worldwide 
in the use of cellular-based wireless telecommunications systems. The 
Department of Commerce and NTIA believe that this global growth will 
continue. The ``third generation'' (or ``3G'') systems advanced by 
industry propose to provide mobile and satellite-based broadband 
capabilities. While current cellular and PCS wireless systems are 
expected to evolve to 3G technology over time, there is a strong desire 
from the wireless industry for additional spectrum now to establish 3G 
networks.
    In recognition of this growth and the trend toward global markets 
for wireless services, the International Telecommunication Union (ITU) 
has considered the spectrum requirements for evolving 3G systems, which 
is internationally termed International Mobile Telecommunications-2000, 
or IMT-2000. At the May 2000 World Radiocommunication Conference (WRC-
2000) in Istanbul, Turkey, an ITU-established agenda item called for 
the review of spectrum and regulatory issues for advanced mobile 
applications in the context of IMT-2000. The ITU acknowledged the 
urgent need to provide additional spectrum, particularly for the 
terrestrial component of IMT-2000 applications. The ITU forecast that 
160 MHz of additional spectrum would be required for 3G systems. This 
amount is over and above that spectrum already allocated 
internationally for 1- and 2G systems. The ITU identified several 
frequency bands that could be used for IMT-2000 systems. However, 
member administrations of the ITU retained the right to implement any 
of the bands in any time frame, for any service or technology, and 
could use any portion of the identified bands that they deemed 
appropriate to satisfy national requirements.
                             current status
    In October 2000, then President Clinton signed an Executive 
Memorandum which stated the need and urgency for the United States to 
select radio frequency spectrum for 3G. The Memorandum articulated 
principles to serve as guideposts for future actions that would be 
taken related to the development of 3G, and directed Federal agencies 
to undertake certain activities. President Clinton directed the 
Secretary of Commerce to work cooperatively with the FCC to take 
certain actions that would enable the FCC to identify, in coordination 
with NTIA, 3G spectrum and to auction licenses to competing applicants 
by September 30, 2002. In addition, the Secretary of Commerce was 
directed to work with government and industry representatives through a 
series of public meetings to develop recommendations and plans for 
identifying spectrum for 3G wireless systems. The Secretaries of 
Defense, Treasury, Transportation, State and other agency heads were 
directed to participate and cooperate with this government-industry 
group. The Secretary of State was directed to coordinate and present 
the views of the United States to foreign governments and international 
bodies. The FCC was encouraged to participate in this government-
industry outreach program and to initiate a rulemaking to identify 
spectrum for 3G, in coordination with NTIA, with the goal of allocating 
3G spectrum so that licenses could be made available via auction by 
September 30, 2002.
    As a result of cooperation between the Department of Commerce, the 
Department of Defense, the Federal Communications Commission (FCC), and 
other Federal agencies, the Department of Commerce, under guidelines 
set forth by the Executive Memorandum, developed an ambitious action 
plan to identify spectrum for 3G services. To date, NTIA and the FCC 
have released interim and final reports on the 1710-1855 MHz band and 
2500-2690 MHz band, respectively; conducted a government-industry 
outreach program; and participated in the State Department's outreach 
program to foreign governments and international bodies. In addition, 
the FCC issued a notice of proposed rulemaking.
    We are now in the process of deciding which of the various 
frequency bands is most appropriate for the implementation of 3G 
services in the United States. The possible bands for allocation for 
the terrestrial component of IMT-2000 in the United States include the 
698-960 MHz, 1710-2025 MHz, 2110-2200 MHz, and 2500-2690 MHz bands. All 
of these bands are being considered in the FCC's rulemaking process. 
Two bands, however, the 1755-1850 MHz band (exclusive government 
spectrum) and the 2500-2690 MHz band (exclusive non-government 
spectrum) require a more extensive analysis to determine their 
potential to accommodate 3G services. NTIA has studied the 1755-1850 
MHz band and the FCC has studied the 2500-2690 MHz band and the study 
reports have been entered in the record of the FCC's 3G rulemaking for 
public comment.
                          ntia spectrum report
    The NTIA report noted that the 1755-1850 MHz band supports various 
Federal functions: space telemetry, tracking and control (TT&C); 
medium-capacity fixed microwave; precision guided munitions; tactical 
radio relay training; and aeronautical mobile applications such as 
telemetry, video and target scoring systems. This band is currently 
allocated on an exclusive basis to the Federal Government for fixed and 
mobile; and in the 1761-1842 MHz portion, space operation (Earth-to-
space) and space research (Earth-to-space) services. This allocation 
supports Federal space tracking, telemetry and command. Fixed links are 
operated by Federal agencies for voice, data, and/or video 
communications where commercial service is unavailable, excessively 
expensive, or unable to meet required reliability. Applications include 
law enforcement, emergency preparedness, support for the national air 
space system, military command and control networks, and control links 
for various power, land, water, and electric-power management systems. 
Other fixed links include video relay, data relay, and timing 
distribution signals. Probably the most critical system in the band is 
the USAF Space Ground Link Subsystem (SGLS). This system, via Earth-to-
space uplinks in the 1761-1842 MHz band, controls the U.S. military 
satellites, including telecommunications satellites, intelligence 
gathering satellites, the Global Positioning System (GPS) satellite 
constellation and U.S. allies.
    The NTIA report studied three options for sharing or segmenting the 
1710-1850 MHz band and provided estimated cost information for 
relocating Government systems to other bands based on the agencies' 
analyses of their respective systems. In its report, NTIA concluded 
that without some form of real-time coordination among IMT-2000 
operators and the Federal users, sharing between the IMT-2000 systems 
and Federal ground and airborne systems would be problematic. For 
example, a Department of Defense analysis (contained as an appendix to 
the NTIA report) indicated that IMT-2000 base stations would interfere 
with the control of Federal Government satellites. The Defense 
Department asserted that it would cost $3.9 billion to relocate its 
systems from the 1755-1850 MHz band assuming no relocation of satellite 
systems until the end of their projected useful life and that such 
relocation could not be completed before the year 2017. The relocation 
scenarios were contingent on whether spectrum could be identified to 
which the agencies' operations could be moved.
    In its report, NTIA discussed the possible ways in which the 1710-
1755 MHz band could be used for 3G services. NTIA previously identified 
the 1710-1755 MHz band for reallocation to the private sector on a 
mixed-use basis under the requirements of the Omnibus Reconciliation 
Act of 1993 (OBRA-93). However, under OBRA 93 the Federal Power 
Administration and fixed links supporting safety-of-life services were 
exempted from the requirement. In addition, NTIA protected operations 
within 16 military areas used for large-scale training exercises. In 
its final report, NTIA noted that one possible option to accommodate 3G 
services within the band would be to relocate Federal systems from this 
band completely if comparable spectrum for these military operations 
could be found and the Federal Power Administration services were 
willing to relocate on a voluntary basis. Identifying comparable 
spectrum is important to the 3G spectrum allocation process because the 
provisions of the National Defense Authorization Act for Fiscal Year 
2000 protect Department of Defense uses of the spectrum unless 
alternative spectrum can be identified that preserves essential 
military capability.
                           outreach programs
    To obtain much-needed technical information and to develop a better 
understanding of industry's needs, NTIA held a number of industry 
outreach sessions in which Federal agencies and industry exchanged 
information on various 3G issues. In addition, the wireless industry 
hosted several smaller, more focused working group meetings that 
addressed the operational and sharing possibilities of Federal systems 
in the 1755-1850 MHz band, and sharing possibilities in the 2500-2690 
MHz band. These outreach meetings included NTIA and Department of 
Defense staff as well as numerous industry stakeholders, including 
radio manufacturers and wireless service providers. These meetings were 
invaluable information exchanges--the Federal Government could provide 
information on radio systems used in the band, and industry could 
provide their views on the feasibility of IMT-2000 systems sharing with 
existing Federal systems.
                             going forward
    Because of the complex issues surrounding the allocation of 
spectrum for 3G services, there is a general agreement among Department 
of Commerce, the FCC and the affected Federal agencies to continue 
these efforts beyond the original July 2001 target date so that we may 
study carefully the various spectrum options available to arrive at the 
best possible decision. In recognition of the work that remains to be 
done, Chairman Powell recently sent Secretary Evans a letter suggesting 
that additional time to study options would be desirable and requesting 
that the Department work with the FCC to come up with a revised 
allocation plan and auction timetable. Secretary Evans responded last 
week by agreeing with the Chairman that continuing these efforts would 
ensure that the final 3G allocation decision would be the best possible 
one. He directed me to work with the FCC and other Federal agencies to 
develop a new plan for the selection of 3G spectrum and to consider 
ways to achieve flexibility on the statutory auction date if such 
flexibility is needed to implement the new plan.
    I thank you for this opportunity to share with you the views of the 
NTIA on this critical issue, and I would be pleased to answer any 
questions you may have.

    Mr. Upton. Thank you.
    Dr. Wells.

                    STATEMENT OF LINTON WELLS

    Mr. Wells. Mr. Chairman, thank you very much.
    Mr. Upton. Just move that microphone over as well, thanks.
    Mr. Wells. Mr. Chairman, thank you very much. DOD is eager 
to participate with our executive branch colleagues, the FCC, 
the Congress and the private sector in the process that will 
determine the best allocation of third generation spectrum for 
the Nation. The band that is of most interest to us, as I'm 
sure you know, is 1755 to 1850 megahertz. To explain why this 
is important imagine that you're the pilot in a cockpit of an 
airplane. The communications support, the intelligence support, 
most of the navigation and the weather that you receive in your 
cockpit comes from the 120 plus military and civilian 
intelligence satellites that are controlled within this band. 
In addition, the training you have received on air tactical 
maneuvering ranges is based largely on this band as one of the 
reasons why our pilots are the best trained in the world. Under 
your wing may well be a precision guided munition, the kind of 
weapon whose accuracy allows not only increased military 
capability, but also dramatically reduced civilian casualties. 
That weapon depends on control band frequencies and this band.
    Beneath your wing are Army and Marine Corps troops. Their 
tactical Internet, the battlefield radio relay is, in fact, 
controlled in this band and links them not only for the 
situational awareness, but also to ships that may be offshore. 
So intensely as we are using this band today, it's even going 
to grow. In the case of Kosovo, we had one tenth of the number 
of troops deployed that we did in Desert Storm and yet we used 
250 percent of the bandwidth in that small scale contingency.
    Equally dramatic in Kosovo, once the fighting started, the 
amount of bandwidth we needed increased 21 times over what it 
had been before the fighting started and we project a 500 
percent increase in our use of military satellite 
communications in the years ahead.
    Moreover, this sort of transformation that the Department 
is going through that Secretary Rumsfeld is encouraging is 
moving us toward network centric operations which use even 
more--rely even more on spectrum and bandwidth.
    Thus, these are functions that have to be performed. If 
they are not performed for whatever reason, there will be a 
severe and immediate impact on the national security of this 
country. The result will be increased casualties, mission 
failures, reduced intelligence to the President and senior 
leadership, not to mention interruptive navigation services to 
the private sector. So if relocation of DOD out of the Federal 
band is necessary, we will need to have comparable spectrum to 
move into. There will need to be some sort of time line to 
allow the adjustment to take place and compensation will need 
to be provided.
    One of the things that interests me is why this band is so 
attractive. It is, after all, only 95 megahertz out of the 
2,000 megahertz that are already available between 700 and 2700 
megahertz in the United States. Various arguments have been put 
forward. Harmonization, for example, including the goal of 
having a single band that you could operate on worldwide is 
very attractive. My concern is that we're not going to get 
there. China recently has announced they're going to operate in 
2.3 to 2.4 gigahertz. That's not even a band that's under 
serious consideration in the United States.
    The question about whether we will encounter increased 
interference overseas certainly is a matter of concern. Thus 
far we have dealt with this with a series of international 
agreements with almost all of our operating partners that have 
allowed us to work through these problems. If we change the 
frequencies, we're going to have to go through and renegotiate 
and entirely new set of agreements.
    Finally, some have said that the U.S. should match the 
amount of spectrum provided to that available in other 
countries. There is, in fact, a lot of spectrum available today 
in the United States. I have included Table 3 in our written 
presentation 130 megahertz that might be made available today, 
rising to perhaps 210 megahertz, 240 megahertz by 2010. 
Obviously, there are considerations, but there is spectrum that 
is available without ever touching the 1755 to 1850 megahertz.
    Mr. Sawyer raised the issue of being a good steward of the 
spectrum. DOD, in fact, has to revalidate periodically the 
continued use of the spectrum we have and if we don't have it, 
we have to give it back up. In addition, we are aggressively 
pursuing new technologies such as demand access which has 
increased by four times the number of satellite circuits we can 
get in a single channel and we are spending tens of millions of 
dollars on advanced technologies such as software programmable 
radios that should allow more efficient use of the spectrum in 
the future. We are good stewards of the spectrum we have.
    Together with NTIA we have analyzed the spectrum and the 
implications of either sharing or vacating the 1755 to 1850 
megahertz band. What we found was that because of mutual 
interference, full sharing of the band would not be feasible. 
We looking at moving and there are several issues. One again is 
comparable spectrum. One of the problems of comparable spectrum 
is that almost all of the attractive spectrum is occupied by 
someone today. We could say 2500 would be a great band to move 
into, but I think Monsignor Dempsey would have a concern with 
us on that point. The same is true of many other attractive 
spectrum, possibly attractive spectrum.
    With regard to timelines, the satellite control I mentioned 
earlier, the satellites on orbit today, we can't just send a 
space shuttle up to fix them and return the receivers like it 
was done with the Hubble Telescope. It may be as long as 2017 
before the satellites that use this band fly themselves out. 
Similarly, by the time we budget for research and development, 
build and deploy the terrestrial systems, that could be as long 
as 2010 even before the terrestrial systems can be fully 
vacated from the band. So there are solutions. There is a time 
line associated with them. There is some near term spectrum 
outside of the DOD band that might be suitable and we look for 
an integrated solution, going forward.
    The other point I would make in moving spectrum is that 
there's an integrated operational fabric that has been put 
together and balanced over many decades. On the AWACS, the 
airborne warning and control system aircraft alone there are 80 
different antennas. If you were to retune one of those antennas 
you have to make adjustments on many of the others on the 
airplane. To return to the pilot in the cockpit, if you were to 
move his precision-guided munition datalink to a higher 
frequency, that would mean he would have to come closer to the 
target in order to control the weapon which, in turn, could put 
his aircraft at risk. Similarly, it increased the power on the 
datalink. That might make his aircraft more detectable. There 
are other tactical sort of situations that one could mention.
    To close then, DOD does look forward actively participating 
with the other members in this debate. We have benefited 
enormously from the private sector's genius and we expect to do 
so again. However, I ask that we not act precipitously. 
Reasonable people can differ over the urgency of transferring 
the spectrum and if a decision is made to move DOD, I ask that 
the risk to national security be balanced against the need for 
a thorough debate over choosing the right option and also the 
enormous benefits that this country, the world and indeed the 
world economy in which this technology so benefits have gained 
from the international peacekeeping, national security efforts 
that our people are conducting, efforts that increasingly 
depend on having adequate spectrum. Thank you very much, Mr. 
Chairman.
    [The prepared statement of Linton Wells follows:]
   Prepared Statement of Linton Wells, Acting Assistant Secretary of 
    Defense for Command, Control, Communications and Intelligence, 
                         Department of Defense
                            1. introduction
    Thank you, Mr. Chairman, and members of the subcommittee, for 
inviting me to speak on this issue of the utmost importance to our 
military forces, allocating radio frequency (RF) spectrum. As the 
Acting Assistant Secretary of Defense for Command, Control, 
Communications and Intelligence, I am responsible for spectrum policy 
and management within DoD.
    The issue of finding spectrum in the United States for Third 
Generation Wireless (``3G'') services illustrates the growing demand 
for spectrum in both the commercial and government sectors. The 
Department of Defense's needs for spectrum are growing along with those 
of other organizations. For example, the satellite bandwidth used in 
Operation Allied Force in Kosovo was two and one half times the 
bandwidth used in Desert Storm nine years earlier, while the Kosovo 
force was one tenth the size. Work done at the Department of Defense 
has projected significant growth in military spectrum requirements in 
all functional areas over the next few years (see Figure 1).
    Access to adequate RF spectrum was critical to US Forces' success 
in Desert Storm and Kosovo and will continue to be crucial to the 
Department's ability to transform itself into a leaner, more agile, and 
more effective force that can meet the security challenges of the 
future at reasonable cost to the taxpayers. Fundamental to this 
transformation is the network-centric concept of operations which is 
already being implemented. RF spectrum is virtually the only way to 
connect mobile ground forces, ships, aircraft, and satellites.
        2. dod use of the federal government 1755-1850 mhz band
    As you know, the Federal government band from 1755-1850 MHz is one 
of the bands under consideration for 3G. DoD uses this band for 
satellite control, battlefield radio relay, aircrew combat training, 
precision weapons guidance, and many other important functions. The 
band was picked for these functions because the signals at these 
frequencies propagate in ways that make the spectrum ideal for mobile 
communications. Altogether more than 100 DoD systems, and a more than 
equal number of systems from other Federal agencies, utilize this band. 
Figure 2 depicts many of the uses. I will briefly describe each of the 
major functions resident in the 1755 MHz band.
    The control uplinks for all DoD and Intelligence Community 
satellites (more than 120 satellites representing a cumulative 
investment of about $100B) use the 1755 MHz band. These satellites 
perform communications, positioning and timing, surveillance and 
reconnaissance, weather observation, and other functions crucial to 
war-fighting and to decision-making by National Command authorities, 
including the President, the Secretary of Defense, and the Chairman of 
the Joint Chiefs of Staff, as well as other senior military 
decisionmakers.
    DoD's Global Positioning System satellites have become crucial 
parts of the national civilian/military infrastructure supporting 
global navigation and positioning requirements for air, land and sea 
vessels. GPS serves functions that are as important as the functions 
provided by railroads and telecommunications systems.
    The battlefield radio relay systems in this band form the long-haul 
backbone of the Army and Marine tactical internets. They let our ground 
forces to share situational awareness and coordinate their operations 
in real time across the extended battlefield, as well as to ships off-
shore.
    The Air Force and Navy aircrew combat training system, which 
provides realistic training with engagement assessment and feedback, is 
one of the main reasons American pilots are the best-trained combat 
pilots in the world.
    The most accurate air-launched precision weapons in the Services' 
inventories are guided by data links using the Federal band. These 
weapons are often used by commanders to ensure the highest probability 
of mission accomplishment with the fewest possible civilian casualties.
    Virtually all of the these systems played a key role in the Allied 
victory in Kosovo. The success of this operation would have been 
unlikely without satellite-based communications, navigation, and 
reconnaissance, without well-trained combat aircrews, without 
precision-guided weapons, and without tactical radio relay systems.
    Other important DoD systems that use the Federal band, include 
Combat Identification, soldier radios, and weapon scoring.
    In an era of reduced force structure, increased mission 
responsibilities and fewer soldiers, sailors and airmen, these systems 
serve to enhance significantly our operational capabilities. Enhanced 
knowledge of the battlefield, coupled with precise engagement 
capabilities obtained from these spectrum dependent, force multipler 
systems, protect our forces, throughout the full range of U.S. 
involvement from combat to peacekeeping and humanitarian operations.I 
want to say in the most unequivocal way possible that the loss or 
degradation of our ability to perform these crucial functions would 
have very severe consequences for National Security. It would result in 
mission failures and increased casualties in future operations, and 
loss of vital intelligence information to the President and senior 
leaders. If the Federal band is to be reallocated, then other suitable 
spectrum must be found to enable the displaced functions to be 
performed without degradation, and we need enough time to relocate to 
the new spectrum.
                         3. dod study findings
    The White House-directed study conducted by DoD on accommodating 3G 
services in the Federal band examined the options of sharing the band, 
vacating all of the band, or vacating part of it. The study found that 
sharing the band between 3G services and incumbent DoD systems would 
not be feasible because there would be too much mutual interference. 
Vacating or segmenting the band is feasible in theory, provided that 
comparable spectrum could be allocated to DoD and adequate, timely 
financial compensation provided, but DoD satellite control systems 
could not vacate the band before 2017 and non-space systems before 
2010. These timelines are driven by fact-of-life considerations 
including the expected satellite lifetimes, the inability to change the 
frequencies of on-orbit satellites and time required to design and 
field new systems in a different frequency band. NTIA's report 
incorporates the DoD findings.
                        4. comparable spectrum.
    Let me emphasize again, as a matter of national defense and 
security, DoD's ability to carry out its operational mission will be 
jeopardized if the Department is not provided with access to spectrum 
with appropriate technical characteristics and regulatory protections. 
The National Defense Authorization Act of 2000 requires that DoD be 
provided ``comparable spectrum'' for functions displaced by 
reallocation of Federal spectrum to meet commercial needs. The 
Secretary of Defense, the Chairman of the Joint Chiefs of Staff, and 
the Secretary of Commerce must jointly certify that any replacement 
spectrum is comparable. We consider this to mean that the replacement 
spectrum for different DoD systems has suitable technical 
characteristics and similar regulatory status so that the displaced 
function can be performed with no degradation in capability. At this 
point, DoD believes that it is unlikely that comparable government 
spectrum can be found for most of the functions presently residing in 
the 1755 MHz band and, to date, the NTIA and the FCC have not 
identified such spectrum. Forced relocation of DoD without provision of 
comparable spectrum will result in the very servere consequences to 
National Security that I addressed earlier.
    We are willing to engage with all parties to find a way ahead on 
spectrum. Nonetheless, we believe that the issue of equivalent spectrum 
must be resolved before any decisions are made on spectrum for 3G, 
including any ``decision in principle'' or ``policy decision'' on band 
reallocation.
                           5. ctia proposals
    In their 3G ``briefing book,'' CTIA has proposed work-arounds for 
satellite control, tactical radio relay, and air combat training 
systems to enable accommodation of 3G services in the Federal band 
earlier than the DoD timelines Our initial assessment is that none of 
these proposals could be implemented without serious degradation to DoD 
capabilities. CTIA has not proposed work-arounds for precision guided 
weapons or many other important DoD systems.
    CTIA has proposed a ``win-win'' solution in which DoD would be 
provided modernization funds, beyond the marginal cost to relocate, as 
an inducement to accept relocation. We would be interested in seeing 
what could be included in such a package but have not yet seen such a 
proposal. Moreover, we emphasize that any such solution could only be 
viable if DoD is provided access to spectrum with equivalent technical 
characteristics and regulatory status. While the offer is no doubt made 
in good faith, a mechanism has not been presented by which it could be 
implemented in such a way as to produce a genuine win-win situation.
      6. need for additional spectrum for 3g in the united states
    We were asked in Chairman Upton's letter of invitation to comment 
on this issue. In our view, the case must be updated, refined and 
timelines for such spectrum spelled out. The U.S. has a much lower 
population density than Europe or Asia, so that requirements for 3G 
personal communications devices may be smaller than either of these 
regions. Further, we can expect that technological advances will enable 
the wireless industry to wring more use out of their spectrum (just as 
the DoD is counting on spectrum-efficient technologies to enable us to 
meet our growing needs without demanding more spectrum from the 
regulators). Finally, the amount of spectrum needed for 3G is 
undetermined because the demand for 3G services is unknown at this 
point. Many industry observers believe that second generation wireless 
services (personal communications services'' or PCS in the United 
States), with enhancements (high speed voice and data connection, but 
not streaming video) will be sufficient for most truly mobile users.
                       7. candidate bands for 3g
    The Federal 1755 MHz band is heavily encumbered and would require 
nearly two decades to become available, there are other bands readily 
available to FCC for meeting the needs of the 3G vendors. Figure 3 
lists some of the other bands available. Much of this spectrum was 
reallocated from DoD/Federal use to commercial use by earlier 
legislation and NTIA action but it has not yet been made available 
through auction by the FCC. Altogether there is at least 130 MHz of 
suitable commercial spectrum that FCC could make available this year 
with limited displacement to established users, and more than 240 MHz 
could be available within ten years.
    Another means of meeting the 3G spectrum requirement in full or in 
part is to provide 3G services on spectrum currently used for PCS or 
other wireless services, as FCC regulatory flexibility allows and as 
some 3G vendors are planning.
                            8. harmonization
    CTIA argues that the Federal band is desired for 3G because it 
would harmonize U.S. spectrum allocation with 3G allocations around the 
world. This is not the complete picture. There are at least six bands 
that WRC-92 and WRC-00 suggested nations consider for 3G. Worldwide 
harmonization of 3G bands is not happening. Most nations have not yet 
decided on which band will be used for 3G, and I am not aware of any 
nation that has auctioned the 1755 MHz band for 3G. In fact, Europe 
uses the 1755-1850 MHz band for 2G. Europe would need to make 
regulatory changes before using this spectrum for 3G and probably will 
not migrate it to 3G for more than a decade. Many nations are waiting 
to see which band the U.S. picks.
    CTIA is now modifying its position to state that the 1755 MHz band 
is needed to enable harmonization of advanced commercial wireless 
services ``in general.'' Harmonization is primarily helpful when it can 
be achieved with respect to a particular band (such as 2G or 3G) or 
waveform (such as CDMA, one of the current U.S. standards for first 
generation phones, or GSM, the current first generation standard in 
Europe and most of Asia). We have no national commitment to 
harmonization with respect to 3G implementation. Finally, multi-mode 
and multi-band phones are available today and appear to be economically 
viable.
    9. the federal government, including dod, is managing spectrum 
                              judiciously.
    DoD is not ``hoarding'' spectrum and using it inefficiently. DoD is 
granted access to spectrum by NTIA and, in a few cases, by FCC for 
specific purposes. The need for government spectrum for particular user 
and uses is reevaluated on an ongoing basis. DoD systems must be 
designed to a very high level of spectrum efficiency since the lives of 
servicemen and women are at risk and many military systems must operate 
in close proximity at the same time, during military operations. We are 
constantly pursuing new spectrum-efficient technologies. For example, 
we are fielding multiplexers for our UHF satellite receivers that 
multiply the number of channels per satellite by a factor of four.
    I would like to put the relative allocation of bandwidth between 
industry and the Federal government in proper context. Out of the total 
amount of spectrum that is appropriate for 3G deployment, generally 
700MHz-2700MHz, the Federal government is the exclusive occupant of 
about 15%. Three times that amount is reserved exclusively for 
commercial use, and the rest is shared.
                             10. conclusion
    This issue requires a balancing of economic and national security 
needs. We should remember that there can be no economic prosperity 
without national security. Furthermore, the value of national security 
cannot be measured in dollars. The benefits the nation derives from 
making spectrum available for Defense are expressed in terms of wars 
that we won't have to fight, and victories achieved and casualties 
avoided in the wars we do fight.
    To summarize the DoD position on this issue, we must have 
comparable spectrum if we are to relocate, and this must be identified 
and certified prior to any decision to reallocate the Federal band. If 
comparable spectrum cannot be identified within the next few months, 
then the Federal band should be taken ``off the table.''
    Forced relocation of DoD without comparable spectrum, or without 
respect for the transition timelines, as proposed in legislation 
drafted by CTIA, would cause grave damage to National Security. In 
effect, without comparable spectrum, we would be risking the lives of 
our Soldiers, Sailors, Airmen and Marines.
    Furthermore, even given comparable spectrum, timely and adequate 
financial reimbursement, and respect for our transition timelines, it 
is still not clear that the Federal band should be reallocated. As I 
have explained, industry's case for needing the Federal band is very 
weak, there are commercial bands that appear to be more readily 
available, and a Federal band should be the last resort, not the first 
resort, for a new commercial need such as 3G. Given that there are 
risks for DoD in moving to other bands, we would like to see compelling 
evidence that this is truly in the national interest before agreeing to 
relocate.
    The way ahead is for all of us to work together to further assess 
what band options are feasible and, of the feasible set, which is the 
best choice for 3G based on mutually-agreed criteria. I believe this 
process should include an attempt to identify and certify comparable 
spectrum for DoD if FCC still wishes to consider the Federal band.
    The United States has global security responsibilities and thus has 
needs for spectrum for military systems that are far greater than any 
other nation's requirements. This is part of the benefits and burdens 
that accrue to our Nation, given our worldwide leadership role in the 
21st Century. We will continue to work in a spirit of cooperation and 
openness with the Congress, other Executive Branch agencies, the FCC 
and other interested parties to reach the best decision for the nation 
on this important question.
[GRAPHIC] [TIFF OMITTED] T4845.001

[GRAPHIC] [TIFF OMITTED] T4845.002

    Mr. Upton. Thank you.
    Mr. Knapp.

                  STATEMENT OF JULIUS P. KNAPP

    Mr. Knapp. Mr. Chairman, ranking member and members of the 
subcommittee, good morning. I am Julius Knapp, the Deputy Chief 
of the Office of Engineering and Technology at the FCC and I 
welcome this opportunity to discuss the spectrum allocations 
for advanced wireless services or the so-called third 
generation or 3G mobile radio services. Unfortunately, Chairman 
Michael Powell could not be here today, but he shares your 
interest in the future of 3G. The Commission is committed to 
facilitating the rapid deployment of new and innovative 
technologies as well as promoting spectrum efficiency.
    It's crucial that we provide the essential ingredients for 
success in the marketplace for advanced wireless services. And 
those are adequate spectrum and an open, competitive, 
deregulatory market. In order to accomplish these goals we must 
work together as a Nation to ensure a cooperative atmosphere 
and a unified voice.
    The Commission is dedicated to working with industry, other 
agencies and Congress to find and deploy the most suitable 
spectrum. Today's hearing is an important step toward 
encouraging the development of shared goals and perspectives 
and we welcome the opportunity to testify here today.
    Let me briefly outline the past and current situation. As 
Mr. Hatch mentioned, the International Telecommunications Union 
has been fostering the development of advanced wireless systems 
for about 10 years. The 2000 World Radio Conference adopted 
Resolution 223 which states that approximately 160 megahertz of 
additional spectrum will be needed to meet the projected 
requirements of IMT-2000 or 3G in those areas where the traffic 
densities are highest by the year 2010.
    WRC-2000 identified a number of frequency bands for 
possible IMT-2000 use and provided that each country may 
determine which of the bands to implement domestically after 
taking into account the impact on their incumbent services. 
WRC-2000 decisions also provided that 3G services may be 
introduced through evolution of technology and frequency bands 
that are used by existing mobile services. The 3G frequency 
bands that were identified internationally are allocated in the 
United States for both Federal Government and nonfederal 
government use and therefore the executive branch and the FCC 
each have jurisdiction for parts of the spectrum that were 
identified internationally.
    A Presidential Memo was issued in October of 2000 
instructing the Secretary of Commerce to work cooperatively 
with the FCC to develop a study plan to select spectrum for 3G 
systems. The Department of Commerce released a plan on October 
20, 2000 to identify spectrum for 3G and the plan established 
target dates for completion of spectrum studies by NTIA and the 
FCC. The plan also called for the FCC to allocate spectrum by 
July 2001 and to establish rules so that spectrum could be 
assigned by competitive bidding by September 2002.
    Late last year, the FCC initiated a rulemaking to consider 
spectrum allocations to facilitate the introduction of advanced 
wireless services. The Commissions Notice of Proposed 
Rulemaking invited comments on the types of advanced wireless 
services that will be provided and their technical 
characteristics, the amount of spectrum that may be required, 
spectrum pairing options and a number of other issues.
    I'd like to take a moment just to focus on the frequency 
bands. The Commission invited comment first of all on the 
extent to which the currently allocated spectrum might be used 
for advanced wireless services including the bands used by 
cellular, PCS, specialized mobile radio services and the 
spectrum that was recently reallocated for commercial use from 
TV channel 60 to 69 as a result of the transition to digital 
television.
    The Commission also invited comment on five new frequency 
bands that are shown on the chart we've placed on the easel. We 
propose to allocate for mobile and fixed services the 1710 to 
1755 megahertz band that was designated for reallocation from 
Federal Government to nonfederal government use under two 
statutory budget directives. And that's shown in yellow on the 
chart.
    We sought comment on providing mobile and fixed service 
allocations for the 1755 to 1850 megahertz band if that 
spectrum is made available for nonfederal government use. We 
also proposed to designated for advanced mobile and fixed 
services parts of the 2110 to 2150 megahertz and 2160 to 2165 
megahertz bands that are currently used for a variety of fixed 
and mobile services and were identified in the Commission's 
emerging technologies proceeding in 1992.
    We also asked for comment on various approaches for the 
2500 to the 2690 megahertz band which is currently used for the 
multi-channel, multi-point distribution and instructional 
television fix services that we refer to in shorthand as MDS 
and ITFS.
    So what's next? The Commission staff is evaluating the 
record in its rulemaking to determine how to proceed. Comments 
filed by the wireless industry suggest that the 1710 to 1850 
megahertz band would be the preferred choice for 3G spectrum. 
This spectrum would harmonize U.S. spectrum allocations with 
those in use or planned internationally, permit economies of 
scale and reduce costs in manufacturing equipment as well as 
facilitating international roaming.
    We've been working in close consultation with the 
Department of Commerce and the Department of Defense and they 
are continuing to evaluate whether in addition to the 1710 to 
1755 megahertz band that has already been identified for 
transfer, spectrum can be made available in the 1755 to 1850 
megahertz band.
    In addition, the Commission staff is working to identify 
other possible nongovernment spectrum bands that might be 
reallocated for 3G or serve as relocation spectrum. Industry is 
also looking at additional spectrum options. CTIA recently 
filed a petition with the FCC seeking to reallocate spectrum 
that was allocated to the mobile satellite service.
    As Mr. Hatch mentioned, the Chairman sent a letter to the 
Secretary of Commerce Donald Evans noting that the entire 
Federal Government faces a challenge in addressing the issues 
for 3G and making sufficient spectrum available.
    Secretary Evans recently responded to Chairman Powell's 
letter and directed the Acting Administrator of the NTIA to 
work with the FCC to develop a new plan for the selection of 3G 
spectrum as quickly as possible.
    In conclusion, the Commission is committed to making 
spectrum available for new advanced wireless services. We will 
continue to work closely with the Congress, the Federal 
Government, the Department of Defense, the wireless industry 
and other spectrum users toward that end. We must approach 
these issues by balancing the needs of all users through a 
well-managed national plan.
    I'd like to thank you, Mr. Chairman, for the opportunity to 
appear before you today and this concludes my testimony and I'd 
be happy to answer questions afterwards.
    [The prepared statement of Julius P. Knapp follows:]
    Prepared Statement of Julius P. Knapp, Deputy Chief, Office of 
     Engineering and Technology, Federal Communications Commission
    Mr. Chairman, Ranking Member, and Members of the Subcommittee: Good 
morning. I am Julius Knapp, Deputy Chief of the Office of Engineering 
and Technology at the Federal Communications Commission (FCC). I 
welcome this opportunity to discuss spectrum allocations for advanced 
wireless service, or so-called third generation (3G) mobile radio 
services.
    Unfortunately, Chairman Michael Powell could not be here today, but 
he shares your interest in the future of advanced wireless 
communications services, including 3G. The Commission, in general, is 
committed to facilitating the rapid deployment of new and innovative 
technologies as well as promoting spectrum efficiency.
    More specifically, it is crucial that we provide the essential 
ingredients for success in the marketplace for advanced wireless 
services - adequate spectrum capacity, and an open, competitive de-
regulatory environment. In order to accomplish these goals, we must 
work together as a nation to ensure a cooperative atmosphere and 
unified voice. The Commission is dedicated to working with the 
industry, other agencies, as well as Congress to find and deploy the 
most suitable spectrum. Today's hearing is an important step toward 
encouraging the development of shared goals and perspectives, and we 
welcome the opportunity to testify here today.
                              introduction
    Commercial mobile radio services have experienced unprecedented 
strong growth, particularly in the past several years. In the twelve 
months ending December 2000, the mobile telephony sector generated over 
$52.5 billion in revenues and subscribership increased from 
approximately 86 million to 110 million users.
    The first wireless phones, introduced in the 1980s, used analog 
technology and offered only voice service. The second generation of 
wireless phones, introduced in the mid-1990s, use digital transmission 
technology but still primarily offer voice services. Data services are 
being introduced that allow consumers to use wireless phones and other 
devices to provide access to the Internet, but transmission speeds are 
relatively slow by today's standards.
    Industry has developed technology for advanced wireless services, 
referred to as third generation or 3G wireless, that will offer high-
speed data rates that make it possible to offer a variety of new voice 
and advanced services. The United States has been very involved 
internationally in developing technical standards and identifying 
spectrum for 3G services.
    Late last year, the FCC initiated a rulemaking to consider spectrum 
allocations to facilitate the introduction of advanced wireless 
services, such as 3G. Some of the spectrum identified internationally 
for 3G currently is used in the United States for Federal government 
communications systems. The Commission's staff has worked closely with 
the Department of Commerce in addressing possible spectrum allocations 
for 3G.
    The FCC is continuing its efforts to address the spectrum 
requirements for 3G systems. I am pleased to report on our progress 
thus far.
               international spectrum allocations for 3g
    The International Telecommunications Union (ITU) has been fostering 
the development of advanced wireless systems, commonly referred to as 
International Mobile Telecommunications-2000 (IMT-2000) or 3G systems, 
for a number of years. The 2000 World Radio Conference (WRC-2000) 
adopted Resolution 223, which states that approximately 160 MHz of 
additional spectrum will be needed to meet the projected requirements 
of IMT-2000 in those areas where traffic is highest by 2010. WRC-2000 
identified a number of frequency bands for possible IMT-2000 use and 
provided that each country may determine which of the bands to 
implement domestically after taking into account the impact on 
incumbent services. The WRC-2000 decisions also provided that 3G 
services may be introduced through evolution of technology in frequency 
bands used by existing mobile services.
                coordination with department of commerce
    The frequency bands identified internationally for possible use for 
advanced wireless services are allocated in the United States for both 
Federal Government and Non-Government use and therefore fall under the 
spectrum management responsibilities of both the Executive Branch and 
the Commission. Setting the direction for the Executive Branch, a 
Presidential Memorandum was issued in October 2000 instructing the 
Secretary of Commerce to work cooperatively with the Federal 
Communications Commission to develop a Study Plan to select spectrum 
for 3G systems.
    The Department of Commerce released a ``Plan to Select Spectrum for 
Third Generation (3G) Wireless Systems in the United States'' on 
October 20, 2000. The plan established target dates for completion of 
spectrum studies by the National Telecommunications and Information 
Administration (NTIA) and the Federal Communications Commission. The 
plan also called for the FCC to allocate spectrum by July 2001 and to 
subsequently establish rules so that spectrum can be assigned by 
competitive bidding by September 2002.
                             fcc rulemaking
    The Commission issued a Notice of Proposed Rule Making (``Notice'') 
in ET Docket No. 00-258 in December 2000 to identify spectrum for 
advanced wireless services, including third generation and future 
generations of wireless systems.
Service Requirements
    In the Notice, the Commission sought comment on the types of 
advanced wireless services that will likely be provided and the 
technical characteristics of such systems. The Commission noted that 
wireless carriers in the United States employ a variety of technical 
standards and sought comment on how networks will migrate to new 
technologies and whether networks have the capacity now to provide data 
services. We also requested information on the projected demand and 
growth rates for mobile data services, the number of licensees needed 
to meet this demand, how to accommodate global roaming, and other 
issues.
Amount of Spectrum Needed
    The Commission's rulemaking invited comment on the amount of 
spectrum required for advanced wireless services, for example, whether 
the 160 MHz of spectrum recommended by WRC-2000 Resolution 223 is 
required or whether some alternative amount is needed. The Notice 
states that the Commission intends to identify a flexible allocation 
for advanced wireless services, noting that it is not Commission policy 
to set aside spectrum restricted to a given technology.
Frequency Bands
    The Commission asked for comment on the extent to which currently 
allocated spectrum might be used for advanced wireless services. This 
spectrum includes the frequency bands used by cellular, PCS, and 
specialized mobile radio services, as well as spectrum recently 
reallocated for commercial use from TV channels 60-69 as a result of 
the transition to digital television.
    The Notice also invited comments on using additional candidate 
bands for advanced wireless systems. Three of these bands are ones that 
the Commission previously identified for reallocation and that the ITU 
identified for possible 3G use: 1710-1755 MHz, 2110-2150 MHz, and 2160-
2165 MHz.
    The 1710-1755 MHz band is now used by Federal Government operations 
and is scheduled for transfer to the private sector on a mixed-use 
basis by 2004.
    The 2110-2150 MHz and 2160-2165 MHz bands are currently used by the 
private sector for fixed microwave services. The Commission identified 
these bands several years ago for reallocation to emerging 
technologies.
    The Notice sought comment on whether portions of the 1755-1850 MHz 
band, which is now used by Federal Government operations, can be made 
available for advanced wireless services. Recent legislation sets 
certain conditions before the Department of Defense (DOD) surrenders 
use of a band, such as this one, in which it is a primary user. 
Further, Federal Government users in this spectrum would be entitled to 
compensation for relocation to other bands.
    The Commission's rule making asked for comment on whether the 2500-
2690 MHz band, which is now used for Instructional Television Fixed 
Service (ITFS) and Multipoint Distribution Service (MDS), can be used 
for advanced mobile, as well as fixed services. The proposal also asked 
whether we should simply add a mobile service allocation to this band 
or if ITFS/MDS incumbents should be relocated.
    Finally, the Notice requested comment on how newly available 
spectrum for advanced wireless services might be paired and the 
importance of global harmonization.
    The Commission's staff currently is reviewing the comments received 
in response to this Notice as we evaluate next steps, which I will 
discuss in a moment.
                          fcc technical report
    The staffs of NTIA and the FCC issued Final Reports in March 
reporting the results of studies for two of the frequency bands under 
consideration for advanced wireless systems.
    The FCC staff report examines the 2500-2690 MHz band. The report 
explains that this spectrum is heavily occupied by existing ITFS and 
MDS systems. These services are experiencing and are expected to see 
significant future growth, particularly in the provision of new 
broadband fixed access to the Internet. Given the ubiquitous nature of 
ITFS/MDS, the report found sharing of this spectrum for 3G does not 
appear feasible. Further, the report found that reallocating a portion 
of the 2500-2690 MHz band from incumbent services for new third 
generation mobile wireless services would raise significant technical 
and economic difficulties.
                  reimbursement for federal relocation
    The Strom Thurmond National Defense Authorization Act of 1999 (NDAA 
99) mandates that new commercial licensees (assigned via competitive 
bidding) reimburse Federal government incumbents forced to relocate 
spectrum. The reimbursement requirement applies to the 1710-1755 MHz 
band that has already been identified for transfer from Federal to non-
government use. It would similarly apply to the 1755-1850 MHz band if 
the Federal government were to make this spectrum available for use by 
the private sector.
    The first application of the mandatory reimbursement provisions is 
under consideration in a separate Commission (ET Docket 00-221) and 
NTIA rulemaking proceedings. The Commission's Advanced Services Notice 
invited comment on relocation rules and reimbursement procedures. The 
Commission and NTIA invited comment as to how these reimbursement rules 
and procedures would affect the commercial viability of Federal 
reallocated spectrum that may be made available for 3G. Concerns raised 
in the comments focused primarily on the availability of adequate 
information and reduced uncertainty in the process for potential 
licensees to develop viable bidding strategies. We are continuing to 
work closely with NTIA to develop reimbursement policies and procedures 
that are viable for Federal incumbents as well as prospective new 
users.
                               next steps
    As I mentioned, the Commission is evaluating the record in the 
Advanced Services Rule making to determine how to proceed. The comments 
filed by the wireless industry suggest that the 1710-1850 MHz band 
would be the preferred choice for 3G spectrum. This would partially 
harmonize U.S. spectrum allocations with those in use or planned 
internationally. Harmonization would permit economies of scale and 
reduce costs in manufacturing equipment, as well as facilitate 
international roaming.
    Parts of the 1710-1850 MHz band could be used to harmonize with 2G 
GSM systems, which are currently used extensively throughout the world 
and are expected to transition eventually to 3G systems. Other parts of 
the 1710-1850 MHz band could be paired with the 2110-2150 MHz band to 
achieve partial harmonization with spectrum recently auctioned in 
Europe and elsewhere for 3G systems.
    The Department of Commerce and the Department of Defense are 
continuing to evaluate whether, in addition to the 1710-1755 MHz band 
that has already been identified for transfer, spectrum can be made 
available in the 1755-1850 MHz band. They have been working closely 
with industry in consultation with the Commission.
    The Commission staff has also been working to identify other 
possible non-government spectrum bands that might be reallocated for 3G 
or serve as relocation spectrum. These additional bands could be 
identified in a Further Notice of Proposed Rulemaking in the near 
future.
    Industry, as well, has been looking at additional spectrum options. 
For example, the Cellular Telecommunications and Internet Association 
recently filed a petition with the FCC seeking to reallocate spectrum 
currently allocated to the mobile satellite service.
    Given these developments, on June 26, 2001, FCC Chairman Powell 
sent a letter to Secretary of Commerce Donald Evans noting that the 
entire federal government faces a challenging set of issues in 
addressing how best to make available sufficient spectrum for advanced 
wireless services. Chairman Powell stated that the public interest 
would be best served by additional time for informed consideration, 
even if this results in some delay in reaching a decision. The Chairman 
also acknowledged that some of the bands identified for 3G are subject 
to September 30, 2002 statutory auction deadlines. The Chairman offered 
that, together with the Executive Branch and the Congress, we can come 
up with a revised allocation plan and auction timetable that would 
enable the important work in this area to be finalized in the most 
effective manner.
    Secretary Evans recently responded to Chairman Powell's letter and 
directed the Acting Administrator of the NTIA to work with the FCC to 
develop a new plan for the selection of 3G spectrum as quickly as 
possible. This effort will be carried out in close coordination with 
the appropriate Executive Branch entities, including the National 
Security Council, the National Economic Council, the Office of 
Management and Budget, and the Department of Defense. Secretary Evans 
encouraged the participants to consider ways to achieve flexibility 
with respect to the statutory auction dates if flexibility is needed to 
implement the new plan.
                               conclusion
    The Commission is committed to making spectrum available for new 
advanced wireless services. We will continue to work closely with the 
Congress, the Federal Government, the Department of Defense, the 
wireless industry, and other spectrum users towards that end. We must 
approach these issues by balancing the needs of all users through a 
well-managed national plan.
    I would like to thank you, Mr. Chairman, for the opportunity to 
appear before you today. This concludes my testimony and I would be 
pleased to answer any questions you or the other members may have.

    Mr. Upton. Thank you.
    Mr. Wheeler.

                 STATEMENT OF THOMAS E. WHEELER

    Mr. Wheeler. Thank you, Mr. Chairman, and members of the 
committee. I want to begin by associating myself with many of 
the remarks that Dr. Wells made. Particularly, there was a 
great word that you had there, eager, and we particularly want 
to work with you in your eagerness to address this issue 
because I think we can really stipulate three things here. One 
is that today we have the best military in the world and we 
want to keep it that way for those men and women who are called 
into harm's way. The second is that the 21st century military 
is going to be an information battlefield as you have often 
pointed out. And wireless is going to be a key component on 
that battlefield. And the third is that there is another 
component of our national security in the 21st century and 
that's our economic security. We are the world leaders in 
information technology today because we had the home field 
advantage. The reason that Yahoo started here and not in France 
is because they had a backbone network they could go to scale 
quickly. There are other countries in the world now who are 
trying to jump and use that home field advantage with spectrum 
to give them the leg up in the next generation.
    The challenge is how do we have both a military win and an 
economic win and there's been a lot of talk in the statements 
earlier about win-win situations, but I truly think that that 
is possible and I think that this Administration, the work 
that's being done at the National Economic Council, the 
National Security Council, along with the efforts of the 
preceding witnesses clearly are moving toward that kind of a 
situation.
    What I hope to do today is to illustrate the potential for 
that win-win by using the information the Defense Department 
has prepared to help guide us toward that win-win. What you see 
up here on the chart right now is page C-6 from the Defense 
Department spectrum report in which they talk about tactical 
radio problems that occur when the military deploys in Europe 
because of the fact that those frequencies are being used by 
Europeans for wireless phones. We had an experience in Asia in 
the Team Spirit exercise in Korea where in order to use our 
radios we had to shut down part of the Korean cellular network. 
And this situation can only get worse and the number of 
wireless subscribers grow. Here's the projection in terms of 
what that growth is going to look like and what that means is 
that the spectrum that we are presently using domestically 
becomes unusable or encumbered when we deploy for either action 
or training abroad. Our international effectiveness starts with 
spectrum policy at home as a result. Now let's look for that 
win-win situation. Let's take a look at the Defense 
Department's report on the findings in their study and this is, 
as you might recognize, with your copyright permission, sir, 
we've reprinted your charts.
    And go immediately to the second bullet there about 
vacating the spectrum and let's just kind of tick through 
those. First of all, the Defense Department says they must have 
comparable spectrum. We agree. The DOD report laid out a 
migration plan from the present spectrum to new spectrum, but 
they're going to need help from the Congress and the 
Administration and the FCC to get there and they should get 
that help.
    The second bullet says that they need timely cost 
reimbursement. We agree. The estimate in the DOD report is $4.3 
billion. We're talking about roughly 95 megahertz of spectrum 
here, covering all the U.S. We recently had an auction, the FCC 
had an auction in which they auctioned off 30, sometimes 
slightly less megahertz covering about 60 percent of the U.S. 
and generated $17 billion. There is availability of funds for 
covering the cost reimbursement.
    And last, the scheduled time to vacate bullet. We agree. 
There needs to be a plan. We're not talking about tomorrow, all 
this gets done in one clean cut. But there needs to be a 
scheduled roll out of spectrum that recognizes the needs of the 
Defense Department as well as the economic needs. Now we do 
disagree with one thing on this chart and that's that line 
right there that says that it is not until 2010 that the non-
space system's spectrum can move. Let me show you another DOD 
chart and suggest that perhaps this might be a way of helping 
to address that problem and priming the pump over all. This has 
to do with fixed systems, microwave networks. And I call your 
attention to the bottom bullet down there that says that half 
of the DOD's fixed spectrum is used by the Corps of Engineers 
for monitoring purposes, to monitor waterflows, dams and things 
like this. That's burst-y kinds of intermittent information. 
Page 9 of the Defense Department report says that there already 
exists a migration path for that that spectrum has already set 
aside if they were to migrate. I might also indicate that those 
are the kind of services that wireless carriers are providing 
daily. Albertson's grocery store in California, for instance, 
is using wireless to monitor their energy consumption during 
the California energy crisis and to control what they do in 
their stores. The same kind of thing can be done with dams and 
other things.
    But why don't we take this spectrum, which the Defense 
Department says is half of all of their fixed spectrum that is 
not a national security issue and why don't we use it to prime 
the pump?
    Ms. Wilson. Mr. Chairman, point of information.
    Mr. Upton. Ms. Wilson?
    Ms. Wilson. Mr. Chairman, we're seeing some excerpts from a 
study here and I wonder if that entire study is available to 
the committee?
    Mr. Wheeler. I'd be happy to submit it for the record, Ms. 
Wilson.
    Ms. Wilson. Do we have a copy here?
    Mr. Wheeler. It's a DOD study.
    Ms. Wilson. I'm concerned I'm seeing excerpts from a study 
that you're presenting me and I just wondered if you have a 
full copy of the report that I could have.
    Mr. Upton. Mr. Hatch?
    Mr. Hatch. Thank you, Mr. Chairman. We have provided copies 
to Members of Congress. If there are members of your committee 
that do not have copies----
    Mr. Upton. We'll make sure we get one.
    Mr. Hatch. We'll be happy to provide copies of both NTIA 
and the DOD report.
    Mr. Upton. Thank you.
    Ms. Wilson. Does anybody have a copy?
    Mr. Wheeler. We'll get you a copy right away.
    Ms. Wilson. Thank you.
    Mr. Wheeler. Thank you, Mr. Chairman. What I'm trying to 
say here is that I think there is a way to prime the pump using 
this spectrum that is for fixed services and that that can 
create, that can go into a trust fund that can then pay for 
additional upgrades, pay for clearing of spectrum and start a 
process, so there is a win-win in this whole situation for 
America. We can build a strong military, paid for with nontax 
dollars and then we can build an internationally competitive 
economy that generates that kind of non-tax opportunity and 
that the good work of the Defense Department has shown the way 
and we look forward to working with Dr. Wells and his eagerness 
to together find that kind of a win-win solution.
    [The prepared statement of Thomas E. Wheeler follows:]
 Prepared Statement of Thomas E. Wheeler, President and CEO, Cellular 
               Telecommunications & Internet Association
    Mr. Chairman and Members of the Subcommittee: Thank you for the 
opportunity to appear before you today. I am Thomas E. Wheeler, 
President and CEO of the Cellular Telecommunications & Internet 
Association (CTIA) representing all categories of commercial wireless 
telecommunications carriers, including cellular and personal 
communications services (PCS).1
---------------------------------------------------------------------------
    \1\ CTIA is the international organization which represents all 
elements of the Commercial Mobile Radio Service (CMRS) industry, 
including cellular, personal communications services, wireless data. 
CTIA has over 750 total members including domestic and international 
carriers, resellers, and manufacturers of wireless telecommunications 
equipment. CTIA's members provide services in all 734 cellular markets 
in the United States and personal communications services in all 50 
major trading areas, which together cover 95% of the U.S. population.
---------------------------------------------------------------------------
    As we look to the challenges of American national security at the 
dawn of the 21st Century it is increasingly apparent that our security 
is dependent upon not only traditional military capabilities, but also 
the strength of our economic competitiveness at home and abroad. We 
presently find ourselves challenged to upgrade military systems and to 
supply each and every one of our fighting men and women every 
technological advantage possible. We also find ourselves challenged to 
maintain our position as world leaders in technology, especially as the 
world prepares to debut the next generation of the wireless Internet. 
At few times in this nation's history have the solutions to both these 
challenges been more closely intertwined.
    Economically, the reason the United States leads the world in 
Internet technology and services is because we had a ``home-field 
advantage'' at the Net's inception. A well-developed Internet backbone 
enabled companies like Yahoo to test an idea and then go quickly to 
scale. Our international economic competitors, however, have learned 
from that experience and are seeking to build their own ``home field 
advantage'' for the next generation of the Internet--the wireless 
Internet. In countries like Japan, Germany, Great Britain and France 
the governments have made available blocks of spectrum for next 
generation wireless services that approximately double the amount of 
spectrum the U.S. government has made available to its wireless 
industry. Our competitors' plan is transparent: control the next 
generation of Internet products and services by giving non-U.S. 
companies access to the pathway necessary to deliver those products and 
services.
    Militarily, there is almost uniform agreement that the new 
battlefield will increasingly be an information battlefield. Satellite 
infrared imaging, for instance, will enable soldiers to see behind the 
next hill. Real time intelligence updates and maps will show the 
enemy's latest positions. Leaders on the ground will have voice and 
data communications with superiors as well as with their own troops. 
Information superiority becomes a force multiplier for whoever is able 
to communicate best. Unless our soldiers are going to be dragging wires 
behind them as they deploy, these capabilities are all going to require 
the airwaves for their delivery.
    The problem is that the airwaves that the rest of the world is 
allocating or otherwise plans to use for expanded wireless services are 
the very same spectrum that the American military utilizes for its 
communications. In the next five years the ability of the American 
military to deploy or train abroad will be compromised by hundreds of 
millions of consumers using wireless devices in the spectrum to which 
U.S. military radios are tuned. Already the growth of wireless 
technology abroad has begun to impact U.S. military capabilities. A 
recent Department of Defense analysis reported on the ``nonavailability 
of alternate [spectrum] bands to provide the high-end frequency 
component'' of command and control systems. The reason these airwaves 
were not available, according to the report, was the growth of mobile 
phones. Decisions already made by other countries have, are, and will 
affect our national security capabilities for years to come.
    The seriousness of this situation was exemplified in the joint 
U.S.-Korean training exercise ``Team Spirit'' held in late 1999. In 
order for the U.S. radios to work, several channels of the Korean 
cellular network had to be shut down. According to a May 22, 2000 
article in Aviation Week & Space Technology, ``There are some U.S. 
weapons that currently aren't allowed to operate in South Korea out of 
fear they would interfere with civilian systems.'' No wonder Major 
General J. D. Bryan, Vice Director of the Defense Information Systems 
Agency, recently warned, ``If we're not real careful, we face chaos in 
the wireless environment.''
    The U.S. military is a forward-deployed force whose international 
assignments will increasingly be hindered by the conflict between 
airwave assignments made at home and those made abroad. In a ``double 
whammy'' affecting both U.S. military and economic security, the 
governments of the world simply changed the rules. For the purpose of 
spurring Internet-related growth, they reallocated to wireless phone 
use vast amounts of the very same piece of the airwaves the U.S. 
military relies upon for its communications because that is what has 
been assigned to it here at home.
    Fortunately, there appear to be solutions. Some solutions may be 
more costly than others--but not as costly to our national defense as 
losing the opportunity to modernize and upgrade older military 
equipment. Deploying new spectrum-hopping, frequency agile radios for 
both ground and air tactical communications could help solve some 
problems. By tuning across a wider band and then having the flexibility 
to jump from one frequency to another as conditions warrant, these new 
radios may solve the problem for our tactical ground troops and 
aircraft. An area requiring more patience is in satellite 
communications. With a fifteen-year average life, the lead-time for 
frequency changes in satellites is longer, but no less manageable.
    At a time of concern over budget-busting defense spending, the 
world's reallocation into domestic U.S. military frequencies 
paradoxically provides a solution. Because the rest of the world is 
rapidly increasing the number of wireless users in these same 
frequencies, the U.S. wireless industry would like to use them as well. 
Should the Federal government decide to reassign the military to other 
spectrum and auction these airwaves, the resulting billions of dollars 
could pay for both the move to new frequency and the necessary upgrades 
to strategic and tactical equipment. There are 95 megahertz (MHz) of 
DoD spectrum in the 1755-1850 MHz band allocated to mobile use by the 
rest of the world. A recent U.S. auction of spectrum blocks ranging 
from 25 to 30 MHz and covering only about 60% of the population, 
generated over $17 billion from wireless carriers. The Department of 
Defense is sitting on a valuable domestic asset whose value can be 
utilized to help solve the military's international spectrum problem.
    This debate over spectrum for advanced mobile services puts a 
spotlight on the urgent need for some fundamental rethinking of our 
nation's spectrum management process. We need to create more positive, 
market-oriented incentives for incumbent users to free up spectrum. And 
we need to create a more efficient spectrum management process that 
focuses more on policy goals than on constituent interests. That does 
not mean that we should ignore the important interests of incumbents, 
especially when they involve crucial national security requirements. It 
means we need to find creative, effective and timely ways of making 
tough spectrum management decisions that leave all affected parties 
leaving the table satisfied that their interests have been addressed.
    One immediate step Congress could take to advance these goals would 
be to pass legislation to ensure that the proceeds of an auction could 
be used by the incumbent to move sooner allowing the auction winner to 
immediately utilize the spectrum acquired. Normally this would entail 
using those proceeds to pay the relocation expenses of the incumbent, 
but in some circumstances the funds could be used to enable the 
incumbent to modify its equipment to share with the new licensed uses. 
Congress might also consider earmarking an additional percentage of the 
auctions' proceeds for the incumbent user, to help give incumbents a 
positive incentive to turn in spectrum for auction. If incumbents were 
guaranteed that their needs would be accommodated and paid for, and 
that they could obtain some additional revenue as well, they would have 
a greatly increased incentive to turn back spectrum that could be 
auctioned. The result in the long run could be not only more efficient 
spectrum management, but higher revenues for the U.S. Treasury. In this 
particular instance, I believe it absolutely imperative the Congress 
guarantee DoD reimbursement funding and additional monetary incentives 
to move, with funds, to modernize and upgrade DoD capabilities. The 
test should be to maintain and enhance capabilities--not fall on your 
sword for a piece of spectrum that will be compromised by the decisions 
of other nations.
    This kind of ``win-win'' requires the implementation of a rational 
spectrum policy. Unfortunately, the United States does not have the 
kind of spectrum policy that would facilitate either this evolution, or 
taking advantage of the potential funding mechanism. In fact, the U.S. 
has no spectrum policy that can effectively deal with such a muliti-
faceted problem. What has passed for spectrum policy has been budget 
policy decisions about when to sell pieces of the airwaves in order to 
generate finds for the Treasury. As the Defense Department's Defense 
Science Board has observed, the system is broken. That unfortunate 
situation hurts both military capability and economic competition.
    The seriousness of the spectrum issue to American combativeness and 
competitiveness calls for dedicated solution-oriented efforts by both 
the defense community and the wireless industry. Denying the economic 
viability of next generation wireless services in hopes of forestalling 
the inevitable need to deal with the spectrum crisis is not a solution. 
New technologies never come forth without hiccups. The military saw 
this with the Patriot Missile, Tomahawk Cruise Missile, Abrams Tank and 
Osprey aircraft, and the same will be true of the new technology of the 
wireless Internet. History's message is clear: those who place their 
bets against technological advancement are ``betting on a nag.''
    The wireless industry is most fortunate that this Administration 
has taken several bold steps to correct a decade-long refusal to make 
tough decisions. Secretary Evans just last week directed the National 
Telecommunications and Information Administration to work with the FCC 
to develop a new plan for (3-G) advanced mobile services. Secretary 
Evans even suggested flexibility in the statutory auction dates for 
1710 to 1755 MHz and 2110 to 2150 MHz may be necessary to implement the 
new spectrum plan. Additionally, over the past 3 months, various 
Executive Branch agencies have been brought together under the able 
direction of the White House NEC and NSC to address the spectrum 
problem. The White House attention to finding a solution to this 
decade-old problem has been most helpful. The industry is encouraged 
that some of the best and brightest minds in the Administration are 
committed to finding a solution that is good for the economy and our 
national security.
    An opportunity appears to exist to demonstrate the good faith 
possibilities of cooperation in the evolution to new military 
technology and continued wireless competitiveness. In recent Capitol 
Hill briefings the Defense Department indicated that approximately half 
of all the Department's spectrum usage for fixed wireless applications 
is by the Army Corps of Engineers to do remote monitoring of water 
levels, alarms and dams. Tying up that spectrum for intermittent 
services that take a quick reading and then report a data burst is not 
only spectrally inefficient; it is probably also overly expensive. 
Throughout America, the wireless industry is providing the exact same 
services on a commercial basis. If the grocery chain Albertson's can 
use commercial wireless networks to monitor and control electricity in 
their stores during the California power emergency, the same should be 
true for the Corps of Engineers to monitor water levels. What's more, 
buying a shared service will no doubt be much lower cost than building 
a stand-alone system with its own allocated airwaves. That spectrum 
then can be sold and the proceeds put into a Defense Department-only 
trust fund for the purpose of paying for the next spectrum move (which, 
in turn, will generate more auction revenue), and for the new 
technology to assure information dominance on the ground, in the air 
and at sea.
    Right now we are at a unique point in time. Most countries are 
reducing their monetary commitments to their military. No other country 
in the world has the available resources, technological know-how and 
the opportunity to up-grade military communications capabilities to 
21st century systems. The U.S military has it within its grasp and 
ability to do what no other country in the world can do in the current 
environment--deploy digital end-to-end encrypted state-of -the art 
communications capabilities. Now is the time to seek a better defense--
and a better economy . Unless we act now things will only become more 
confusing and more intractable. We must not fail to seize upon the win-
win opportunity before us--a second rate communication system is no 
real option for a world leader.

    Mr. Upton. Thank you.
    Mr. Strigl.

                  STATEMENT OF DENNIS F. STRIGL

    Mr. Strigl. Mr. Chairman and members of the committee, 
thank you very much for inviting me to appear before you today. 
The allocation of adequate spectrum to support the development 
of 3G services is the most important and timely issue facing my 
company and the wireless industry. We're grateful for this 
committee for its interest and support, but time is running 
out.
    While we have made some progress since I appeared before 
you last year, no new spectrum has been allocated and no such 
action appears imminent. Consequently, I come before you today 
to deliver the same message that I had a year ago and that is 
that the wireless communications industry must have additional 
radio spectrum in order to provide innovative services which 
will meet the needs of our customers while bringing critical 
benefits to the American economy.
    The following actions are urgently needed for 3G services 
to reach their potential. First, the Commerce Department and 
the FCC need to identify 200 megahertz of globally harmonized 
spectrum for reallocation to commercial mobile services, the 
1710 to 1850 megahertz band provides a good start. The band was 
identified by WRC-2000 as a primary candidate band for 3G 
services and in fact, is globally harmonized.
    Second, the government and private industry need to develop 
an implementation plan for how this spectrum will be cleared 
and auctioned and the process must be established for 
reimbursing Federal Government users for relocation. In this 
regard, I applaud the efforts of Congressman Pickering, of 
Chairman Tauzin, of Congressman Wynn and of you, Mr. Chairman, 
for your leadership in exploring legislative solutions which 
balance the needs of DOD with the spectrum requirements of the 
wireless industry. And I do believe that this is a win-win 
approach. It's an important step forward in the process of 
making 3G spectrum available.
    Third, Congress should pass Congressman Stearns' bill to 
repeal the spectrum cap. The rule was adopted when there were 
just two carriers in wireless market. The FCC's own studies 
show that the wireless market is robustly competitive. The 
Commission's 2001 Competition Report finds that 91 percent of 
the population has access to three or more competitors, while 
75 percent of the population lives in areas with five or more 
mobile telephone providers.
    The report also finds that wireless prices continue to fall 
substantially, including 12 percent drop in the year 2000, but 
with the explosion of demand in wireless services, the primary 
challenge for continued competitiveness is obtaining additional 
spectrum resources. The spectrum cap impairs the very 
competition that we intend to promote and in part by capping a 
carrier's potential for success at the amount of demand 
supportable by 45 megahertz.
    In conclusion, Mr. Chairman, I cannot overstate the 
importance to the wireless industry of the spectrum need for 
third generation services. My company bid nearly $9 billion 
this year for spectrum in an auction that raised $17 billion 
for the U.S. Treasury and I know that this hearing is focused 
on 3G, but how could I come to Washington without at least 
mentioning my $9 billion problem. Congress should do all it can 
to encourage all the parties to settle. This is the best way to 
ensure that valuable mobile licenses purchased at auction are 
put into the hands of carriers to deploy immediately to serve 
our customers.
    Additionally, Verizon Wireless has also announced our 
intention to purchase $5 billion of third generation network 
equipment and I can think of no greater examples to demonstrate 
the need that we have for spectrum than this commitment that 
Verizon Wireless has made and the industry is making to provide 
third generation services to our customers.
    In conclusion, I urge the committee to take every action 
you can to make spectrum available to the wireless industry so 
that carriers can move on and deploy third generation services. 
Thank you again for your continued interest and leadership on 
wireless policy issues.
    [The prepared statement of Dennis F. Strigl follows:]
  Prepared Statement of Dennis F. Strigl, President and CEO, Verizon 
                                Wireless
                                summary
    Mr. Chairman and Members of the Committee, thank you for inviting 
me to appear before you today. The allocation of adequate and 
appropriate spectrum is one of the most important and timely issues 
facing my company and my industry. We are grateful to this committee 
for its interest and support, and together we must find a way to 
quickly address the critical spectrum needs of this industry. Foremost 
among these needs is adequate spectrum to provide Third Generation 
(``3G'') wireless services. These services and the technologies that 
support them will enable U.S. industry to maintain its global 
competitive and technological leadership in both wireless and Internet 
markets. If spectrum is not available on a timely basis, we risk 
squandering our global position and with it a panoply of associated 
economic and societal benefits.
    Efforts by many government and private sector interests have led to 
some progress in achieving the necessary spectrum reallocation, but 
today, just as was the case last July when I last appeared before this 
committee to discuss spectrum needs, new spectrum has not been 
reallocated to meet our needs nor is such action imminent. For that 
reason, I come before you today with the same basic message as I had a 
year ago: the wireless communications industry must have additional 
radio spectrum to provide innovative new services and other critical 
benefits to the American public and to foster continued economic 
growth. In addition, this year I must add that: Time is running out. We 
are facing the prospect of our industry's equivalent of a ``fuel 
crisis''--with access to the spectrum ``fuel'' restricted by government 
policy.
    The following actions are urgently needed:

1. Reallocation of adequate globally harmonized spectrum for mobile 
        services. As reflected in decisions made at the 2000 World 
        Radiocommunication Conference (``WRC-2000''), with U.S. 
        Government support, the U.S. wireless industry needs at least 
        200 MHz of additional spectrum, aligned with spectrum to be 
        used in other regions of the world, to meet its long-term 
        growth requirements.
2. Implementation plan for how this spectrum will be auctioned and 
        cleared. Equally important to the actual reallocation of needed 
        spectrum is the implementation plan setting out the timeframes 
        when that spectrum will be auctioned and when it will be 
        available for use by the industry. The entire band will not be 
        able to be auctioned at once, nor will it all be available at 
        the same time given the variety of incumbent uses. Operators 
        need some certainty and predictability about what spectrum will 
        be available and when. Moreover, Congress must establish a 
        workable process for enforcing the clearing of the spectrum and 
        for reimbursing relocated Federal Government users.
3. Repeal of the ``spectrum cap''. This outdated rule limits the amount 
        of spectrum a single company can own. In the intensely 
        competitive wireless industry, this rule only impedes companies 
        from competing for the spectrum needed to meet the future 
        demand for wireless voice, data and other new services.
The continued growth of the wireless industry will provide critical 
        benefits to the American public and the U.S. economy.
    3G services will be the next important chapter in a compelling 
success story as wireless industry growth continues unabated. Today, 
more than 110 million people in the United States subscribe to mobile 
services and that number continues to grow at an annual rate of more 
than 20 percent. Two years ago, analysts predicted a healthy 60 percent 
of the public would subscribe to mobile services by 2008. But having 
reached 40 percent penetration this year, the analysts now expect a 
higher 70 percent penetration level to be reached 4 years sooner, that 
is by 2004.
    As impressive as our subscriber growth is, it tells only part of 
the story. In addition, we have seen a tremendous surge in individual 
subscriber usage, including a 20-fold increase in total wireless 
minutes of use between 1992 and 2000. The 2000 total of 280 billion 
minutes reflects a compound annual growth rate of 50 percent. In the 
three years between 1997 and 2000 alone monthly usage per subscriber 
doubled, and it is projected to double again between 2000 and 2004.
    Digital technology has been a primary driver of this amazing 
growth. Since introducing the digital technologies into our network in 
1997, we have substantially increased the capacity and efficiency of 
our network and provided consumers with enhanced services and choices, 
including many new pricing plans. Digital handsets feature longer 
battery time and reduced equipment size and cost. Wireless services are 
more accessible and affordable, they have become a part of many 
customers' daily routine, and increasingly they are an alternative to 
using a wireline telephone.
    Despite the efficiency gains of digital technologies, the overall 
growth in customers and usage is placing increasing strain on network 
capacity. The next phase of technology deployment will relieve some of 
these capacity constraints, but technology alone cannot meet our 
capacity and new service needs. The industry's urgent need for new 
spectrum to meet growing demand for existing voice services, for 
example, is evidenced in the $17 billion bid for C and F block licenses 
when they were reauctioned. As we proceed to offer customers new, 
higher-speed mobile services, a continued lack of access to additional 
spectrum will only exacerbate capacity constraints.
    In developing 3G and other innovative wireless technologies, the 
industry is addressing customers' desire for a wide range of high-speed 
data and multimedia applications, including wireless Internet access. 
Verizon Wireless will begin this year to address demand for these high-
speed, high-bandwidth data services by deploying 3G technology in our 
existing licensed spectrum. This technology--cdma2000 1XRTT--will not 
only increase the efficiency of our existing network, but it will allow 
us to provide customers with mobile data services at rates up to 144 
kilobits per second--ten times what is currently available.
    Mobile data services currently represent less than two percent of 
total network usage. However, analysts predict that data applications 
will account for more than 50 percent of network usage by 2004 and 
ultimately those applications will dominate the use of the network. As 
I just indicated, we can initiate some new, high bandwidth services, 
and Verizon Wireless will be among the first companies to do so, but we 
will be bandwidth limited in the nature and scope of these services. 
The industry needs additional spectrum before the services can reach 
their potential anticipated by analysts.
    The importance of these advanced wireless data technologies cannot 
be overstated. As I stated earlier, these technologies converge two 
powerful, largely U.S.-led, innovations--wireless communications and 
the Internet--and in so doing, they will deliver significant benefits 
to consumers and complementary benefits to the U.S. economy. To this 
point, the President's Council of Economic Advisers (``CEA'') 
documented the likely benefits of 3G services in a report it released 
last year. The report estimated that the likely consumer benefits from 
3G services would approach $100 billion annually. That report also 
determined that an adequate supply of additional commercial spectrum 
was needed for these services and urged government action making 
adequate spectrum available for 3G applications.
This Committee is in a key position to ensure that the needed spectrum 
        is made available.
    Congress has an important role in ensuring that the spectrum 
resources is managed for the benefit of the American public--it is the 
public, after all, not carriers, that uses this scarce resource to meet 
its communications needs. Given the significant benefits that 3G and 
other advanced wireless services will provide to American consumers, 
businesses, and the economy, Congress has every reason to ensure that 
adequate spectrum is available to support the full potential of such 
services. Other nations have already allocated and licensed sufficient 
amounts of spectrum to meet the needs of their wireless industries. The 
United States must do the same.
    There are three concrete steps that Congress should take now:

1. Allocate the additional spectrum needed for mobile services.
    WRC-2000 identified two spectrum bands to accommodate 3G 
development around the world. This action to identify spectrum on a 
global basis will provide the global ``harmonization'' that is so 
important to future services. By implementing the WRC-2000 actions and 
allocating harmonized spectrum, U.S. carriers will be able to compete 
globally in offering international roaming while achieving the 
economies of scale that reduce network and customer equipment and 
service costs.
    The 1710-1850 MHz band, as identified at WRC-2000, provides the 
best, initial opportunity to harmonize U.S. spectrum allocations with 
those being made around the world and thereby to meet the 3G growth 
needs of the industry. The band is already used for second generation 
mobile services in Europe and parts of Asia, where it is expected to 
evolve to 3G. In Canada, Mexico, Brazil, and other parts of North and 
South America, this band is the first choice for initial 3G deployment. 
Even though the United States, at WRC-2000, supported the use of this 
band for global 3G services, most of the band is currently occupied by 
the U.S. Department of Defense (``DOD'') and other Federal agencies.
    In cooperation with the wireless industry, the U.S. Government has 
worked diligently to assess the potential for making this band 
available for commercial use. My company and others from the wireless 
industry have been working closely with the FCC, the Department of 
Commerce, DOD, and various other Federal agencies to develop a workable 
reallocation plan. We have made progress, as I stated earlier, but a 
final decision on this band has not been made; nor is one imminent. 
Beginning with this hearing, this Committee can provide the impetus for 
the quick allocation action we need.
    Obviously since reallocating the 1755-1850 MHz band will not 
satisfy the 200 MHz requirement, additional spectrum must be 
identified. To that end, the 2110-2165 MHz band, for example, is an 
appropriate and workable supplement. This band, most of which has 
already been proposed for reallocation, is encumbered with commercial 
fixed operators, and we are working with the FCC on relocation options.
    Recent events suggest that the 1990-2025 MHz and 2165-2200 MHz 
bands, currently allocated as additional spectrum for Mobile Satellite 
Service (``MSS''), may better serve the public interest by being 
reallocated at least in part to more viable purposes. Reported business 
difficulties among the applicants for MSS licenses raise questions as 
to the viability of MSS. For these reasons, we and other carriers 
requested the Commission to evaluate how this band could be used to 
facilitate the development of advanced mobile services, e.g., by 
accommodating the relocation of commercial and/or government systems 
from bands used for 3G.
2. Establish an implementation plan for auctioning and clearing 
        spectrum.
    Equally important to the reallocation of needed spectrum is the 
implementation plan setting out the timeframes when portions of that 
spectrum will be auctioned and when it will be available for use by the 
industry. The entire band will not be able to be auctioned at once, nor 
will it all be available at the same time, given the variety of 
incumbent uses. The industry can and will work with these logistical 
realities, but operators need certainty and predictability about what 
spectrum will be available and when so that we can develop our plans. 
Moreover, a workable process must be established to enforce the timing 
of spectrum clearing as set out in the implementation plan. Last but no 
less important, a process must be adopted which identifies the 
relocation costs of government users in advance of a reallocation 
auction, provides for recovery of these costs through the auction 
process and reassures government users that these relocation costs will 
be reimbursed.
    This implementation plan must reflect the need for allocation 
decisions that promote harmonization. For example, the Commission is 
considering whether to pair the 1710-1755 MHz band (for mobile 
transmit) with the 2110-2150 MHz band (for base transmit). This pairing 
would be inconsistent with existing and anticipated future uses of this 
spectrum around the world. As a result, mobile base stations and 
portable devices developed for U.S. markets would be incompatible with 
and more expensive than equipment developed for markets where spectrum 
is harmonized. The availability of additional spectrum in the 1755-1850 
MHz band would permit the Commission to establish pairing arrangements 
that are harmonized worldwide. I urge you to quickly resolve the 
broader 3G spectrum allocation decisions so that the Commission can 
consider all viable candidate bands before taking action on a few. In 
doing so, the Commission can establish a spectrum allocation and 
auction plan that promotes harmonized use of spectrum, reduces the 
costs of 3G equipment and services, and increases the overall value of 
spectrum.
    In establishing a workable process for clearing the 1710-1850 MHz 
Federal Government band, the method for reimbursing displaced Federal 
users can be improved and in so doing it may actually facilitate the 
clearing process. Current law requires that wireless operators 
negotiate with Federal agencies to relocate after they have acquired 
their licenses at auction. Based on past experience, this ``after-the-
auction'' approach means that operators have considerable uncertainty 
regarding the costs of relocation and the availability of spectrum, 
affecting their bidding strategy and the value they attribute to the 
license. It also imposes unnecessary transaction costs on operators 
when they proceed to the negotiation, and it may result in DOD and 
other Federal agencies being expected to disclose information about 
their systems that they contend is classified or proprietary.
    The law can be improved by providing for the identification of 
relocation costs and timing in advance of the auctions and collection 
of relocation costs directly from the auction proceeds. In this way, 
operators would know the timeframe for spectrum clearing and the costs 
attributable to that clearing. For its part, the government users would 
know that their relocation costs would be fully compensated without the 
need for any negotiations with industry. Legislation should be adopted 
that would make these changes to the relocation and reimbursement 
process.
    Concerning these proposed action steps, I want to thank Rep. 
Pickering, Chairman of the Wireless Caucus for his leadership, and 
similarly I want to thank Chairman Upton and Chairman Tauzin, and Rep. 
Wynn for their commitment to this critical matter.
3. Repeal the ``spectrum cap''.
    As this committee well knows, the spectrum aggregation limit or 
``spectrum cap'' rule has outlived the FCC's purpose and now is working 
to the detriment of maintaining the very competitive and robust market 
it sought to foster. The rule was adopted when there were two carriers 
in the wireless market to encourage new entrants in that market. Today, 
the Commission's own studies show that 75 percent of the population 
lives in areas with five or more mobile telephone providers. Nearly 50 
percent of the population has at least six carriers from which to 
choose. In Washington, D.C., for example, Verizon Wireless competes 
against Cingular, AT&T, Sprint, VoiceStream and Nextel. New entrants 
continue to gain considerable ground. Price competition is steep, but 
perhaps even more important, carriers are competing on the basis of new 
and enhanced product features. The consumer is winning.
    Now, the primary challenge to continued competitiveness in domestic 
markets is access to additional spectrum to meet demand, and the 
spectrum cap is impeding that access.
    The spectrum cap rule prohibits any company from holding more than 
45 MHz of cellular, PCS and specialized mobile radio (``SMR'') spectrum 
in the same geographic area, with a higher limit of 55 MHz in rural 
areas. The adverse impact of these arbitrary limits is exacerbated by 
the non-uniform nature of the size of license areas and licensed bands, 
and this lack of uniformity prevents carriers from approaching even 
these caps in their full footprint.
    Congress did not impose this economic regulation. To the contrary, 
the 1993 Omnibus Budget Reconciliation Act replaced traditional 
wireless regulation, such as entry and price controls, with a 
competitive, market-driven model--a deregulatory change that has 
contributed to the growth of our business.
    The cap is an artificial and uneconomic constraint on our ability 
to determine how best to meet demand and offer new services. It 
threatens to impair the very competition that it was intended to 
promote, in part by capping a carrier's potential for success at the 
amount of demand supportable by 45 MHz. My company and many others are 
restricted from acquiring new spectrum even though we are facing strong 
competition and will use the additional spectrum productively to serve 
the public.
    I want to thank Congressman Stearns for introducing legislation to 
remove the cap, and I urge the Committee to proceed with this important 
legislation. Lifting the cap will allow an open and fair market for 
available spectrum, and it will favor innovation and competition in the 
wireless industry. It will facilitate the deployment of advanced mobile 
services and promote the global competitiveness of US industry. Today, 
U.S. competitors are at a significant disadvantage relative to our non-
U.S. counterparts, as other governments either do not have caps or have 
much higher limits on existing spectrum, while they are working 
aggressively to provide 3G spectrum to their wireless operators.
    In short, the spectrum cap rule is unnecessary and 
counterproductive. Competitive industries require market-driven 
policies, not outmoded regulation that picks winners and losers, 
penalize success and denying access to critical resources.
                               conclusion
    Congress must act now to ensure the timely allocation of necessary 
additional spectrum, the creation of a mechanism for reimbursement and 
relocation of incumbents and the adoption of market-driven spectrum 
policies that promote the development of advanced wireless technologies 
and services. The steps include: (1) allocating a minimum of 200 MHz of 
additional, harmonized spectrum for mobile services, (2) establishing a 
plan for the timing of license auctions and spectrum clearing, (3) 
ensuring that all candidate spectrum bands are dealt with as part of a 
comprehensive allocation plan that is harmonized with worldwide 
allocations, (4) revising the reimbursement process so costs are 
identified in advance of auctions and displaced Federal users are 
reimbursed from auction proceeds, and (5) repealing of the spectrum 
cap.

    Mr. Upton. Thank you.
    Monsignor Dempsey, welcome.

                 STATEMENT OF MICHAEL J. DEMPSEY

    Mr. Dempsey. Good morning, Mr. Chairman and members of the 
subcommittee. I am Monsignor Michael J. Dempsey, the Director 
of Patrick Communications for the Diocese of Brooklyn, New York 
and I've been doing this work for 35 years. I also serve as 
President of the Catholic Television Network. That's an 
association of Roman Catholic Diocese that operate many of the 
largest school systems in the United States. We also operate 
large ITFS systems that serve more than 600,000 students. These 
systems transmit a broad range of onsite and distance learning 
programs, teacher and medical training courses, inspirational 
programs and live interactive services to schools, community 
centers and hospitals.
    I'm here today to urge Congress to assure that the 
broadband networks being deployed on our ITFS channels not be 
held hostage to the efforts, legitimate efforts defined 
spectrum for 3G. We have traveled to Washington many times to 
make our peace and after extensive study, the FCC staff has 
found that our spectrum is serving a valuable educational 
purpose and is not a viable choice for 3G, so I ask you today, 
please urge the FCC to take our spectrum off the table and let 
us go back to serving our students and communities before the 
start of another school year.
    There are three reasons why the FCC should act now. The 
first is the extensive record developed by the FCC staff fully 
supports this action. The second is removing the cloud of 
uncertainty will enable us and our commercial partners to build 
out our new broadcast systems, broadband systems and allow 
educators to focus on educating students. And third, the 3G 
community itself has expressed an overwhelming preference for 
bands other than ours. So I'm asking for your support to end 
this uncertainty.
    I make this request not only in behalf of CTN, but on 
behalf of an unprecedented number of public and private 
elementary, secondary and higher educational institutions in 
all 50 States. There are far too many of them to name them all, 
but they include groups like the American Association of School 
Administrators, the Association of American Universities, the 
National Educational Association and thousands of individual 
institutions.
    Let me give you an example of why this spectrum is so 
important to education. The per pupil cost of education is 
increasing faster than the income needed to support it, either 
from tuition in our case or taxes in the case of the public 
schools. And as a result in my diocese alone, we have closed 75 
schools in 25 years. In the case of the public schools, when 
you can't close schools, the entire system declines. In New 
York City, 45 percent of the youngsters who enter first year 
public high school do not even get to senior year of high 
school. The only way to change this situation is to redesign 
our schools and the only way we can do that is with this 
technology. We need this technology to do that.
    Now ITFS is the only spectrum set aside for education. ITFS 
systems that are licensed to and controlled by schools empower 
us to use technologies in ways we need to help students. We now 
stand at the threshold of a new digital broadband era for our 
schools that will make available high speed Internet access, 
video on demand, wider area networking and other similar 
services. But the 3G proceeding has caused significant 
regulatory delay and uncertainty that has hurt our students and 
the educational community. Nothing in the FCC record credibly 
supports delaying action to remove the ITFS and the MDS bands 
from further consideration.
    The final FCC staff report regarding our band demonstrates 
that no portion of it should be reallocated.
    Mr. Chairman, ITFS is the most valuable technology tools 
available to education. So please support our request that the 
FCC act now to remove our band from further consideration. If 
this vital resource is taken away or is compromised by 
prolonged uncertainty, the real losers will be our Nation's 
children. A single school year is a very long time in the life 
of a student. Thank you again for the honor of appearing before 
the subcommittee.
    [The prepared statement of Michael J. Dempsey follows:]
  Prepared Statement of Monsignor Michael J. Dempsey on Behalf of The 
                      Catholic Television Network
    Mr. Chairman and members of the Subcommittee, my name is Monsignor 
Michael J. Dempsey. I am the Director of Pastoral Communications for 
the Diocese of Brooklyn, and I have the responsibility of supporting, 
through television and information technology, the educational, 
medical, and religious needs of approximately four million people in 
Brooklyn and Queens, New York. I have been doing this for the past 35 
years.
    I also serve as the President of the Catholic Television Network 
(``CTN''). CTN is an association of Roman Catholic archdioceses and 
dioceses that operate many of the largest parochial school systems in 
the United States including those located in New York, Detroit, Los 
Angeles, Dallas, and the San Francisco Bay area. CTN's members use 
frequencies in the 2500-2690 MHz band to distribute educational, 
instructional, inspirational, and other services to schools, colleges, 
parishes, community centers, hospitals, nursing homes, residences, and 
other locations. Collectively, CTN's members serve over 600,000 
students and millions of households throughout America.
    I am here today to urge Congress to assure that the broadband 
networks being deployed across the country in the 2500-2690 MHz band 
not be held hostage to efforts to find spectrum for commercial 3G 
services. While I understand the need to review all possible spectrum 
options, the review must have a reasonable end. The time has come to 
remove our band from further consideration as a possible home for 3G 
services.
    I am speaking not only on behalf of the Diocese of Brooklyn and 
CTN, but on behalf of an unprecedented number of public and private 
elementary, secondary, and higher educational institutions and 
commercial entities from all 50 states that have joined forces to 
protect this valuable spectrum resource. In over 40 years as an 
educator, I have never seen an issue generate such a high level of 
concern from so many sectors of the educational and business 
communities.
                          the history of itfs
    The Instructional Television Fixed Service (``ITFS'') was 
established in 1963 when the Federal Communications Commission 
(``FCC'') allocated spectrum in the 2500-2690 MHz band for use by 
accredited educational institutions and other non-profit entities to 
further their educational missions. This is the only spectrum 
specifically set-aside for formal educational instruction.
    Historically, the band was used for one-way video program delivery. 
However, as a result of new regulatory and technological developments, 
the band is evolving rapidly into high-speed, two-way interactive 
services. As a result, the band is becoming an even more valuable tool 
for teachers and students in our nation's schools and communities. 
There are four key points with respect to this evolution that I would 
like to emphasize this morning.
    Educational/Commercial Partnerships. First, one of the most 
important things to understand about ITFS is that the effective use of 
this spectrum by educators is highly dependent on partnerships we have 
forged with commercial operators who hold Multipoint Distribution 
Service (``MDS'') licenses at 2150-2162 MHz and on certain channels 
within the 2500-2690 MHz band. In 1983, the FCC adopted a regulatory 
paradigm that encouraged educators to lease part of their spectrum to 
commercial operators. The FCC's goal was to stimulate the creation of 
shared networks that would not only promote efficient spectrum use, but 
also advance the interests of both education and commerce. This is 
exactly what happened.
    Shortly after the 1983 rules were implemented, ITFS licensees began 
leasing some of their transmission capacity to commercial partners in 
return for equipment, services, and funding that has been used to 
further their educational mission. These partnerships are absolutely 
essential to the success of ITFS/MDS licensees. They have enabled CTN 
and hundreds of other educators to deliver high-quality educational 
services at a reasonable cost. At the same time, they have enabled our 
commercial partners to amass enough spectrum to deploy commercially 
viable broadband networks that they share with educators.
    New Two-Way Rules. Second, it is important to understand that we 
are at the threshold of a new and exciting digital, two-way broadband 
era that will revolutionize education in America. In 1998, after a 
lengthy and complex rulemaking proceeding, the FCC issued new rules 
that permit ITFS/MDS licensees to use their channels for a whole new 
array of two-way video, voice, and data services. These new rules were 
intended to spur competition in the market for high-speed, two-way data 
communications and Internet access services. They were also intended to 
help ITFS licensees whose needs have changed dramatically since the 
1960's. To effectively improve education, students today require more 
than one-way video programming. They need interactive two-way video; 
document and data exchanges; high-speed Internet access in the 
classroom, home and workplace; videoconferencing; wide area networking; 
and a host of other technology tools. The FCC's new rules are the 
stimulus to provide these services.
    Significant Investments. Third, the FCC's 1998 decision is 
important because it encouraged the entry of major new players into the 
ITFS/MDS arena. In 1999, shortly after adoption of the FCC's rules, 
Sprint and WorldCom alone spent more than $2.0 billion acquiring rights 
to ITFS/MDS spectrum in an effort to get a foothold in the wireless 
broadband field. Since then, both MDS and ITFS licensees have made 
substantial additional investments in the form of renegotiating 
existing lease agreements, preparing and filing complex two-way 
applications with the FCC, developing new equipment, and planning and 
building the infrastructure needed to offer high-speed broadband 
service to the public.
    Educators now have the right partners to deploy the technology and 
services that students need in the 21st century. Sprint has spectrum in 
90 markets encompassing 30% of the nation's homes, and is operating 
first generation broadband systems in 14 markets. WorldCom has spectrum 
in over 100 markets encompassing another 30% of the nation's homes, and 
is offering wireless broadband service in five markets with plans to 
serve up to eight additional markets by the end of this year. Nucentrix 
Broadband Networks has spectrum in over 90 mostly rural markets 
covering 9 million households across Texas, Oklahoma, and the Midwest. 
Nucentrix is currently providing broadband wireless Internet access in 
two Texas markets (Austin and Sherman-Denison), and is testing second-
generation technology in Amarillo, Texas.
    Heavily Encumbered Spectrum. The final historical point I want to 
make is that the 2500-2690 MHz band is one of the most heavily 
encumbered bands in the United States, and the licensing regime is 
extremely complicated. There are over 2,000 existing ITFS stations held 
by over 1,200 licensees serving millions of public and private school 
students throughout the United States. The National ITFS Association 
estimates that there are more than 70,000 sites (schools, libraries, 
hospitals, government centers, etc.) in the United States currently 
receiving educational programming over ITFS channels. This explains why 
virtually every national educational association in the country has 
joined forces, with each other and with commercial service providers, 
to protect the ITFS/MDS bands.
                         the record at the fcc
    Because the ITFS/MDS bands have been identified as possible 
candidates for 3G mobile services, our spectrum has been under a 
microscope for nearly a year. The FCC issued an Interim Report 
regarding our spectrum in November 2000, a Notice of Proposed 
Rulemaking in January 2001, and a Final Report on March 31, 2001. The 
FCC requested public comment on each of these items, and voluminous 
comments, reply comments, and ex parte submissions were put into the 
FCC record.
    The Final Report released by the FCC staff on March 31, 2001 
demonstrates conclusively that no portion of the ITFS/MDS spectrum 
should be reallocated for 3G. Let me be clear: There is nothing in the 
FCC record that supports reallocating our spectrum. Here are a few of 
the key findings made by the FCC staff, which support the conclusion 
that our spectrum should be removed from further consideration:

 ``ITFS licensees make extensive use of their spectrum to 
        provide formal classroom instruction, distance learning, and 
        video conference capability to a wide variety of educational 
        users throughout the nation.'' Final Report at 13.
 ``ITFS has approximately 1,275 entities holding over 2,175 
        licenses in urban and rural locations throughout the United 
        States. Over 70,000 locations serve as registered ITFS receive 
        sites, although the number of actual locations at which ITFS 
        programming is viewed is likely much higher since receive sites 
        are typically located within a 56.3-kilometer (35-mile) 
        protected service area around an ITFS base station.'' Final 
        Report at 14.
 ``The MDS industry has invested several billion dollars to 
        develop the band for fixed wireless data systems. Final Report 
        at 13.
 These systems will provide a significant opportunity for 
        further competition with cable and digital subscriber line 
        (DSL) services and deliver broadband services to rural 
        America.'' Final Report at 13.
 ``Sharing between 3G systems and ITFS/MDS operations is 
        extremely problematic.'' Final Report at 36.
 ``Segmentation would require considerable time and costs on 
        both private entities and the public . . . Furthermore, 
        delivery of fixed broadband wireless services to the public and 
        educational users would be delayed, and in rural areas or 
        smaller markets, may never be realized. Relocation would also 
        require considerable time and costs to re-engineer and deploy 
        systems in alternate frequency bands. Again, delivery of 
        service would be delayed or never realized. The relocation 
        option also would require other services to be relocated, and 
        the time and costs to move those additional services would be 
        significant.'' Final Report at 92-93.
 The relocation costs for traditional ITFS facilities would be 
        approximately $19 billion; and secondary relocation costs would 
        fall between $10.6 and $30.4 billion. Final Report at 90-92.
 ``There is no readily identifiable alternative frequency band 
        that could accommodate a substantial relocation of the 
        incumbent operations in the 2500-2690 band . . . Relocation to 
        higher bands could affect significantly the economics of 
        current and planned ITFS and MDS systems and lessen their 
        ability to provide service in rural areas or smaller markets.'' 
        Final Report at iii.
    In addition to these very compelling findings, the record 
established at the FCC shows that the ITFS/MDS bands are not the 
preferred bands for 3G services. The 3G community has expressed an 
overwhelming preference for reallocation of the 1.7 GHz band used by 
the government; and there is ample spectrum in a variety of other bands 
that can be used to provide 3G services including the 700 MHz, 2110-
2150 MHz, and 1990-2025/2165-2200 MHz bands.
                     the need for immediate action
    I respectfully submit that the time has come to remove our spectrum 
as a possible candidate for 3G services. The FCC's 3G proceeding 
already has caused significant regulatory delay and uncertainty that 
has hurt both the business and educational communities. For new 
businesses, especially those focusing on rural markets, this 
uncertainty has prevented access to the capital necessary to complete 
their network build-outs. In addition, some vendors are finding it 
difficult to get new funding for ITFS/MDS projects, and are diverting 
their research and development efforts to other areas.
    And, while businesses have been struggling to survive, America's 
children have been denied access to new technologies and broadband 
networks as envisioned by the FCC's ITFS/MDS policies. Equally 
disturbing, the educational community has been forced to divert scarce 
financial resources to fight a regulatory battle in Washington to save 
spectrum that is not a viable choice for 3G services.
    Given that nothing in the FCC record credibly supports reallocation 
of our bands, and given that 3G proponents prefer other spectrum 
options, it is fundamentally unfair to hold our spectrum hostage and 
further delay a decision while the FCC explores other more desirable 
options. I would like to articulate the many compelling public policy 
reasons to eliminate the uncertainty and let us get on with our 
business.
    Improved Educational Opportunities. First, rapid deployment of 
broadband services in the ITFS/MDS bands will help ensure the success 
of the important educational initiatives that are currently underway to 
create classrooms for the 21st century. Mr. Chairman, in a recent 
letter to President Bush you emphasized that deployment of broadband 
services into our homes and schools can ``vastly improve educational 
opportunities'' for our children. Under the current regime for ITFS/
MDS, educators have the necessary technical capability and spectrum to 
make your vision a reality. But, we cannot proceed until our spectrum 
is taken ``off the table'' as a possible candidate band for 3G.
    Renewed Certainty in the Marketplace. Second, removing our spectrum 
from further consideration will bring credibility to the FCC's spectrum 
management policies in the capital markets. The FCC has gone to great 
lengths to encourage ITFS licensees to lease spectrum and deploy fixed 
broadband services. In reliance on these FCC's policies, commercial 
service providers have invested billions of dollars in this spectrum, 
and educators have devoted significant resources to ensure that the 
spectrum will serve the needs of their students. It would be a travesty 
for the FCC to change course now. Certainty and stability must be 
maintained in formulating and implementing spectrum management 
policies.
    New Options for Consumers. Third, rapid deployment of broadband 
services in the ITFS/MDS bands will result in immediate and concrete 
benefits to the American public. There is a huge demand for fixed 
broadband access. The MDS/ITFS spectrum is uniquely suited to serve the 
residential market and broad geographic areas. It reaches places that 
local telephone companies and cable companies cannot or will not serve. 
High-speed service has already been deployed in some markets, and many 
more will follow. As the roll out continues, homes, businesses, and 
educational institutions will benefit from the availability of these 
new broadband service options.
    New Competitive Alternatives and Rural Deployment. Fourth, rapid 
deployment in the ITFS/MDS bands will provide a meaningful competitive 
alternative to incumbent local exchange carrier offerings consistent 
with the goals of the Telecommunications Act of 1996. Currently, 
broadband competition is limited primarily to DSL, cable modem, and 
satellite service, each of which suffers from limitations which 
restrict their ability to provide full broadband competition. 
Nationwide deployment of fixed wireless broadband systems in the ITFS/
MDS bands will provide Americans with another competitive alternative. 
Indeed, in rural areas, the ITFS/MDS bands may provide the only option 
for broadband access.
    Increased Educational Opportunities. Fifth, rapid deployment in 
these bands will help close the information technology gap. Through the 
continued deployment of fixed broadband wireless services, students and 
adult learners in rural and traditionally underserved areas will have 
access to the same educational opportunities as those in better served 
metropolitan areas. In urban areas, the continued roll out of fixed 
broadband wireless services will provide students in all school 
districts with access to the latest instructional materials at all 
levels, helping to even the playing field and promote learning 
opportunities.
    Managing Educational Costs. Finally, rapid deployment in our bands 
will help reduce the spiraling cost of education. The United States 
must find better ways to manage the cost of education. When the cost of 
operating a Catholic school exceeds the income needed to operate that 
school, it is closed. In the last 25 years, we have closed nearly 75 
Catholic schools in my Diocese alone and thousands more across the 
country. Our tuition income was simply insufficient to support these 
schools. Public schools, however, cannot be closed just because tax 
revenues are insufficient. Instead, the quality of education for the 
entire system is reduced. As a result, today in New York City, nearly 
45% of those entering the first year of public high school drop-out 
before reaching the fourth year. Educators need ITFS/MDS frequencies to 
help them rethink the way schools are designed and to reduce the cost 
of education. Without these frequencies, the challenge of reducing 
educational costs is much greater and perhaps insurmountable.
                       the need for your support
    President Bush has made education one of his top national 
priorities. Shortly after taking office, the President said that if 
``our country fails in its responsibility to educate every child, we're 
likely to fail in many other areas. But, if we succeed in educating our 
youth, many other successes will follow throughout our country and in 
the lives of our citizens.'' The President also has encouraged schools 
to ``use technology as a tool to improve academic achievement.''
    The ITFS/MDS bands are one of the most valuable technology tools 
available to education. We have been using this educational tool for 35 
years to improve academic achievement. We don't want to lose it now. If 
this vital resource is taken away or compromised, the real losers will 
be the millions of students, teachers, and schools that rely on 
services provided by ITFS/MDS licensees.
    Mr. Chairman and members of the Subcommittee, there is wide 
bipartisan support for improvement of education and for the effective 
use of technology toward that end. Please seize this opportunity and 
support our efforts to have the FCC remove the ITFS/MDS bands from 
further consideration as a possible candidate for 3G services now.
    Thank you. I am honored to have had the opportunity to appear 
before you today.

    Mr. Upton. Thank you all for your testimony, again, thank 
you for getting it in so we could take it home last night as 
well to review. At this point we'll begin with members' 
questions, alternating between sides for 5 minutes and I 
suspect that we'll go to a second round when this is done.
    Dr. Wells, I too, appreciated your comment and your 
eagerness and wrote that in my notes as well and I have to tell 
you from the very outset that as we begin to look at this 
situation and try to build bipartisan solution to what is 
clearly a problem out there that we're looking at two main 
items that have to be included in that legislation which has 
yet to be unveiled. One is that we do need comparable spectrum 
for the Defense Department. That's absolutely essential. And 
second, yes, we do need to compensate DOD if, in fact, spectrum 
is taken away and as I understand it and I know my pre-dinosaur 
age colleague, Mr. Markey has stepped away for a moment, but as 
I understand it that did not happen in the pre-dinosaur age and 
we've got to make sure that things turn around as we begin to 
look at bipartisan legislation.
    I have a number of questions for you. First of all, Dr. 
Wells, how much spectrum is the Pentagon's fixed point to point 
wireless operations actually occupy?
    Mr. Wells. Let me take that, for the record, Mr. Chairman. 
I do not believe it's fully half the band, but I'll take that 
to the record.
    Mr. Upton. Okay, if you provide that to us, that would be 
appreciated.
    Do you know how many channels within the 1755 to 1850 
megahertz band these operations actually use and do they share 
channels with any other Pentagon operations? Related to that, I 
think, is the comment that Mr. Wheeler made in his testimony 
with regard to the Army Corps of Engineers, water level 
monitoring activities.
    Mr. Wells. The channels of this fixed system, how many 
channels the fixed system uses, I'll take that for the record 
also.
    Mr. Upton. Okay, is the Pentagon aware of any other bands 
other than the 1755 megahertz band and we can get these back to 
you in writing, 1755 to 1850 megahertz, that provide the 
propagation characteristics necessary to the Pentagon satellite 
uplink operations that provide enough spectrum to accommodate 
those operations?
    Mr. Wells. One of the problems is the devil in the details. 
For example, people have talked about a band called unified S-
band that other satellites use. That's becoming a crowded band 
and so for us to move our applications in there, again, there's 
a time line consideration. It's going to have to deal with the 
usage of other people and the band. This has been the case with 
a number of alternatives that have been suggested for 
comparable spectrum. It looks great when you first take a look 
at it, then the more you get into it, you find that there are 
complications.
    So the best band that we've seen for the satellite has been 
this unified S-band. There's clearly a timing issue involved 
and we look forward to working through that question.
    Mr. Upton. In your testimony as you refer to S-band, I know 
on page 2 of your testimony you indicated you thought that the 
costs of 120 satellites was $100 billion.
    Mr. Wells. The investment costs of the constellation.
    Mr. Upton. Right. How many of those 120 satellites actually 
use S-band because I mean that is the best, right?
    Mr. Wells. The satellites we're talking about here use for 
their uplinks today the 1755 to 1850 so those are satellites 
that are controlled now within the military band, so they would 
have to--of those 120 we're talking about are all within the 
1755 to 1850 band.
    Mr. Upton. And they all use the S-band then?
    Mr. Wells. Those are some frequencies that could possibly 
move to 2100 megahertz for uplink, but again, other satellites 
use that today and for us to move in there could well cause 
crowding and interference with the existing systems. This would 
have to be worked out.
    Mr. Upton. As I understand the report, the DOD report that 
says that the S-band offers physical advantages for tracking 
telemetry and control operations, particularly in areas of 
launch, early orbit and anomaly resolution. It went on to say 
that S-band is uniquely suited for conducting critical and 
nonroutine satellite operations functions. So I guess the 
question is, is the Pentagon doing everything that it can to 
ensure that as many satellite operations are moved to the S-
band as quickly as possible.
    Mr. Wells. We are actively looking at it. Let me see if 
saying ``as quickly as possible'' but there is the problem we 
have these satellites on orbit now, Mr. Chairman, some of which 
will not fly out to 2017. It will not complete their orbits and 
so we will have to continue controlling those and the existing 
bands until that constellation dies or if someone wanted to put 
lots of money in to accelerate replacement of the 
constellation, that might be an option.
    Mr. Upton. Lots of money is how much?
    Mr. Wells. I would think in the multiple tens, billions of 
dollars.
    Mr. Upton. I suspected that that was the answer.
    Mr. Wells. And frankly, sir, I would not suggest that would 
be a useful use of taxpayers' dollars.
    Mr. Upton. Okay. Ms. Eshoo.
    Ms. Eshoo. We don't want to knock over coffee and water 
here.
    Let me start with Mr. Knapp from the FCC. In your 
testimony, you state that the FCC's report concluded that the 
sharing of the spectrum in the 2500 to 2690 megahertz band 
doesn't appear feasible because it would raise significant 
technical and economic difficulties.
    What are the next steps that the FCC is going to take with 
regard to that spectrum and will it formally be removed from 
consideration so that regulatory uncertainty is eliminated?
    It's an important area. I've written to the FCC about this. 
It has an impact on education, the schools. Monsignor, I think, 
has given excellent testimony in that and the uncertainty that 
exists is yet another overlay in this. So it is having an 
effect. It may not be the biggest issue that's at the table 
today because the struggle is what we're going to do with 
defense, how that opens up parts of the spectrum for 3G, but 
this is, I think, on the front lines in terms of education. So 
can you comment on that?
    Mr. Knapp. Yes, thank you. That's an excellent question.
    Ms. Eshoo. Thank you.
    Mr. Knapp. This band, of course, was examined because it 
was one of the bands that was identified internationally and 
that's why we took it up and conducted the study and so forth.
    In our report, we looked at sharing and basically because 
these systems are distributed throughout the country, you have 
a problem of spacing any new systems in. They couldn't share 
the same channels. Relocation because of----
    Ms. Eshoo. I think I know what the problem is, but I'm 
asking you what you're prepared to do. How is this going to be 
resolved?
    Mr. Knapp. We have the request in front of us for taking 
that off the table. I think that's going to be looked at very 
shortly. We also have a pleading that was filed by one of the 
carriers asking us to continue to look at that until we resolve 
the ultimate selection of the spectrum.
    I expect we're going to take the issue up very soon.
    Ms. Eshoo. Well, I think the sooner, the better, because 
the longer the uncertainty exists, the tougher it makes the 
situation and there are an awful lot of schools that are really 
looking for an answer on this. So it's not small potatoes. It 
just isn't. So I'm encouraged when you say that the FCC is 
going to take action soon on this. When you say ``soon'' is 
that within the next 3 months, 30 days, 60 days, 90 days? Can 
you give us just a little----
    Mr. Knapp. I would hope months. I would hope it would be 
within a matter of months.
    Ms. Eshoo. Matter of months. Before the end of the year?
    Mr. Knapp. Certainly.
    Ms. Eshoo. Great. All right. We don't come to these answers 
easily, do we?
    Now, to one of my favorite subjects, E-911. I want to go to 
Mr. Wheeler. As I said in my statement, I'm concerned that the 
wireless industry is focusing on--well, I shouldn't say that 
I'm concerned. I think that it's important to focus on the 
benefits of 3G. I don't want to cloud that issue by saying that 
somehow it isn't important and that we should hesitate and that 
we shouldn't, as a Nation, really be prepared to embrace not 
only the technology, but how to make it work so that it can be 
in--that the American people would be able to benefit fully 
from it.
    What I'd like to ask you is how many tests and pilots has 
the industry conducted on 3G technologies this year?
    And by contrast, how many tests and pilots have been 
conducted on Phase II for E-911?
    Mr. Wheeler. I'd like to also observe that's a good 
question and I don't have the answer to it, either part.
    Let me see if I can pick up on one thing though insofar as 
the question you asked Mr. Knapp earlier, because I think what 
you did was you focused right in on what one of the key issues 
insofar as spectrum planning is concerned and that is that 
heretofore, we have always gone at it piecemeal. We look at 
this piece and we look at it separate from this piece and what 
we need to have is an overall plan that says here's where we 
want to be in 10 years. Here's where we want to be in 5 years. 
Here's where we want to be in 2 years. And that would make the 
kind of things you were talking about moot because everybody 
would know where things are going. And so when and if there is 
a legislative vehicle, we would hope that the committee will 
have a vehicle that comes up for the first time with a spectrum 
plan to address those kinds of issues, to address Monsignor 
Dempsey's kinds of issues, to address the Defense Department's 
issues, because that's really what's at the crux of this whole 
thing.
    Ms. Eshoo. I appreciate your lengthy comment on that 
without addressing E-911.
    Mr. Wheeler. I will get the answer for you for the record. 
I'm sorry I don't know what--may I say one thing?
    Ms. Eshoo. I wanted just to--the red light is on. I think 
that if the industry would spend less time and energy in 
formulating the request for waivers in just getting this done, 
that we would really be far better off in our country. There 
are far too many people today that buy into wireless, believing 
that they're covered so I still remain concerned that there's a 
stalling. I think the more the players put in for their waivers 
that others say well, if they are, then we're going to as well. 
Let's get this done. I will find you far more believable 
players if you get this behind us and get this implemented, 
rather than spending time on waivers.
    So I want to work with you on 3G. I think it's an important 
technology. We should be the leaders in the world. We should be 
able to blend all of this, but what kind of a country are we 
when people believe that they're going to be able to dial into 
this and they're not. It's a lifesaving issue and I think you 
should be able to advertise and say come with us because we 
indeed cover this.
    So thank you, Mr. Chairman, and I look forward to your 
answer.
    Mr. Wheeler. I just want to say I personally, in our 
organization, am very proud about the fact that the rulemaking 
at the FCC for this requirement is one that we initiated. We 
asked the FCC to come up with location based rules. We worked 
out with the public service community exactly how to make that 
work and together we went in and said will you please enact 
these because we both agreed this is the way to do it. The 
problem is in the intervening 4 years that has been nipped away 
at and new technological issues have been introduced which has 
slowed the whole process down. But I want to say to you without 
doubt that yes, the wireless phone is the greatest safety tool 
since the development of 911 and we are the ones that 
petitioned the FCC to have location capability as a part of 
caller 911.
    Ms. Eshoo. Can I have 30 more seconds, Mr. Chairman, 
unanimous consent for 30 seconds?
    Mr. Upton. Without objection, 30.
    Ms. Eshoo. Thank you, Mr. Chairman. I would only respond, I 
appreciate what you've just said in terms of the history and I 
think that it's important, but how are we to have confidence 
that you're going to work out what you're here for today on 3G 
if, in fact, in the last chapter of 911 it seems to be falling 
apart in my view by these requests for waivers? Let's get this 
thing done. Let's get it done. It's a great technology, but 
it's not going to touch people if, in fact, it can't be 
implemented. Thank you.
    Mr. Wheeler. There's a desire to get it done. You're right. 
There's a desire to get it done.
    Ms. Eshoo. Thank you, Mr. Chairman.
    Mr. Upton. Mr. Stearns.
    Mr. Stearns. Thank you, Mr. Chairman. Mr. Knapp, what 
consideration has the FCC given to repealing the current 45 
megahertz spectrum cap?
    Mr. Knapp. We have an outstanding notice of proposed 
rulemaking that we conducted under a biennial review. The 
comments have been filed and we expect to address that before 
the end of the year.
    Mr. Stearns. So by the end of the year we'll have an answer 
definitized?
    Mr. Knapp. Yes, I believe so.
    Mr. Stearns. Anything more in terms of--it will be sort of 
a yes or no? I mean it will be a full dimension answer that 
these companies will be able to move on it?
    Mr. Knapp. At this point, the Commission staff is still 
evaluating the record and trying to determine what action to 
take on it.
    Mr. Stearns. And it's your intention that with this 
decision American companies will realize that 3G advanced 
mobile services with the current spectrum cap in place or not?
    Mr. Knapp. No, I think, of course, as you know the spectrum 
cap only applies to the cellular PCS and specialized mobilized 
radio services bands. It would--it would not necessarily apply 
to any additional spectrum allocations. That would be reviewed 
separately.
    Mr. Stearns. Mr. Strigl, this is sort of an easy question 
which you covered in your opening statement, but I thought I'd 
give you another chance on this. You mentioned my bill.
    How does the current 45 megahertz cap affect your company's 
business decisions to expand and offer additional services, 
particularly 3G services and then Mr. Wheeler, if you'd just 
comment how it affects your member companies? I'd appreciate 
it.
    Mr. Strigl. Thank you, Congressman. It affects us in one 
simple way. Today, we operate in most of our properties with 25 
megahertz to 30 megahertz of spectrum. Some places we have gone 
up to 40. With our commitment in auction 35 in New York, we 
operate on 25 megahertz. We have committed for 20 additional 
megahertz. Takes us to the 45 megahertz cap. We don't have that 
spectrum. We can't look for additional spectrum in the interim 
until this current auction 35 issue is resolved.
    Furthermore, we need a minimum of 65 megahertz of spectrum 
in our major cities. That requirement will exist within the 
next 5 to 6 years.
    Mr. Stearns. Mr. Wheeler?
    Mr. Wheeler. Mr. Strigl just did a great job of explaining 
the impact on companies. Let me just see if I can relate it to 
the rest of the world. We're the only country, major country 
that has this kind of an artificial cap. In the rest of the 
world, spectrum finds its own level, if you will, in terms of 
how much spectrum a carrier needs to be efficient and be 
competitive.
    Mr. Stearns. He or she--he could go out and buy it if he 
wanted it?
    Mr. Wheeler. Correct. For instance, in the UK, four of the 
five carriers in the UK have more than 77 megahertz. We're 
capped at 45. In Germany, 4 of the 6 have more than 60 
megahertz. We're capped at 45. In Japan, 2 out of the 3 have 
more than 92 megahertz. We're capped at 45. And so the rest of 
the world is saying okay, what are the levels that water will 
seek of its own accord.
    The other thing that's really interesting is that this has 
an impact on Monsignor Dempsey and this has an impact on Dr. 
Wells. Let's just do the math here for a second. Let's say take 
Mr. Strigl's 65 megahertz is the minimum that he needs. Eight 
licensees which is not an untypical situation, that's 520 
megahertz. Where are we going to find that? That puts pressure 
on Dr. Wells. That puts pressure on Mr. Dempsey and why are we 
having to put that pressure on? We're putting the pressure on 
because of the fact that the spectrum that has already been 
allocated is not out there and necessarily being fully 
utilized. It could be if it could be transferred and get above 
that spectrum cap.
    Mr. Stearns. Mr. Strigl, how--I'm talking about timeframe, 
how soon should additional spectrum be made available, do you 
think? I mean what is the drop dead, is it another year, 2 
years or you're at an instant you need it right away?
    Mr. Strigl. Congressman Stearns, in places like Los 
Angeles, New York, Washington, DC, Chicago, the need is within 
1 year to 18 months. The issue is that unless we are provided 
with additional spectrum, in order to--this will work precisely 
against what we have worked so hard to create which is a 
competitive industry, low prices, high bundles of minutes, lots 
of usage. We find ourselves constrained. The supply is limited 
at this point. There will become a point in time when I fear 
that this commodity will carry with it higher prices in order 
to guarantee a high quality of service for those customers who 
will remain on the service.
    I don't want to sound like an alarmist. I don't mean that 
at all, but there comes a point in time when you've used 
everything you can use and to continue with a high quality of 
service, something has to give.
    Mr. Stearns. Thank you, Mr. Chairman, my time has expired.
    Mr. Upton. Ms. Harman.
    Ms. Harman. Thank you, Mr. Chairman. I have a few questions 
for Mr. Wells.
    Mr. Wells, I describe myself as a pro-defense, pro-
business, pro-choice Democrat, so I make apologies to no one 
about my advocacy for a strong defense. And even if I might 
forget, my constituents wouldn't let me forget, since most of 
the major defense firms are located in my District. That by way 
of prologue.
    I am very well aware, as you are, of many priorities that 
the Pentagon has in this year's budget and next year's that we 
may not be able to fund. Just to start off the list, more C-17 
airlift, more B-2s. Missile defense, just to name several. And 
I'm sympathetic to those priorities. My question to you is if 
you have the opportunity to consider some changes in your use 
of spectrum that would generate revenue that could potentially 
fund some DOD priorities, if you have that opportunity or let 
me put it another way, do you have the opportunity to consider 
changes that could generate funds that could help other DOD 
priorities?
    Mr. Wells. I believe that a wide range of options is on the 
table. I have some concerns. What is often teed-up as a win-win 
as I mentioned to the Chairman earlier, runs into devil in the 
details. For example, the comparable spectrum needs to be made 
available clearly and in enough time, with enough compensation 
early enough to make the change.
    Second, when people talk about trust funds and funding 
mechanisms for DOD, one of the reasons it becomes complicated 
in law of how those monies migrate from the general revenues to 
a particular department and I honestly have not seen an air 
tight, if you will, mechanism to ensure that promises made in 
discussions actually get translated into the transfer of funds.
    So in theory, it sounds excellent. I remain skeptical that 
it will work.
    Ms. Harman. Well, I certainly would agree that the devil is 
in the details, but I would not agree that because it is the 
right answer is to resist change. I think that your 
communications needs are a very high priority. I support your 
communications needs, but I also suggest that resources are not 
infinite and the Defense Department budget is large and money 
is going to have to be freed up to fund other programs and so 
with all the talent you have down there, I would suggest that 
more focus be given to how to make that transition effective so 
that we have not just Jane Harman or not just this committee, 
but the country has the benefit of funds for other defense 
priorities. I just listened to your testimony very carefully 
and didn't hear anything said about that. So as one voice up 
here, I would like to suggest that it's not just the slogan 
win-win, it is two other words called national security that 
will be short changed if we don't have a more creative view of 
the opportunities here for spending on additional defense 
priorities.
    Mr. Wells. The Secretary has spoken in terms of 
transforming the Department. We fully subscribe to that and I 
seek as many innovative solutions as possibly can. The flip 
side is I do have a responsibility to make sure that we wind up 
actually getting the benefits that are offered and we will 
aggressively, eagerly seek an opportunity to engage on this 
issue.
    Ms. Harman. I like those words, aggressive and eager. It 
takes that to overcome the inertia, not just in your building, 
but in this building to change. And so I would urge Mr. 
Chairman, that we be aggressive and eager in considering these 
issues and that we certainly view national security as a high 
priority when we're allocating and reallocating the spectrum, 
but we define it to include more than just the communications 
function. We define it to include a lot of priority programs 
that we may not be able to fund if we don't free up some money.
    Thank you, Mr. Chairman.
    Mr. Upton. Thank you. Mr. Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman. Kind of following up 
on some of my comments of my colleague. I think the military 
and national security concern is that the transition in that 
there's no gap. It would have to be a seamless transition which 
means capital would have to be upfront, satellites would have 
to be in place, and so that when the handover of the current 
spectrum was given that it would initially transfer over.
    The risk of someone deployed anywhere in this world and the 
ability not to communicate is life or death. It is market share 
and capital for folks in the industry and in a competitive 
world time is money, but in the military environment it's life 
or death and meeting national security goals, and Mr. Wells, 
you mentioned the timeframe. We're talking years out and then--
so that's the challenge and that's why we're hear.
    I want to ask Mr. Hatch first, were you the representative 
at the World Radio Conference? Who represented our government 
at the World Radio Conference in 2000?
    Mr. Hatch. The delegation was headed by Ambassador 
Schoettler and there were representatives from the government 
agencies. Both NTIA and the FCC were vice chairmen of the 
delegation, and we had four representations from those two 
agencies, as well as from other government agencies and the 
private sector.
    I was only there for the last 2 weeks of this particular 
conference, but have been to many of the previous conferences 
and our delegation, I believe, was well over 100 delegates. So 
we had full representation.
    Mr. Shimkus. Did we have anyone from the Department of 
Defense there?
    Mr. Hatch. Yes sir, we did.
    Mr. Shimkus. It was construed as a success by our 
government in identifying the three different bands instead of 
one large band. Can you explain why that's a success?
    Mr. Hatch. Various foreign governments wanted to identify 
just a single frequency band. The Europeans wanted to identify 
just the 2500 to 2690 MHz band. There were other 
administrations including some in Region 2 that wanted to 
identify just the 1710 to 1850 MHz band--I think those were the 
two principal bands that were trying to be identified. We knew 
that we had some difficulties with these frequency bands and 
that we would need maximum flexibility in order to try to come 
back and then determine how much spectrum would be available 
and where we could find that spectrum.
    So the U.S. made a proposal to not only identify those two 
bands as potential for use by 3G, but also the 806 to 960 
megahertz band that would give us three potential options for 
identifying additional spectrum for 3G.
    We made the commitment prior to going to the conference 
that if our proposal is accepted, we would then come back and 
do the detailed studies, especially on the two frequency bands, 
1710 MHz and 2500 MHz. This is what we have, in fact, 
accomplished to make that information available to guide us in 
making a decision on spectrum for 3G.
    Mr. Shimkus. Has it been successful in speeding up the 
process? I mean I think that's what it was construed to do if 
we had a victory over at the World Radio Conference and then 
split it up into three bands that that would help us more 
rapidly change.
    Mr. Hatch. Well, it would give us the opportunity, 
Congressman, to look at the various options and the various 
frequency bands to see if any of the frequency bands, either 
all of them or in part could be made available and what the 
conditions are that they would be made available for 3G. So I 
think it did help in providing us with options and as I said 
right now we're in the process of evaluating those options and 
determining what spectrum can be made available for 3G. I do 
believe that having the option of looking at three different 
frequency bands would be better than having a single frequency 
band and if that frequency band turned out to be one that we 
couldn't support, then we would not have the flexibility.
    Mr. Shimkus. Thank you. Mr. Wheeler, I appreciate you being 
here and we've had a good relationship and I appreciate the 
industry and the 911 efforts that have been made so far and 
look forward to the next generation.
    This is being pitted industry versus the DOD spectrum. I 
guess a question would be why should an industry be challenged 
to consider other bands?
    Mr. Wheeler. Industry has been, Congressman. There is--I'm 
sure that you are as tired as I am of the stories in Time 
Magazine and the newspaper headlining why the United States is 
in second place in the world in wireless. The difficulty that 
we have had heretofore has been that there hasn't been a 
unified piece of spectrum, therefore requiring different radios 
if you're to have one device and eliminating economies of 
scale. What has happened in the rest of the world is that--can 
we put that world chart up, pleas, Craig? What has happened in 
the rest of the world is that they have made decisions and 
those decisions have consequences for us in terms of scope and 
scale economies. This chart right here, the green areas are the 
countries of the world who have either currently allocated, 
plan to or have indicated a preference toward using this 
particular spectrum. The yellow countries are those who haven't 
yet and the red is us who have yet to make that--we're sticking 
out there like a sore thumb.
    And the problem is when our troops deploy into those green 
areas, they're going to be impacted. When our consumers buy 
products, they're going to be impacted. Both of those impacts 
can be resolved if we have a harmonized set of spectrum.
    Mr. Upton. Dr. Wells?
    Mr. Wells. Mr. Chairman, thank you. The concern I have with 
this slide is that it suggests that the only thing standing 
between global harmonization and future peace and prosperity is 
the United States because of the 1755 to 1850 megahertz band. 
Harmonization, as I believe is indicated by the fact that 
Europe was looking to use 2500, 2690; China has picked 2300 to 
2400 megahertz for their bands; others are looking at other 
things, is not going to happen around a single band.
    In addition, it's not even necessary for effective global 
roaming. I'm pleased to have a world phone here that already 
operates on multiple frequency bands and multiple different 
modulation schemes that is effective today at reasonable prices 
for the consumer.
    So while it would certainly be desirable, if you could get 
a single band, I don't believe you're ever going to harmonize 
around a single band and to hold DOD up as the sole set of 
obstacle to achieving global harmonization, I'm sorry, I have 
to disagree.
    Mr. Shimkus. Mr. Chairman, if I could just follow up 
because and I ought to ask the question is then why, Dr. Wells, 
why isn't industry considering using other bands and that's a 
question I asked of Mr. Wheeler.
    Mr. Wells. I will have to defer to industry, sir, but I 
would just point----
    Mr. Shimkus. I mean easy pickings or I mean is that 
spectrum easy pickings versus competitive alternative of moving 
other corporate entities off their bands?
    Mr. Wells. Well, certainly it is a government band. It is 
not now allocated for commercial and if it were reallocated it 
would increase the total amount of commercial spectrum.
    My only point is that in Figure 3 in our, in my written 
statement, addresses 130 megahertz of commercial spectrum 
that's available today without touching either the 2600, 2500 
band or the 1755 band that could be made available now and 
there are difficult choices. These are not easy allocations.
    Mr. Wheeler. But Dr. Wells, you will agree, I trust, that 
that spectrum which you have identified as not in your area, is 
also not in anybody else's area and that what it creates is a 
continuation of what has burdened this economy in terms of the 
ability to compete.
    The phone that you pulled out, for a second, a couple of 
things that are necessary that the committee understands about 
that. No. 1, that phone was probably about 4 years, maybe 5, 
late getting to this country. The people in the rest of the 
world were able to do that before American consumers were able 
to do that because, precisely because of the problem of 
incompatibility.
    Second, let me just tell you a story. It happened last 
weekend, I was in Finland. My wife became infatuated with a 
phone that is available in the rest of the world that opens up 
and is kind of a combination computer, palm pilot, everything 
all at once. She asks the question when can I get that? Why 
can't I get this in the United States? And the answer is they 
only make it for the rest of the world because of the fact that 
only the rest of the world can provide the scale economies for 
the radio, that to do it so that it works in the United States 
market drives the scale economies into the ground, drives them 
this way, and drive the price like this.
    So there are consequences. This chart that you have here 
really doesn't answer the question because it's not a question 
of just more spectrum. It's a question of spectrum that is 
going to work with our neighbors in the rest of the world and 
is going to work for you as well as for us and that's why we 
need to be eager to get at the issue.
    Mr. Wells. Mr. Chairman, may I? I would love to have a 
global harmonized band in which the military could go and 
operate and not have interference from other users. I just fear 
the reality is that we're always going to have to negotiate 
agreements. The demand for spectrum everywhere is going to be 
increasing and that just to say that if DOD would only move out 
of this we'd be able to gain global harmonization is an 
oversimplification of an argument that's still going to be a 
very difficult problem to come to closure on.
    But just what concerns me, this is a hard problem. I'm not 
saying that these bands are easy. If they were easy somebody 
would have taken them. Just like if our band were easy, someone 
would have taken it. This is a decision that has to be reached 
deliberately from a national approach and not just have a fiat 
that says ah, we solved the problem by striking away the DOD 
access.
    Mr. Wheeler. But if we go to your conclusions that says 
let's have someplace to move, yes, let's do that together. 
Let's work on that and let's get these people involved on it. 
Let's have compensation and let's get even more beyond that for 
that and let's have a timeframe. We can do it.
    Mr. Wells. But let's find comparable spectrum into which we 
can move. That is the key that we have not----
    Mr. Upton. The gentleman's time has expired.
    Mr. Shimkus. I yield back the balance of my time, Mr. 
Chairman.
    Mr. Upton. It doesn't work. Mr. Green.
    Mr. Green. Thank you, Mr. Chairman, and frankly, I enjoyed 
that interchange and in reading the testimony, particularly 
from Dr. Wells, on page 6 where you say that CTI has proposed a 
win-win solution to DOD, you'd be interested in seeing such a 
package, but you haven't seen the proposal. It sounds like 
other than having us as witnesses, you all may want to leave 
this hearing and sit down and see if you all can trade those 
proposals because nobody on this committee, I know myself, 
doesn't want any degradation of our ability for our service 
personnel. And one of the questions, Dr. Wells, in looking at 
that chart over there where it looks like most of Europe, 
except that one yellow part and even with my trifocals I can't 
see if that's Bosnia or Kosovo there that it's there just to 
the east of Italy, there's some questions that the Department 
of Defense is already facing serious degradation around the 
world and increased use of wireless devices in the 1755 to 1850 
megahertz. Did DOD see that during Bosnia and Kosovo and again, 
without binoculars I don't know if I can tell but was there any 
degradation in Bosnia and Kosovo by using those megahertz 
because of the overflow or what's happening in Europe?
    Mr. Wells. There were a variety of degradations and a 
variety of bands. It was not just in this band and it just 
indicates that almost everywhere the band is crowded and we 
have been able to solve some of this by negotiating host nation 
agreements wherein we get some priorities and in other cases we 
have to adjust our operations to the realities of the 
situation. So we don't want to complicate, as I say, we've been 
able to negotiate agreements in many of these cases to allow us 
to operate satisfactorily. We are concerned that since there 
will not be a single harmonized military band that any 
movements we do now are just going to generate the need for 
additional negotiations and it's a cause for concern. As I've 
tried to maintain all along. If there was an easy answer, if, 
in fact, there was a hard answer that would let us get global 
harmonization, that would let us get money for the Defense 
Department, that would let us get comparable spectrum and 
continue our operations without risk to the lives of our 
servicemen and women, we ought to leap at that chance. The 
problem is reality is more complicated and to take a quote from 
President Reagan, ``trust, but verify.'' We would love to have 
these solutions. We need to make sure that the i's are dotted 
and the t's crossed.
    Mr. Green. Well, the concern I have again, even though this 
is Energy and Commerce Committee is that in the parts of the 
world that we may need that, you may have to spend time 
negotiating with those host countries and not with ourselves in 
the United States, but again, I would suggest maybe CTIA and 
Department of Defense sit down and share that proposal because 
otherwise it's much better if you all work it out than if 
Congress gets involved and even though I'm a student of 
government and have been involved in it for 30 years, it's much 
better with the folks involved instead of us having to do it.
    Mr. Strigl, let me talk a little about in your testimony or 
in your answers to questions, you said in certain areas in our 
country you're going to see the need for increased spectrum in 
18 months?
    Mr. Strigl. Yes sir. We have begun to see that in places 
like New York and Los Angeles today, the need for spectrum is 
here.
    Mr. Green. And again, in Dr. Wells' testimony, I mean 
there's obviously a great many years between 18 months and 10, 
15, 20 years. What can we expect? Is it the increase in the 
need for that spectrum? Is it typically in cell phones or is 
there some other killer application that we know we may use and 
need that spectrum for other than just cell phones?
    Mr. Strigl. The immediate need is one driven by low prices 
and high packages of minutes that our customers buy. The main 
need in places like New York City and Los Angeles today is 
driven by voice applications. As we begin to unfold our data 
and Internet access applications on top of that, it is just one 
further need for the spectrum.
    Mr. Green. Okay, so it's mostly in voice right now?
    Mr. Strigl. Yes sir. Today it is mostly voice application, 
correct.
    Mr. Green. Thank you, Mr. Chairman.
    Mr. Upton. Mr. Pickering.
    Mr. Pickering. Thank you, Mr. Chairman. Let me quickly just 
say I represent a district that is the home of Sonny 
Montgomery, Mr. Veteran, Mr. National Guard, Mr. Defense and 
John Stennis, father of the modern Navy. I have two military 
bases. I have multiple defense contractors. The story I would 
like to be able to tell if we could successfully work out--the 
devil's in the detail--is to say that through these policy 
decisions that we're making in this effort, we are able to buy 
the planes, the carriers, the destroyers, the transports. We 
have made our military modern, agile, mobile, quicker, faster, 
more ready, effective in fighting the threats that we face in 
the 21st century.
    As I understand it, the modernization needs of the military 
over the next 10 years are approximately $100 billion. With 
budget realities of today I don't know where that money is 
going to come from to achieve your modernization objectives 
which I would desperately want to see achieved, representing 
the district that I do and the examples and the legacies of the 
men who have gone before me. That this offers a possible 
solution that if we could work out as what you call an airtight 
mechanism that would guarantee you the proceeds of such an 
auction, estimates, conservative estimates, $40 billion, almost 
halfway there as to what you need for your modernization 
objectives over the next 10 years. And so if we can work it 
out, I do think it would be a great story to tell not only in 
the military side as far as what we can do for our men and 
women in the military, but then in a rural district like mine, 
the 3G applications and the wireless potential to bring to our 
hospitals, our schools, our businesses and those areas, the 
applications of 3G, I think it would be a tremendous story that 
we would be able to tell and a good result.
    And so this is my question, Dr. Wells, could we, working 
with your attorneys and the FCC and this committee, work out a 
mechanism, an air tight mechanism that would guarantee you that 
if we went down this path, if we did try to take the 1755 to 
1850 or the 1710 to 1855 and we worked out a migration plan, 
would you be willing to sit down with us, with your attorneys 
and to try to develop that trust fund or airtight mechanism 
concept so that we could answer the devil's in the detail 
legislatively and from a budgetary point? Is that something 
that the Department of Defense would be willing to do and ready 
to do?
    Mr. Wells. We met yesterday with the FCC and the NTIA to 
look at a way ahead on a national approach toward choosing the 
best set of options for way ahead on allegation of third 
generation and certainly these sorts of things are on the 
table.
    My caution, Mr. Pickering, is a couple-fold. First of all, 
these numbers are so large as to be very seductive. If only you 
could get this, then you would get half of the modernization 
requirements you would need and yet this is not strictly just a 
regulatory or even a commercial issue. If a few calls are 
dropped on the battlefield is not a question of redialing. It's 
a question of people's lives. So we really do have to make sure 
that this is done. If that could be done, absolutely. I would 
love to be able to see that happen, but the other consideration 
is the United States as the sole superpower with its global 
responsibilities does have somewhat different sort of criteria, 
perhaps, for judging the allocation of spectrum than most other 
nations in the world and we have to take into account the fact 
that we do have these global security responsibilities as well.
    I am more than willing to engage in a process to find this 
answer. I would love to be able to solve the Department's 
problems this way. I just need to make sure that we're not 
putting our people or the security of the country at risk in 
the process.
    Mr. Pickering. Dr. Wells, to follow up to my question, 
would you be willing to sit down with this committee and with 
the other Federal agencies' counsels and then--there are two 
questions, the proceeds, if we can have a mechanism to 
guarantee the proceeds back to DOD, then the second and more 
fundamental question which you talk about, can you maintain 
secure, strategic communication capability and that is the 
process, the migration, the relocation, those issues? I think 
that if we can answer the first one and set up a process that 
doesn't prejudge, but set in motion the decisions that have to 
be made to allocate the spectrum, to relocate the spectrum, to 
maintain your capability, I think they both fit and work 
together. Would you be willing to work on a mechanism with us 
to guarantee the proceeds and then to work with us on a 
process?
    Mr. Wells. I'm certainly willing to work. I think we need 
to work together.
    Mr. Pickering. That's what I'm suggesting.
    Mr. Wells. The Department of Defense deals unilaterally 
with the Commission, committee. We need to work together. But I 
think there's also another question that needs to be answered 
and that has to do with fully justifying the business case that 
additional spectrum is needed at this time. There have been 
statements that additional spectrum is needed. There are other 
members of the cellular community who have said right now we 
don't need additional spectrum. We can deploy 3G services 
within additional spectrum. I was in Europe a few weeks ago and 
the headline of the international Newsweek talked about other 
tech meltdown, $300 billion folly, the race for third 
generation phones. We're willing to do this. I just want to 
make sure the business case has looked at other spectrum before 
someone just defaults the fact that it's going to be 1755 to 
1850.
    Mr. Pickering. Dr. Wells, I would agree that we need to put 
everything on the table. We need to have a fair process, but 
going back to my original question, would you be willing to 
work with us on a mechanism to guarantee the proceeds so then 
you could have the confidence that the second and the third 
questions that you're raising would be beneficial to DOD.
    Mr. Wells. Absolutely, we're willing to work on the 
process. We're willing to work on the process. We're willing to 
work toward a solution and you understand what I need to see to 
get that process culminated.
    Mr. Pickering. Yes. Thank you, Mr. Chairman.
    Mr. Strigl. Mr. Chairman, may I just respond to one point, 
please?
    Mr. Upton. Go ahead.
    Mr. Strigl. Dr. Wells has stated that business case needs 
to be done. I can only say that we did a business case and it 
justified us spending $9 billion in the last auction. I think 
that demonstrates the value of the spectrum and how much money 
can be raised.
    Mr. Upton. Thank you. Mr. Rush.
    Mr. Rush. Thank you very much, Mr. Chairman. I want to ask 
Mr. Knapp, first of all I want to make a statement. I want to 
emphasize and re-emphasize, underline and in the most strongest 
words that I could possibly express, my association with the 
comments of my colleague from California, Ms. Eshoo, regarding 
E-911 and the absolute necessity that it's present for the 
rapid deployment, I mean 911.
    I want to also say that I would ask that the FCC be very, 
very mindful that any delay through the waiver process be 
discouraged. This is very, very important. Last winter, a 
public school teacher in my District, one of my constituents, 
was kidnapped as she returned home with groceries in her car. 
They kidnapped her and kept her for almost 2 days. They locked 
her up in the trunk of her car. She had a cell phone. She made 
two phone calls to try to get help, but nobody could help her 
because they could not identify and she could not describe and 
give them the location where she was at. When they found her, 
she was dead. And it just further illustrated to me how 
important it is to make sure that we have these location 
devices so that we will be able to locate people who utilize 
their cell phones for emergency calls. So I wanted you to know 
that I am absolutely convinced that we need to have the rapid 
deployment of E-911 available to all of our consumers and I 
again want to associate myself in a most emphatic way with the 
comments of my colleague from California.
    I want to ask Dr. Wells, has the degradation in the 1710 to 
1850 band ever reached a level where national security was 
somewhat compromised? And if so, to what extent? It seems to me 
like if there's millions of consumers worldwide using 1710 to 
1855, it's hard to imagine that DOD has experienced only slight 
degradation in this band and I would also like you to comment 
on whether or not you find the statement in Mr. Wheeler's 
testimony on page 3 regarding the situation in South Korea. 
Would you consider that slight degradation or was that a major 
incident, major occurrence there?
    Mr. Wells. Let me take, for the record, the 
characterization of the Korean incident, slight or major, I'll 
put that in context. But we in the service have lived ever 
since I was a junior officer in the Navy with spectrum 
interference. It used to be in the Mediterranean that you would 
always listen to the Italian taxicabs on your ship to ship 
radio frequencies because they just shared frequencies. We have 
been able through the years to work through this, either 
through operational procedures or through host nation 
agreements or in some cases changing our procedures. So again, 
I will get you a characterization of this incident. I have 
not--and obviously Kosovo is the recent example. We have not 
seen interference at the level that it caused the military 
operations to fail.
    On the other hand, we have suffered fairly serious losses 
in the aeronautical telemetry area by virtue of the 1710 to--by 
virtue of the spectrum we've had to give up in the past when it 
was redirected away from DOD. So one of the reasons why I'm 
cautious in signing up the idea of international harmonization, 
even though I recognize that the number of users of these cell 
phones is going to grow is that up to now we have been able to 
work through it. Second, there is no panacea that a single band 
is going to solve all these problems, and third, that there are 
other ways to address the problem, if, in fact, the 
interference becomes too severe. So let me take the question on 
Korea for the record and that's how I answer the other 
question.
    Mr. Upton. Ms. Wilson.
    Ms. Wilson. Thank you, Mr. Chairman. I think and I'll have 
to go back and look at the list, but I think I am the only 
member of the Commerce Committee who is also a member of the 
House Armed Services Committee and so I see this from both 
sides and what concerns me about the interchange we saw here at 
the table and some of the other pieces of testimony is that I 
think we've seen evidence here and I've seen it in my one on 
one briefings with members of industry and with the military, a 
deep distrust of each other because your different objectives, 
in some ways those objectives being directly contrary to one 
another.
    I don't know if it's possible to resolve this issue, but 
like Mr. Pickering, I would like to see it resolved. And I'd 
like to see a solution that works for everyone. But having read 
a fair amount about this and then briefed on it by multiple 
parties, I do see that there is a real issue and that the 
migration for spectrum is not as easy as some in industry would 
like it to be. It would be wonderful if with the help of 
industry we could modernize and bring next generation 
communications technology to our military systems and do that 
on a time line that works for industry. That would be great. 
Reality is, we're not going to replace those satellites that 
are working in this band and we can't go up there and just 
unplug the transponders and put in something new. This is more 
difficult than some of the rhetoric that I've seen, not 
necessarily here today, but some that I've heard in some of the 
briefings and at the same time I think the military is probably 
justifiably distrustful that they would ever see any of the 
money that came from the spectrum auction because let's face 
it, they've been messed over before. And they have reason to 
distrust.
    I hear a factor of 10 difference in how much money the 
spectrum auction would really bring to the military, everything 
from $4 billion to $40 billion just here this morning. It's a 
big difference and the $4 billion end is 1 percent of 1 year of 
the Defense budget. Let's not kid ourselves about this funding, 
the transformation of the military. It may help in mitigating 
and allowing the military to migrate to a next generation 
technology. This isn't going to stop the shortage of ships. 
It's not going to provide us the training that we need over the 
next 10 years. It's a drop in the bucket of what the military 
needs to do its job.
    I don't have specific questions for you all this morning 
because I've asked them mostly privately on my own. But I do 
wish that we'd see a change in approach by both Defense 
Department and those involved in industry. I know you want to 
succeed in the market place and that you believe that what 
you're doing is to the benefit of the American consumer and the 
American economy, but there's another side of this too. And 
likewise, if I can be of assistance to the military in easing 
some of that sense of distrust and making sure that this 
migration doesn't hamper our ability to protect this country, I 
would be more than willing to work with Mr. Pickering and the 
Chairman and others to find out what that solution is. I yield 
the balance of my time.
    Mr. Upton. Thank you. Ms. McCarthy.
    Ms. McCarthy. Thank you, Mr. Chairman. I have three 
questions for Mr. Wheeler. One is on the June 4th hearing on 
911 and at that hearing I raised the question of Mr. Sugru of 
the Agency. What keeps the industry from cooperating on the 
technology since France has indicated it will be ready on time 
and everybody else is looking at waivers, because in the end, 
no matter where I am and whose systems I'm on, whether it's 
Sprint or whatever, it's all got to work together. And so in 
the end everybody is going to know about everybody else's 
technologies because it all has to go into that main system and 
come out and locate the person. So I was a little miffed today 
when you talked about you wanted a dedicated solution oriented 
efforts by both the Defense community and the wireless industry 
on this next generation 3G, but then when Ms. Eshoo asked you 
about E-911 you talked about well, we're nipping away at those 
problems. I'd like you to revisit that issue with me and I 
think the same dedicated effort ought to be on E-911 as I think 
most everyone in the room would agree.
    The other concern I have is with regard to rural America 
and providing them with affordable broadband. Spring and 
WorldCom have developed some MMDS technology, are working on it 
and have invested $2 million for spectrum to get that 
technology out to rural America as an alternative to the 
wireless we now use and to try to help those people. But if the 
government takes that part of the band for 3G as you advocate, 
what would be the impact on rural deployment by MMDS providers 
and how would you and your industry compensate companies like 
Spring and WorldCom for their investment loss? And third, in 
light of the FCC's decision to move forward with the auction of 
C block spectrum owned by NextWave what impact will the recent 
Federal court decision have on your member companies?
    Mr. Wheeler. Those are three excellent questions. Let me 
see if I can go through them. First of all, with regard to E-
911, I don't think I was saying that we're chipping away at the 
problem. I was saying that the changing of the rules chipped 
away at the solution that was already worked out. We're now in 
a situation where there is a handset based solution which is 
what you referenced with Sprint and there is a network based 
solution and those are for units that are mobile, so I'm going 
to--I may have service here in Washington, DC, roam up to your 
District, expect the service and expect it from not only the 
wireless carrier, but also from the 911 service provider. 
Unfortunately, what we're finding is the technical issues on 
the carrier side and also technical issues on the 911 provider 
side so that even if the signal was provided, it is not 
necessarily capable of being decoded, if you will, to determine 
exactly what the address is for dispatch.
    I think what we're looking at here, perhaps we're playing 
with--there's a word that's getting in the way here. We've used 
the word ``waiver'' a lot. There's not going to be a lifting of 
the rule and again I go back and say we asked for the rule. 
There's not going to be a lifting of the rule. What is being 
worked out between carriers and the FCC however is a schedule 
for how they will implement it, based upon their own unique 
technologies and the realities that exist, so this is not it's 
going to go away. This is here's the plan to deliver it and 
what I hope we can also get to and the FCC has no jurisdiction 
over this latter issue, but what I hope we can also get to is 
the similar kind of an implementation plan on the side of the 
E-911 so that when Mr. Strigl or anybody else's company goes 
forward with the implementation of their plan, that their 
signal won't be a tree falling in the forest and it is those 
kinds of things that we have to move through. But I go back to 
the point that we asked for this rule. We started. We proposed 
a solution. Unfortunately, it's been changed over time. That 
has inhibited the ability to deliver on it. But there is going 
to be location capability tied to 911. Nobody's letting anybody 
off the hook.
    Insofar as your rural question----
    Ms. McCarthy. My point was is that a company has figured 
that already out and why can't everybody else do it?
    Mr. Wheeler. Because they use one particular technology 
that is tied to GPS signals and not all other carriers do. And 
so there are both handset services, handset-based solutions and 
network based solutions and there's actually going to have to 
be a hybrid. What happens when you take that phone into an area 
that doesn't have that particular technology, so there's going 
to have to be a hybrid. See, the difficulty is that when the 
initial rule was proposed by us and the public safety community 
together, we had that worked out. Then it got changed over time 
and the complexity of meeting it increased. We're working our 
way through that. It's not that we're not going to, but we are 
working our way through that.
    Ms. McCarthy. We'd like you to work your way through on the 
time table set so we can save lives. I think that was the point 
of several of us this morning.
    Mr. Wheeler. And I hope, Ms. McCarthy, that there is no 
doubt that the wireless industry is committed to saving lives, 
140,000 times a day and we are proud of that and yes, we want 
to do that also.
    Ms. McCarthy. I don't doubt that. I just think you have 
priorities in your industry and you know, bottom line and how 
the stock is doing and all of those things. Sometimes they are 
a higher priority than sitting down in a room and not leaving 
until you get the solution, but please answer my other two 
questions.
    Mr. Wheeler. You raise a really good point that we need to 
address. There are strong economic incentives for location 
technology. If you read any of the Wall Street analysts' 
reports and they talk about the future of M-commerce, mobile 
commerce, the kind of things we're talking about here, the 
Internet on your handset, a large component of that is going to 
be knowing where you are. You look at the Wall Street analysts 
and what they say is that here's the revenue that location 
information used for commercial purposes can mean to a wireless 
carrier.
    Believe me, they want that revenue. And there is an 
economic incentive to get to your solution as great as this 
public safety incentive to get to that solution and so these 
are working in tandem. We wouldn't be walking away from dollars 
coming in the door in this situation if there really weren't a 
serious challenge technically.
    Quickly on rural and MMDS, one of the things that has 
always fascinated me is that wireless has been used around the 
world to deliver telecommunications services to areas that have 
never been able to afford them before, yet in this country we 
retard them. Wireless carriers, as a result of government 
policy, for the most part have a very difficult time going into 
rural areas and providing the kind of high speed service that 
have got to compete against companies that are subsidized, 
etcetera.
    There is great opportunity for wireless carriers to do in 
the United States what they've done in South Africa and other 
countries around the world, if we can be allowed to get there. 
Now insofar as your specific question about Sprint's MMDS 
spectrum, I would submit to you that if we can, eagerly, work 
out with Dr. Wells, the kinds of things we've been talking 
about today, then there is much less pressure on either 
Sprint's MMDS spectrum or Monsignor Dempsey's MMDS spectrum and 
that's what we're trying to work our way through.
    Your third question insofar as Nextwave, I can only echo 
what Mr. Strigl said and there is a--this spectrum--the fact 
that this spectrum is off the table, if you will, is only 
compounding the very problem that we're here talking about and 
anything that this committee or any of you could do to urge the 
parties to come to the table and settle this issue so that 
spectrum is out there and being used, it will then take the 
pressure off of all of us to some extent because there's 30 
megahertz of spectrum that's sitting there fallow right now and 
only the lawyers are using it.
    Ms. McCarthy. Mr. Chairman, thank you for indulging me in 
those lengthy answers and my questions. I appreciate it. I 
yield back.
    Mr. Upton. You are very welcome. I would note that we have 
had 21 members here during all or part of the hearing this 
morning. I know there are a couple of members, I know Mr. 
Pickering has got a couple of questions. I would just like to 
note for the record that we'll leave the record open for all 
members, some of which I know said they were not able to ask 
questions due to other commitments.
    But let me say just Dr. Wells, it is my understanding that 
a new generation of radios is being developed called the high 
capacity line of sight. It's also my understanding that these 
new radios will operate between 1350 and 2690 megahertz. Are 
there other spectrum bands within the range other than the 1710 
to 1855 megahertz to which the Pentagon's tactical radio relay 
operations could be moved?
    Mr. Wells. A number of the radios today can tune over a 
wide range of frequencies. Some of those are denied to us for 
training in the United States because those bands are not 
available. So as I mentioned earlier, there are tradeoffs in 
all of these between, if you increase the frequency then you're 
now in line of sight, you can't get longer ranges, you get 
higher data rate, you need more power. If you decrease the 
frequency you can get longer ranges with lower power, but you 
may not have the same kind of data rates. So there are those 
kind of tradeoffs. We're developing a number of different radio 
approaches and those will operate over wide bands.
    Mr. Upton. How quickly are you planning to have this 
installed, the line of sight system, completely operating?
    Mr. Wells. Let me take that for the record, Mr. Chairman.
    Mr. Upton. Do you have any cost estimates of expediting the 
change over?
    Mr. Wells. Expediting the change over to this new radio--
let me take that also. I do have an answer, by the way, for 
your earlier question about fixed sites. DOD uses 1855 fixed 
sites in the 1755 to 1850 megahertz band and that's 49 percent 
of the total fixed sites in that band.
    Mr. Upton. Okay. Mr. Pickering?
    Mr. Wells. You asked me one thing. You asked me earlier 
about the unified S-band, moving the satellites. One of the 
concerns we have in that band is that we would need better 
regulatory status in the band than some of the other users. 
NASA, for example, is accorded priority right now after 
broadcast auxiliary services. If we're going to move military 
and intelligence satellites into that band, clearly they would 
need adequate regulatory protection.
    Mr. Wheeler. Could I just ask a clarification? 1855, how 
much spectrum are we talking about? You said 1855 fixed sites, 
was that the number that you used?
    Mr. Wells. In various places within the 1755, I'll get 
that----
    Mr. Wheeler. I'm just curious. Good.
    Mr. Upton. Mr. Pickering.
    Mr. Pickering. Mr. Chairman, my understanding is as we 
start the legislative process with this hearing today that it 
is with the intent and objective of soon introducing 
legislation. I would like to introduce legislation as soon as 
possible, but I would like to have as broad a consensus as 
possible and as broad of an input and buy in. We hope, I 
believe, this fall to try to move legislation through this 
committee and to a mark up and so my first question would be to 
the panelists from both industry and from the agencies and DOD, 
would you all be willing to work with the committee as we draft 
legislation over the next month? Would everybody be willing to 
come to the table in this process and let me start with Mr. 
Hatch?
    Mr. Hatch. Thank you and----
    Mr. Pickering. You can be very brief, with just a yes or a 
no.
    Mr. Hatch. The answer would be yes. Obviously, we'd be glad 
to work with industry, the FCC, government agencies, and the 
Congress to try to help resolve how to accommodate third 
generation and at the same time protect the interests of the 
incumbent users. Thank you.
    Mr. Pickering. Dr. Wells?
    Mr. Wells. Of course, Judy will work with the committee and 
we'll use--the only thing that I would ask is that there not be 
a precipitous decision to sort of treat 1755 to 1850 as being 
the solution and that everybody sort of march down the path.
    Mr. Pickering. And Dr. Wells, let me assure you that I do 
want to end this process, put everything on the table except 
maybe Monsignor Dempsey's spectrum.
    Mr. Knapp?
    Mr. Knapp. Yes, thank you. Of course, we'd be pleased to 
provide whatever help we can and we'd be more than happy to 
work with you.
    Mr. Pickering. I think I know your answer, Mr. Wheeler.
    Mr. Wheeler. In a heartbeat.
    Mr. Pickering. Dr. Wells, if you could, I believe Mr. 
Wheeler has outlined some possible migration plans. Is there a 
way in looking at and again, not prejudging the 1710 to 1855, 
but I believe that you've identified I believe in your 
testimony 130 megahertz. Is there a portion of that, is there 
half of that, is there a quarter of that that we make--be able 
to identify in the near term, looking at the long term issues 
and what we have to do in the long term, but in the short term, 
by 2004, is there some spectrum that you believe DOD could make 
available? Again, with all the caveats of compatibility and 
security, do you think that there's a way that we can find a 
way to do so?
    Mr. Wells. The 130 megahertz I mentioned was outside both 
the DOD and the 2500 band, so that's commercially available 
spectrum today that again, tough decisions will have to be 
made. I think the FCC and NTIA have laid out the beginnings of 
a thorough systematic deliberate process that will, in fact, 
allow all the options to be put on the table. And if some of 
those include genuine win-win options for DOD, I'm certainly 
willing to consider those. So the answer is there may, in fact, 
be a path. What I need to make sure of is that as part of this 
integrated operational framework we don't break one thing while 
we fix another. The fixed radio relays that were talked about, 
perhaps that will be an option. We are certainly willing to 
consider them. I only ask it be done deliberately and 
considering all factors.
    Mr. Pickering. Mr. Wheeler, would you like to comment on a 
path or just again summarize what you think is doable from a 
migration plan, finding the comparable spectrum that DOD would 
need?
    Mr. Wheeler. I want to also, this looks like the closing of 
things, close it with the same point I made at the outset and 
that is make no mistake about it. We want a strong defense. We 
don't want to threaten one life of one individual in uniform. 
It does appear very plain, however, that in the Department of 
Defense's report, suggestions were made as to migratory paths 
that were available. There are challenges in many of those, but 
this committee, this Congress, the Administration, the 
leadership that has already been shown by your Department and 
the White House and the willingness of the industry, I think 
can address those issues. We are not looking for a solution 
that is a couple hundred megahertz falling from the sky 
tomorrow. There needs to be a plan, a step-wise logical 
progression. I think that you have outlined those in your 
report and that we have, we're sitting in front of the people 
who can actually make things happen in regard to some of the 
solutions that you need along the way to make that transition 
work.
    Mr. Pickering. Mr. Chairman, thank you for your patience.
    Panelists, I thank you for your participation and look 
forward to working with you as we try to find a legislative 
solutions to these very important objectives. Thank you.
    Mr. Upton. Thank you, Mr. Pickering.
    Mr. Hatch, I have just one quick other question. Are there 
other sharing or segmenting options that were not studied for 
the 1710 to 1850 megahertz band?
    Mr. Hatch. Thank you, Mr. Chairman. There were proposed 
segmenting options provided in the FCC NPRM. We considered 
three options in our report. Industry has also put forward some 
options, so it's all of these options and the information that 
has been submitted for the record in the FCC's proceeding that 
we need to now take into consideration, do a very detailed and 
careful study and analysis to see what are the best options, 
what are the time lines associated with those options and try 
to prioritize those options as to which ones to consider and 
which ones to look at in detail. I need to keep stressing that 
this comparable spectrum issue is one that is going to be very 
difficult for us to address and will take some cooperation and 
time by all parties to look at this migration and try to find 
comparable spectrum. It is not an easy task.
    Thank you, Mr. Chairman.
    Mr. Upton. Thank you. Again, I just want to say that other 
members may have some questions for the record that we may ask 
you to respond to. I want to thank all members and their staffs 
for participating today and last couple of weeks as we've 
prepared for this hearing and I would also say that as we look 
toward the next step, we look to continued bipartisan 
cooperation, working with the Administration. I'd like to think 
and I've talked to Mr. Markey and had some discussions with the 
Chairman Tauzin. I'd like to think that the next step will be 
the introduction of some legislation, probably led by Mr. 
Pickering and others, again on a bipartisan basis, particularly 
as we deal with other committees that may have jurisdiction as 
well, the Armed Services Committee, I don't know if they have 
direct--they probably would have some referral, but my goal 
would be to try to see legislation introduced some time after 
we return from the Labor Day break at which point we will 
schedule a legislative hearing later on, on that legislation 
with the idea that we would move forward beyond that, probably 
in October.
    So with that again, we welcome your participation in this 
very important issue, Monsignor Dempsey, particularly your role 
here as well and I adjourn the hearing.
    [Whereupon, at 12:15 p.m., the subcommittee was adjourned.]
    [Additional material submitted for the record follows:]

                                      Department of Defense
                                                     September 2001
Honorable Fred Upton
Chairman, Subcommittee on Telecommunications and the Internet
Committee on Energy and Commerce
U.S. House of Representatives
Washington, D.C. 20515-6115
    Dear Mr. Chairman: I want to thank you for the recent invitation to 
speak before your subcommittee regarding the ``U.S Deployment of Third 
Generation Wireless Services: When Will It Happen and Where Will It 
Happen?''. I also welcome this opportunity to provide additional 
information concerning Department issues related to the potential loss 
to the 1755-1850 MHz band. Enclosed are the Department's answers to the 
questions you sent me on August 2, 2001.
    Finding suitable spectrum for Third Generation (``3G'') Wireless 
services is a challenging telecommunications issue. Industry proposes a 
win-win solution--a goal that we endorse, provided it is truly a win 
for our National Security as well as for Industry. However, we must be 
cautious about proposals that promise uncertain future benefits to the 
Department of Defense, in exchange for a firm commitment to relinquish 
the Federal spectrum now. We shall continue to work with the Executive 
Office of the President, Commerce Secretary Evans, Federal 
Communications Commission Chairman Powell, the Congress, and other 
concerned parties to help us reach the best decision for the nation and 
the Defense Department.
    If either my staff or I may be of further assistance to you or your 
subcommittee, we would be most pleased to do so.
            Sincerely,
                                                       Linton Wells
Enclosure: As stated

cc: Honorable W.J. ``Billy'' Tauzin
   Honorable John D. Dingell
   Honorable Edward J. Markey

                        QUESTIONS FOR THE RECORD
    Question 1a. How much spectrum does the Pentagon's fixed point-to-
point wireless operations occupy? How many channels in the 1755-1850 
MHz band do these operations use and do they share channels with any 
other Pentagon operations?
    Response: There are fully 595 frequency assignments (e.g., 
channels) recorded for DoD fixed point-to-point wireless operations in 
the U.S. between 1755 and 1850 MHz. These point-to-point systems use 
``channels'' throughout this band and use bandwidths ranging from about 
1 MHz up to 40 MHz, with the vast majority using less than 4 MHz. The 
fixed nature of their use, frequency engineering, and geographic 
separation allow the same frequencies (channels) to be re-used for 
assignments elsewhere in CONUS. Full cognizance of fixed point-to-point 
receiver and transmitter equipment parameters ensures DoD frequency 
management personnel are able to develop compatible frequency plans for 
simultaneous operations of other systems with these fixed equipment 
systems.
    It should be noted that these numbers address only those DoD 
systems that are physically fixed in place, as opposed to those systems 
that operate in the ``Fixed Service'' but are actually transportable, 
such as Tactical Radio Relay (TRR) systems.
    Question 1b. What percentage of these fixed wireless operations are 
non-combat or battle-related such as the Army Corps of Engineers' water 
level monitoring activities?
    Response: Of the assignments identified in the answer to question 
1a, approximately 60% support non-combat related efforts, such as Army 
Corps of Engineer (ACE) backbone communications and base administration 
functions. The balance of assignments support DoD test and training 
efforts whose functions have a direct bearing on combat readiness.
    Question 2. Your written testimony states that the 1755-1850 MHz 
band was chosen for the Pentagon's crucial operations ``because the 
signals at these frequencies propagate in ways that make the spectrum 
ideal for mobile communications.'' What Pentagon and other agencies' 
fixed wireless operations have to be performed in this band? Why do the 
fixed wireless operations have to be performed below 3 GHz?
    Response: As stated in the DoD report, most, if not all, DoD non-
tactical fixed point-to-point systems could be accommodated in other 
frequency bands above 3 GHz that are already allocated for this 
particular type of service. Tactical radio-relay systems however, are 
transportable by design, have time-to-deploy requirements, and link 
establishment requirements that are best fulfilled in frequency 
spectrum below 3 GHz. Mobile aircrew training and precision guided 
munitions systems would face extreme technical hurdles if forced above 
3 GHz because of aircraft dictated size and weight limitations that 
would constrain power availability and would result in reduced 
effective ranges for these systems. Antenna factors and mobility and 
increased power requirements would make it very difficult to 
successfully meet the performance requirements of our tactical and 
training systems.
    Question 3a. Is the Pentagon aware of any other bands, other than 
1755-1850 MHz, that provide the propagation characteristics necessary 
to the Pentagon's satellite uplink operations that either already have 
enough spectrum to accommodate those operations or could have enough 
spectrum if incumbent users were relocated?
    Response: Yes, DoD is investigating the potential for moving these 
satellite control operations (SATOPS) to what is generally referred to 
as Unified S-Band (USB) at 2025-2110 MHz. There are, however, 
regulatory considerations regarding priorities to be accorded the 
Pentagon's satellite functions in the USB, compared to priorities of 
incumbent commercial and Federal government users that must be 
satisfactorily addressed in order for USB to be comparable. The risk 
associated with international coordination of satellites (in terms of 
priorities in the international coordination process through the 
International Telecommunication Union) for use in USB is also of 
concern. Furthermore, as explained in the DoD report on IMT2000, 
satellite control could not be moved out of the band until 
approximately 2017 or later.
    Question 3b. Please provide the answer to that question for the 
Pentagon's tactical radio relay operations.
    Response: Tactical Radio Relay (TRR) systems have operational 
requirements, including transportability, propagation range, and 
foliage/building wall penetration, that are best accommodated at 
frequencies below 3GHz. Three potential alternate bands (2200-2290 MHz, 
4400-4490 MHz, and 7/8 GHz) were assessed and found to be unsuitable. 
NTIA has stated that there are no government bands below 3 GHz to which 
TRR could migrate without displacing incumbent users or creating a 
crowding problem.
    Question 3c. Please provide the answer to that question for the 
Pentagon's air combat training operations.
    Response: Three potential alternate bands (2200-2290 MHz, 4400-4490 
MHz, and 7/8 GHz) were assessed and found to be unsuitable. We are not 
aware of a government band that could accommodate air combat training 
operations.
    Question 3d. Please provide the answer to that question for the 
Pentagon's precision guided missile operations.
    Response: Three potential alternate bands (2200-2290 MHz, 4400-4490 
MHz, and 7/8 GHz) were assessed and found to be unsuitable. We are not 
aware of any other available bands that provide the same very effective 
propagation characteristics to support the unique mission requirements 
of our precision guided munitions (PGM) systems.
    Question 4a. Your written testimony indicates that ``[v]acating or 
segmenting the band is feasible, provided that comparable spectrum 
could be allocated to DoD and adequate, timely, financial compensation 
provided, but DoD satellite control systems could not vacate the band 
before 2017 and non-space systems before 2010.'' What is the Pentagon's 
definition of ``timely, financial compensation'' that support the 2017 
and 2010 time-lines?
    Response: To meet these timelines, funding sufficient to begin 
development of the new systems would have to be provided in FY2002. 
Remaining funding would be needed within the next two to three years to 
enable efficient production and timely fielding of all units.
    Question 4b. What if more money was provided for compensation than 
the Pentagon has envisioned? Could these operations be moved more 
quickly if more money was made available?
    Response: No, more money would not enable significant acceleration 
of the transition timelines because they are based on constraints other 
than cost. In the case of satellites, the transition timeline is based 
on a ``flyout strategy'': existing satellites will be replaced when 
they reach end of life. It is doubtful that there is sufficient 
satellite manufacturing capacity and launch capability to allow the 
timeline for satellite control operations to be shortened significantly 
regardless of the availability of enhanced funding. Furthermore, it 
would waste billions of taxpayer dollars to prematurely retire 
functioning satellites.
    With regard to other systems that would require redesign, the 2010 
transition timeline is based on the time needed to complete the 
processes of developing and fully deploying a new system. For most 
systems, this timeline could not be accelerated without adding 
substantial risk to the program.
    Question 5. In your written testimony, you indicate that ``DoD 
believes that it is unlikely that comparable government spectrum can be 
found for most of the functions presently residing in the 1755-1850 MHz 
band.'' What functions are not in that ``most'' category? For what 
functions can comparable spectrum be found?
    Response: Recalling that, at a minimum, ``comparable spectrum'' 
makes reference to equivalent technical characteristics, equivalent 
regulatory status, and sufficient spectrum to avoid degradation due to 
interference with incumbents, it is believed that the DoD fixed point-
to-point systems could be relocated to alternate spectrum. Also, we are 
investigating the feasibility of migrating the satellite control to 
Unified S-Band (see the answers to Questions 3a and 9). However, 
questions remain regarding the regulatory status of DoD operations 
should they move to this band, compatibility with incumbent uses, and 
international coordination. The FCC has not yet proposed commercial or 
shared spectrum into which the DoD functions presently in the 1755-1850 
MHz band could move.
    Question 6. The Pentagon's report that serves as an annex to the 
NTIA 3G Report on the 1755-1850 MHz band states that ``[m]ost 
installations of microwave systems that employ spectrum in this band 
are legacy in nature.'' What exactly does this mean? Do these systems 
not use spectrum as efficiently as they could?
    Response: The term legacy means that the systems have already been 
fielded. It is possible that a redesign of some systems could enable 
more efficient use of spectrum, but we must also consider that the 
spectrum needs for some functions, such as battlefield communications, 
are growing. DoD's overall spectrum requirements for mobile 
communications are expected to grow by ninety percent by 2005.
    Question 7. The Pentagon's report also states that ``[a] 
significant amount of frequency spectrum is already allocated to the 
Government on an exclusive basis for Fixed Service operations in higher 
frequency ranges. The 4400 to 4990 MHz and 7125 to 7185 MHz bands are 
already employed by the DoD for fixed point-to-point microwave 
communications in CONUS.'' Why is it that the fixed wireless operations 
currently in the 1755-1850 MHz band cannot be relocated to these bands?
    Response: The fixed wireless operations in the 1755-1850 MHz 
probably could be relocated to other government bands. It is also 
possible that some of these operations could be outsourced, thus 
enabling the use of commercial bands.
    Question 8. Please explain the geographic sharing that may be 
possible for fixed microwave links? The DoD Report states that 
``[s]ince the microwave links tend to be in remote area, sharing does 
not present a problem. For those links near population centers or IMT-
2000 systems, frequency sharing could be coordinated.'' What does this 
mean?
    Response: Since signal strength fades with distance, two systems 
can use the same or adjacent frequencies provided they are far enough 
apart. The acceptable geographic separation is related to the closeness 
of the operating frequencies. In population centers where geographic 
separation is impractical, 3G and fixed microwave systems might still 
be able to share through coordinating time of use, as well as through 
coordinating frequency assignments.
    Question 9. The DoD Report states that the ``S-band offers physical 
advantages for TT&C [tracking, telemetry, and control] operations, 
particularly in the areas of launch, early orbit, and anomaly 
resolution.'' The report also states that ``[g]iven the current 
implementation, S-band is uniquely suited for conducting critical, non-
routine SATOPS functions.'' Given these conclusions, is the Pentagon 
doing everything it can to ensure that as many satellite operations are 
moved to the S-band as quickly as possible? What impediments stand in 
the way of moving all of these operations to the S-band?
    Response: The area of the spectrum commonly referred to as ``S-
band'' extends from 1550 to 3900 MHz. It encompasses both the current 
satellite control band of 1755-1850 MHz and the ``Unified S-band'' from 
2025-2110 MHz. The unique and desirable performance features of ``S-
Band'' described in the DoD Report apply to both of these bands.
    Question 10a. DOD engineers argue that emissions from commercial 
use would extend so high in the sky over a city or area where its 
commercial use is deployed that [any] satellite uplink would have to be 
at least 250 kilometers away, or risk interference. Industry engineers 
argue that commercial wireless antennas direct their emissions towards 
the ground (where customers use the service) so, the interference would 
not extend so high into the sky. Please explain the reason for the 
disparity in the conclusions of the engineers?
    Response: This question addresses two interference issues. The 
first is interference from DoD satellite ground terminals to 3G phones. 
DoD studies predicted that SATOPS emissions could cause interference to 
ground based 3G receivers up to 350 km away. Industry does not dispute 
this analysis. The other issue refers to the potential for interference 
from 3G base station emissions to the DoD SATOPS receivers on orbiting 
satellites. The differing conclusions regarding the interference to 
satellite receivers are based on differing assumptions about the 
antenna pattern.
    Question 10b. What process will you follow to determine which set 
of engineers is right?
    Response: DoD and industry engineers are in discussion to resolve 
the difference if possible. DoD analyses must be based on appropriately 
conservative assumptions to ensure adequate control is maintained of 
priceless space assets.
    Question 10c. What is the time-frame for resolving this dispute? 
When will we have a definitive answer to technical question surrounding 
this issue?
    Response: We look forward to expeditiously closing this point of 
misunderstanding of the risks to our SATOPS capabilities.
    Question 11. It is my understanding that the Army has already begun 
to experience problems in Europe with the Army Mobile Subscriber 
Equipment (MSE) and the Tri-Services Tactical Communications (TRI-TAC). 
Can you please explain the nature of this problem and what is being 
done to overcome it?
    Response: The problem experienced in Europe relates to the need for 
tuning flexibility to achieve both radio transmit/receive frequency 
separation and collocated system frequency separation. The Army employs 
the Mobile Subscriber Equipment (MSE) system regularly in Europe and is 
able to support both operations and training missions through proper 
frequency assignment coordination procedures, though large networks of 
multiple systems are challenging to support with available frequency 
assignments. The Army is acquiring the High Capacity Line of Sight 
(HCLOS) radio system that has significantly increased tuning 
flexibility to address the increased complexity of frequency 
separation.
    Question 12. It is my understanding that a new generation of radios 
is being developed called High Capacity Line of Sight (HCLOS). It is 
also my understanding that these new radios will operate between 1350-
2690 MHz. Are there other spectrum bands within this range other than 
1710-1850 MHz to which the Pentagon's tactical radio relay operations 
could be moved? In your answer, what assumptions are you making about 
the spectrum capacity needs of these operations?
    Response: NTIA has stated that there are no other government bands 
to which TRR could be moved, regardless of tuning capability. Like MSE, 
HCLOS requires a separation of at least 60-70 MHz between transmit and 
receive frequencies with sufficient total capacity (at least current 
allocation) to meet rapidly growing information transfer requirements. 
The 1710-1850 MHz band provides the single largest block of contiguous 
spectrum available to the DoD for support of tactical radio operations. 
This large spectrum block is critical to being able to employ system 
tuning flexibility for required frequency separation of transmit/
receive links and collocated system operations. It should be noted that 
one of the main reasons for acquiring the High Capacity Line of Sight 
(HCLOS) radio system is to significantly expand tactical network 
capacity. This will be accomplished by the HCLOS radio being able to 
support much higher data rates than the current MSE systems. We firmly 
believe that spectrum requirements to support the Army battlefield 
networks in the future will be significantly greater than the needs of 
today.
    Question 13a. When is the HCLOS system slated to be installed and 
fully operating?
    Response: About five percent of the systems have been fielded to 
date. Fielding will continue beyond FY 2009. The Navy and Marine Corps 
have not programmed for HCLOS or another system to meet their TRR 
requirements if access to the 1755-1850 MHz band is lost.
    Question 13b. Is there any way to expedite the full installation 
and operation of the HCLOS system?
    Response: For Army requirements, yes. The current contract for the 
HCLOS system has options and range quantities that would permit the 
accelerated procurement and fielding of radio systems. This would not 
address Navy and Marine Corps requirements, however.
    Question 13c. Do you have any cost estimates of expediting the 
change over?
    Response: For the Army, yes. Fielding could be accelerated by two 
years at a cost of an additional $243M over funding currently budgeted 
between FY 02 and FY 06.
    Question 13d. What can be done in the interim? Is there a mutually 
agreeable temporary solution?
    Response: There is no mutually agreed temporary solution to 
accommodating 3G in the 1755-1850 MHz band prior to relocation of TRR 
and other DoD systems. The DoD report found that sharing of the band 
would not be feasible.
    Question 14. It is my understanding that Secretary's Rumsfeld 
``bottom-up review'' will recommend that significant changes be made in 
DoD's spectrum management responsibilities. I understand that these 
changes will be radical in some respects. What are the recommended 
changes and when will they take effect?
    Response: We are strengthening spectrum management at the OSD level 
and within the Defense Information Systems Agency. The Joint Staff is 
leading a study to address other changes to spectrum management 
responsibilities.
    Question 15. How much spectrum (in megahertz) would be required for 
a new Joint Tactical Combat Telemetry [sic] System (JTCTS)? Are the 
spectrum requirements over land different from requirements over water?
    Response: The JTCTS program is being restructured. However, based 
on the most recent design and assuming 20 MHz guard bands, land-locked 
sites would require about 60 MHz and littoral sites about 95 MHz.
    Question 16. When will JTCTS be operational?
    Response: Full operational capability of JTCTS and replacement of 
existing training systems that use the 1755-1850 MHz band is not 
envisioned until well after the 2010 timeframe. Acceleration to earlier 
than 2010 would be problematic.
    Question 17. What reason(s) would the Department of Defense have 
for not migrating to the JTCTS?
    Response: The DoD intends to migrate to JTCTS.
    Question 18. What bands, other than the 1755-1850 MHz band, could 
the JTCTS operate in?
    Response: The JTCTS could be designed to operate in any band from 
138-2400 MHz predicated on allocation of sufficient bandwidth, 
regulatory action to give Government airborne mobile service 
appropriate regulatory status, and incumbent user relocation.
    Question 19. Could the JTCTS operate in a guardband in the 1755-
1850 MHz band if advanced commercial mobile radio services operated in 
the 1755-1850 MHz band?
    Response: Not without providing unacceptable limitations on 
littoral range operations.
    Question 20. Has the equipment for JTCTS already been designed 
specifically and exclusively for the 1755-1850 MHz band?
    Response: The datalink developed under the E&MD effort was 
specifically designed for the 1755-1850 MHz band but this effort was 
halted.
    Question 21. Are there other sharing or segmenting options for the 
1710-1850 MHz band that were not studied by the Department of Commerce 
and the Department of Defense that would protect current Department of 
Defense operations in that band against interference while permitting 
3G services to operate in that band as well?
    Response: The DoD report examined the feasibility of full band 
sharing and partial band sharing or segmentation. It was determined 
full band sharing was not possible from a DoD standpoint or an industry 
standpoint, that interference to either DoD or IMT-2000 systems in the 
band would be unacceptable. Two partial sharing/segmentation options 
were also examined and determined to be not feasible. Our study shows 
any sharing option is not feasible. Alternate segmentation options may 
vary in terms of which and how many systems may be impacted. However, 
all options likely will require comparable spectrum as well as cost 
reimbursement and the adherence to timelines similar to those for full 
vacation of the band.
    The NTIA report found that FCC's, `Out-of-Band Pairing & Band 
Unrestricted Operation', proposal in the 3G NPRM, which pairs the 2110-
2150 MHz and 2160-2165 MHz bands with spectrum in the 2500-2690 MHz 
band, would result in no impact to Federal users. NTIA also believes 
that the Commission's proposal to pair the 1710-1755 MHz with the 2110-
2150 MHz and 2160-2165 MHz bands could be a viable option.
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