UNITED STATES FEDERAL COMMUNICATIONS COMMISSION
In Re: WIRELESS BROADBAND FORUM ) ) ) ) ) ) ) )
Pages: Place: Date:
1 through 254 Washington, D.C. May 19, 2004
HERITAGE REPORTING CORPORATION
Official Reporters 1220 L Street, N.W., Suite 600 Washington, D.C. 20005-4018 (202) 628-4888 hrc@concentric.net
Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In Re: WIRELESS BROADBAND FORUM ) ) ) ) ) Commission Meeting Room FCC Building 445 12th Street, S.W. Washington, D.C. Wednesday May 19, 2004 The parties met, pursuant to notice. BEFORE: HONORABLE MICHAEL POWELL Chairman
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APPEARANCES:
Heritage Reporting Corporation (202) 628-4888
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P R O C E E D I N G S (9:35 a.m.) MS. SEIDEL: Good morning. I'm Cathy Seidel I'd
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4 and I'm the Deputy Chief of the Wireless Bureau.
5 like to welcome you all to the Commission's Boardband 6 Forum. Today's forum will focus on three critical
7 issues relating to broadband wireless services. 8 Specifically, we'll talk a little bit about what 9 wireless broadband is, what wireless broadband will be 10 and, perhaps, most importantly, what wireless 11 broadband should be. We've brought together business,
12 technology and government leaders in what is sure to 13 be an open, informative and lively discussion. 14 As outline in the agenda, today's forum will
15 be comprised of four panels, each of which will be 16 moderated by one of our commissioners, each of whom 17 has graciously agreed to be a part of this effort. 18 These panels will explore technological development, 19 consumer demand, barriers to further success and 20 expectations for the future. 21 To ensure a healthy discussion, we have set
22 aside time for questions from the audience at the end 23 of each panel discussion. In addition to the panels,
24 we will be setting up demonstration rooms from noon to 25 5:00 p.m. so that everyone can view some of the key Heritage Reporting Corporation (202) 628-4888
1 technological developments in the wireless broadband 2 space. 3 With the recent creation of the Broadband
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4 Division within the Wireless Telecommunications 5 Bureau, under the able leadership of Joel Taubenblatt, 6 the Commission's vision of wireless broadband 7 continues to develop and sharpen. We believe that
8 this forum today will support and help inform the work 9 of the division and outline options for the Commission 10 that will have a positive impact on long-term wireless 11 broadband development. 12 This point will be brought home later today
13 by the Wireless Bureau's Chief, John Muleta, who will 14 fight his own unique perspective of the wireless 15 marketplace and the strives the Bureau is making to 16 promote wireless broadband. 17 As many of you are aware, conducting a forum
18 such as this requires a heavy amount of 19 behind-the-scenes work. I'd like to thank the work of
20 staff in the Wireless Telecommunications Bureau as 21 well as the Office of Engineering and Technology for 22 the detailed work that was done to make this forum a 23 reality. Specifically, I'd like to thank Chelsea
24 Fallon, who's probably running around here somewhere, 25 who has really been the primary organizer for today's Heritage Reporting Corporation (202) 628-4888
1 event and really has gone above and beyond the call of 2 duty to make today's event a meaningful experience for 3 each of its participants. 4 Before we get started with our panel
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5 discussions, Chairman Michael Powell has agreed to 6 kick off today's events by discussing his vision for 7 wireless broadband. As you know, Chairman Powell has
8 consistently championed wireless technology and 9 innovative broadband services in particular as a means 10 to achieve ubiquitous and affordable telecommunication 11 services nationwide. As chairman of the FCC, he truly
12 has his finger on the pulse of wireless broadband and 13 is singularly positioned to help ensure the continued 14 development of wireless broadband for the benefit of 15 individuals, commercial entities, public safety 16 entities and the community and beyond. So, without
17 further ado, please join me in welcoming Chairman 18 Powell. 19 20 (Applause.) CHAIRMAN POWELL: Thank you, Cathy. That
21 was a great introduction. 22 Very nicely done. 23
She's not press agent.
I want to the opportunity today to welcome
24 all of you here to the FCC for this very important 25 forum on broadband and, particularly, the promise that Heritage Reporting Corporation (202) 628-4888
1 wireless holds for bringing the great benefits of 2 broadband to all Americans. It seemed to me, walking
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3 in here today, I don't need any more graphic 4 representation of broadband than looking at our narrow 5 band security system to get people into this room. 6 that's our own graphic representation of the value 7 that we're here to talk about today. 8 We have been talking about, as a community, The recognition of the So
9 broadband for years now.
10 internet, the recognition of the promise that it holds 11 for America and world citizens everywhere, but, as we 12 move into this year, we really begin to see the 13 intensifying recognition at all levels of government 14 the promise that broadband holds for any nation that 15 hopes to remain competitive and globally significant 16 in the world of the information age and the world of 17 the future. And that recognition is punctuated by our
18 leaders increasingly setting out ambitious goals for 19 this nation to reach. 20 The President of the United States recently
21 talked about wanting broadband availability to all 22 Americans by 2007, a truly bold and ambitious goal 23 that's going to be difficult to meet, but we're able 24 to meet. But it only will be met by the use of every
25 possible tool in our broadband tool kit to get there. Heritage Reporting Corporation (202) 628-4888
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And it will be critical that wireless a major role in
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2 our ability to provide these benefits to the American 3 consumer. 4 This is, as we often say, the central It's more
5 communication policy objective of the era.
6 than talk now and it's time for action and these 7 forums are unique and important way to bring together 8 critical communities to identify issues, to develop 9 solutions and highlight important questions for 10 government as it develops a spectrum policy that's 11 respectful and efficient and productive for the 12 broadband goals that we hope to achieve. 13 It is becoming more clearly focused what the
14 benefits to a nation are of a constructive broadband 15 policy and a broadband success. 16 we have a simple goal. The American consumer
We want to be able to provide
17 this critical plug into an information appliance in an 18 information age to every single American no matter 19 where that American chooses to set up their family and 20 live and to do so at affordable rates so that it is 21 something that is for all of us regardless of our 22 sociodemographic class. That issue has always proven
23 to be difficult and sometimes impenetrable using the 24 technologies of the past. For a hundred years, we
25 have hauled copper wire over a mountain and through Heritage Reporting Corporation (202) 628-4888
1 rivers and through valleys and over poles to try to 2 reach this objective using a single technology. But
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3 that's what holds so much promise as we move into the 4 future. We're able to use other technologies that
5 will make that challenge more addressable. 6 A satellite cares very little about those Wireless can bridge distances Wireless has unique
7 demographic difference.
8 that wire line functions can't.
9 opportunities for interactivity and mobility that 10 other technologies don't. So, as we begin to sort of
11 put this together for consumers, we see wireless as a 12 critical component to that. I think, also, we begin
13 to recognize anybody who cares about the economic 14 well-being of their nation has begun to see the 15 critical value of investing in broadband 16 infrastructure and information technologies. 17 The United States has been able to steadily
18 increase its global and its economic productivity 19 almost exclusively because of its continuing 20 willingness to invest in information technologies. 21 Indeed, last year the United States had extraordinary 22 productivity growth at the end of the year 23 attributable directly to our investments in internet 24 and information technologies of the '90s. If the
25 United States is going to maintain its ability grow Heritage Reporting Corporation (202) 628-4888
1 its economy, I think the continued proliferation of 2 broadband technologies with wireless playing a 3 critical part are key to that solution. 4 Productivity and growth are what we are
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5 about to make our generation better for our children 6 and that's how daunting and important that task will 7 be. And safety and security, as we all have come to
8 be aware, in the post-911 world, we understand that 9 we're vulnerable. 10 were by geography. We're not blessed as much we once We can't take for granted the
11 safety and security that we've come to enjoy in our 12 generation and we understand that as an economy moves 13 into an information age, its dependence, its vital 14 dependence on critical information infrastructure 15 becomes deepened and, as it becomes deepened, indeed, 16 we become both benefitted but more vulnerable to 17 problems in that network. 18 We have a historic opportunity as we
19 engineer networks for next great era of communications 20 to be cognizant of the need for safety and security at 21 the front end of the engineering problem. It's
22 important to be thinking about first responders and 23 public safety now not later. It's important to be
24 talking about how to secure networks and encrypt them 25 and protect them from those who would rather do you Heritage Reporting Corporation (202) 628-4888
1 harm or gain access to information inappropriately. 2 It's important to have that up front. 3 To often, I think, in public policy, we
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4 often are working on those things on the back end of a 5 deployment or we're bolting them on at the end. Let's
6 be cognizant of them at the front end for the good of 7 our citizens. 8 Wireless, again, as I have said, is vital.
9 And I'll put it this way, to me and in my mind, one of 10 the great ways to achieve the benefits that we're 11 talking about is we can't rest on any single 12 technology. I will give anyone a platform who has a
13 broadband platform, who has the possibility, the 14 opportunity, the entrepreneurial spirit to bring it to 15 the market and bring it to deploy it to consumers. 16 This is not an agenda just for a phone company, just 17 for a cable company, just for a big wireless company. 18 It's also a form for entrepreneurs and innovators and And it's
19 radical creators of new goods and services.
20 the Commission's mission to try to drive any platform 21 that can deliver these services and deliver them 22 effectively. 23 For 100 years, if I were to characterize the
24 great regulatory difficulty, it's because we always 25 had one wire. We had one wire to the home and because Heritage Reporting Corporation (202) 628-4888
1 of that one wire you had enormous difficulties of 2 monopoly control, bottle-neck facilities, the pricing 3 of those facilities, how to get that one wire to every 4 home in the United States. We have a historic We have
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5 opportunity here to not repeat that world. 6 the opportunity for not one.
We're clearly going to
7 have two, DSL and KL modem are well on their well, but 8 the holy grail is when you get to three. Magical
9 things happen in competitive markets when there are 10 three. Magical things happen when there is real And we are
11 choice and pressures for innovation. 12 looking.
We want your poster up here for the third
13 great access and, indeed, the fourth or fifth for the 14 American consumer. And we all know that wireless rest
15 somewhere there in that solution to bring that 16 competitive world and take pressure off the regulatory 17 environment for upgrading the market benefits that 18 that dynamic can produce and we're already beginning 19 to see it. 20 I don't need to catalog for this community
21 the explosive growth in everything from Wi-Fi 22 technologies to wireless internet service provision 23 that is popping up in rural America, particularly, all 24 over the country. We're beginning to see greater uses
25 of wireless mobile broadband products such as EVDO Heritage Reporting Corporation (202) 628-4888
1 coming into the marketplace. 2 fiction anymore.
This is not science
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These are true commercial
3 applications that are rapidly spreading throughout the 4 marketplace. But, more exciting, there are a number We see
5 of dramatic wireless technologies on the way.
6 creative uses OFDM, wideband CDMA, wi-max, ultra 7 wideband, products that just a few years ago 8 technologies very few had every heard of now beginning 9 to work its way through the commercial system and 10 beginning to produce real products for consumers. So
11 the future is exciting, innovative and bright and we 12 look forward to wireless as part of that solution. 13 The FCC has recognized for years now that
14 spectrum is vital to realizing this vision and that it 15 had to have a bolder, more enlightened national 16 spectrum policy. And, from Day 1, we have been
17 working very, very hard to change the traditional 18 command and control approach that is not respective of 19 innovation, not respective of the need to move 20 spectrum to its highest and best uses and to work 21 really, really hard to provide a spectrum policy 22 that's much more facilitating of more platforms, more 23 broadband platform, more innovation, more choice, more 24 flexibility. Put simply, our view is that more
25 spectrum more flexibility and more innovation will Heritage Reporting Corporation (202) 628-4888
1 equal more broadband and a brighter information 2 landscape and that's the core of our policy. 3 Just to mention a few of the big items that
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4 we've looked at and are looking at, Advanced Wireless 5 Services, just last year the Commission allocated an 6 additional 9 megahertz that can be used for Advanced 7 Wireless Services, MDS and ITFS will begin working 8 very, very hard to develop new rules that will provide 9 less complicated and more flexible structures for MDS, 10 ITFS band. 11 this summer. 12 The 70, 80, 90 gigahertz bands, the We expect to release these rules sometime
13 Commission has established innovative framework for 14 allowing commercial use of spectrum in those bands. 15 24 gigahertz, the auction of spectrum license and the 16 24 gigahertz band that can be used to provide a range 17 of fixed broadband services is going to begin on July 18 28th. We have promoted the use of secondary markets
19 for people to have more commercial flexibility in 20 obtaining spectrum and allocating spectrum. 21 In our world of important order, we're
22 working on specific solutions for rural America. 23 We've promoted more unlicensed spectrum and recently, 24 in particular, in the 5 gigahertz band and we're 25 working very aggressively on new technologies like Heritage Reporting Corporation (202) 628-4888
1 smart radio that will provide really new and creative 2 technological solutions to spectrum scarcity and can 3 open up more possibilities. 4 5 is there. So the bottom line is all the raw material The recognition is there. The Now
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6 understanding of its importance has begun to gel. 7 all there is the easy part of actually making it
8 happen and that's what this forum is one small part of 9 to bring the stakeholders together who know how to 10 make it happen and to leave this room better than we 11 found it this morning and, hopefully, in a few years, 12 we'll be looking back quite proudly of our 13 accomplishments, knowing that we put the country and 14 the world on a better, more competitive footing and a 15 world that our children will enjoy for many years to 16 come and I'm excited to be a part of it, excited to 17 have you here and want to thank you for your service. 18 19 20 21 Thank you very much. (Applause.) MS. SEIDEL: Thank you, Chairman Powell.
In a moment, we'll get underway with our
22 first panel and I'd like to invite the first panelist 23 to come on ahead and take a seat here. And, while you
24 do that, I'll mention just a couple of housekeeping 25 items. Heritage Reporting Corporation (202) 628-4888
1
First of all, and, perhaps, most
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2 importantly, there is an overflow room which is in 3 TWC488 and I think there are signs outside that point 4 you in that direction for folks that may be standing 5 or may not have a seat. 6 The format for the panels today is that the
7 moderator will give each panelist five minutes to 8 introduce themselves and their company or organization 9 that they represent. Following the introductions,
10 there will be an informal, moderator-led question and 11 answer session for approximately 30 minutes. 12 Following that, the floor will be opened up for 10 to 13 15 minutes of questions from the audience and there 14 are speakers placed throughout the room for that 15 purpose. 16 With that, I'd like to welcome
17 Commissioner Abernathy and our first set of panelists. 18 19 20 much. Thank you. COMMISSIONER ABERNATHY: Thank you very
As the Chairman spoke so eloquently this
21 morning, this is an opportunity for us to learn even 22 more about wireless broadband services, what's going 23 out there, what technology is doing and what we should 24 be doing better. But, first, I want to thank everyone
25 for attending today's forum, both the speakers and the Heritage Reporting Corporation (202) 628-4888
1 folks in the audience.
It's just another mechanism
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2 for us to try and figure out how we regulate a 3 technology that's head and shoulders above how fast 4 the government can act. 5 So what we're trying to do is get a handle
6 on that and understand where we can add value, where 7 we would simply be standing in the way and we should 8 step back. This first panel on wireless broadband
9 technology, it serves as a baseline for all of our 10 further discussions that we will be having throughout 11 today's forum and this is because technology and 12 consumer demand, not regulatory policies, should be 13 what drives the marketplace. And I'm excited about
14 the innovative technologies that are appearing in the 15 market. I'm hopeful that we can craft a regulatory
16 framework, continue to work on a regulatory framework 17 that will incent further development and deployment of 18 broadband wireless services to American consumers. 19 So far, what we've been able to do, as
20 outlined by the Chairman, is we've embraced broadband 21 wireless by making additional unlicensed spectrum 22 available for unlicensed devices, allowing more 23 flexibility for licenses and the types of services 24 that they can provide, initiating a proceeding to 25 create rules for broadband over powerline and Heritage Reporting Corporation (202) 628-4888
1 examining rules that would allow more efficient use of 2 the spectrum resource. 3 These are our first steps.
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What I'm hoping for today is to hear more
4 from our panelists about their views on where the 5 technology for wireless broadband is taking us, what 6 consumers expect, what they want that they don't know 7 that they want, and already wireless broadband 8 services is changing our lives by providing services 9 such as mobile access to medical information by 10 emergency personnel, any time, any place access to 11 data services and improved communications for public 12 safety. So we're already seeing significant, dramatic
13 changes in how we live our lives as a result of 14 broadband wireless services. 15 So, with that, I thought I'd go ahead and
16 introduce each of our panelists and provide them with 17 a few minutes to tell us more about themselves, what 18 they're working on, why they've been involved in this 19 area and then we'll move on to a question and answer 20 session. 21 So I think down at the very end we have He's the CTO, Chief
22 Pierre de Vries of Microsoft. 23 Technology Officer.
They've created this great
24 microsoft home that I've seen and we'd love to hear a 25 little bit more about your background and what you're Heritage Reporting Corporation (202) 628-4888
1 up to. 2 MR. de VRIES: Commissioner Abernathy, thank
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3 you very much. 4 Good morning ladies and gentlemen. It's
5 always an interesting question, what's a software 6 company doing here in our communications environment? 7 And the vision that we have, the dream that we have
8 is for affordable connected computing for everybody. 9 And you can see the computing part is something where 10 we would like to contribute by providing a platform, 11 by providing applications, but it's not something that 12 we can do on our own by any means. 13 We work with people who provide the People who provide other
14 equipment, the hardware. 15 services.
People who actually provide the
16 connectivity and we're very excited by the prospects 17 of wireless. It's a way of providing connectivity as It's another choice that people
18 the Chairman said.
19 will have and there have been a lot of investments and 20 a lot developments in this area, broadly speaking, in 21 three places. The technology keeps improving. The
22 technologies like OFDM, the improvement in online 23 sites connectivity for consumer wireless broadband. 24 It has been very impressive to observe over the last 25 10 years. Heritage Reporting Corporation (202) 628-4888
1
The companies keep investing.
There are
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2 people who are entrepreneurs who start new companies. 3 They get funded by people who want to create new And
4 businesses and that is continuing and exciting.
5 the third thing is that the regulators, the FCC, is 6 moving aggressively to create the environment for this 7 and I'd like to thank the Commission for inviting us 8 and for setting up this conversation. 9 Those three things that I mentioned are, I
10 think, the golden triangle of new innovation, the 11 three things that one has to get right. 12 get the technology right. You have to
You have to get the
13 business right and you have to get the policy 14 framework right and we need to see investment and 15 progress in all of those. 16 Microsoft's investments are mainly in the
17 technology space where we're working to create support 18 in our operating systems and applications that run on 19 top of that use broadband connectivity and make sure 20 that customers can use new technologies that are 21 emerging. We're also investing time and effort in
22 standards organizations because it's very important to 23 create the environment and the low cost through doing 24 standards. 25 If I think about what the future is like for Heritage Reporting Corporation (202) 628-4888
1 this space, it doesn't feel to me as if we've nailed 2 it yet. In a way, we wouldn't be here today if we'd We
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3 nailed broadband, but we're moving in a spiral. 4 keep improving. When I think about what really
5 remains to be done, I'm guided by the entrepreneurs 6 that I've spoken to and the business models that I've 7 seen. And, when I think about consumer wireless
8 broadband, there seems to be three things that really 9 drive the models. The first is the customer's premise
10 equipment, the cost of the customer's premises 11 equipment. The second is the subscriber acquisition
12 cost and the third is the cost of spectrum. 13 Now, if we think about the customer premises
14 equipment, the cost keeps coming down thanks to 15 Moore's Law and the innovation and the invention by 16 people who are building things. 17 Subscriber acquisition cost is a tricky one How do
18 because that depends on a variety of factors. 19 you get your marketing out? 20 do you advertise in the city?
If you send out a flyer, And you get leads, can
21 you actually provide service to everybody who picks up 22 the phone and says, yeah, I want this service? 23 actually touches on coverage and range. That
And another
24 factor in subscriber acquisition cost is, do you need 25 to have a truck go to the house and install an outside Heritage Reporting Corporation (202) 628-4888
1 antenna.
That adds about $250.
Again, that's a
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2 coverage question and that's why spectrum is an 3 important part of this. 4 I don't want to pre-judge the conversation We only get a five-minute
5 we're going to have later.
6 head start before the hounds get released, but I think 7 some of the issues that are important in my mind for 8 spectrum is that we need a mix of spectrum in order to 9 bootstrap these businesses. 10 spectrum at 2.5, 3.5. There needs to be
But there also needs to be
11 spectrum below 2.5 gigahertz in order for companies to 12 get going. 13 Below 2.5 gigahertz is code. It's code for
14 700 and, therefore, there needs to be progress -- and 15 there's a lot of work going on in this building and in 16 many other places about accelerating the transition, 17 the broadcast spectrum and allowing agile use of 18 radios in that spectrum. 19 spectrum? What will we do with that
I think it's good to have a mix of licensed
20 and unlicensed usages for a variety of reasons. 21 And, also, last but not least, to make sure The FCC and the NTIA
22 that we have global alignments.
23 of industry did an amazing job in the last couple of 24 years with ultra wideband and with the 5 gigahertz 25 allocation to ensure that the U.S. remains the leader Heritage Reporting Corporation (202) 628-4888
1 in these technologies.
But one can only do that with
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2 a colonization of business, technology and policy and 3 that's what I look to this group to contribute to. 4 Thank you. 5 6 much. 7 Next we have Guy Kelnhofer, who is the CEO COMMISSIONER ABERNATHY: Thank you very
8 of NextNet Wireless and this is a company that is an 9 industry leader in broadband wireless access. Thank
10 you for joining us and we look forward to hearing from 11 you. 12 MR. KELNHOFER: Thank you,
13 Commissioner Abernathy. 14 I'd like to thank John Muleta from the
15 Wireless Bureau for the invite to speak before you 16 today. 17 Let me talk about our vision. Imagine
18 getting on a plane in Montreal, Canada and getting off 19 a plane in Rio de Janeiro and having an device that 20 fits inside your briefcase that allows you 21 instantaneous voice and data communications, including 22 video streaming, voice over IP and ASL and DSL speeds 23 and better? That's here today. That is our vision.
24 That's we've created.
Imagine like Mr. de Vries said,
25 the need to -- to eliminate the need for a truck roll, Heritage Reporting Corporation (202) 628-4888
1 the need for software in your computer, the need for 2 multiple visits from the cable guy. 3 It's here today.
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We've spent four years developing this We've been selected three times for
4 technology.
5 national employment, including Canada, Mexico and 6 Brazil. As Chairman Powell said today, the vision for
7 this technology is the ability to deliver very secure 8 communications at very high speed. Imagine driving
9 150 kilometers per hour in your car and being able to 10 download multiple sessions over the internet. 11 doing that today. 12 This gives us the ability to completely We're
13 change the economics for public safety 180 degrees. 14 As Chairman Powell indicated, after the changes of 15 post-911 that's a preeminent that broadband wireless 16 technology find its nitch within the security 17 applications. We have the ability to change the We're going from uniband public The ability to
18 economics today.
19 safety to broadband public safety.
20 deliver to police over 9 percent of the dollars in an 21 actual solution and still spending that money for 22 software for spoofing compression, TCP application 23 spoofing and everything that is required by now. 24 One of the challenges we face as an
25 industry, first and foremost, is the MPRM that sits Heritage Reporting Corporation (202) 628-4888
1 before the Commission today and the speedy resolution 2 for that MPRM. We all are hopeful that the result
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3 will relieve enough channel bandwidth to still be able 4 to deliver broadband services regardless of modulation 5 techniques we might use, whether that be 4 quam, 16 6 quam or 64 quam. If the pipe becomes too narrow, the So that is one of the
7 benefits of broadband are lost.
8 important things that we need to really focus on today 9 as far as what happens in the imperium. 10 The second and more important thing is As we've
11 movement with the major spectrum holders.
12 said, we've managed to be selected now for both Canada 13 and Brazil. And what's happened in the U.S. has been
14 a very unique situation where, instead of waiting for 15 the 600-pound gorillas to move, there's been a ground 16 swell of small communities, rural communities that are 17 interested in deploying broadband and they're 18 interested in doing it over a licensed spectrum 19 because of the problems associated with unlicensed 20 spectrum with the noise floor, interference -21 potential interference coming on line. 22 These communities are struggling to keep
23 their economies strong, to keep their economies 24 vibrant. They're struggling with issues like We're deployed in six cities today Heritage Reporting Corporation (202) 628-4888
25 depopulation.
1 across Iowa.
Iowa has suffered from depopulation.
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2 Iowa is looking for any solution to keep their 3 economies vibrant and strong. We see the same things
4 in New Mexico, in Michigan, in Minnesota, in Texas, in 5 Arizona, in other states where it applied today. 6 communities are looking for a solution. 7 looking for leadership. They're All
They're looking for a way to And, for that,
8 keep their population stable and grow. 9 they need access to the internet.
They need
10 alternative solutions other than what are available 11 out there today. 12 Finally, as we move forward, there's the We believe very strongly in the
13 issue of standards.
14 standards process and we believe that's one of the 15 ways in terms of Moore's Law and the economy of skill 16 will be able to drive pricing down within the 17 marketplace. From that standpoint, we have driven
18 very, very closely to follow the Wimax standard and 19 ensure we are going to be interoperable now and in the 20 future and we stack up very closely today in that. 21 You can pass the 802.16 or 802.20. We're OFDM. We're Our
22 nearly there.
Our air link is TTD.
23 capacity is 12 megabytes over the air.
We have the
24 ability now, which is a separate standard from 16, 25 which is actually 20. So we think standardization is
Heritage Reporting Corporation (202) 628-4888
1 important.
We think that's another key driver in this
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2 space and we think it's imperative that all of the 3 vendors drive towards interoperability in the future. 4 5 Thank you very much. COMMISSIONER ABERNATHY: Thank you very much
6 and thanks for coming. 7 Next we'll hear from Margaret LaBrecque and She's chair of the Regulatory
8 the Wimax forum. 9 Taskforce.
And, in response to some of the concerns
10 just expressed by Kelnhofer, she's been working on 11 interoperability in standards. 12 13 MS. LaBRECQUE: So, Margaret, welcome.
Thank you, Kathleen.
Well, from the perspective of Intel,
14 broadband access is without question the number one 15 driver of demand for our primary product, which is 16 microprocessors. Therefore, it's very natural for us
17 to be interested in broadband wireless access, 18 broadband access in general. 19 Certain business are based upon value It costs Intel upwards of $40 million The
20 manufacturing.
21 to create a single generation of a single chip. 22 availability of cost effective production to
23 manufacturers of broadband wireless access systems has 24 been a huge issue in this industry. We believe it's
25 been the primary -- one of the primary issues holding Heritage Reporting Corporation (202) 628-4888
1 this industry back.
If we do some simply math --
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2 although it may cost Intel $40 million to develop and 3 market a chip, if you're developing your own chip, you 4 may be able to do it for 15 or $20 million if you can 5 only use it yourself void of a global standard in 6 place. 7 If you sell 200,000 units of your product in
8 a year, which for this industry, which has been driven 9 by innovative companies, such as the ones here today, 10 $200,000, historically, would have been a good unit 11 run for a year. Divide $20 million by 200,000 and
12 you've just added $100 to your cost of your system. 13 You know that by the time this system ends up in the 14 consumers hands, typically, it's a two to three X 15 increase in price. So you just added 250 to $300 to
16 the price the consumed system, meaning you have lost 17 the chance for explosive growth in this industry. 18 What's necessary for Intel to be involved in
19 this market is a global standard and we see that in 20 IEEE 802.16. 21 IEEE. Some of you may be familiar with the
If you're not, some of our favorite technology, Wi-Fi is 802.11. So, we feel
22 internet, is 802.3.
23 that the IEEE is a very credible, global standards 24 body to back this effort. But a standard itself
25 doesn't buy you much because any vendor can say Heritage Reporting Corporation (202) 628-4888
1 they're compliant to the standard and without a body 2 like the Wimax Forum to actually certify that they are 3 compliant, it won't be a benefit for service providers 4 of the operators actually deploying this equipment. 5 The key litmus test for compliance to the
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6 standard is that you are actually able to interoperate 7 with another vendor's equipment. What that means for
8 the service provider is that they can mix and match 9 equipment within their network from different vendors. 10 When you know that there's ability to mix and match
11 standards based technology is what made the PC 12 industry take off. 13 off. It's what made the internet take
It's what made Wi-Fi take off and it's what will
14 make Wimax take off. 15 16 I'm pleased to say that the Wimax Forum has over 100 vendors today, 100 members today, which These
17 about 40 are system manufacturers.
18 manufacturers ship well over 90 percent of all 19 broadband wireless access equipment that's shipped 20 today, of course, this is pre-standard broadband 21 wireless access equipment. 22 over 130 countries. They have deployments in
So it's my belief that we have
23 the question, the momentum for building the forum to 24 take this industry to the next level. 25 As we know, anyone involved in hi tech knows Heritage Reporting Corporation (202) 628-4888
1 that it's globally competitive and it's really not 2 possible to survive unless you can compete on all the 3 relevant vectors and one of those key vectors is the 4 availability of spectrum, good spectrum. 5 spectrum is equal. Not all
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The U.S. has been a progressive
6 leader in the area of license exempt spectrum and, of 7 course, this is why Wi-Fi is so successful today. 8 Wimax operates in both licensed and licensed And, therefore, not only are the
9 exempt spectrum.
10 efforts that have happened to gain more access to 11 license exempt spectrum very beneficial for us, but, 12 also, the efforts to gain access to more licensed 13 spectrum for broadband wireless access, especially, in 14 lower frequency bands, this is a huge benefit. As an
15 example, 700 megahertz, you may need 1/10th the number 16 of base stations that you would require at, say, 17 2.5 gigahertz. 18 This is a huge cost advantage.
If you're going to really roll this
19 broadband wireless access out globally in a cost 20 effective manner, we must have access to good 21 spectrum. 22 Thank you. COMMISSIONER ABERNATHY: Thank you very
23 much, Margaret. 24 And now we will turn to Brian Markwalter He's
25 from the Consumer Electronics Association. Heritage Reporting Corporation (202) 628-4888
1 Senior Director of Technology and Standards, which 2 we've been talking about and he's been working in many 3 different inter-industry venues on behalf of CEA. 4 Thanks for coming today. 5 what you have to say. 6 7 MR. MARKWALTER: Thank you. We look forward to hearing
29
Well, I'm happy to be here on behalf of Our mission is very
8 Consumer Electronics Association. 9 simple.
We promote growth to the consumer technology
10 industry and, as a result of that, we've grown 11 phenomenally, actually. We have now more than 1500
12 corporate members that represent every aspect of 13 consumer technology -- audio, video. And the things
14 that are important in this area, both wireless or wire 15 line communications, information technology, home 16 networking and our company's also sold every part of 17 the food chain of the consumer technology cycle, the 18 design, development, manufacturing, retail, service, 19 and installers. 20 We have virtually every part of it.
It's a $90 billion industry in the U.S. and I'm
21 we produce and sponsor the International CEA. 22 sure many of you have been to it.
It's quite a sight It's a very
23 to see and the Commissioner's been there. 24 interesting invent.
It's eye candy for those who But, more importantly, the
25 enjoy this kind of stuff.
Heritage Reporting Corporation (202) 628-4888
1 profits that are made from that show are funded back 2 into work to grow the industry, to fund things like 3 training, technology and standards, advocacy work and 4 policy work. So, CEA has had a long history of
30
5 working with the FCC in many bureaus and departments. 6 We work with OHE, with Wireless Telecommunications,
7 with your Consumer and Government Affairs and 8 Strategic Planning and Policy bureaus. 9 familiar territory for us. So this is
I suspect somebody is over
10 here every week or so dealing with various issues. 11 Now CEA, in terms of what we do outside of
12 pure regulatory work and interaction with the FCC, we 13 conduct training. We might get to that later on, I'm not sure we've touched on We also, somewhat in response
14 perhaps, in questions. 15 that subject just yet.
16 to the increased activity of the FCC, I suppose, in 17 dealing with spectrum issues, we created a spectrum 18 policy taskforce under our Government Affair Council 19 that we use to develop our industry position by 20 talking to member companies and we have since last 21 year added a technical to advise them so that our 22 filings can have both a technical and a policy 23 component to them because these are very complex 24 issues we're getting into now, especially, was we try 25 to maximize use of spectrum. Heritage Reporting Corporation (202) 628-4888
1
We are, and I'm actually very happy, so far
31
2 all three speakers have mentioned a pro-standard 3 stance. We're actually an ANSI accredited standards I suspect the only one on the sessions Now we are not a Certainly,
4 organization. 5 today.
So we develop standards.
6 primary developer of wireless standards.
7 OET is imminent in that area in lands and man 8 technology and others in other areas. 9 But one of the things we do is take those
10 standards and then apply them in consumer technology. 11 In fact, we have a program going on now in one of our
12 groups that -- it's kind of a two-phase program where 13 we're looking at how to compare the various wireless 14 land technologies against the needs of the consumer 15 electronics industry. 16 measurement approach. 17 These technologies are developed and So it's more of an analysis and
18 standards are created through a complex, sometimes 19 difficult, process. But what's interesting, seeing
20 how well they work, particularly, for things like 21 video applications. You'll probably notice we do a
22 pretty good job of IT applications, but we haven't 23 really addressed all the consumers connectivity 24 problems just yet. 25 We also, I think, if you look at our Heritage Reporting Corporation (202) 628-4888
1 industry and how things are done, and this certainly 2 aligns, I think, with what Pierre and Margaret said. 3 Our industry is on a constant search for these winners 4 and it's an expensive process for one and one that 5 they undertake in search of ongoing products to 6 introduce into the market. But what you'll see is
32
7 that, typically, new technologies emerge as separate 8 devices as you would notice with wireless land cards. 9 And then you get some integration in the platform as
10 we've now seen with laptops where it's integrated into 11 the platform. And then, ultimately, you get some what
12 I would call cross-over integration where you get, for 13 example, cell phones and Wi-Fi being integrated 14 together and that's an interesting phenomenon and one 15 we see repeated. 16 Now that does tell us certain things about One is
17 how we need to think in a regulatory sense.
18 that it's increasingly important for us to consider 19 global aspects. I think this is a point made before
20 that you have to sell a lot of things and markets are 21 global now, so we need to think about whether these 22 technologies can be deployed worldwide. It's very
23 important to be able to recoup the cost of the 24 technology and semiconductor development. 25 There are many failures and, for the most Heritage Reporting Corporation (202) 628-4888
1 part, we don't hear a lot about the failures and the 2 companies try a lot of different things before they 3 get the winners. And, actually, the FCC has done a
33
4 fantastic job of creating fertile ground for that 5 experimentation. The unlicensed devices are allowed
6 to operate on a non-interference basis and the work 7 that's gone on recently is very commendable. It's
8 kept us very busy, but it's great for us to see the 9 attempts to really open up spectrum and make it 10 available for consumer technology devices. 11 12 much. 13 Now our last speaker is David Reeder from He's the Vice President of Sales It's COMMISSIONER ABERNATHY: Thank you.
Thank you very
14 Airspan Networks.
15 and he does broadband wireless access equipment. 16 a key part of this entire puzzle. 17 research.
We can have all the We can have
We can have all the spectrum.
18 lots of equipment on the shelves and then it can just 19 sit there. So the next piece is, how do you bring it
20 to the consumer and how do you make it an integral 21 part of their daily lives? 22 David. 23 24 25 course. MR. REEDER: Thank you, Commissioner. So thank you very much,
I appreciate the opportunity to be here, of Airspan Networks is a global supplier of Heritage Reporting Corporation (202) 628-4888
1 broadband wireless access equipment.
We started in
34
2 1992, '93, predominantly dealing in the international 3 markets because, again, the spectrum question. We
4 have the majority of our products deployed in the 3 5 and 1/2 gigahertz internationally with some large 6 national deployments, mainly, being in the rural 7 markets again, fitting the need where broadband is not 8 met today in places like Ireland and New Zealand and 9 Asia Pacific and Africa. 10 We are excited to see our entire industry As
11 grow rather significantly over the last few years.
12 a public company, we're certainly watching and waiting 13 for the explosive growth opportunities and I think 14 we're starting to see that now. You know, projections
15 for our company are to be over 100 percent increase in 16 sales from last year. So we're very pleased to see
17 this growth in our industry now. 18 The challenge for our company has been, as
19 we've been focusing on international markets, is how 20 and when to break into the U.S. market? The challenge
21 of available license spectrum for broadband wireless 22 access, fixed wireless access has been one that we've 23 been working on and I applaud the FCC's efforts in a 24 couple of key areas. 25 break into U.S. It's really helped us start to
One is the secondary market for
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1 spectrum, allowing other folks to get a hold of that 2 spectrum and use it in the areas that they want. 3 other idea is to use or lose it so we don't have 4 people just squatting on spectrum. That's really The
35
5 initiated a lot of the efforts that we've been working 6 on deploying equipment into. 7 So the challenges that -- if I agree with
8 all the comments that have been said here and I don't 9 want to repeat. If I bottom line it for myself, in
10 our company, I see that, again, CPE cost and the 11 spectrum to work are the issues that we're dealing 12 with today as far as seeing this explosive growth. 13 We were very pleased to see the 700
14 megahertz license go to market and we took a very 15 aggressive stance in getting products to market very, 16 very quickly. And I would say right now that's the
17 largest driver from a product technology spectrum 18 perspective that Airspan has in the U.S. right now. 19 The challenges that we run into when we
20 start talking with operators about deploying broadband 21 wireless access are the balance between available 22 spectrum, unlicensed spectrum, say, in the 5.8 23 gigahertz where there's lots of good spectrum to use. 24 The challenge is being that the spectrum lends itself So the
25 very much to a line-of-site application.
Heritage Reporting Corporation (202) 628-4888
1 desire to use some lower than 1 gigahertz, 900 2 megahertz, for example, is very, very high. 3 tremendous desire to use that spectrum. We see a
36
We also see a
4 tremendous amount of interference when we try to start 5 to deploy in that spectrum. So the 700 megahertz
6 really kind of excites us and there is the issues of 7 licensed spectrum which the target market for Airspan, 8 historically, has been the telephone companies, the 9 traditional ILECS and the CLECS and R box, both here, 10 domestically, and around the globe. And the
11 challenge, of course, in the unlicensed space is can I 12 guarantee a long-term service in that unlicensed space 13 and what protection do I have and the challenge that 14 there are unknowns in terms of going forward and 15 investing in that infrastructure is hard for these 16 guys to swallow. 17 So the idea of opening up more spectrum in
18 the 700 megahertz band, just from a pure physics point 19 of view, lends itself, again, very well to very large 20 footprint and also non-line-of-site. Yes,
21 non-line-of-site can be done in the higher 22 frequencies, but, as we've already discussed, the 23 challenges increase rather dramatically. 24 So, anyway, Airspan is pleased to We're members of the
25 participate in this discussion.
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1 Wimax Forum. 2
We're very much pro-standard.
So, Glen,
37
you can add us to that list of yours that you've got And we see that moving towards 802.16, both
3 going.
4 the D and E standards, the fixed and the mobile 5 standards and the Wimax Forum kind of pushing that to 6 market, we'll call it, not just be a technology 7 standard, but also pushing them to market, helps solve 8 that CPE cost issue and does help drive kind of the 9 spectrum problem in terms of -- I think the 802.16 10 body chose a very robust technology platform, the OFDM 11 platform that Guy mentioned, to get as many 12 technologies in the non-line-of-site environment as 13 possible. And, clearly, we're not going to see the
14 real explosive growth until we see very low cost CPE 15 that's in a non-line-of-site environment as Pierre 16 mentioned as well. 17 The truck roll is certainly doable and we're
18 working with lots of companies that are deploying that 19 model today. But, in order to get to the millions of
20 subscribers per network as opposed to tens of 21 thousands or hundreds of thousands as we have today, I 22 think those are some of the challenges that we still 23 have to work through. 24 COMMISSIONER ABERNATHY: Great. That gives
25 us a bit of a background of what folks seem to be Heritage Reporting Corporation (202) 628-4888
1 talking about today.
It sounds like, if I were to sum Although, I've So, just
38
2 this up a little bit, more spectrum.
3 never heard any demand for less spectrum.
4 understand, that's terribly original, but more 5 spectrum and it sounds like both licensed and 6 unlicensed, interoperability, meaning global 7 standardization, mix and match equipment with the 8 recognition that we really are talking about a global 9 market, particularly, when we're trying to drive down 10 the prices of the equipment so that it's available to 11 more people, both urban and rural. 12 And then, finally, the cost of the How do you get the scale and
13 equipment, the CPE.
14 scope and how do you drive the technology in such a 15 way that you still recover all of the research costs, 16 but then you bring it down to a point where you can 17 really bring it out to large groups of users globally? 18 And I guess the first question I'd pose to
19 all of you is, how do we technologically -- we've been 20 trying to crack this nut for a while and it sounds 21 like we've jumped some hurdles recently. It sounds
22 like the equipment is new and we resolved some of the 23 problems where there was an off-the-shelf equipment 24 for some of the first users. And we saw three years
25 ago a number of folks headed down this path, a number Heritage Reporting Corporation (202) 628-4888
1 of them went under. 2 robustness. 3
There didn't appear to be the
39
The equipment didn't appear to be there.
What's happened over the last two to three years Where are we when it
4 that's made the difference?
5 comes to the technology, the viability of the 6 technology and the reliability of it that's really 7 changed, it appears to me, maybe over the couple of 8 years? 9 10 that. And I throw that open to anyone. MR. KELNHOFER: I'm going to try to answer
What do carriers want, and I believe David was But, if we're
11 addressing some of those issues.
12 talking about ILECS or even CLECS, why has the 13 technology changed? It's absolutely mandatory if
14 you're going to get this out into a large consumer 15 market, whether that be Soho or even medium 16 enterprise. But you have to be able to deliver a non-
17 line-of-site solution. 18 So what's the first key thing that changed The actual ability to deliver true,
19 in technology?
20 non-line-of-site, no truck roll, as I said earlier. 21 This is really ILECS major carriers want to see. 22 want to eliminate truck roll. 23 They
Well, it's gone today.
The need to have direct line-of-site, hence, the need Well,
24 to put an antenna on the subscriber premise. 25 that's gone today. That's also gone.
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1
Secondly, the ability to deliver fixed
40
2 service, but the ability to deliver nomadic 3 portability. The ability to take a device not yet
4 embedded in the computer, but, hopefully, in the 5 future, as Margaret was speaking to, that would become 6 reality. But today, they actually take your device
7 and put it in your car, put it in your briefcase, get 8 in a plane, fly to another city if that service is 9 available. As I often remind my team, you can't tie
10 your cable modem to your car and down the road at 175 11 kilometers per hour. But you certainly can do that
12 with the technology that's available today. 13 So, from that perspective, I think those are
14 really the key features that have changed the 15 landscape. 16 Thank you. COMMISSIONER ABERNATHY: Margaret, maybe you
17 can add to the discussion.
This idea of moving Can we, in fact, move cellular I had
18 seamlessly, are we there yet?
19 from, say, a Wi-Fi network to wide area
20 network or wireless to a wire land platform.
21 heard years ago, 10 years ago there is a vision of a 22 smug phone that would naturally seek out the lowest 23 cost reading and, if satellite was your only available 24 technology, it would go satellite. But, if it could
25 go cellular, it would seek out cellular or land line. Heritage Reporting Corporation (202) 628-4888
1
Are we there yet and how fast are moving in that
41
2 direction? 3 MS. LaBRECQUE: Well, I would say that we're
4 not there yet, but the efforts are in place to take us 5 there. And, actually, they've been in place for the Intel and other companies have
6 last several years.
7 been working to create a seamless infrastructure 8 between Wi-Fi and 3G, seamless hand-off, a common way 9 to authenticate users. We've been doing it through a
10 number of global standard bodies, including the ITU 11 and the ITEF. 12 Now, when we talk about Wimax, the 3G, often
13 we're talking about what's known as the air interface, 14 which in the seven-layer network model, OSI model, 15 that's layers 2 and below. What we're talking about
16 when we're talking about a seamless roaming 17 infrastructure is abstracting layers 3 and above so 18 that any air interface, whether it's Wi-Fi, Wimax, 3G, 19 can bolt into a common infrastructure from roaming and 20 hand-off. 21 Now, locally, we saw this work between Wi-Fi So we're on the way.
22 and 3G about three years ago.
23 And it's our expectation that we will be able to bolt 24 Wimax into that same infrastructure. We certainly
25 wouldn't want a service provider who, perhaps, is a 3G Heritage Reporting Corporation (202) 628-4888
1 service provider for mobile voice and wants to add a 2 Wimax network for high-speed data, assuming you really 3 want them to have to have two billing systems. So I
42
4 would say that we're a few years off, but we're headed 5 in that direction. 6 7 COMMISSIONER ABERNATHY: Okay. Thank you.
Well, then that leads to the next question,
8 I think, for Peter and probably Brian and I think you 9 brought this up, is we'll have this very smart, very 10 useful equipment and then it won't work. So what do
11 we do about the training or the ability to take this 12 into mass market deployment to folks who don't have 13 the ability to take classes on how to use it or how to 14 fix it or how to make it work? And how do you develop
15 it in such a way that it becomes as friendly as, say, 16 a wireless phone that still today a lot of people just 17 use for voice because they haven't quite cracked the 18 nut about all the other services. 19 them to want these other services. And, yet, you want You want them to
20 start using all these other applications, but we need 21 it to work. 22 MR. de VRIES: Yes. I'll leave the training
23 comments to Brian.
I think, in terms of the user
24 experience, the catch phrase that I hear amongst my 25 company is it just works. That's what we have to get
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1 to.
It's actually very hard to demo when it just And so I think
43
2 works because there's nothing to see.
3 the reason why we're talking about this is we're not 4 there yet. I think there's been a lot of work, and,
5 again, 802.11 and Wi-Fi has been a good test bed for 6 us. If you flip open your laptop these days, it's a
7 lot easier to just associate with the hot spot. 8 There's work being done between service
9 providers and software providers and hardware people 10 around how you can associate automatically with the 11 service provider of your choice. So those things,
12 ultimately, for the consumer, need to be part of a 13 invisible experience. 14 The other question, though, I think is, in
15 terms of "it just works" I think it touches on the 16 range of devices you mentioned or the uses you 17 mentioned, Commissioner, was it the diversity that is 18 going to be important here. One of the questions --
19 people say, well, what's going happen with all these 20 standards? The great thing about standards is that
21 there are so many of them. 22 23 (Laughter.) MR. de VRIES: And I don't think that's
24 going to change because, increasingly, as we become 25 more sophisticated, we're trying to solve more and Heritage Reporting Corporation (202) 628-4888
1 more problems for customers of a whole variety of 2 sorts. But, at the same time, the requirements, in And I think
44
3 terms of the spectrum, are diverse, too.
4 what you may be hearing, at least, on this panel is 5 that we need a diversity of solutions. 700 is good. A higher
6 It's not the only thing that's required.
7 frequency spectrum is good, too, for consumers because 8 that's what you need to get capacity. If you want to
9 provide really high band width service, you need high 10 frequencies. But, in the same way that the cellular
11 companies, when they started years ago, started in 12 lower frequencies with a few towers serving a few 13 people and then moved to smaller cells, higher 14 frequencies. We need to do the same things in order
15 to provide affordable connected computing to 16 everybody. 17 MR. MARKWALTER: Nobody seems to be taking
18 up training here.
And we've, I guess, just out of
19 need, and this has come up, both in discussions, 20 particularly, about HDTV and why people don't 21 understand it and what's happening to adoption. 22 we see it in every part of our industry. But
And CEA
23 ended up creating online training, a facility called 24 CE Know How.com and it's targeted our retailers to 25 help train sales people to be able to explain the Heritage Reporting Corporation (202) 628-4888
1 things they sell.
Manufacturers make a valiant
45
2 attempt at providing training materials into the 3 retail channel, but it's not sufficient in many cases 4 and the staff in some retail environments -- you know, 5 there's a lot of turnover. There's nothing new about
6 it and the products in technologies are just 7 tremendously complicated. You can't talk about the
8 things that make it all work and the consumer doesn't 9 want to know about it either. 10 We also do things related to what we call
11 take-home rating programs to help identify how ready 12 this mainly in the installer and information 13 technology home networking kind of market, but how 14 ready the home is to accept broadband and IT services. 15 But, you know, we're sometimes our own worse enemy in We go through
16 this process of searching for winners.
17 a lot and we may be a little bit of a victim of 18 Moore's Law in this case. We can do many, many things
19 in these platforms and very small device now and we 20 search around and some companies get it right. 21 And one of the interesting parts is that
22 manufacturers tend to reserve that area for themselves 23 and for their differentiation. We're full of
24 contradictions in our industry where we want standards 25 so that we can get enough volume to make the Heritage Reporting Corporation (202) 628-4888
1 semi-connector and deployment sheet, but we want to be 2 able to differentiate on what's left, which is 3 typically useability and user interface. So it's
46
4 never easy and we have a lot to do on training and 5 useability. I think our industry works hard at it and
6 it actually getting better at trying to cooperate on 7 the useability aspects of it. 8 9 on that. 10 11 COMMISSIONER ABERNATHY: MR. REEDER: Sure. MR. REEDER: Just a couple of quick comments
As manufacturers, we use forums
12 such as the Wireless Communication Association where 13 they bring operators and vendors together to discuss 14 these kind of forums and these type of issues. And,
15 clearly, as a manufacturer you have to get your hands 16 dirty. You have to be involved in the deployments
17 over very large scale networks with tens of thousands 18 of subscribers to understand what those issues are in 19 terms of, okay, when this shows up in one's home, how 20 do they turn it on, plug it, use it? 21 back from us I think very good. And so, the push
The communications
22 that we're getting back from the operators saying this 23 is what we need. We need your help to get there.
24 We're working on our part on the manufacturing side to 25 do that as well. Heritage Reporting Corporation (202) 628-4888
1
COMMISSIONER ABERNATHY:
That's great.
And
47
2 this then leads me to believe, based on everything 3 you're saying, we're working on standards. 4 working on equipment. We're
We're getting spectrum out
5 there, yet, we continue read that, according to 6 various studies, that the U.S. is ranked relatively 7 low compared to other countries when it comes to 8 certain measures of international broadband 9 availability. 10 David, I know that you mentioned you've gone
11 into other countries and have only recently entered 12 the U.S. market, too. So how are we doing? Are we
13 really behind or are the measures just different for 14 the U.S. as compared to other countries? And, if we
15 are behind, what more can we do short of making it 16 free to everyone. 17 Short of that, what more can we do?
David, why don't you start with that and
18 then I'd be happy to have anyone else jump in. 19 MR. REEDER: Sure. I mentioned we've been
20 kind of waiting to get in the U.S. market until about 21 a year and a half ago and some of the challenges were 22 spectrum. Some were technology. The U.S. market for
23 us, when we look globally, is so very unique in terms 24 of the customers. 25 particular. The networks need to be very We're
They need to be very stable.
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1 dealing in networks in locations in Africa, for 2 example, where there is not existing service at all. 3 So the quality of service or the need to have very low 4 priced communications to match DSL offering isn't 5 there. So we're bringing the very first
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6 communications into some of these markets and the 7 demand and the appetite, frankly, for broadband is 8 rather overwhelming in those locations. 9 And so what we see in the U.S. is that the The
10 rural markets are Airspan's focus for the U.S. 11 rural markets also have this demand.
I mean, Guy
12 talked about the issues in Iowa, for example, that his 13 company and their deployments are helping to address. 14 But we see the demand in those areas is very high.
15 But we also see that the expectations are very high in 16 terms of what type of service they get and how it 17 matches up with maybe some other competitive 18 offerings. 19 The economics here in the U.S. are very
20 unique as well compared to many other places in the 21 world in that, truck roll installation labor is 22 extremely high. It other places it's extremely low.
23 And, in fact, some operators prefer to roll a truck 24 because they get to go touch the customer and they get 25 involved there and it's really -- it doesn't add a Heritage Reporting Corporation (202) 628-4888
1 whole lot their total subscriber addition cost. 2 in the U.S. market, it's different from that 3 perspective as well. 4
But,
49
What we're focusing on to help address this
5 problem is clearly through -- I don't want to beat 6 this drum too much, but, clearly, through the 7 standards process and seeing our products interoperate 8 with companies like NextNet and others that we can 9 drive cost down and we can see very flexible networks. 10 The other thing that we see is, from a
11 network perspective, people are choosing one frequency 12 and deploying there. They're taking platforms that
13 operate in multiple frequencies and using that 14 flexibility as much as possible. So now that we have
15 technology that can help address some of those 16 problems, I think we're starting to see that improve. 17 But, again, we still have these nuances of DSL prices
18 jumping between 30 and $50 a month and the challenge 19 to deploy a fresh network from the ground up is hard 20 to address in those kind of markets. 21 COMMISSIONER ABERNATHY: Can you talk a
22 little bit about some of the price plans that you've 23 seen globally as compared to what -- we know what it 24 is here in the U.S. 25 MR. REEDER: Well, it's hard to say. We
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1 have some markets in Japan, for example, where they're 2 offering pretty close to a megabyte per second 3 service, close to a T1 service for around $30 a month. 4 And we've heard that there's government initiatives
50
5 in some countries to even subsidize the cost of these 6 networks to get things rolling. So we, as vendors,
7 are taking advantage of some of that and helping us 8 get to market and get some of our scale and get access 9 to large networks. But we see that -- it varies
10 rather significantly. 11 COMMISSIONER ABERNATHY: Would anyone else
12 like to comment a little bit about the U.S. versus 13 deployment in other countries? 14 MR. de VRIES: A few observations from One of them is that, as
15 conversations that I've had.
16 David pointed out, the U.S. has some geographic and 17 demographic peculiarities. Although, in other ways It
18 it's similar to rural deployments everywhere. 19 doesn't surprise that others have come into the
20 market, narrowing the U.S., once we have 700 megahertz 21 to operate. And, to your point, Commissioner, nobody
22 ever wants less spectrum. 23 If you offered me a trade between 10
24 megahertz at 700 versus a gigahertz at 60 gigahertz, 25 guess what I'd take? And so it's a question of what
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1 the appropriate spectrum is.
The other points, which
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2 I think, perhaps, relates to this and it will be 3 interesting to hear what other companies have seen, is 4 the cost of back haul is sometimes an issue in rural 5 areas. That's something where wireless helps, too.
6 Now you can see that you have a combination of, let's 7 say, 5.8 unlicensed to back haul with 700 licensed of 8 four of the last mile is also something that will help 9 kick start this market. 10 11 12 this. 13 MR. KELNHOFER: I think that David covered COMMISSIONER ABERNATHY: Great. Thanks.
Anyone else want to chime in before we leave
14 it very well.
I mean, we're also deployed in a lot of I would say
15 the same markets that Airspan is also in.
16 this, there has been a lot of discussion -- obviously, 17 there's been a great deal of effort in the U.S. to 18 create a national broadband policy. In some respects,
19 I think we are a little bit behind other parts of the 20 world, including places that are even less developed 21 than we are. 22 I've actually, and I think David can confirm
23 this, I mean, we have been, as I said, selected for 24 national employment now three times. And, on a
25 comparable scale, if you don't get GDP, just any Heritage Reporting Corporation (202) 628-4888
1 demographic factors you want to look at, obviously, 2 the U.S. is somewhat ahead in both Mexico and Brazil. 3 But both of them seem really driving the national
52
4 policy at a faster rate than we are here and that's 5 not a criticism. I mean, we have a lot of challenges
6 and, as Pierre said, we also have some very big 7 peculiarities based on our overall geographic size and 8 so forth. 9 I think that the most important thing for us And I have very strong We specifically
10 is, again, access to spectrum.
11 concerns about unlicensed spectrum.
12 don't play there and Airspan doesn't play there 13 either. And, if you talk to people who have been in
14 the industry a long time and you really understand -15 and really are RF junkies, so to speak, the issues 16 with having unlicensed spectrum permeate more problems 17 than they really create good service to the consumer. 18 19 It's like having no rules on the highway. COMMISSIONER ABERNATHY: Although, what
20 we've heard is that there are parts of the unlicensed 21 uses that have clearly added value and that they can 22 be a piece of the solution, but maybe not the only 23 solution. And you're saying that you never see it as
24 a valuable way to allocate spectrum for the U.S. or, 25 given your business plan, you prefer license? Heritage Reporting Corporation (202) 628-4888
1
MR. KELNHOFER:
Well, no.
You're right. If you talk
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2 Must be careful about generalizations.
3 about Wi-Fi or 802, that's a real success one, but 4 you're talking about a rather small sale radius. 5 if you try to expand that sale radius, then you're 6 really not delivering the non-line-of-site anymore. 7 If you're using 5.7 and 5.8 for back haul as part of 8 your solution to lower your back haul cost, that's an 9 excellent choice. If you're talking about going up And,
10 about 5.7 or 5.8 or anything really above 3.5 and try 11 to play a non-line-site solution over a wide area, 12 over a man, then you're talking about some pretty 13 severe economic penalties and some pretty severe lost 14 characteristics at that frequency range. 15 16 COMMISSIONER ABERNATHY: MR. REEDER: Okay.
Can I just make one other
17 comment here? 18 19 COMMISSIONER ABERNATHY: MR. REEDER: Sure.
We are seeing very successful So
20 unlicensed networks being deployed, too, as well.
21 I agree, clearly, the operators always prefer licensed 22 spectrum if they can it and if they can get at the 23 right price. But the good news is that we're seeing,
24 again, a variety of frequencies used, whether it's 25 unlicensed for back haul or even, say, unlicensed for Heritage Reporting Corporation (202) 628-4888
1 data applications and use your licensed spectrum for 2 that higher, sensitive communications like voice 3 applications or security applications. I don't want
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4 to, certainly, short change the hundreds of networks 5 out there deployed in the unlicensed band. 6 7 COMMISSIONER ABERNATHY: MR. de VRIES: Okay.
I'd like to echo that comment
8 because it seems to us as if unlicensed can be an 9 interesting lever. It allows people who are trying to
10 deploy to operate in both licensed and unlicensed, 11 obviously, the trade off that you have is that in 12 unlicensed you have interference protection, but no 13 more barriers to entry. On the other hand, if you go
14 licensed, you have much better protection, but you 15 have to fork out up front for the spectrum. And so, 16 again, the mix of the regimes seems to us to be very 17 useful. 18 It's interesting that people who are
19 actually offering a service in license can use 20 unlicensed as well as anybody and probably better. 21 Now there is the issue that Guy raised about 22 interference. And I think that one looks at the rules
23 that we have and will continue to have in 2.4 and in 5 24 and so on, there are issues with interference. 25 are activities going on in various standards Heritage Reporting Corporation (202) 628-4888 There
1 organizations, industry organizations, looking at 2 coexistence between various different systems that are 3 operating in unlicensed bans. 4 And, if we're looking at low frequency uses,
55
5 let's say 700 with unlicensed, it's going to be 6 necessary to have spectrum rules showing etiquettes, 7 for example, that allows systems to coexist without 8 prejudging what the technology is that people want to 9 build and implement. 10 COMMISSIONER ABERNATHY: Well, that's the
11 perfect opportunity to segue into some of the 12 challenges on the standards front. But, before I move
13 in that direction, I wanted to see if there's anyone 14 from the audience who'd like to ask some questions of 15 our panelist? 16 Please go over to a microphone. I think
17 this is being streamed. 18 19 Abernathy. 20 AUDIENCE MEMBER: Thank you, Commissioner
Thank you, panelists. The first thing I want to do is take just a
21 second to thank all of the panelists on behalf of my 22 colleagues on the executive committee of IEEE 802 for 23 the wonderful pitch for our standards that they've 24 made here today and the value that they provide. 25 I also wanted to just mention that we're Heritage Reporting Corporation (202) 628-4888
1 looking at a new standard related to the IMRM that the 2 Commission just adopted last Thursday for the sharing 3 in the T.V. band, using cognitive technologies for 4 regional area networks. 5 is sort of twofold. 6 One is, you know, there's mention of the And the question that I have
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7 interference issues if you're operating in the 8 unlicensed mode and that, to me, sort of begs the 9 question of what about the concept of some unlicensed 10 spectrum for certain uses that doesn't become a food 11 fight, as it were, amongst all sorts of different 12 applications and still reduces the cost of entry for 13 people that want to provide broadband services? 14 So I'd just like to kind throw that one out
15 for comment from the panelists in terms of whether 16 unlicensed with some limited set of applications 17 permitted in that spectrum, encouraging standards for 18 interoperability and coexistence. Would that be a
19 better play in the view of the panelists for some of 20 these applications? 21 22 COMMISSIONER ABERNATHY: MS. LaBRECQUE: Margaret?
Well, recently, in the Wimax
23 Forum, we've gone around the globe speaking with 24 regulators and some of them like to use the term 25 "light licensing" to refer to, I believe, what the Heritage Reporting Corporation (202) 628-4888
1 gentleman has brought out.
And where there is a
57
2 strategic need, say, to deploy broadband access in low 3 population density areas, rural areas, if that's 4 really a strategic objective for the regulator, then 5 this might justify this form of light licensing. 6 MR. MARKWALTER: I'd like to comment. We've
7 looked at that.
We looked very carefully at a lot of
8 the activities coming out your spectrum taskforce here 9 at the FCC and, in our mind, it's way hard to prejudge 10 applications and even technologies. Hardly anybody
11 gets it right the first time and that's what's been so 12 economically productive about unlicensed is that it's 13 brutally efficient at searching for the best users and 14 best technologies. 15 So we are -- I guess, the way we've put it
16 is that if there are rules that are necessary to get 17 access to spectrum that we otherwise would not have 18 gotten because you need to protect some existing 19 services, that makes sense. And, beyond that, it's
20 difficult to see that it's helpful to try to guess 21 what applications are going to be winners. 22 And, to be honest, there's not been that I think we're
23 much of a tragedy of commons, I think.
24 still somewhat self-healing because as uses go up, 25 people can pour money back into the technology and Heritage Reporting Corporation (202) 628-4888
1 more efficient protocols and more efficient 2 implementations. So we're a little bit hesitate to
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3 prejudge and say there need to be certain rules to 4 allow use of spectrum. 5 6 MR. de VRIES: The uh -Go ahead. You want
COMMISSIONER ABERNATHY:
7 to go ahead and walk up to the microphone while 8 Pierre's speaking? 9 Good. The regulators, I think, are
MR. de VRIES:
10 most effective when they focus on ends and not means. 11 And the FCC, this Commission, I think, has been very
12 cognizant of the fact that the requirement is to look 13 at what the outcomes are rather than specifying the 14 way in which the outcome is achieved. So, when
15 there's a suggestion of saying, well, we need to have 16 particular services optimized for unlicensed or 17 license exempt, I get a bit nervous because it begins 18 to smack a bit of command and control to me. 19 However, I can see a case that one could say
20 there's a category or a set of things which, at this 21 moment, we believe is important. So, for example,
22 let's say wireless, two-way data services, which 23 doesn't prejudge the kind of service. But, it can
24 well, let's say, well, if we're going to have these 25 wireless, two-way data services at low power where Heritage Reporting Corporation (202) 628-4888
1 there's not a lot of spectrum and it will propagate, 2 what are the kinds of rules that one needs. 3 I believe that one can actually get to an
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4 outcome which is light enough to allow innovation, but 5 strong enough to actually give users of the technology 6 some guarantee of a liability. 7 8 9 COMMISSIONER ABERNATHY: MR. KLANSI: Yes, sir. I'm Andy Klansi.
Good morning.
I want to shift gears for a second and ask about One of the things I've noticed in this
10 training.
11 Commission is the lack of some representation from 12 universities and academia. And, speaking about
13 training, I can remember back a few years ago the 14 adage that, in the cellular industry, they had 15 difficulty because no one knew RF. And I think the
16 comment was there was no formal training in RF in any 17 colleges in North America or very few. 18 were a couple of college in Canada. 19 So what do you say on the panel about I think there
20 bringing the technology forth, but also bringing the 21 academics and bringing the universities in to train 22 people. Train people in the truck rolls. Train
23 people on how to use spectrum.
I mean, how many How many Think about
24 people -- I'll just ask about training. 25 people's VCRs and DVDs still flash 12:00?
Heritage Reporting Corporation (202) 628-4888
1 for a second.
Now that's a technology that we all
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2 have and use, but we use it. 3 But, taking it further, what's going on, on
4 the university side, to train, to teach the technology 5 and to then drive the technology forward? 6 MR. KELNHOFER: I can tell you some of the I mean, we've There's a
7 things that we're trying to do. 8 actually instituted them.
You're right.
9 bit of a dearth in terms of good universities turning 10 out topnotch RF engineers. You'd be surprised.
11 They're not the better known schools that are actually 12 today turning out the best RF engineers. 13 Network engineers, no disrespect to the
14 software people, but network engineers are more 15 prevalent. 16 I'll just leave it at that. One of the things that we're doing -- I want
17 to answer your question -- at least, one part of your 18 question in terms of how do you track good talent is 19 we actually initiated a scholarship program with one 20 of the universities. And what we specifically do is What we
21 we call it a Grow Your Own Program.
22 specifically do is we go out and we look for talent, 23 usually in the junior year, and we offer them a 24 scholarship, plus an internship over the summer that 25 is actually sufficiently, not only to pay their Heritage Reporting Corporation (202) 628-4888
1 tuition and books, but to give them a bit of extra 2 funds so they can focus completely on their 3 engineering program. And that goal is that we nurture
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4 them into our organization and into our specific 5 needs. And, at the end of that, I've always said, So that's what we doing,
6 yes, as far as taking a job. 7 at least, in that respect. 8 9 programs. MR. REEDER:
I know there's several
The University of Colorado, for example, Virginia
10 has a very good telecommunications program. 11 Tech, as well, I believe. 12 programs there.
So I know there are some
I can speak a little more directly of I'm a graduate of the
13 the University of Colorado.
14 Masters Telecom program several years ago and I know 15 the challenge has been placing graduates into telecom 16 companies. I mean, the last few years has been rather I think there
17 tough, so they are focused, I think.
18 needs to be more dialogue with industry, saying, 19 here's where we're -- the direction we're headed and 20 make sure the programs are oriented towards that and 21 not necessarily just catching up. 22 COMMISSIONER ABERNATHY: Okay. Why don't we
23 take one more question from the audience. 24 AUDIENCE MEMBER: Steve Stroud. I'm
25 curious, Mr. Kelnhofer, that there's been a number of Heritage Reporting Corporation (202) 628-4888
1 metropolitan area deployments, entire zones of 2 unlicensed wireless and entire cities are spending 3 their budgets wiring their cities as an economic 4 development measure and, yet, they're choosing to use 5 license exempt spectrum. 6 My observation is largely they're doing that They can't
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7 because they can't get licensed spectrum. 8 get access to licensed spectrum. 9 license spectrum.
It's yet another
It's yet another "Mother, may I" And,
10 with "would you please deploy in our area."
11 well, we'll get to it when we can when decide you're 12 an important enough market just like the cable 13 companies and the telephone companies have done. 14 So they're choosing to take their destiny
15 into their own hands because they can with licensed 16 exempts. 17 go and do. 18 that. 19 MS. LaBRECQUE: I wanted to comment earlier They don't have to get permission. They can
I'd like to get the panel's impressions on
20 that, in fact, I think the U.S. has been a leader in 21 speaking with system manufacturers, the overwhelming 22 majority of equipment license of sound is in the U.S. 23 I don't know the exact number. I've seen one of the
24 leading wireless ISPs in the audience here and 25 probably others. But I know that there were over 2500
Heritage Reporting Corporation (202) 628-4888
1 wireless ISPs in the U.S. serving over 6000 markets. 2 So, in theirs, we believe that getting the portable 3 cell phones to all is extremely important to 4 expressing growth and getting it into this laptop is 5 the next step after that. 6 7 you I spoken with retailers who have said to, know, Margaret, we deploy satellite dishes all
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8 day long -- you know, the outdoor subscriber station 9 is not a problem for us. And what you're telling me, It
10 in addition, is that it's more expensive. 11 increases their revenue.
I mean, that's not a benefit
12 for the consumer but for the retailer and they can 13 charge more on a monthly basis because the outdoor 14 subscriber station will get better, in general, then 15 an indoor subscriber station and that's why it can be 16 used for a business back haul, for example, back haul
17 enterprise of a thousand users or an entire area full 18 of hot spots. 19 So, I guess, to Steve's comment, I would say
20 I believe it viable for deploying broadband access. 21 And I believe this fulfills our vision of ways of 22 being able to be anywhere and to get connectivity. 23 MR. REEDER: A quick comment. Somewhere
24 around 80 percent of our revenue in the U.S. this last 25 year was in the license exempt band space and we also Heritage Reporting Corporation (202) 628-4888
1 have examples outside the U.S.
In the 2.4 gigahertz
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2 band we have network deployed of about 30,000 3 subscribers in an urban deployment all in the 4 unlicensed band, so it can work. 5 6 ahead. 7 COMMISSIONER ABERNATHY: I'm going to go
We're going to have to bring this to a close.
I want to thank all of our panelist as well as all And,
8 the people in the audience for participating.
9 more specifically, I want to thank Joe Muleta and his 10 team in the Wireless Bureau for putting together this 11 forum. For those of you who have ever tried to
12 assemble folks for something like this, it's a huge 13 task. It requires a lot of flexibility. It turned
14 out great and I want to thank them and all of you. 15 16 (Applause.) MS. SEIDEL: Thank you,
17 Commissioner Abernathy and thanks to each of our 18 panelists for such an interesting discussion and also 19 just for taking the time to be here with us today. 20 know you are all very busy, so thank you. 21 We have time now for about a 10-minute break We
22 if everyone would just be back in their seats at 11:15 23 that would great and we'll start with our second 24 panel. 25 So thanks to everyone. (Recess.) Heritage Reporting Corporation (202) 628-4888
1 2 panel. 3
MS. SEIDEL:
We're begin with our second
65
I'd like to introduce Commissioner Jonathan
4 Adelstein, who will be moderating the panel and I 5 would like to welcome each of our second panelists. 6 Thanks. 7 COMMISSIONER ADELSTEIN: Thanks. I hate to
8 interrupt all the great networking going on up there. 9 That's probably more valuable. There was a great
10 buzz in this room.
We have, obviously, hit upon an
11 issue of huge important by recognizing the turnout 12 that we have here and the level of interest and the 13 great participation that we had in the first panel. 14 So thank you all for coming to participate. 15 great and thank you for the introduction. 16 We have an outstanding list of panelists This is
17 there today that are going to tell us about these 18 business strategies for getting this wireless 19 broadband going. 20 It's a real exciting panel I think.
I think accelerating deployment of broadband
21 services has been a real focus of this Commission and 22 certainly a focus of mine since I got here. I
23 personally believe that broadband services had the 24 potential to transform people's lives, to transform 25 communities and there's such a huge difference, Heritage Reporting Corporation (202) 628-4888
1 especially, in rural areas, but in all parts of the 2 country to provide an alternative and competition. 3 And we're seeing just the tip of the iceberg in the 4 explosion of services that's going to be 5 revolutionizing how we look at broadband, I think, 6 based on what we're learning here today and we're 7 hearing some great stories. 8 The Commission is going to do its best to
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9 extent these wireless technologies, both licensed and 10 unlicensed to Americans, whether they live in urban 11 areas or rural areas. We want to get as much
12 information flowing over the airwaves, as much data 13 flowing over the airwaves as possible. 14 our mission here at the FCC. 15 What a really diverse group of panelists, I think that's
16 but one thing that they have in common is that they've 17 been successful in deploying wireless broadband 18 networks, at least, they've found a successful 19 strategy for offering wireless broadband. So let's
20 learn what lead to their success, maybe what some of 21 the pitfalls might be along the way and we also want 22 to hear from the panelists on the current state of 23 wireless broadband and what they see in the future for 24 both licensed and unlicensed to our wireless broadband 25 services. Heritage Reporting Corporation (202) 628-4888
1 2 panelists.
So I'm going to first introduce the We're going to give you each about five
67
3 minutes to give your prospective on the wireless 4 broadband industry. And, after the final I
5 presentation, we'll open the floor to questions. 6 can read off some questions now, but I want to
7 encourage everybody to really get involved and to get 8 a good dialogue going and also have a dialogue amongst 9 the panelists themselves. 10 So I will introduce everybody randomly and
11 we'll start from that end with your presentations. 12 But I'll start introducing from this end, Mike 13 Anderson, who's Chairman of the Part 15.org, Licensed 14 Exempt Internet Service Providers Organization. Mr.
15 Anderson also serves as the Chief Information Officer 16 for Prime Directive Quick Link, PDQ Link, and is 17 responsible for overseeing all wireless technologies 18 deployments for the West. Mr. Anderson is also the
19 finder of the Wireless Internet Service Providers 20 Conference or WISPCO. 21 Paul Berriman is the Senior Vice President
22 of Strategy and Marketing of PCCW, Ltd., one of Asia's 23 leading integrated communications companies. He leads
24 teams of experts who perform an important role in the 25 strategic direction and product technology of the Heritage Reporting Corporation (202) 628-4888
1 company.
Most recently, he lead the fix and wireless
68
2 broadband projects in Hong Kong and in the U.K. 3 Our next panelist is from Nextel Mr. Gude is Vice
4 Communications, Atish Gude.
5 President of Strategic Planning and Corporation 6 Strategy for Nextel Communications. He's responsible
7 for developing strategy and access for Nextel's 8 overall strategic and competitive positioning. Prior
9 to joining Nextel, he was Senior Manager at the Rice 10 Consulting Telecommunication Strategy Practice. 11 Next we have Doug Sobieski from XO Mr. Sobieski is Vice President of He
12 Communications.
13 Broadband Wireless Service at XO Communications.
14 oversees the commercialization of the company's fixed 15 broadband wireless services and filing successful 16 trials in early 2004 in southern California. XO has
17 initiated plans to rent out these services nationwide. 18 19 Wireless. We have Bill Stone with us from Verizon He's the Executive Director of the Network Bill is responsible
20 Strategy for Verizon Wireless.
21 for advanced technology planning, including the 22 deployment of the company's third generation data and 23 voice networks. Under his guidance, Verizon Wireless
24 conducted several broadband wireless technology 25 evaluations, including NDDA technology trials which Heritage Reporting Corporation (202) 628-4888
1 have culminated wireland service right here in 2 Washington, D.C. as well as in San Diego. 3 We have Richard Wong here from Openwave.
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4 Mr. Wong is General Manager of Openwave, which is the 5 leading independent provider of software products and 6 services for the communications industry, including 7 wireless operators, broadband providers and device 8 manufacturers worldwide. Mr. Wong leads the business
9 direction and management of the messaging and 10 applications team at Openwave. And we're glad to have Maybe we'll
11 such a great group of panelists here.
12 start down there and, if you could give us that over 13 for five minutes, we'd appreciate it. 14 MR. WONG: Good afternoon or good morning, I My name is Rich Wong. I'm
15 guess it is still.
16 responsible for a software company called Openwave 17 where we sell almost exclusively to the service 18 provider community. So we have people like Verizon So we come out here, not
19 wireless, PCCW as customers.
20 as much as a service providers, but as one that 21 services almost substantially a majority of the 22 wireline and wireless players. 23 At a personal level, before coming to
24 Openwave, I actually did work at a company called 25 Kodak Communications that many of you know was one of Heritage Reporting Corporation (202) 628-4888
1 the larger independent DSL companies.
So I have some
70
2 experience in the broadband world, at least, from the 3 wireline experience. 4 Just in terms of some opening comments
5 around the state of wireless broadband, I would say 6 that we're in the very early stages of the secular 7 growth of wireless broadband, both from a Wi-Fi, Wimax 8 arena as well as 1X in the case of Verizon and Spring 9 as well as people like Cingular or T-Mobile renting 10 out GPRS. 11 For those of you that have studied the
12 broadband industry for a while, I would analyze it to 13 the broadband DSL industry probably in the 1997, 1997 14 timeframe. If you think about that timeframe, most of
15 you -- there were a few of you back then who had 16 broadband access. You knew they were very rich
17 because you had a T-1 line or probably had a medium to 18 slowish ISDN model at the time or you were one of the 19 people first discovering the internet for AOL or 20 Prodigy. 21 And so I would submit to you that the state
22 of the industry today in wireless broadband is in that 23 similar state. You have some regions around the world
24 who have still actually broad scale access to this. 25 San Diego, for example, has, through 3G, launched Heritage Reporting Corporation (202) 628-4888
1 right now.
And you have people like T-Mobile and
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2 Starbuck's and Red Carpet Clubs around the country 3 having Wi-Fi capable. So I think there's a lot of
4 growth in the market over the coming few years and I 5 think we're just at the early stages in that. 6 The primary limiter to growth, in my
7 opinion, of at least the 3G services and folks like 8 Bill and Atish have a better view than I do, is about 9 what are the real applications running on wide area 10 3-G networks. Is it photo-messaging? Is it
11 video-messaging?
What are the types of services?
12 That is the question that is yet to be answered. 13 14 15 16 Adelstein. COMMISSIONER ADELSTEIN: Bill? MR. STONE: Thank you, Commissioner Commissioner Adelstein I'm with Verizon Thank you.
I am Bill Stone.
17 already gave you the background. 18 Wireless Service Provider.
The largest service
19 provider here in the U.S. market, currently, providing 20 service to roughly 40 million customers. 21 I started in the industry back in 1988. I
22 have held positions in network engineering, 23 operations, system performance. Currently, I hold a
24 position in our headquarters organization responsible 25 for long-term technology planning. Let me just start
Heritage Reporting Corporation (202) 628-4888
1 out by saying that from my perspective, the existing 2 policy for CMRS, the flexible, exclusive use licensed 3 policy is one of the drivers -- there's been a lot of 4 talk about a license today. I'm certainly not saying
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5 that unlicensed doesn't have its place, but the 6 certainty associated with licensed spectrum is one of 7 the key components driving wireless broadband and 8 certainly driving Verizon Wireless. 9 We've had great success. You can't argue
10 with the success that the CRMS industry has had today. 11 Currently, in the U.S. market, we're serving over 125 We're generating tremendous value.
12 million customers. 13
An economic study done by Hazlet & Spitsor indicates
14 that the CRMS industry is generating over $80 billion 15 in consumer surplus annually. 16 works. So the existing policy
I think that's a key message and it's one of
17 the key drivers and one of the reasons why Verizon 18 Wireless is moving into to wireless broadband. 19 In addition, the existing policy provides an
20 economic incentive for us to use our spectrum very 21 efficiently. 22 We have to pay for spectrum at auction. If
We're incented to put it to very efficient use.
23 you look at the CMRS industry, historically, depending 24 on what study you reference, spectrum efficiency over 25 the last 10 to 15 years has increased on the order of Heritage Reporting Corporation (202) 628-4888
1 1300 percent.
I actually read a CTI report right
73
2 before I came up here that indicates that since 1990, 3 on a per megahertz, per square kilometer basis, the 4 CRMS industry has increased by 70 times the number of 5 customers we're providing service to today. So we are
6 making very efficient use of our spectrum and we are 7 incented to do so. 8 In addition, new technology investment or
9 the opportunity to raise capital -- that's one of the 10 keys here, to raise capital and the certainty with 11 licensed spectrum enables us to go to the capital 12 markets and raise the capital we need to move forward 13 with significant investments in new technology that 14 enable new services to meet customer demand. So
15 existing policy enable us to react to the demand in 16 the marketplace and the key linkage here is that it 17 enables us to raise the funding we need to move 18 forward with wireless broadband technology, which 19 brings me to EVDO. 20 Verizon Wireless, as Richard pointed out
21 earlier, offer 3G service today in San Diego and 22 Washington, D.C. I encourage you to stop by the We offer service
23 demonstration room, check it out.
24 across a large geographic area in both Washington and 25 San Diego. We have committed to a significant Heritage Reporting Corporation (202) 628-4888
1 investment over the next two years, around a billion 2 dollars. Actually, we've committed to exactly a We
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3 billion dollars to propagate EVDO technology.
4 market it under the service name Broadband Access to 5 many more markets across the country. 6 I'll tell you more about EVDO when the panel
7 gets started, but suffice it to say the existing 8 policy that Commissioner Adelstein and the FCC has 9 used to date works, allocate spectrum, allocated for 10 licensed, unlicensed, both. I'm here to represent the
11 licensed community today as you can tell, auction it 12 and get out of the way and let the market drive 13 technology deployment. 14 15 16 Thank you. Thank you, Bill.
COMMISSIONER ADELSTEIN: Mr. Sobieski? MR. SOBIESKI: Thank you.
XO is a national
17 local exchange carrier.
As part of that, we're also
18 the largest LNDS or fixed wireless spectrum holder in 19 the United States. We have over 100 licenses that The licenses So we have a
20 cover more than 170 million people. 21 average about a gigahertz a spectrum. 22 lot of spectrum.
Those licenses are deployed in 75
23 FCC defined marked places, which would include 95 24 percent of the top 30 markets in the United States. 25 Those license are complimented by the other Heritage Reporting Corporation (202) 628-4888
1 assets XO brings to the table.
We have approximately
75
2 37 metropolitan markets with fiber line services, both 3 voice and data services as well as robust inner-city 4 network that provides IP and TTM services. 5 Deployment of IP enabled broadband wireless So what are strategies?
6 its key to our future.
7 Providing IP enabled wireless services to provide a 8 wide range of data services that leverage our assets, 9 provide competition for the last mile to solve the low 10 speed restrictions where cooper line services are only 11 available, to partner with carriers to maximize the 12 consumer value and to partner with manufacturers to 13 expand the product set available in the spectrum band. 14 We've had some successful trials. What
15 feedback we're getting from them?
The consumer really The
16 like the fact that it is true broadband service. 17 quality has exceeded their expectations. The
18 deployment intervals have met or exceeded their 19 expectations and we've seen strong market demand for 20 the pricing points we've set in mark places. 21 we see out there? What do
We still see competitive services We
22 creating downward price for convention services.
23 see that IP enabled access networks are facilitating 24 new services that are creating new values in the 25 marketplace. Heritage Reporting Corporation (202) 628-4888
1
What have we learned?
Build it and they Vendor We
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2 will come, obviously, did not work.
3 investments and dependencies are not sustainable. 4 need to provide the marketplace incentives for 5 manufacturers to create technology in this spectrum 6 and we encourage use of standards as a way of 7 encouraging a wide range of manufacturers to be 8 involved. 9
I think we need to look at the paradigm in
10 which manufacturers and service providers work with 11 each other. We need to figure out how to make us both
12 share in the risk and reward of rolling out these kind 13 of technologies in the spectrum. We believe that the
14 public interest is best served by partnering and the 15 spectrum we've seen only provides marginal 16 opportunities. 17 What do you think we have to do on a going I think we need to form a vision
18 forward basis?
19 within the industry and in the regulatory bodies that 20 LNDS is a tremendous opportunity for future IP-based 21 platforms. We have to make it so that we can line up So that would
22 our spectrum with our operating units.
23 allow us to exchange spectrum between licenses to 24 leverage the assets each of the licensees bring to the 25 table. Heritage Reporting Corporation (202) 628-4888
1
We need to have access to SUF funds in the We cover a tremendous amount of the Wireless is viable alternative to those
77
2 rural areas. 3 rural areas. 4 areas.
We need to have the same access other wireline
5 carriers are provided and we need to ensure that we 6 have regulations associated with the wireless 7 environment that are similar to that of the broadband 8 network providers. 9 10 very much. 11 12 Adelstein. 13 First of all, let me thank you for the Thank you. Well, thank you
COMMISSIONER ADELSTEIN: Atish? MR. GUDE:
Thank you, Commissioner
14 opportunity to be here to learn from and contribute to 15 this great forum because I think this is a starting 16 point of a discovery process related to broadband in 17 general and, specifically, wireless. 18 My name is Atish Gude and I am the Vice Let me A lot
19 President of Strategic Planning at Nextel.
20 start out by talking a little bit about Nextel.
21 of people think that Nextel started on the basis of a 22 fundamental technology that we called "push-to-talk." 23 Let me put forth a slightly different suggestion that
24 what Nextel really tried to do was to understand and 25 serve a specific customer need years ago in the Heritage Reporting Corporation (202) 628-4888
1 dispatch community.
And, as that customer grew to
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2 interconnect services, we offered interconnect with 3 direct-connect, push-to-talk services and that's 4 fundamentally what Nextel has been built on to really 5 serve a customer need. 6 I think that's important because, after
7 considerable research and planning, earlier this we 8 launched a wireless broadband service trial in 9 Raleigh/Durham, North Carolina for two primary 10 reasons. The first reason was, obviously, to evaluate
11 this OFDM technology provided to us by a company 12 called Carion, evaluate the technology. But the more
13 important reason is, is the second, which is we really 14 wanted to understand customer demand, customer usage, 15 usage and behavior. And the reason for that is to
16 develop a well-thought-out, go-to-market model that 17 would help bring these kinds of new services to the 18 market. 19 So we're on a discovery process. This
20 service is aimed at, not only business users, but also 21 individual purchase decision-makers, home users, 22 people who want to use the service on the road, and we 23 are learning a tremendous amount already, but would 24 not suggest that we're at the end of that learning 25 process. Heritage Reporting Corporation (202) 628-4888
1
A couple of things that I would like to The usual
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2 suggest from our learning process.
3 hypothesis or question we had was, wireless broadband, 4 what's the value proposition. And, so far, what we
5 are finding is that that value proposition is not 6 tremendously different than the value proposition that 7 wireless, cellular brought to the market with respect 8 to wireland. Our customers there are telling us that
9 what they value -- one of the first things that they 10 value is the ability to be freed from a specific 11 desktop, freed from time and place. That concept of
12 mobility rings very well in taking internet access 13 away from the desktop. 14 The second value proposition is, again, not
15 unlike what cellular voice services brought to the 16 market with respect to wireland and that is the 17 concept of having access to where a wireland has not, 18 could not or, perhaps, even will not build out to. 19 And then, again, that issue is related to 20 fundamentally being connected. 21 And the third value proposition that we are
22 recognizing, based on the questions that are customers 23 are starting to ask us, is the proposition of enhanced 24 services, new services that would go hand-in-hand with 25 broadband and that brings us to a fundamental Heritage Reporting Corporation (202) 628-4888
1 conclusion, or the start of one, that I think many 2 people recognizes is that broadband is just a highway. 3 It's a highway for voice, video and data services Wireless is just a mode of transport. Now one of the hypothesis that we are
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4 period. 5
6 starting to develop, based on what our customers are 7 telling us is that there is a requirement for voice. 8 There's a requirement of video. There's a requirement
9 for data and all of the cellular type of services that 10 go hand-in-hand with wireless service. But, in the
11 same context that wireless and wireland coexist today 12 in a business as well as in a home, we are starting to 13 build some thinking that would suggest, while 14 intermodule competition, wireless broadband and 15 wireland broadband may exist, at some point, the 16 higher order of value proposition is intermodule 17 services and wireless broadband just provides a 18 highway for a lot of services and applications. 19 I think we still have a lot of research to
20 do, but that is a very interesting concept that we are 21 starting to learn from, from our customers and, 22 hopefully, this forum will, perhaps, start to discuss 23 those kinds of issues of intermodule services rather 24 than just talk about the intermodule competition. 25 Thank you. Heritage Reporting Corporation (202) 628-4888
1 2 Berriman? 3
COMMISSIONER ADELSTEIN:
Thanks a lot.
Paul
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MR. BERRIMAN:
Good morning and thank you,
4 Commissioner. 5 I guess I'm more interested in the U.S. at
6 the moment. I'm just here because John asked as an old 7 friend if I'd come and tell you how we're finding it 8 as a new operator overseas. 9 10 Kong. 11 lines. PCCW is the incumbent fixed operator in Hong We currently have about 3 million telephone Because of the small topology of Hong Kong, we
12 can deliver a 6 megabytes broadband and EDSL to about 13 91 percent of the lines in Hong Kong. So we've been
14 able to really experiment with what can be done with 15 demands are for broadband when its a variable and in 16 sort of dimensions. We did all of that for about $35
17 U.S. dollars amongst customers. 18 19 market. The whole thing is a very competitive We have five, six mobile operators, about 15
20 of these various fixed operators and they are leaving 21 with our market share. So what we've been doing in
22 Hong Kong is defend the market there and we have some 23 innovative broadband T.V. services and are the leading 24 ISP in Hong Kong. 25 Kong to grow. So we've had to leave out of Hong
And, obviously, we didn't have any Heritage Reporting Corporation (202) 628-4888
1 facilities in the environment in any other places, so 2 we believe that broadband wireless is ranging for 3 growth for us. 4 About two years ago we started playing
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5 around with the technologies and we found that the 6 site prototype technologies will rapidly starting to 7 mature, so we started to look for spectrum around the 8 world and, in that respect, we were looking for 9 licensed spectrum. I don't think we need to invest or
10 available to invest in unlicensed network unless it's 11 spectrum networks, apart from the hotspots that we 12 have to provide in Hong Kong. 13 hotspots. 14 So we found the new support regulatory Now we have about 250
15 environment, the transparent regulatory environment, 16 the legal environment and such were most opportune for 17 us was a 3.4 gigahertz license in the U.K. Now we
18 recognize that 3.4 is at the upper limit of the non19 minus site spectrum, but, at least, in this particular 20 situation, it's a very clean spectrum and we were able 21 to, I think, catch the market with its trousers down. 22 We got the national license for $14 million U.S. in So, in that
23 total for about 40 megahertz a spectrum. 24 respect it was good. 25
But the main driver is, in fact, as we Heritage Reporting Corporation (202) 628-4888
1 looked around the world, we were looking for 2 penetration of broadband and the U.K. is a very good 3 example where you have 55 percent of household with 4 dial-up internet or access, but less than 10 percent 5 with broadband access and, even then, the government 6 there has tried to make it look better by allowing 7 ADSL and 512 to be classed a broadband, which we 8 don't, given our situation, we see that and the 9 competition is pretty poor in reacting to broadband in 10 the U.K. So we saw that made it vastly for the fact
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11 that we were going to have to put in a lot more cell 12 sites than you would do at 700 megahertz, for 13 instance. 14 We decided that our major proposition was to
15 go hit ADSL head on with an online of site 16 proposition. So, once we got the license, we were
17 given approval to get out there and do a soft launch 18 in the Thames area of the U.K. and covering about 19 400,000 houses. 20 In terms of the technology, as I said, we've
21 been looking at various types of technology, but we're 22 still not satisfied that we have the standards that we 23 need to warrant how we go forward international roll 24 out, so we're still treading cautiously. We've
25 actually put in a few different technologies at this Heritage Reporting Corporation (202) 628-4888
1 point in time.
We use IP wireless to get started.
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2 But, in our RFPs for international roll out, we're 3 planning more to providing where we are successful 4 with the initial launch. We really see some migration
5 capabilities in what we may move towards a standard 6 and Intel is one of the investors in PPC data and we 7 will continue to have dialogues about Wimax with them 8 is one potential. 9 So that's really all on the technology, but
10 one of things that is for sure, for that standard, so 11 we'll have to get out there and do something now and 12 we'll go forward with these two technologies and, 13 hopefully, we launched -- in about 300,000 homes. 14 whole cost is about $40 million for that. The
We launched
15 about three weeks ago now and the results have been 16 pretty good. 17 In order to facility the fast roll out,
18 we've used all of our network facilities in Hong Kong, 19 so the billing systems, the customer care systems, the 20 web platforms, they're all based in Hong Kong to give 21 us another roll out and we've been using companies 22 such as ATM Crown Castle for the line-of-site 23 acquisition, which is very much the critical path of 24 the whole project. 25 And, in terms of selling, we're selling to Heritage Reporting Corporation (202) 628-4888
1 full-party retailers, call centers and online internet 2 service. I think that's 70 percent of all broadband The customer
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3 in the U.K. sold to the internet.
4 proposition is broadband-to-go and there is some 5 relatively new work. Some of the propositions that we
6 offer a customer -- the modem is delivered in 24 7 hours. I think over the internet or, if not, bought
8 in the shop and they can be installed in three 9 minutes. It's portable within the home. It doesn't
10 need a phone line.
We give them a one-month free
11 trial and it's good value for many of the 512 cable 12 service we offer as 18 pounds, which is about $30 and 13 we think that's about 2 pounds than BT's offering and 14 at 28 pounds, roughly, a l megabyte service, which is 15 about $50. 16 side. So we're really are not hitting the other
Because of the 3.4 megahertz, we've had to
17 design the cell size at about 2 kilometers in radius 18 to get the coverage that we want so that we can 19 penetrate at least one more into the whole. 20 We targeted to prove in our initial roll out
21 of about 10 percent of unit additions in the covered 22 market area to the broadband market and, in the first 23 few weeks, we began to see that we were exceeding that 24 several times over. So we're very confident that very
25 shortly the board will be giving us approval to move Heritage Reporting Corporation (202) 628-4888
1 towards a national network order -- roll out. 2 And, to quote Pierre, it just works. What
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3 we're finding from the feedback the number of new 4 members that we've served, at least 95 percent of them 5 were actually online 6 receipt. activations within their
So we were very confident that our
7 predictive tool, which looks at the current area 8 versus the address of the inquiring potential customer 9 is giving a high degree of accuracy, so that's been a 10 great relief for us. 11 quite good. And the feedbacks have been
There are lot of bulletin boards and
12 message boards on the internet of some people you can 13 imagine they're quite technical geeks or whatever and 14 the reports on the performance has been pretty good. 15 Assuming we do get the approval from our
16 board, we'll begin looking to roll out to about -- I 17 don't know, 75 percent of the population in two years 18 is our target if we can meet all of the initial 19 performance indicators that we've been looking for. 20 That's about it really and with the major problems 21 that I would say we've had has not been so much 22 spectrum. We got it relatively easily and, besides
23 acquisition and planning approvals have been a major 24 difficulty and don't think that should be 25 underestimated. I think that will become, if a
Heritage Reporting Corporation (202) 628-4888
1 problem in the U.S., it will become a growing problem 2 from what we've seen in the U.K., local councils, 3 local groups objecting to the town. 4 threat of wireless. 5 And, also, we have to rely, to a large This potential
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6 extent, on the incumbent provider for the back haul 7 capacity from the base stations and that has not been 8 good. I think it's been more corruption rather than
9 conspiracy, but it hasn't been a good experience. 10 That's for sure. So we're now looking for the
11 alternatives to provide some ways of mitigating that 12 risk. 13 14 David. Thank you. COMMISSIONER ADELSTEIN: Well, thank you,
There's a lot we can learn from that
15 experience. 16 Now from the unlicensed perspective, we have
17 Mike Anderson from PART-15.ORG. 18 19 MR. ANDERSON: Thank you, Commissioner. I'm also here
My name is Mike Anderson.
20 wearing two hats, I think, today.
I think is license
21 exempt wireless internet service provider and just 22 outside of Chicago we have 28 POTs, WIPOTs we call 23 them, wireless internet point of presence. 24 28, I think we pay rent on 2. Out of the
The rest of them we
25 either bought our services in exchange for water tower Heritage Reporting Corporation (202) 628-4888
1 space or rooftop space to mount our antennas and 2 stuff. 3 We cover about 900 square miles. We have a We have
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4 little less than 900 subscribers, customers. 5 12 hotspots.
Most of our hotspots, we chose early on
6 not to go the way of charging individual users to use 7 the hotspot technology. We more elected to either use
8 that hotspot as an advertising point so when somebody 9 walks in, they open up their laptop, they try and 10 surf. They have to go to the login page and that's
11 where our advertisement is because we're in a small 12 community, rural America, so it seems to work as a 13 good advertising promotion for us very inexpensively. 14 The other hotspots we have, the person who
15 owns the location is the one who pays for the hotspot 16 technology. Many of the small rural places that the
17 license exempt guys are going after are the 18 restaurants, businesses, things like that and those 19 owners, the landlords of the property as a utility. 20 It's something to get. They needed to help the
21 customers come in and buy their food, beer and wine 22 and stuff like that, so they've just thrown the cost 23 of the broadband in with the cost of electricity and 24 gas and the other normal utility bills. 25 PDQ Link offers services to hospitals and Heritage Reporting Corporation (202) 628-4888
1 courthouses and everything broadband is needed for -2 realtors, fire departments, police departments. 3 have ambulances that have IP video cameras now in 4 them. So the hospital can actually watch the EMT We
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5 doing their thing in the back of the ambulance on the 6 way to the hospital -- sheriffs departments. 7 people are jumping on the licensed exempt. 8 inexpensive to be a licensed exempt WISP. A lot of
It's very You can
9 become a WISP for less than $5000, which creates its 10 own problems by being so cheap as far as technologies 11 go because a lot of people in the old days that were 12 in the good old networking guys now turn to the new 13 wireless side of things and they're not really RF 14 familiar and that causes self-interference issues 15 actually along with interference with other WISPS. 16 But, for the most part, it's working out extremely 17 well. 18 Just to make a quick comment, I'll put on my There are actually over
19 other hat of Part 15 here.
20 8000 licensed exempt WISPS in the United States 21 actively providing service. 22 outside of Chicago. 23 in suburban Illinois. PDQ Link is 35 miles
If I look out my front door, I'm If I look out my back door, So we
24 there's cornfields, so I'm in rural Illinois. 25 cover both.
We didn't try to get into the major Heritage Reporting Corporation (202) 628-4888
1 metropolitan areas, numerous issues, line-of-site, 2 everything else that's associated with the tall 3 buildings and the massive amounts of movement and 4 people but that's where all the bandwidth is. If you
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5 go downtown Chicago, you can buy dark fiber for $50 a 6 meg, but I'm 40 miles out in the boonie, so it cost me 7 $600 a meg. So how do we overcome that. I don't own it. So I do have I rent it
8 some licensed spectrum.
9 from a person providing me the back haul, but I can 10 now buy 250, $350 a meg bandwidth instead of that 11 normal hard wired $600 a meg. 12 excellent. That's working out Most of
We have, like I say, 28 WIPOTs.
13 our customers are providing voice over IP services and 14 packet 8 and things like that, very happy with the 15 performance of even the Wi-Fi 2.5 customers that we 16 have. 17 Out of the 28 towers, I just want to make a
18 note -- out of the 28 towers, not two of them have the 19 same exact equipment on them. This tower over here
20 might have a 900 megahertz solution and a 5.2 gig back 21 haul. This one over here will have a Wi-Fi solution
22 for the customer access and a 5.7 back haul or this 23 old tower over here might not have any Wi-Fi on it 24 because of the noise flow in that area because maybe 25 in that area I'm competing with 15 other WISPS. Heritage Reporting Corporation (202) 628-4888
1
Just an antidote, the other day I was
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2 driving home from one our POTs and there's a program 3 out there called NextNumber. 4 you know of it. 5 Wi-Fi arena. I don't know if many of
It searches out access points in the
And, in that four miles it took me to
6 drive this one straight road in my service area, using 7 NextNumber, we picked up 111 access points and this 8 rural America gang. It's not like downtown. I would
9 have expected that leaving the City of Chicago, not 10 out in rural Illinois. 11 Enough about PDQ Link.
Part 15 is the licensed exempt wireless We have
12 internet service providers organization.
13 hundreds of members from across the world actually, 14 major manufacturers, the Motorolas, the Airspans and 15 many of the manufacturers that are producing the 16 licensed exempt equipment. We saw the need for the
17 education and to going from the hard wire to the RAF 18 side. We host a conference called WISP Com. It's the It's
19 wireless internet service providers conference. 20 kind of different than a normal conference. 21 your typical conference. 22 type thing.
It's not
It's more of an education
If the speaker says their company name
23 more than three times, we kind of beat up on them. 24 It's not really there for marketing type things. 25 Again, there's over 8000 WISPS in the U.S. Heritage Reporting Corporation (202) 628-4888
1 Most of them are providing support for rural and 2 suburban America. The advantages for licensed exempt The disadvantages -Most
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3 -- low cost for the spectrum.
4 you're going to deal with interference issues.
5 of the interference issues can be worked out, though. 6 Most WISPS that want to cooperate know there's only
7 so much room in the sandbox and we all need to get 8 along or none of us are going to go very far. So, so
9 far, even with the massive growths -- back in '98 when 10 I started the transition from dial-up to wireless, the 11 Wi-Fi card that you can buy for $39 at Best Buy now 12 cost me $167 back then. But the prices keep going
13 down, so more and more people are getting into 14 wireless. It creates it own problem, but it's not That's not a word.
15 overcomeable. 16
Anyway, I'd rather get to the questions and
17 answers because I think that's more important than me 18 rambling. 19 20 COMMISSIONER ADELSTEIN: Well, thank you.
I'd actually like to follow-up on that.
21 You're kind of outnumbered here by the licensed 22 operators. You're an unlicensed person, but I wanted
23 to talk a little bit about the relationship between 24 the two, about what impact services and technologies 25 that operate in the license bands are having on the Heritage Reporting Corporation (202) 628-4888
1 deployment of wireless broadband in general. 2 of curious of what you think.
I'm kind
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Anyone who wants to
3 respond is welcome to jump in here, whether or not 4 these services are complimentary or are they really 5 substitutes for one other? Or are there strategies
6 for integrating Wi-Fi with wide area wireless networks 7 and what types of integration strategies are working? 8 Do you think we'll ever see sort of a greater
9 seamless integration between them? 10 MR. WONG: It doesn't do either. Since we
11 serve both. 12
The classic example of that is T-Mobile.
T-Mobile is probably the largest to my knowledge of They have all the
13 the commercial lifetime provider.
14 Starbuck's and they have a lot of red carpet clubs and 15 admiral clubs as well. So they obviously are a 2 and
16 1/2, 3G GPLS provider as well, which is GS exempt 17 technology. 18 So we do both.
In terms of integration, I would say to you
19 that it's not the transport level for the integration 20 to occur. In most of these cases, the operators have
21 a better view than I do, perhaps, but it's about 22 billing and customer care integration that's sort of 23 job one. And job two, in my personal opinion, is the 24 applications integration. You have the same whether
25 it's an e-mail account, or photomessaging account or Heritage Reporting Corporation (202) 628-4888
1 whatever it is, to work equally well whether you're 2 sitting at the Starbuck/s or plugged into your Fiji 3 card at home. So I think it's billing and
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4 applications and I think they're fully complimentary. 5 MR. STONE: Actually, I'll try mainly to say
6 I agree with everything Richard said, especially, the 7 last couple of points about services and applications 8 being transparent across access technologies -9 billing, et cetera. We all, in fact, in the CMRS
10 domain, working in industry standards and moving 11 towards standards that will enable us to evolve our 12 network infrastructure to support multiple access 13 technologies. So that is a movement or a process
14 that's underway in standards as we speak. 15 In addition to that, I will say that I
16 believe that the success that we've seen with Wi-Fi, 17 especially, in the residential and enterprise domain, 18 not so much in the hotspot domain, but that remains to 19 be seen. T-Mobile is a good example. But,
20 especially, in the -- Michael pointed out the number 21 of residential access points he could pick up. I can
22 give you an antidote in my neighborhood that there's 23 at least six of my neighbors that have it. And, as a
24 matter of fact, as an RF engineer, I've already 25 coordinated frequency radios amongst us and I should Heritage Reporting Corporation (202) 628-4888
1 charge a fee for that, but haven't gotten to that just 2 yet. 3 4 (Laughter.) MR. STONE: But the point is, is that's
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5 wetting the appetite for broadband wireless on a 6 larger scale. One of the things that we found in our
7 broadband trials, similar to Atish, was that the 8 customers want coverage, ease of use and coverage, 9 which is very similar to the wireless services we 10 provide today. You turn on your phone. It works. It just
11 That's another quote that came up today. 12 works. 13 getting.
That consistently is the feedback we're So, if we're going to move in this direction
14 of integrating access technologies or allowing these 15 services to work across multiple access technologies, 16 I think the key to success is that it's got to be easy 17 to use. 18 MR. GUDE: Bill, I think that, you know, one
19 of the things -- at some point in time I'd like to sit 20 next to the Verizon people. 21 things in common. 22 23 (Laughter.) MR. GUDE: I think that we have learned in I think we'd find more
24 this industry of licensed spectrum users is that 25 quality is essential for our customer adoption and Heritage Reporting Corporation (202) 628-4888
1 interference is a significant barrier to that quality. 2 We have been very close to this interference issue. most of us wireless carriers, I think, feel very
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3 So
4 comfortable in a world of delivering quality, 5 delivering services that customers value in a world of 6 licensed spectrum, but that doesn't mean that 7 unlicensed spectrum cannot coexist. 8 seeing it in the 802.11 world. We're already
And, as technology
9 moves forward, the link between unlicensed and 10 licensed will become clear because of a point that I 11 was trying to stress earlier is that we will be in a 12 world -- we will likely live in a world of services 13 that will be increasingly more converged and networks 14 that will be increasingly more converged. 15 802. 11 provides a great bridging I mean,
16 environment between wireless and wireline. 17 it's taught us that.
We also have, I think, overcome There are But IP and SIP
18 the hurdle of multi-mode, multi-band. 19 devices that exist in those realms.
20 are two protocols that get us a lot closer to 21 integration of technologies such that we're not that 22 far away from integrated billing, integrated customer 23 care because of those protocols. 24 we're there today. I wouldn't say that
But, in that sense, we're probably
25 very close to a world where licensed and unlicensed Heritage Reporting Corporation (202) 628-4888
1 can coexist together and probably customers will 2 require that. 3 MR. SOBIESKI: Today, most of our partners Our value
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4 are operating in the other bands.
5 proposition we're bringing to the table is that we 6 have a high capacity, ubiquitous IP connection to the 7 PSTN. That's what we provide. LNDS provides that and Right now, it's
8 we provide it to the wireless users. 9 mostly the transport layer.
I think that an important
10 step is that, as the technologies and the standards 11 evolve, is more of that transparency, because 12 transport only provides -- can only go so far before 13 you're going to see the kinds of application space 14 that's really going to be available in the future. 15 That information has to be transported more than just 16 at the protocol level. So I see wideband spectrum
17 availability being used as an aggregation network 18 today, in the future. I say let's learn from what we We started out We're
19 learned in the wireless environment.
20 with very expensive, very few base stations. 21 now to quarter miles basing on those mobile 22 technologies.
The higher frequencies play very well
23 in small, dense coverage areas. 24 So I see the whole industry evolving. I see
25 every one of those service groups will continue down Heritage Reporting Corporation (202) 628-4888
1 their path.
I think there is a path in which
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2 everybody can provide mobility services across 3 spectrums, so that the user can benefit with a high 4 flow of application space available to them. 5 MR. BERRIMAN: I'd like to concur with I think it's overview is 802.11 is It's
6 everything that's been said.
7 interference risk and investment risk. 8 really a world network. 9 not providing less line.
It's in the hotspot.
It's providing less yard and
10 I think, in Hong Kong, more broadband customers, we 11 have taken care of getting Wi-Fi hotspots into the 12 coffee shops, et cetera. And it's interesting. I
13 think about our way back into mobile. 14 mobile business a few years ago.
We sold our
On our way back,
15 we've been dealing with handsets where a person is 16 locked into his home and at this point, which is Wi-Fi 17 compatible. 18 In that situation, we don't have a problem We think it's good. But I
19 with unlicensed spectrum.
20 think for us to go investing the last mile solutions, 21 using unlicensed, then I think we'd have a problem. 22 So it's really has to do with investment risk and 23 interference risks. 24 MR. ANDERSON: Just a quick note, I'd just A lot of people think
25 like to clarify, I guess.
Heritage Reporting Corporation (202) 628-4888
1 unlicensed means 802.11 and there's so many other 2 things in the unlicensed that are not 802.11 that are 3 working very successfully to overcome the interference 4 issues that the people are concerned with. For
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5 example, we have 57 and 58 radios that can detect 6 another frequency being used in that range of changes 7 and bypass it to continue providing the service. So
8 there are many other license exempt bands out there 9 that we are using because of the interference issue. 10 So I just wanted to make it clear that most people 11 think Wi-Fi 802.11 is license exempt. Well, it is,
12 but there are so many other things out there as well. 13 MR. BERRIMAN: Can I come back on that?
14 Well, I think the only problem I've got with that is 15 the fact that what can work now? It works now but you
16 don't know what's going to come along in the future. 17 We've seen an influx in Hong Kong with devices from 18 Korea that allow you to connect your T.V. in the 19 bedroom from your DVD player in the living room and it 20 uses the 2.5 license spectrum. You turn it on. You
21 get a good picture in the bedroom, but your Wi-Fi has 22 just died and it what comes on afterwards, not whether 23 you can make it work now that is the issue with 24 unlicensed versus a future risk. 25 MR. ANDERSON: True. Maybe unlicensed is a
Heritage Reporting Corporation (202) 628-4888
1 temporary solution because it's here now and until the 2 Nextels and everybody else comes to north rural 3 Illinois, I have to do something or I'm just -- can I 4 say SOL? 5 6 (Laughter.) COMMISSIONER ADELSTEIN: Now, in terms of I'm
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7 business strategies we're here to talk about.
8 from a rural state, South Dakota, and I think about 9 the fact that we led the way. I used to be so proud
10 that we had this company out there and I want to 11 reflect on some tragedies as well as the benefits. We
12 had a company called Morning Mobile Services that was 13 using EVDO just like Verizon, only they did before 14 Verizon in the small markets. I used to say we love
15 the rain in South Dakota because we had through first 16 in Sioux Falls. Actually, our biggest community and
17 they were targeting these mid-size communities like 18 Sioux Falls and Duluth, Minnesota. 19 They went bankrupt and they're out of So I kind of
20 business and they've shut down service.
21 wanted to think about, in terms of business 22 strategies, what you've learned from their experience. 23 Were they too early? Was this something that really What are the Is it
24 doesn't work in less populated markets?
25 most important factors for the plain services? Heritage Reporting Corporation (202) 628-4888
1 consumer demand or is it network quality because, 2 certainly, they had a good quality service? 3 type of service? 4 technology. 5 consumer? EVDO seems like a wonderful Is it the
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Or was it about price and educating the What is it that works? What can we learn
6 from that experience? 7 that.
Anybody who wants to reflect on It's used the
Obviously, Verizon go first.
8 same technology. 9 MR. STONE: I think, in this case, you
10 really have to start with the business case and 11 network quality, absolutely, is very important. We've
12 learned that through the years and we focus a lot of 13 time and energy and investment on providing a high 14 quality network. But, in addition to network quality, I mean, you need revenues to
15 you need customers.
16 offset the costs of operating the network and the 17 capital to build out the network. 18 And what we've found with experience that You
19 works is you target the metropolitan areas first. 20 go where the enterprise customers are located.
You go
21 whether there's the highest concentration of consumers 22 and, as you ramp up volume and ramp up skill, you can 23 drive down the operating cost. 24 goes down. The cost to deploy
The device cost goes down and you That's
25 prorogate outward from the metropolitan areas. Heritage Reporting Corporation (202) 628-4888
1 the formula that's worked over and over again with 2 Verizon Wireless. 3 We started with analog technology way back
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4 when and started in the metropolitan areas, propagated 5 outward. Did the same thing with our digital Most recently, our 1-X And,
6 deployment in the mid-'90s.
7 technology we started in the metropolitan areas.
8 all of the above, is now in 100 percent of our cell 9 sites. So we're starting over again with EVDO. I
10 expect it to go the exact same way and, all the while, 11 we continue to add base stations as well. So, in
12 addition to starting with new technology and building 13 outward, we continue to expand coverage by investing 14 in most base stations as well. 15 MR. WONG: I would say, God bless The entire history of
16 capitalism, basically.
17 telecommunication has never said go after stuff and 18 sometimes they break out and make it happen and 19 sometimes they don't. And, since the Telecom Act of
20 '96, whether it's Kodak, Rhythms, at home, Arsenio, 21 you know, every single one of those companies has had 22 its ups and downs and some of them have survived and 23 some of them haven't and that's healthy. 24 That's good.
That's what capitalism is about is trying those So, actually, I view that as a
25 different experiences.
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1 very healthy thing that there are people that go out 2 there that are mavericks that experiment and not all 3 of them are going to make it. 4 The second point I think I'd make is I
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5 believe there are some things and it turns that EVDO 6 technology, I think, is one of those things where it 7 just take a greater set of deep pockets to resource to 8 make it happen. It is just a very expensive process
9 as well as technology challenges to go after it and I 10 think that it was probably a little bit ahead of its 11 time in terms of the handsets and the technology 12 really wasn't there to be deployed at that scale, but 13 those are necessarily bad things. I think
14 experimentation is a healthy thing for the industry 15 and for, frankly, our economy in my opinion. 16 COMMISSIONER ADELSTEIN: Is it sort of a bad I mean, is
17 sign for future deployment in rural areas?
18 it going to be the last place to get this kind of 19 service because of the small scale? 20 21 MR. BERRIMAN: Can I speak from experience?
At the moment, one could believe the technology is We're not driven by technologies. We're
22 available.
23 driven by the fact that it's a 24 proposition. 25 available.
non-line-of-site
So there's all different technologies But one of the common things is that, to Heritage Reporting Corporation (202) 628-4888
1 make it work, we've got to work with current projected 2 prices of that equipment at infrastructure costs will 3 allow you to be viable with something like 79,000 4 households per cell. 5 Right now, I'm sure as you were saying,
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6 Bill, the cost will come down, the standards, with 7 everything else, and then you can start to look out to 8 the more rural areas. But I mentioned you're going to
9 try to do 75 percent of the households within two 10 years. Doing 25 percent, we might never do this twice
11 because it's so spread out and, unless we move to a 12 line-of-site technology to do it, I can't see us doing 13 it unless the prices come down in the infrastructure. 14 MR. SOBIESKI: The driver in all of these CP
15 equipment -- I mean, we need to get CP equipment used 16 in all these bands. The cost to the service provider
17 in the few hundred dollar range, not the thousands or 18 thousands of dollars or 10s of thousands dollar range. 19 As long as that equipment is at that kind of price
20 point, you're going to still have to service only 21 selected market segments, either geographical or 22 customer bases. So the only way you're going to get
23 that is to kind of economy to scale for mass 24 production that you're seeing in the unlicensed band 25 because people perceive the spectrum availability Heritage Reporting Corporation (202) 628-4888
1 opens up the marketplace. 2 Our position is we're trying to change the
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3 paradigm and say that even licensed space can be 4 available through partnership arrangements to create 5 that kind of access to the marketplace that will allow 6 people to produce equipment in that spectrum that 7 gives you that same kind of price point from a 8 purchase perspective. 9 and we understand that. 10 COMMISSIONER ADELSTEIN: One more question I So it's a different paradigm
11 just I'd like to touch on quickly before we open it up 12 is really is constantly here at the FCC we hear about 13 working on and contemplating the future of voice-over 14 internet protocol and the thing that raises this issue 15 for me is, when do you think we'll see mobile phone 16 become commercially available? Is that a peculiar
17 application here for wireless broadband and would 18 these device be able to roam, you think, between Wi-Fi 19 hotspots and some of the networks? 20 MR. GUDE: Let me see if I can just start
21 off with that.
Voice-over IP, I think everybody
22 understands there are three kinds of voice-over IP. 23 There's voice-over IP in the back haul technology and 24 there's been a lot of progress made in that area. 25 There's voice-over IP vantage style and then there's Heritage Reporting Corporation (202) 628-4888
1 voice-over IP on the air link between some tower and a 2 mobile phone and, perhaps, there's other definitions 3 as well. 4 We don't see voice-over IP as something that We But I
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5 we take a very long period of time to develop.
6 think that it is relatively close on the horizon. 7 I don't want to start from the technology first.
8 really want to go back to the customer demand issue 9 and talk about a conceptual state of mind that people 10 always refer to as convergence. In a world of
11 convergence, we need to talk about network 12 convergence. You can talk service convergence. You
13 can talk about a lot of different kinds of 14 convergence, but what broadband allows us to do is to 15 take all of those service within voice, media or data 16 and put them over the same access medium. 17 So the importance of VOIP is that, number
18 one, it allows for enhanced services to be brought to 19 consumers. And, depending how you look at it, it also Let me give you
20 lowers the cost of broadband entry. 21 an example.
If you have a customer who is a landline
22 -- an example, if you have a customer who is paying 23 for DSL access at $35 and they're paying $50 for local 24 and LD service, they're paying about $85. 25 If that customer happens to buy broadband Heritage Reporting Corporation (202) 628-4888
1 and then starts to go vantage like, unlimited local 2 and LDs are only $35. So you're now at $70 total.
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3 That savings of $15 or $20 effectively lowered the 4 cost of broadband. So voice-over IP is a very It is an application. It's
5 interesting opportunity.
6 also a means of communication and then you can extend 7 this to a wireless, but, at the end of the day, what 8 we think is that voice-over IP is an application that 9 really brings a lot of utility to customers in 10 enhancing the value proposition. 11 MR. BERRIMAN: I was just going to say I If
12 think it depends on what your business model is.
13 you're looking to do lower cost long distance, then 14 voice-over IP there is a market for that. If you have
15 a fixed network, like we have in Hong Kong, we have so 16 many voice lines already, we're not going to replace 17 voice with voice for new additional revenue. 18 So, with that end of the spectrum, in the
19 U.K., for our next generation of modem we'll have a 20 built-in voice-over IP software with the intention of 21 having that capability because it suits us, having an 22 IP stream as our access mode to have voice-over IP as 23 the means of doing. So, in Hong Kong, we have
24 voice-under IP as well voice-over IP where we have an 25 IP stream as our main access. Heritage Reporting Corporation (202) 628-4888
1
MR. STONE:
Adding to what Atish said, and I
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2 agree with everything, especially, the consumer demand 3 piece. Just a couple of other comments. I think I'm
4 a little more bearish on timing, certainly, I see the 5 potential, the incentive for a wireless provider, the 6 exist CMRS providers to move forward with voice-over 7 IP. However, you do need to keep in mind that today,
8 as we've talked about a lot, our customers demand high 9 quality service. We, the service providers, are
10 incented to provide service in a very efficient 11 manner. 12 And today, voice-over IP, does not
13 accomplish either of those things or I should say 14 differently. The CDMA circuit switched or the circuit
15 switched voice call model, in general, has a very rich 16 set of features. It's well optimized and operates
17 very, very efficiently. 18 So the up side in the near term is the
19 enhanced services, but we also need to catch up -20 voice-over IP over wireless needs to catch up with 21 circuited switched voice in terms of efficiency and 22 the set of features and I think that's going to take 23 more time than what people currently realize. That
24 being said, resources are actively working on it and 25 I'm hopeful that it'll come to market very quickly and Heritage Reporting Corporation (202) 628-4888
1 potentially could even be offered over our EVDO 2 network in the future. 3 So it's certainly promising, but I'm a It's not ready for prime
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4 little more pessimistic. 5 time.
And one other thing I'll offer is that we do,
6 in fact, offer services today that are based on 7 voice-over IP and as Atish points out, back in the 8 core network, we use voice-over IP as well, but not 9 for mainstream voice. 10 MR. SOBIESKI: We are I guess we have a different
11 perspective.
using voice-over IP as part of
12 our core network.
They are one of the largest It works very well. We
13 deployment of soft switches.
14 see that last mile solutions, using IPed enabled 15 transport is a very natural marriage of the two 16 technologies. Obviously, our applications are So, in the fixed
17 primarily fixed not mobile.
18 environment, a high band width last mile solution tied 19 to IP core provides lots of services and voice-over IP 20 is just a natural service to be provided over it. 21 MR. WONG: The one case study I would just
22 add for, I think, everyone needs to consider is a 23 company called Reliance of India that's actually going 24 to the rural markets. I believe they use the LDS as It may be in MDS,
25 their wireless transport method.
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1 but their primary application to the market is 2 actually voice because it's one of the most efficient 3 ways, in their view at least, of going to a broad 4 array of smaller towns within India. So, maybe a case
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5 of it in terms of voice over wireless, actually, and 6 they're going to naturally go for it. 7 how it goes. 8 MR. ANDERSON: A lot of the license exempt So we'll see
9 WISPS are offering voice-over IP services through 10 partners with the Vontages, the Packet 8s, the 11 Homebrew. 12 out there. There's a Homebrew voice-over IP product One that comes to mind is Asterisks. It's
13 a LINUX takeoff, but you can become your own linear 14 PBX local long distance type of operator and a lot of 15 small, rural communities are actually picking up on 16 that and it now provides another alternative, another 17 type of local and long distance calls. 18 There actually are some Wi-Fi enabled The gentleman there has
19 voice-over IP mobile phones. 20 one in his hand.
I got to touch it last night and But
21 maybe today he'll let me play with a little bit. 22 it's coming soon, I think, very, very soon. 23 MR. SOBIESKI:
I work with a vendor out in
24 California that's already has a set that, when you're 25 working within the Wi-Fi sphere, it works off the Heritage Reporting Corporation (202) 628-4888
1 Wi-Fi.
When you step out the door, it connects to the So they're here today.
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2 traditional cellular CSTN.
3 The price points are still too high, but it's that 4 same argument about everything else, as the 5 capabilities and consumer see the value propositions, 6 those handsets will go down just like cellular has 7 over the last 10 years. So it's just a value-added Now we'll allow
8 service from a basic broadband.
9 voice, then we'll add video and then we'll have this 10 and it just keeps growing. 11 MR. SOBIESKI: The important part about it I don't
12 is having the quality network available.
13 think we have a quality aggregation network in place 14 that recognizes the difference between packets and, if 15 that's prorogated all the way through the network 16 fabric, then many services, many of them we have not 17 even envisioned here today that are just over the 18 horizon. 19 COMMISSIONER ADELSTEIN: So it's really not
20 a question of if but when we're going to move in that 21 direction then. I want to thank you. Here is that If we
22 level of agreement between Nextel and Verizon. 23 just build on that and a few other little items, 24 there's nothing we can't do. 25 (Laughter.) Heritage Reporting Corporation (202) 628-4888
1
COMMISSIONER ADELSTEIN:
I just have a few
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2 minutes left.
I'd like to know if there are any We'd love to get one from the
3 questions out there? 4 audience.
Yes, if you would just step up to the
5 microphone and state your name. 6 MS. GOLDMAN: I'm Debbie Goldman. I am
7 sitting listening and I'm going to check in with all 8 of you to see if I heard you correctly. I came here
9 thinking that I was going to learn a lot about how 10 wireless broadband would be the way to get broadband 11 to the rural areas that now have no access. And, if I
12 heard you correctly on this panel, that is still a 13 dream. That the business proposition is still going
14 after the dense areas and providing mobility and 15 broadband connection. But this is not yet the way to
16 make money and, therefore, there won't be investment 17 in wireless broadband in the rural areas. 18 I heard one exception, which was Aurora, and
19 I am a midwesterner and I know that Aurora is a -- I 20 would call a small-sized city, not a rural area. 21 maybe you can tell us if you're serving less dense 22 areas. So did I hear this correct and then, if so, we And
23 have some interesting work around policy. 24 25 COMMISSIONER ADELSTEIN: MR. GUDE: Great question. I
If I could just add to that.
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1 think that my interpretation from listening to this 2 panel is that it's not a question of if, again. 3 a matter of timing. It's
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Similar to wireless voice, we did
4 start similarly in urban areas where there was demand 5 to understand if coverage over a larger number of 6 subscribers gives you greater opportunity to have 7 demand. But, as we became more comfortable with that,
8 we started to increase the value proposition by 9 increasing coverage. 10 Rural -- I'm from upstate New York and rural
11 can be defined as Saranec Lake and I love that place. 12 Or rural be defined as rural New York, which is also But, ultimately, I believe, that It's a matter of timing.
13 a very small city.
14 there will be coverage.
15 What we'd encourage, I believe, faster deployment is 16 not necessarily to rely on one access mechanism. 17 There are people who have different business cases and 18 different business models who want to use unlicensed 19 technology. There are others, like ourselves, who
20 have different business cases and different business 21 models. 22 At some point in time, there will be some There will be overlap and the
23 level of converge.
24 market will detect how the services are broadened and 25 served. But I think it is a matter of timing rather Heritage Reporting Corporation (202) 628-4888
1 than if it would happen. 2 3 else? 4 MR. ANDERSON: Out of the 8000 licensed COMMISSIONER ADELSTEIN: I agree. Anybody
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5 exempt guys, I would say more than 5 to 6000 of those 6 guys are serving real rural. 7 two customers on it. 8 anything like that. I have a tower that has
I don't have to pay rent or It was small investment for the
9 equipment, so, yes, that tower has two customers and 10 it's way out in the boonies. One guy is a farmer who
11 checks his stock and the price of beans and stuff like 12 that and the other one is a Mom and Pop flower shop 13 nursery type thing. But, yes, we are way out in the
14 boonies as compared to even the suburbs. 15 Like I said, if I look this way, I'm in the
16 suburbs and, if I look that way, I see cornfields and 17 most of our equipment is out in the cornfields because 18 I'd rather be out there with less interference from 19 other competitors and things like that. I fully
20 understand why the licensed guys can't go way rural 21 because it's just a money thing. If you're going to
22 supply -- it cost $5 million to put equipment out 23 there to service 500 people. 24 that investment? What is the return on
So I can see why a lot a people --
25 there's money to go here, but maybe that's a future Heritage Reporting Corporation (202) 628-4888
1 thing. 2 MS. GOLDMAN: Well, why does the license
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3 cover the rural area? 4 5 MR. ANDERSON: MS. GOLDMAN: I'm sorry? Why does the license cover the
6 rural area if the person who owns the license is never 7 going to build there? 8 MR. ANDERSON: I think that's what the
9 notice of proposed rulemaking and things like that are 10 coming up. 11 AUDIENCE SPEAKER: As far a statement, since
12 you guys were talking about us, I thought I'd get up 13 and say something. My name is Rich Kinks and I'm
14 former president and chief operating officer of Monet 15 Mobile and the reason -- you guys hit on all the 16 reasons why we did fail. The cost of infrastructure,
17 the cost of CP, the cost of the license in a rural 18 area just doesn't add up to a license spectrum 19 deployment of technology. 20 At least, today it doesn't.
At least, for a small Greenfield startup company, it
21 doesn't and I don't know when it's going to make sense 22 for even a Verizon or somebody else to go out there 23 and do it. 24 And so the answer is, I think, for rural
25 guys is what Mike's talking about and that is Heritage Reporting Corporation (202) 628-4888
1 unlicensed. 2
We have to get more equipment out there.
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We have to make more spectrum available to start
3 competing to make unlicensed more like licensed 4 spectrum so we can provide the products and services 5 at the price frame that the consumer requires out in 6 the marketplace to bring unlicensed spectrum and 7 broadband wireless spectrum to rural marketplaces. 8 That's what we need to do. 9 Monet. That's what we learned at
If you guys want to ask me any other questions
10 about all the horror stories that we learned at Monet, 11 I'm sitting in the back. 12 So we did it. We learned some valuable
13 lessons, some hard lessons, but we've got to find a 14 way to bring, I believe, unlicensed broadband wireless 15 to the rural, smaller communities, places like South 16 Dakota. 17 18 comment. So thanks. MR. GUDE: If I could make one quick
I think that the unlicensed/licensed issue
19 is a very important issue to determine cost of entry, 20 but there are a whole set of other issues and I think 21 Paul here mentioned the cost of getting access to 22 towers. There are regulatory hurdles and local issues
23 that consistently -- issues that we have to face and 24 increased cost to getting access to build towers to 25 bring services to markets. All of these things
Heritage Reporting Corporation (202) 628-4888
1 increase the barrier of cost of entry.
We you've
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2 increased the cost of entry that way, the business 3 case gets a little harder. So I think there are other
4 things that can be contemplated to lower the cost of 5 entry rather than just focusing on spectrum alone, 6 although that is an issue as well. 7 MR. BERRIMAN: I have no idea about the U.S.
8 universal service. 9 administration
In the U.K. what the
has done is taken a commitment of
10 getting a broadband 100 percent available to 100 11 percent of households by 2006. But it will take about
12 a billion pounds to do that and where that funding is 13 available is through competitive means via the 14 regional development agencies in the U.K. 15 really remarkable to get the funding. 16 MR. ANDERSON: I think most of the WISPS, So that was
17 the licensed exempt guys, the smaller, less than 10 18 employees, 100 miles from any metropolitan area, those 19 guys, for the most part, started their business 20 because of the frustration of not having the 21 availability of broadband in their areas, which makes 22 them either suburban or rural. I think in '98, '97,
23 when I started wireless from ISP, I had the same 24 frustrations. I was paying $1700 a month for a T-1 at
25 the office and four blocks away at my home the best I Heritage Reporting Corporation (202) 628-4888
1 could hope for was a 288 connection and we went 2 through all kinds of -- then we settled on wireless. 3 But it's the same thing with everybody else I think rural -- to me,
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4 out in the rural communities.
5 rural is 15,000 people or less and that's total 6 people. 7 people. That's not house. Each house has 2. whatever
But you can't overlook the rural communities We are
8 and that's why most of us are out there. 9 rural. We're part of the community.
I don't deploy
10 more than 30 miles from my home.
Granted, that covers
11 6 or 7, 10 or 15 different communities, three 12 counties, but I'm there. I'm physically there in the
13 communities with them, most of us are. 14 15 for time. COMMISSIONER ADELSTEIN: I think that's it We've
I really appreciate this panel.
16 learned a lot about the challenges and opportunities, 17 but I don't want to step into people's lunch times. 18 So we have a few more announcements here. 19 for coming. 20 21 (Applause.) MS. SEIDEL: Thank you, Commissioner and Some of whom I know Thank you
22 thanks to each of our panelists.
23 traveled an awfully long way to be here and we do 24 appreciate that. For those of you not familiar with
25 the building, there are two cafeterias in the Heritage Reporting Corporation (202) 628-4888
1 building. 2 CY level.
You just need to take the elevator to the Be sure you take your name tag or your
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3 badge because you will need to go through security. 4 5 corner. There's a cafeteria up 12th Street on the There is the Mandrin Hotel is from that There are places on the
6 corner up the street there.
7 waterfront, but, if everyone could just be back by 8 1:40, we'll start promptly with the next panel. 9 you. 10 11 // 12 // 13 // 14 // 15 // 16 // 17 // 18 // 19 // 20 // 21 // 22 // 23 // 24 // 25 Heritage Reporting Corporation (202) 628-4888 (Whereupon, a lunch recess was taken.) Thank
1 2 3
A F T E R N O O N
S E S S I O N (1:41 p.m.)
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MR. MULETA:
Good afternoon.
My name is
4 James Muleta.
I'm Chief of the Wireless I'm
5 Telecommunications Bureau here at the FCC.
6 terribly excited to have you all participate and 7 listen in on the discussion of bringing wireless 8 broadband to our consumers. I'm thankful for all the
9 people that have come out from many places far away, 10 including California and Hong Kong and England and 11 it's exciting to see the possibilities of wireless and 12 what I think it can do to benefit our country and our 13 people. 14 The way we're going to start off this
15 afternoon is a couple of folks are going to talk to 16 you about some activities that are going on at the 17 Commission, Lauren Van Wazet, who's Associate Chief 18 and Officer of Engineering Technology and also co-head 19 of the Wireless Broadband Taskforce, which is really 20 an attempt to sort of solicit comment and input into 21 the framework of both licensed and unlicensed so that 22 we can bring the benefits of ISP services to the 23 broader parts of America that are struggling together 24 out there. 25 She's working as co-head on that with John Heritage Reporting Corporation (202) 628-4888
1 Branscome, one of my legal advisors.
He's working
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2 with the Spectrum and Competition Policy Division and 3 they're working very hard. And anybody that has input
4 please realize the FCC process is one in which a 5 letter, a note, let's make sure it's not on a napkin, 6 but anything that you can do on a little bit of a 7 formalistic way to input into our process and give us 8 your thoughts on what we could do better to bring 9 broadband wireless -- and you can even put that into 10 both the activities that we do in the Bureau as well 11 as the Taskforce report. 12 There's also Spectrum Policy Taskforce,
13 which is this overarching issue about how do we reform 14 spectrum policy and the director of that is Peter 15 Tahula, one of my deputies. So there's lots of If this issue
16 opportunities to give us the feedback. 17 was easy, we'd already be there.
These are very
18 complex issues in this country as well as overseas. 19 Also speaking, before we get to the
20 panelists, is Joel Taubenblatt, who is the Chief of 21 the Broadband Division and the person responsible for 22 organizing this forum. Joel has probably one of the
23 greatest jobs, which is he's on the cusp of all great 24 new things that are going to happen and he has an 25 organization that spans around 60 people. In the
Heritage Reporting Corporation (202) 628-4888
1 Wireless Bureau, we deal with over 3 million licenses, 2 part of which is part of his organization. 3 We have a group of people, some of whom are
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4 in the back, from our Gettysburg office, who are 5 visiting us today that do our licensing work. So he's
6 going to tell you about what the Broadband Division 7 is, what its mission is, what its activities are and 8 give you depth and give you some information about how 9 to get in touch with them as we deal with the 10 rulemakings. 11 Other things that we've got to go, and I'm
12 way over my two-minute limit, but I'm the chief. 13 Anyway, so next after that there will be two other 14 panels with Commission Copps and Commissioner Martin 15 and then we'll close off the day. 16 With that, I want to give you one other
17 piece of information, which is we have two 18 demonstration rooms in which broadband wireless 19 equipment and vendors are displaying their wares. 20 It's in the back. 21 Com. We have Sky Pilot. We have Array We have Reciva. And I'm
We have NextNet.
22 trying to figure if Verizon Wireless is there, 23 Motorola and Airspan. If I left anybody out, I
24 apologize, but my memory is only so good. 25 But what I'll do now is I'll turn it over to Heritage Reporting Corporation (202) 628-4888
1 Lauren and she'll give you an idea about what we're 2 doing in the Wireless Boardband Taskforce. 3 4 MS. VAN WAZER: Thank you, John.
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I've asked this afternoon to share some of
5 the developments in wireless broadband from an 6 unlicensed perspective as well as to talk about some 7 of our activities with the Taskforce and discuss the 8 impacts these developments are having on the provision 9 of broadband services more generally and I'd like to 10 start with a brief overview of the regulatory lay of 11 the land for unlicensed, Part 15 devices. 12 All unlicensed devices must be authorized.
13 I like to call this the FCC goodhousekeeping seal of 14 approval. All of our devices need to be authorized.
15 For unlicensed devices, spectrum access is free, but 16 it comes at a cost. They must not cause harmful
17 interference with authorized services and these 18 devices must accept any interference received. 19 With our rules, we like to provide a broad
20 framework for the private sector to develop detailed 21 standards. I like to call this the "if you build it,
22 they will come" axiom for unlicensed devices and our 23 hope is to provide the flexibility so these standards 24 will develop. There's a plethora of unlicensed
25 devices and the technologies really range from Heritage Reporting Corporation (202) 628-4888
1 cordless telephones and the mundane baby monitors, but 2 essential, to garage door openers, PDA, wireless local 3 area networks, ultra wide band devices and RFID 4 systems. 5 Given the incredible diversity of the
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6 technologies available for unlicensed devices, I don't 7 think it's an exaggeration to say that the unlicensed 8 device bands have been real incubators for innovation. 9 I like to use the very technical term and call it the The growth
10 "way cool area" of spectrum development. 11 in this area has just been explosive.
There are
12 millions of these devices and in operation. 13 I'd like to take a moment to highlight two
14 of the areas that have been of particular interest and 15 high growth. Wireless local area networks, which
16 we've heard about a bit today already, in the Year 17 2001, the equipment sales for these devices exceeded 18 slight $1 billion. By next year, it's projected that
19 they will exceed $5 billion and that's billion with a 20 "B". 21 Another area that's been of particular
22 interest has been the growth of wireless internet 23 service providers. I like to call this the Often these small
24 "grassroots broadband movement."
25 Mom and Pop companies provide services, using license Heritage Reporting Corporation (202) 628-4888
1 exempt spectrum to rural and undeserved areas, but 2 they're also regional, also multi-state and in 3 metropolitan areas as well like Tampa and St. Louis. 4 And what's interesting is these networks aren't just 5 last mile. 6 They can be last 30 to 50 miles. Broadband services using unlicensed devices
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7 are on the rise because there are few barriers to 8 entry. The equipment costs are relatively low. The
9 equipment is off the shelf or readily available for 10 consumers and businesses. As I noted, access to
11 spectrum is free because these devices operate 12 exclusively in unlicensed spectrum. And,
13 significantly, there is flexibility in our regulations 14 in terms of the types of technologies required. 15 just don't specify them. We give folks the We
16 flexibility to use what's appropriate for the 17 circumstances. We provide the technology parameters
18 within which they need to operate. 19 At the FCC, our goal is to continue to FCC policies directly
20 foster these developments.
21 affect access to spectrum and the degree of 22 flexibility in our technical regulations. 23 As I noted, one of the important rules we
24 have is to provide access to spectrum and the issue 25 for unlicensed devices is whether or not there's Heritage Reporting Corporation (202) 628-4888
1 sufficient capacity for growth and how the bands that 2 we've made available are well-tailored for the use by 3 unlicensed broadband networks. By the way, there's a
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4 test on all these bands after this and, when I move to 5 the next slide, I'll be asking those questions. 6 We've got different buckets of rules that And, as has been
7 are applicable for different bands.
8 noted earlier today, not all spectrum is created 9 equal. In part, it's just the physics that determines Say, for
10 what works where and for what purpose.
11 example, the 902 to 928 megahertz band has better 12 foliage in building penetration. At the 5725 to 2850
13 megahertz band allows those higher powered operations 14 that are permitted there which may be more suitable 15 for back haul operations. 16 In terms of the upper millimeter wave bands, At 58 gigahertz there's 7 These
17 we've got big pipes there.
18 gigahertz available in terms of band width. 19 work well for short distances.
I'd like to say this
20 is akin to the Goldilocks in terms of, when a service 21 provider is configuring their network, they need to 22 see what spectrum is suitable and for what purposes to 23 figure out what's just right. 24 accordingly. 25 In addition to spectrum access, the FCC has Heritage Reporting Corporation (202) 628-4888 They mix and match
1 been working to increase flexibility in technical 2 regulations. I like to call this "regulatory
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3 leveraging" of the benefits of new technologies so the 4 consumers and businesses have access to additional 5 services and we've done this in a couple of areas. 6 We're looking at making our equipment authorizations 7 more modular. Can we move to more of a lego model
8 approach so certain equipment can be switched out of 9 systems that are certified? 10 We're looking at the area of smart antennas
11 to ensure that our regulations permit the full 12 deployment of these spectrally-efficient technologies. 13 Also, we've begun a proceeding in the area of smart
14 radios or smart or cognitive radios and enabling the 15 use of these radios. These radios often work
16 effectively as a communications bridge between 17 multiple technologies and different modulation 18 schemes. 19 I think with all these smart technologies --
20 again, we have smart antennas, smart radios and, in 21 the RFID systems world, we've got smart containers and 22 I think we're moving to a Garrison Keeler world where 23 everything is above average, but it's true. All the
24 technology is getting smarter and enabling us to do 25 more things. Heritage Reporting Corporation (202) 628-4888
1
At same time, beyond the FCC's role, two
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2 other factors directly affect the provision of 3 unlicensed services using unlicensed broadband 4 services, technology advancement and the continued 5 evolution of industry standards. As I noted,
6 technology keeps changing and technologies keep 7 getting smarter and we've had the continued evolution 8 of industry standards from Wi-Fi to Wimax to Wi-Next. 9 There's certain attributes of Wimax that I'd like to
10 focus on because I think these attributes show that 11 it's particularly promising in terms of acting as a 12 catalyst for the future deployment of wireless 13 broadband services. 14 As has been noted earlier today, 802.16a
15 covers the 2 to 11 gigahertz region of the spectrum, 16 which covers both licensed and unlicensed band. Under
17 802.16a, customer premise equipment is interoperable, 18 which is extremely important. It can work for both
19 point-to-point situations like as possible back haul 20 or point-to-multipoint situation as a possible last 21 mile solution. 22 And, under 802.16, they're even developing a
23 mobile specs, 802.16e, which promises increasing 24 flexibility with the standard. And I note they're
25 also considering extending the standard below 2 Heritage Reporting Corporation (202) 628-4888
1 gigahertz into the beach front region of the spectrum 2 as well. So the flexibility and the bands covered and
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3 the interoperability, I think, will be key factors in 4 determining the ultimate success of any industry 5 standard. 6 While I'm pleased to discuss these
7 developments in terms of unlicensed wireless 8 broadband, and there's a similar parallel story in the 9 licensed arena as well, which Joel Taubenblatt will be 10 addressing shortly, but we've moved ahead in spectrum 11 access. In terms of flexibility in our regulations,
12 there's been significant advances in technology as 13 well as standards. And, ultimately, we're moving to a
14 world of integrated wireless networks, kind of a 15 convergence, if you will. And it really won't be an
16 issue of whether something is licensed or unlicensed. 17 It's an issue of what will fit and where and this
18 premise extends to the wireline platforms as well. 19 As Chairman Powell noted this morning, we
20 are continuing to work to add more tools to the 21 broadband toolbox to enable service providers to 22 optimize their own networks based on geography, 23 applications, density of users and other factors. 24 I'd like to take a minute to focus on the We'd like to do
25 Wireless Broadband Access Taskforce.
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1 more to facilitate these developments and the 2 provisioning of wireless broadband. And, to that end,
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3 Chairman Powell created the Wireless Broadband Access 4 Taskforce to look at how we can focus on some of these 5 issues, especially, on wireless internet service 6 providers. 7 I'd like to extent an invitation, along with
8 my co-director, John Branscome, to participate fully 9 in this inquiry so we can make informed 10 recommendations to the Commission in late October. 11 I'd like to leave you with one parting
12 thought, sort of the policy driver in all of this. 13 And, when I read the following quote by the late Red 14 Barber about the commercial broadcast industry it 15 reminded me of some of the issues in our current 16 context today. 17 and read it. 18 "Kids flip on their transistor radios People And I'm just going to take a moment
19 without thinking and take it all for granted.
20 who weren't around in the '20s when radio exploded," 21 by the way, I wasn't, "can't know what it meant. 22 milestone for mankind. This
Suddenly, with radio, there No longer were our The world came
23 was instant human communication.
24 homes isolated and lonely and silent. 25 into our homes for the first time.
Music came pouring
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1 in.
Laughter came in.
News came in.
The world
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2 shrank with radio." 3 Like radio broadcast services, broadband
4 services have the potential to bring the world into 5 every home in America. And, with good policies and
6 continued technological advances, let's work to do 7 just that. 8 9 10 Thank you. (Applause.) MR. TAUBENBLATT: Hi, I'm Joel Taubenblatt.
As John said, Chief of the Wireless Bureau's
11 Broadband Division and John had indicated that I have 12 a cool job and I think that's true and one only 13 rivaled by my night and weekend job, which as father 14 to a two-month old infant girl. 15 I will try to walk through the slides fairly
16 quickly and I would walk through a little bit about 17 the licensed activities that are going on at the 18 Commission and a little bit about my division. I
19 think there are really three primary ways that we are 20 trying to facilitate wireless broadband networks. 21 is through a variety of different policies and 22 rulemakings. Some examples are those listed on the One
23 screen and the Chairman also referenced them this 24 morning. 25 Certainly, getting out more spectrum for Heritage Reporting Corporation (202) 628-4888
1 advanced wireless services, reconfiguring the MDS/ITFS 2 band to allow for more flexible use and fixing some of 3 the interleaving problems, adopting different licenses 4 schemes for 70/80/90 gigahertz and trying to provide 5 some flexibility in terms of the licensing there. 6 also have auctions coming up, particularly, 24 7 gigahertz late in July. And, for those of you who are We
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8 interested, there are fact sheets in the back of the 9 room and also through the Commission's secondary 10 markets initiatives to try to get spectrum flowing and 11 access to spectrum increased. 12 We also are trying to facilitate wireless
13 broadband through having fairly high-tech and 14 sophisticated interactive licensing databases and 15 systems here at the FCC. Some of you, I'm sure, are
16 familiar with our universal licensing system which has 17 done great wonders for us in terms of allowing us to 18 work through a variety of different actions relatively 19 quickly. In the Bureau, we administer some 3 million
20 license, a staggering number, and take about 500,000 21 actions a day -- rather, I'm sorry, a year. 22 are constantly looking for ways to modify the 23 universal licensing system to make it more accessible 24 to take into account new initiatives such as secondary 25 markets and 70/80/90 gigahertz. And, as John And we
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1 mentioned, all my licensing staff from Gettysburg is 2 here as well today. 3 The third way really is by reaching out for Certainly, this forum is a means
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4 stakeholder input.
5 of doing that and we very much appreciate everyone's 6 participation in it. I think, also, the Commission
7 tries to gather information for a variety of different 8 reports and I just wanted to give applause for our 9 Section 706 report, the comment period is running. I
10 believe the replies are due on Monday and we certainly 11 would welcome any input from the wireless industry in 12 terms of the types of things that are being done, the 13 types of services, capabilities and things like that. 14 Also, as Lauren mentioned, through the Taskforce,
15 there will be quite a few outreach activities, I 16 think, going on the rest of the year. 17 Just a brief word about my division, and I
18 think there are pamphlets, or at least there were, in 19 the back. 20 But the Bureau itself is relatively large. Back in December, the
There's about 300 folks.
21 Chairman and John created a Broadband Division to 22 emphasize a facilitation of wireless broadband and I 23 also wanted to give a plug for other divisions as well 24 which are focused on very related policies of spectrum 25 and competition policy, auctions, public safety, Heritage Reporting Corporation (202) 628-4888
1 information technology and mobility. 2 Lastly, I just wanted to leave you with the
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3 idea that I think wireless has had an incredible 4 potential to increase the market for voice 5 communication services over the last several years. 6 And I think the exciting today is that it's got the 7 potential, in many ways is doing it now, to increase 8 or broaden the market for internet, for media and 9 entertainment services. 10 bright. 11 And, with that, I will turn it back to John So I hope the future is
12 to introduce the next panel. 13 14 (Applause.) MR. MULETA: Thank you, Joel. It's a great
15 honor to, first of all, introduce Commissioner Martin, 16 who will be heading up the panel. 17 Commissioner Martin, how are you? And,
18 also, all the other folks who are on the panel, Andy 19 Kreig, Rick Kunze, Ms. Radcliffe from Australia and 20 Scott Slater and Charlie Townsend. If you could all
21 come up to our panel, I'd appreciate it. 22 One thing I have to tell you is I think the The
23 potential for wireless broadband is great.
24 instructive lessons are really studied and I think the 25 U.S. did it right. I spend a lot of time in hotels
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1 and one thing I do remember is when I was in the 2 Wireline Bureau, I used to have to deal with a lot of 3 complaints that a hotel room phones and whether or not 4 you had the 10 card and all those kind of things. 5 Today I just use my cell phone, so we bypass that 6 whole problem. With that, I'll turn it over to
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7 Commissioner Martin. 8 COMMISSIONER MARTIN: Well, thank you.
9 Thanks, John, and thank you all for being here today. 10 Certainly, everyone's attendance here exemplifies the
11 interest everyone has in this and I'm excited and 12 pleased to be a part of the forum today. 13 Wireless broadband is vitally important. I
14 know that -- and actually, John and the Chairman and I 15 had a chance to go visit and see some demonstrations 16 out in Virginia that were important and we got to see 17 just how important it was for many of the different 18 rural areas and the importance that wireless 19 connections can be to people that 20 for their economy and for the way that they continue
21 living with being able to be connected to the 22 mainstream of society. And it's also important
23 outside of rural areas in urban areas as well. 24 And wireless, obviously, provides them the
25 mobility that consumers are increasingly craving today Heritage Reporting Corporation (202) 628-4888
1 and that is ultimately going to be one of the most 2 important competitors to cable and DSL for those last 3 mile connection. 4 Bringing that kind of competition to those
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5 providers is critical and I think that one of the 6 challenges that everyone faces is getting pass those 7 barriers to entry and that's why this part of the 8 panel is being so important. This part of the
9 presentation today is so important and I want to 10 introduce each of the panelists now and make sure we 11 get right into the presentation, so I will be brief. 12 And I'm sure I won't do their bios justice, but let me 13 give everyone a very short introduction. 14 alphabetical order. I'll go in
I can't actually even see exactly
15 the order everyone's in. 16 We've got Andrew Kreig with us who's the
17 president and CEO of the Wireless Communications 18 Association. He has lead the WCA's transition into
19 being the premium association focusing on the 20 provision of wireless broadband services. 21 We have Rick Kunze, a part of PART-15.ORG I've met with him before and learned
22 and ColusonNET.
23 about he has done some great things in Coluson County, 24 California, including single-handedly building 25 150-foot tower that, at least, I've heard about and Heritage Reporting Corporation (202) 628-4888
1 maybe we'll all hear about today. 2 We have Jeannette Radcliffe of the She's the
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3 Australian Communications Authority.
4 manager of the Spectrum Markets Group, which has the 5 responsibility for developing and implementing market 6 base reforms and spectrum management. 7 We have Scott Slater, the co-founder of the He has over
8 Personal Broadband Industry Association.
9 25 years in wireless and technology business 10 development experience and he's worked with laser disc 11 technologies, cellular service, and e-mail technology. 12 And, finally, Charlie Townsend of Aloha The
13 Partners in 700 Megahertz Advancement Coalition.
14 manager and general partner of Aloha and Aloha is the 15 largest owner of the 700 megahertz licenses in the 16 United States, covering almost half of the United 17 States population. And, with that, I will now turn it
18 over to our panelists and we'll start here and work 19 our way through. 20 MR. KREIG: Thank you. And, on behalf of
21 WCA, I'd first like to thank the Taskforce for this 22 great opportunity to share some thoughts today. And,
23 from England, it's probably that, clearly, wireless 24 broadband has come a long way and is rapidly gaining 25 ground on its tettered competition. Heritage Reporting Corporation (202) 628-4888
1
We're on the verge of a major breakthrough The Commission's
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2 in the United States in our belief.
3 efforts have much to do with that and we're going to 4 provide some background where we think we're going 5 with that. 6 To set back a bit, WCA is the nation's
7 oldest and largest trade association focused on 8 wireless broadband. We are wireless broadband's
9 primary voice in Washington on regulatory and policy 10 matters and have participated in virtually every FCC 11 proceeding effecting this industry. We're also active
12 internationally, at the states and in Congress and 13 last fall, for example, we helped lead the fight to 14 preserve the primary federal broadband loan program 15 for rural Americans. 16 Our tent is large and getting larger every
17 day with approximately 260 mobile companies on six 18 continents. Our numbers include most of wireless
19 broadband's leading carriers, vendors and consultants 20 who utilize all spectrum bands available for fixed and 21 mobile wireless broadband services. This ranges from
22 700 megahertz as represented by our member and 23 distinguished co-panelist, Charles Townsend, to 70 and 24 even 80 plus gigahertz. 25 All of this comes together, I might add, in Heritage Reporting Corporation (202) 628-4888
1 the industry's major annual convention, which is two 2 weeks in Washington, 150 speakers. There's Also, we
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3 information about it up at the front desk.
4 were asked to just spend five minutes in opening 5 presentations. So rather than hog too much time, I'm
6 also going to point to that front desk where we have a 7 written statement that I won't read to you entirely 8 right now, but representing such a diverse 9 constituency many of them have many, many concerns and 10 I've attempted to summarize those in the overall 11 statement addressing the general topic of the panel, 12 but, inevitably, there's not going to be time to do 13 more than touch on just a few of them in the rest of 14 my statement. 15 For a little bit more background, though,
16 I'll say that WCA's origins are in the licensed bands. 17 We anticipated the growth of unlicensed services and
18 in 1999 created the License Exempt Alliance or LEA 19 that is a leading voice of carriers. And, in fact,
20 here today are the president of that group, Douglas 21 Kimball of AMA Textile and the president-elect of that 22 group, Neil Mohalland of Prairie Internet. And this
23 represents, as you've heard so often today, a growing 24 and important constituency for wireless broadband 25 throughout the country. Heritage Reporting Corporation (202) 628-4888
1
In touching on some of the regulatory
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2 barriers and topics that are the focus of this 3 particular panel, I'd like to highlight out of my 4 statement a few of the most important points. The
5 main one, I would say, is that the best course for the 6 Commission is to establish as few ground rules as are 7 necessary to provide operators with an environment of 8 regulatory certainty and then let the marketplace take 9 its course. 10 History has taught us the adverse
11 consequences of doing otherwise and we take, as one 12 example, the licensed MDS/ITFS spectrum that the 13 Commission itself has identified an ideal vehicle for 14 wireless broadband. Without going through the whole
15 history of that band, I'll say that it's gone through 16 many transformation, it's undervalued and underused, 17 but, in large part, that's because of problems that 18 could be readily anticipated in which our 19 organization, in conjunction with the other two major 20 organizations, both as educators, has sought to 21 rectify with a filing in 2002 to reform that band to 22 meet modern conditions of use. And we're very
23 excited, as Chairman Powell said earlier today, that 24 the Commission is on the verge of undertaking a 25 historic transformation of that band. Hopefully,
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1 congruent with the proposal that the three major 2 organizations have proposed after a long, long study 3 of the varied constituencies. 4 To wrap up and hit a couple of the
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5 highlights of the rest of my presentation, I'll say 6 that the lessons of this MDS/ITFS proceeding are 7 lessons that we think carryover to many, if not all, 8 of the bands that we work with and that are the 9 subject of the FCC's Taskforce. And, to take maybe
10 one sentence out of each paragraph, we would say that 11 regardless of the spectrum at issue, the FCC should 12 remain focused on the core principle of flexible use, 13 letting the marketplace issue regulation determine 14 how, when and where these services will be introduced 15 to consumers. 16 Another item is that new services and Forced
17 technologies must be sustainable financially.
18 deployments by regulators of broad economics is a 19 recipe for disaster. 20 prepared statement. 21 Third, the FCC can and should encourage And, Again, we have specifics in our
22 robust secondary markets for licensed spectrum.
23 here again, the experience of MDS and ITFS is helpful. 24 They've been operating in the secondary markets for
25 20 years, demonstrating that licensees will make Heritage Reporting Corporation (202) 628-4888
1 access spectrum available if given the flexibility to 2 negotiate the terms. 3 Finally, application processes where
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4 necessary should be streamlined and adapted as 5 necessary to the specific characteristics of the 6 spectrum band. And, in this case, if we go all the
7 way up the spectrum charts to our initiative in the 70 8 to 90 gigahertz band, you'll see, again, as the 9 Chairman mentioned earlier today, that he put this 10 proceeding, along with the rest of the Commission, on 11 a fast and innovative track to create new spectrum 12 rules that all of the licensees and -- they were 13 prospective providers at that point, which came 14 together under the WCA banner were very happy with. 15 It was a very creative solution that the Commission 16 reached and I think is an example of flexibility that 17 is going to serve the public. 18 So I'm going to conclude at this point by
19 saying that this is the time of great opportunities 20 and changes for both the FCC, the consumers and the 21 industry who have much to gain, but much remains on 22 their plate. As always, we and our members will
23 attempt to help the Commission do what's necessary to 24 complete its agenda and achieve all the unique 25 advantages wireless broadband can bring to the Heritage Reporting Corporation (202) 628-4888
1 consumer plate. 2 3
Thank you very much. Thank you, Andrew. I
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COMMISSIONER MARTIN: MR. KUNZE:
My name is Rick Kunze.
4 represent a ISP I founded in a rural area of northern 5 California called Coluson County. 6 about 60 miles north of Sacramento. Coluson County is Had I known what
7 I was going to be faced with when I originally moved 8 there I probably wouldn't have. That being a very
9 expensive telecommunication services, absolutely no 10 internet service and an uphill battle on a lot of it. 11 So my claim to fame, so to speak, is that
12 I'm one of the people that's doing all of this in the 13 trenches, not to be confused with knowing it all. 14 some of the hurdles that I've run into are very 15 typical in what's happening with WISPS around the 16 country or around the world even. For those of you And
17 who were here for the first half of the day, a lot of 18 it sounded probably rather -- I overheard some 19 conversations that, obviously, went away from it 20 thinking that this wireless stuff isn't really going 21 to be able to serve their area, but I don't agree with 22 that at all. It's exploding in our faces and there
23 are people like me showing up at these WISPS 24 conferences that Part 15 puts on every six months. 25 haven't seen this much new activity in the industry Heritage Reporting Corporation (202) 628-4888 I
1 since the late '90s. 2 There's a whole new set of faces at these
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3 conferences every time, along with a group of core -4 the core group of individuals that comes back each 5 time, but these are not people that were ISPs before. 6 These are new people entering the industry and
7 probably the biggest sign that things are turning 8 around is that money is starting to pour into it. 9 year and a half ago, when I started doing this 10 wireless stuff -- and I really haven't even solicited 11 VC money, but a year and a half a go or so, there 12 really wasn't much VC money being offered to the 13 internet community. Those offers dried up in the late A
14 '90s and 2000 and so forth when the bubble crashed, 15 but that's all changing now, too. 16 I mean, quite literally, in the last week, I
17 think I've had five offers from local individuals to 18 borrow their money instead of the money I'm about to 19 borrow from somebody else. So it is very alive. It
20 is very rapidly growing and the people, like myself, 21 that are actually doing it are doing remarkable things 22 with the equipment that they have available. 23 cases, inventing the equipment as they go. 24 25 example. The power over eithernet thing is a good That came out of guys that were taking stuff Heritage Reporting Corporation (202) 628-4888 In some
1 apart and creating power of eithernet when none 2 existed. Now, of course, it's the standard. I had to I've
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3 laugh at the close of Lauren's presentation.
4 been an amateur radio hobbyist all my life, which also 5 had to be when the wireless thing fell out of the sky, 6 but they reference to radio exploding in the '20s, the 7 other side to that is that a lot of radios in the '20s 8 exploded. 9 10 (Laughter.) MR. KUNZE: But the point she was making, of
11 course, was that the kids just turn them on now. 12 Nobody even thinks about it, so, in this little area 13 where I live, Coluson County is a very productive 14 agricultural area, most of your rice and tomatoes are 15 grown there and that also means that it has, 16 typically, the highest unemployment in the State of 17 California. 18 It's a very old town, a lot of heritage.
It's actually, I believe, and I could be wrong, but
19 I'm pretty sure that it was the second functioning 20 courthouse in the State of California. But the annual
21 unemployment rate is about 18.9 percent and we're 22 often at the top of the list for about two or three 23 months out of the year. 24 I'm on the board of a local economic
25 development corporation and we oftentimes are Heritage Reporting Corporation (202) 628-4888
1 approached for relocation for some very large 2 projects, actually -- million square-foot warehouse, 3 things of that nature and, oftentimes, we fall short 4 of meeting their requirements because of the 5 horrifically bad telecommunications infrastructure. 6 The only way that I was able to help this a little bit 7 was a couple of years ago I need -- I saw the wireless 8 potential, obviously, so there was a mountaintop 9 nearby that I was going to try to deploy from, but it 10 was about 10 miles away and it was managed by one of 11 the large tower management firms. And, after about
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12 six months of trying to get a contract out of them, I 13 threw in the towel, and as Commissioner Martin 14 mentioned, I pretty much entirely by myself erected a 15 150-foot self-supporting tower on the property right 16 next to my building. So, in this rural town, we're
17 now providing megabyte symmetrical broadband wireless. 18 And, within the next two or three months, the
19 footprint will be expanded to about several hundred 20 square miles in the area. 21 So people are eating it up.
There's no question about it, even in a rural area There's no shortage of demand for it. When I was -- back in around '97, '98 when
22 like that. 23
24 DSL was starting to explode, back then you could still 25 get cooper pairs and I bought a DSL chassis, a D-slam, Heritage Reporting Corporation (202) 628-4888
1 which is still in my building. 2 few who can still get pairs.
I'm one of the lucky But it probably took me
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3 a year before I could even sell a DSL circuit to 4 anybody because nobody knew what it was. They didn't
5 understand why they needed anything faster than 6 dial-up, which, of course, has changed considerably 7 since then. 8 So my claim to fame, other than the trench
9 warfare, is the tower project, which is 10 do-yourself-tower.com, if you're at all interested in 11 seeing how to put one up yourself. 12 hyphens, by the way. That's all with
Other than some other notes that
13 I'll probably fire off in a little bit, that's my 14 introduction. 15 16 COMMISSIONER MARTIN: MS. RADCLIFFE: Jeanette?
It's really humbling sitting
17 here listening to so much innovation and it just 18 underlines to me that we often joke, with wonderful 19 humor. Someone actually said today that our job is
20 just to get the hell out of the way. 21 In preparing to come here, and I'm really
22 delighted to have this opportunity to participate in 23 this forum. That in preparing to come here I've put
24 together a little snapshot just to show you how 25 different things were in Australia, but I've rethought Heritage Reporting Corporation (202) 628-4888
1 that sitting here this morning.
I'm really struck by
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2 how many similarities there are on so many levels and 3 how we are, as regulators, looking at a very similar 4 range of issues and we probably have very similar 5 goals I'm pleased to say. 6 If flexibility in regulation and
7 facilitating access to spectrum and providing a 8 regulatory environment that's conducive to innovation 9 are important in the U.S., they're vital in Australia. 10 Like the U.S., Australia has a very challenging We have a very large land mass and we have Ninety percent of Our
11 geography.
12 a very highly urbanized population.
13 our population lives in our urban environment.
14 cellular service providers are able to cover about 92 15 percent of the population, while only covering about 3 16 percent of the land mass and this has advantages and 17 disadvantages. Advantages if you're trying to roll
18 out a service because you can get pretty good coverage 19 without having to have extensive infrastructure 20 necessarily and disadvantages because that leaves a 21 small part of our population highly dispersed and 22 faced with high costs if they're going to get delivery 23 of services like -- well, they're certainly not going 24 to get a lot of wire services and broadband wireless 25 is difficult to get to them, too. Heritage Reporting Corporation (202) 628-4888
1
Like the U.S., Australia is rural and, in my They don't
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2 population, have very high expectations.
3 just expect a basic level of communications 4 infrastructure. They expect to have access to quality
5 broadband wireless services and at a cost that's 6 comparable to their urban counterparts. And a recent
7 OECD report I noticed actually said that concerns 8 about price and quality of service in our rural and 9 remote communities is actually in why broadband 10 wireless isn't necessarily taking off in some places 11 where we thought it might. 12 Also, like the U.S., Australia has allocated
13 a lot of spectrum that's suitable for broadband 14 wireless access and we have both licensed bands and 15 unlicensed bands. We have unlicensed spectrum at 2.4
16 and 5.8 gigahertz and licensed spectrum at 1.9, 2.3, 17 3.4, 27, 28 and we're looking to allocate more around 18 2 gig at 20.10 to 20.25 and possibly the midband gap 19 in the 1.8 gigahertz band. The question for us now
20 really is, have we allocated too much, is it being 21 used efficiently and what should we do or what could 22 do as a regulator if we think that that's the case? 23 So we find ourselves in a situation, and I
24 guess you are too, listening to what happening within 25 the Wireless Bureau at the moment, we're looking at Heritage Reporting Corporation (202) 628-4888
1 our regulatory approach constantly to try and see 2 where we can make it flexible enough to embrace the 3 new technologies that are just bombarding us. 4 And, like the U.S., these are really
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5 exciting times in our communications sector in 6 Australia. Once again, the communications sector is
7 growing faster than our overall economy and we're 8 seeing innovation and investment right across the 9 board in the range of bands. We've got people using a We
10 range of spectrum, deploying a range of systems. 11 have private companies. 12 involvement. We've got government
We've got things happening at a
13 community level and then happening on a large scale 14 level, so there's a lot going on. 15 It's very early days. The government is
16 strongly committed to seeing broadband wireless rolled 17 out in Australia and is doing some things, in terms of 18 incentives, to try and encourage deployment of the 19 infrastructure. But the enormity of the task, even
20 with all this development and growth, is just 21 mindblowing. 22 And it's interesting, just listening to the
23 industry representatives in this room -- I mean, no 24 surprises that everybody wants more spectrum. Not so
25 surprising, too, but comforting to hear that having a Heritage Reporting Corporation (202) 628-4888
1 range of license types and the ability to mix and 2 match spectrum and license types is important. As
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3 I've said, interesting to know that as our role as 4 government is to get the hell out of the way. And,
5 also, our role as government is to focus on the ends 6 not the means. And I would say that's what we think
7 we're trying to do at the Australian Communications 8 Authority. We strive to be consultative. We try to I've
9 be responsive to demand within the industry.
10 said that we're working on trying to achieve the 11 greatest degree of flexibility in our regulations that 12 we can. We strive to be technologically neutral and
13 we don't believe in roll out requirements or anything 14 like that that might stifle innovation because we 15 think that, for a country like Australia, innovation 16 is going to be the key. 17 Speaking of innovation, it's just been
18 wonderful to see Array.com here today who, of course, 19 is one of our big success story and I think, perhaps, 20 a good example of what it is governments can do to 21 facilitate roll out of broadband wireless access. 22 Thanks. 23 24 COMMISSIONER MARTIN: MR. SLATER: Thank you. Scott?
Thank you.
So our thanks to
25 the FCC for their invitation today. Heritage Reporting Corporation (202) 628-4888
1
Barriers and risks are relative and they are One
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2 greatest when a market lacks a clear consensus.
3 of the biggest challenges we have ahead is to inspire 4 a capital market to see this new opportunity that many 5 of us believe in. So we're here today to propose a
6 unifying framework that defines the market and the 7 opportunity that we're discussing. 8 Wireless broadband describes a technology. A market
9 Personal broadband describes the market.
10 that can be understood by all and that embraces the 11 broad assets of various networks and that has paradigm 12 shifted the internet. So this is a framework that can
13 inspire the capital market's understanding and 14 enthusiasm. We're not advocating one network over We're
15 another nor one piece of spectrum over another. 16 proposing the big picture so that all boats rise. 17
We all seem to agree that there's a paradigm
18 shift afoot, hence, we should be able to define what 19 this paradigm looks like. Wireless and broadband
20 represent ideas that are no longer limited by the 21 physical and regulated pipes which defined the capital 22 market used today. 23 the big picture. 24 Many see the communications industry as a A marketplace which is So it's helpful to take a look at
25 commoditized marketplace.
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1 fighting amongst itself for limited spectrum and 2 resources. We started the PBIA because there are too
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3 many sources of disparate or incomplete information 4 and, unfortunately, no clear view to where all of this 5 is going. To illustrate the market problem that
6 misinformation creates, does anybody here know the 7 difference between a used car salesperson and a 8 wireless phone sales person? A used car sales person
9 knows when they're lying to you. 10 11 (Laughter.) MR. SLATER: So we've been working with the
12 support and guidance of IXEs, carriers, cable 13 companies, ISPs, wireless carriers and companies, 14 technology firms, and interfinance personal broadband 15 startup pioneers, other global industry associations 16 as well as distinguished market voices. We're focused
17 on educating the global market and to provide a 18 unified industry voice and understanding to educate, 19 promote and support the global market for affordable, 20 ubiquitous broadband technologies and services. 21 The questions we are focused on are, how big
22 is the market for affordable, ubiquitous broadband? 23 What are the metrics we should use? 24 maximizes opportunity? What principles
Wireless broadband is an
25 ingredient, an important ingredient for much more than Heritage Reporting Corporation (202) 628-4888
1 the wireless industry today.
We chose the term
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2 "personal broadband" because it provides a unifying 3 framework for guiding policy, discourse and capital 4 and a clarifying definition for what we're already 5 seeing in the market. So what we know is that
6 personal broadband is software driven, broadband 7 connectivity that is convenient, more affordable as 8 these technologies fundamentally reduce the cost of 9 access and always there. 10 Personal broadband is a market definition of
11 the future reach of the internet and digital media. 12 And, most importantly, personal broadband represent a 13 new market, which is worth $500 billion annually. 14 So, to better understand where we are going, Let's take a
15 it helps to look at what we've learned.
16 look at how the shift from fixed analog to personal 17 communications impacted economics and behavior. 18 look at an average day 10 years ago. Let's
Most of us had We might
19 POTs, plain old telephone service at home.
20 have stopped along the way to work and used a pay 21 phone to make a call. 22 used centrex or PBX. When we got to the office, we In a meeting, we were also
23 reached via the centrex or PBX and we might have paid 24 for a call from cellular in our car on the way home 25 because we might be late due to traffic. Heritage Reporting Corporation (202) 628-4888
1
Today the shift in behavior and market is The primary access method is the phone we Interesting to
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2 understood.
3 carry in our bags or on our person.
4 note, that for most of us this has not replaced the 5 phone at home nor the phone at our desk at work. But
6 personal communications has become the primary method 7 of communicating. 8 So the shift from fixed communication to
9 personal communication expanded the market to 10 individual users, not homes or buildings. The
11 resulting transformation of personal communications 12 caused a new way of using and thinking about 13 communication, new ways to think about an increased 14 productivity, new employment opportunities and new 15 industries. And, importantly, wireless technology was
16 the glue that increased both the reach of the network 17 and the availability of communication. Because we
18 knew were connected wherever we went, it transformed 19 the way we use communications. 20 So let's take a look at how most of us At home, we access via
21 access the internet today.
22 DSL, cable, most of us, 80 percent of America, us 23 plain old dial-up access. And, on the way to work, we
24 might stop at Starbuck's for a coffee meeting, log on 25 via a Wi-Fi connection. At work, one's connected via
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1 T1 or DS3 and some of us might use wireless or a data 2 application in the car on the way home. 3 It's important to note how many different
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4 network operators participate in providing points of 5 access and value. The personal broadband market
6 offers primary, always on, flat rate broadband access 7 for everyone. Now imagine that the cost would be the The shifts from fixed
8 same as dial-up today.
9 connectivity to personal broadband connectivity 10 significantly impacts current applications in the 11 industry and will also evolve the market for other 12 industries such as digital media. 13 Now PBIA has been working with Artstone
14 Consulting, whose partners have been leading telecom 15 sourcing practices with Fortune 500 enterprises over 16 the past decade. We will be releasing their white
17 paper on the impact of personal broadband on the 18 enterprise market shortly. According to Artstone
19 Consulting, enterprise spends $7 billions annually for 20 personal employee connectivity. Personal broadband This
21 technologies can reduce this cost by 40 percent. 22 figure does not even capture the new markets for
23 productivity mobility where these services created. 24 So, with personal broadband, the broadband
25 connection is no longer to a house or to a building, Heritage Reporting Corporation (202) 628-4888
1 but to a person.
The digital media industry,
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2 especially, the advertising industry clearly 3 understands the importance and value of being able to 4 reach you and me interactively and directly. 5 Each year the digital media industry spends
6 billions of dollars each month, for example, promoting 7 movies. Movies, as I have learned, are much more than Movies have
8 the business of tickets to a theaters.
9 become brands where the brand starts with the movie 10 experience and evolves to CDs, DVDs, videogames, 11 computer games and ring tones. So media spin is
12 ultimately about reaching people not houses. 13 As traditional advertising seeks to create
14 awareness and reach, personal broadband represents an 15 ability to effectively focus, reach, reduce certain 16 spin and effectively drives sustainability. So,
17 instead of spending $100 million to create an initial 18 awareness, imagine spending 20 percent less in 19 achieving the same market impacts and results? 20 Personal broadband will prove to be a more
21 cost-effective method than existing broadcast channels 22 for the digital media industry. Last year, TNS media
23 intelligence in New York reported that the advertising 24 industries spent $128 billion inspiring a GDP of $10 25 trillion in the U.S. So much in the way that personal
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1 communications transform and grew the market for 2 communication, personal broadband will transform and 3 grow the market for broadband applications. 4 that we estimate to be $500 billion per year. A market And a
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5 wireless broadband is the glue that will leverage 6 existing broadband infrastructure and make this 7 transformation possible. 8 So tomorrow's new digital media market
9 depends upon current providers working together and 10 supporting this personal broadband vision. This is a
11 structure that illustrates a much larger market ahead 12 for all. This framework is best understood as a It is clearly
13 layered approach to creating value.
14 difficult to reconcile the fighting that is occurring 15 between traditional silos of communication providers 16 from limited assets. Technology innovation without This layered paradigm
17 market insight is doomed.
18 illustrates the huge value creation opportunity for 19 all sources of data in digital media. 20 Policy and market thinking about spectrum
21 and capital needs to recognize this untapped 22 potential. Digital media is the driver for an
23 unregulated market for transaction and application. 24 The future that leverages existing assets of all is a 25 vision that is compelling and attractive for all. Heritage Reporting Corporation (202) 628-4888 Now
1 this is a vision that is being adopted around the 2 world. 3 today. 4 In Australia this year, we've learned that We've heard about many innovators and pioneers
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5 Sydney is the first major city in the world to deploy 6 personal broadband network. And what's interesting
7 about this development is that this effort coordinated 8 by Vodafone and MIC, Crown's Castle and Mitsubishi
9 supports a wholesale distribution model with multiple 10 distributors. This is a model that can't be supported
11 by current broadband solutions today. 12 Imagine the opportunity -- pardon me. The
13 economics here indicate that there can be dozens of 14 personal broadband networks in any market. 15 the ultimate opportunity for a competitive 16 marketplace. Imagine the opportunity, not one or two, This is
17 but dozens of new interactive business, each 18 customized and energizing entire market segments -19 consumer enterprise, homeland defense, government 20 agencies, libraries, schools, disabled and nonprofits. 21 We've been working with RHK Consulting to The U.S. is
22 additional insights into these markets. 23 not a leader in broadband today.
The new wave of
24 personal broadband provides the United States an 25 opportunity to dramatically expand our economy and Heritage Reporting Corporation (202) 628-4888
1 regain the leadership position.
Personal broadband is We
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2 already being deployed in Korea and Australia.
3 must focus our efforts and work together if we hope to 4 emerge the global leader in personal broadband. 5 To summarize, to move this market pass
6 barriers and risks, the communications industry needs 7 a unifying vision and framework that resonates for 8 all. We applaud the initiatives and objectives of There is a reason path forward for
9 this FCC forum.
10 all and while different business motivations vary and 11 while this shift will not be easy, with the 12 innovation, intelligence and inspiration of the people 13 in this room and in this industry, the opportunity 14 ahead is clear. The FCC knows and the U.S. economy The
15 needs to overcome current barriers in thinking.
16 whole is much bigger than the sum of its parts and to 17 inspire economic growth, new jobs and to ensure the 18 U.S. emerges as a global leader in wireless broadband, 19 we propose (a) adopting personal broadband as a 20 unifying framework for guiding policy, discourse and 21 capital, allocate more spectrum as we work together to 22 promote this clarifying definition of what we're 23 already seeing in the market and use these ideas as a 24 catalyst for discussion and growth to the U.S. 25 economy. I thank you very much. Heritage Reporting Corporation (202) 628-4888
1
COMMISSIONER MARTIN:
Thank you, Scott.
Our
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2 final panelist, Charles Townsend. 3 4 MR. TOWNSEND: Thank you.
You've heard comments, I think, earlier this
5 morning about the potential for 700 megahertz and I'm 6 going to give you a little update on where it is and, 7 I think, where it can go. 8 First of all, just a personal note, this
9 forum has been one of the most interesting ones I've 10 been to in the last two years. 11 and his team. 12 Good job. So I thank John Muleta
As Commissioner Martin said, Aloha Partners
13 is the largest owner of 700 megahertz spectrum in the 14 United States, over 167 licenses. We cover 135
15 million people, which is a little under 50 percent of 16 the country and we cover 26 of the top 50 markets. 17 The 700 Megahertz Coalition which covers almost all of 18 the operators of 700 neighbors and practically the 19 entire country. So there's a group of organized
20 people who have 700 megahertz spectrum. 21 President Bush has set an ambitious
22 objective of having universal broadband service by the 23 end of 2007. The question is where are we today and It's going
24 what do we need to reach that objective?
25 to surprise you, the answer to that, because it is not Heritage Reporting Corporation (202) 628-4888
1 something that is easily quantified.
The Pugh
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2 Charitable Trust is a group that tracks internet usage 3 and they do a terrific tracking study every two or 4 three times a year and they came out with their 5 February survey just a month ago. And what they
6 indicated was that in urban areas 7 percent of the 7 homes don't have any broadband service. 8 good. That's pretty
We're practically there in urban areas, not so Forty-two percent of rural
9 in rural markets.
10 household don't have any broadband today. 11 What's even more dramatic is that if you
12 look at how many rural homes have just one provider or 13 no providers is 70 percent. So 7 out of every 10
14 rural homes either have one or less rural broadband 15 providers. To look at a comparable number for the
16 urban areas, it's only 1 out of 5, so less than 20 17 percent. 18 What the Pugh Trust has concluded as to why
19 this exist shouldn't be any surprise to anybody that 20 was here this morning. The cost and deployment is the The
21 single biggest barrier to rural broadband today.
22 dilemma is that neither cable or DSL is cost-effective 23 in rural markets because of the low density. We
24 simply can't put these large wires in low density 25 areas. Wireless is the obvious solutions, which I'm Heritage Reporting Corporation (202) 628-4888
1 sure everybody here thinks. 2 The problem that was articulated earlier by
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3 Lauren is that in frequencies over 1000 megahertz or 1 4 gigahertz, they don't propagate very well. 5 difficulty through a terrain. 6 by foliage or trees. They have
They can be deflected
So the frequency is, I think,
7 most efficient to deliver broadband to rural 8 communities is 700 megahertz, which is why we bought 9 all the licenses. 10 We have been diligently working on a
11 solution here, as I don't know how many of you are 12 familiar with it, but the broadcasters currently 13 occupy a number of these licenses, which is why nobody 14 can use them. And I think the FCC has made some
15 pretty good progress on potentially getting these guys 16 to do some moving, but it's a big task. So we have
17 been working on an interim solution that would 18 potentially free up many of these licenses right now. 19 And the current rules for 700 megahertz
20 prohibit us from transmitting on the channels that we 21 currently own, which are channels 54, 55, and 59. The
22 complicated factor is that it also prohibits us from 23 transmitting on the adjacent channels, which would be 24 in this case 53, 55, 58 and 60. So, really, if
25 there's one of six television stations in one of our Heritage Reporting Corporation (202) 628-4888
1 markets, we can't use it. 2 Having come out of the cellular telephone
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3 business, I recognized that there were other ways to 4 cope with interference and what we concluded was that 5 because we were transmitting at such low power from 6 our high speed realm internet access the chances were 7 that we were not going to be an interferer with the 8 adjacent broadcasters. 9 We have done a number of studies which
10 confirmed that guess and, in the next month, we will 11 be submitting to the Commission a request to operate 12 on a channel adjacent to broadcasters. 13 so what's the significance of that? You might say,
The significance
14 is that if this approach is approved by the Commission 15 over 50 percent of the United States can be served by 16 700 megahertz right now. So the need for the digital
17 transition, while important, isn't critical. 18 I think that the wireless broadband business
19 is going to explode in the next two to three years. 20 We're just seeing the inklings of what's about to 21 happen with Nextel's deployment in Raleigh/Durham and 22 Verizon's deployment in Washington and San Diego. The
23 dilemma, as they both articulated this morning, they 24 don't want to go to the rural areas because it's too 25 expensive. We can provide service to rural markets at Heritage Reporting Corporation (202) 628-4888
1 one third to one half less than the large companies 2 can because of the propagation characteristics of 700 3 megahertz. 4 Verizon and Nextel both transmit at 1900 and So, assuming
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5 above and you need half as cell sites.
6 you can get the equipment for the same price, you can 7 cut your cost in half. So we think the 700 megahertz
8 is a very cost-effective way to get the rural markets. 9 COMMISSIONER MARTIN: Thank you. I thank
10 all the panelists for their introductory remarks. 11 I do what to have the chance at the end to
12 make sure and open up the floor to questions, but I 13 did want to try to have a few questions for each of 14 the panelists before we did that. 15 Andrew, you mentioned, I think, in the
16 beginning, that you're first principle was that we 17 should have as few rules as necessary. Believe it or
18 not, that's what the Commission tries to do, even 19 though, I'm sure that a lot people don't always agree 20 that that's what we accomplish. But I thought that it
21 was instructive, Jeanette was talking about the 22 difficulty they have and that maybe they've allocated 23 too much to the unlicensed band and I was going to ask 24 you and any of the other panelists if they had 25 comments on how we try to find a proper mix of Heritage Reporting Corporation (202) 628-4888
1 licensed and unlicensed.
I know you said that you'd
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2 anticipated us doing more unlicensed, but how do we 3 try to do that and find that balance as we proceed? 4 MS. RADCLIFFE: Just before they do, though,
5 our balance -- we were thinking have we allocated too 6 much licensed spectrum. 7 COMMISSIONER MARTIN: I'm sorry. I thought
8 I had heard that wrong because I was surprised when 9 you said there would be too much unlicensed. 10 MS. RADCLIFFE: I would hate anyone in
11 Australia to think I said that because we are under 12 pressure to, perhaps, get more unlicensed spectrum as 13 well. 14 COMMISSIONER MARTIN: Well, you distracted I wasn't
15 me with the "get the hell out of the way."
16 sure if they informed you about our recent efforts on 17 indecency and I was going to go get David Solomon, but 18 that probably distracted me. 19 clarified that. 20 So I'm glad you
No, I'm just kidding. I'll try to answer, anyway, from
MR. KREIG:
21 a big picture perspective, again, I guess, I would 22 suggest returning to the market, see what people want. 23 See what people are asking the Commission,
24 particularly, the stakeholders who have had experience 25 across the board in trying to build systems. Heritage Reporting Corporation (202) 628-4888 And what
1 we try to do, representing both categories, is tee 2 things up for the Commission. And so the bottom line
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3 question is, I would say there is a number of 4 statements in different filings that point to some 5 answers. And one answer may be that it shouldn't
6 ought to be about how much spectrum does each group 7 have, but is it being regulated in an efficient way. 8 So, for many of our licensed members, they
9 would say the big issue that how much spectrum, in 10 some ways, but can the regulation be cleaned up in the 11 case MDS and ITFS. 12 spectrum. They're not asking for more
They're asking the Commission to, in a
13 timely way, help them make the spectrum they have be 14 useable. That said, there are, again, pointing to
15 surveys that are done and from filings indications 16 that more spectrum would be helpful in license 17 exempted services in the 3600 megahertz proceeding, in 18 the TD proceeding that the Commission has underway are 19 excellent first steps and directions we would suggest. 20 21 COMMISSIONER MARTIN: MR. KUNZE: Rick?
The spectrum issue is, But, if you want to use a
22 obviously, a hot topic.
23 case example, right now I'm spreading our wireless 24 footprint out for probably 50 miles in each direction 25 from a central tower, so it's a hub and spoke Heritage Reporting Corporation (202) 628-4888
1 arrangement in
to other tower sites.
Now, if I
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2 wanted place some 2.4 and some 5.8 OFDM stuff or 3 something like that, in 2.4, you've only got three 4 overlapping channels that you know and you've got two 5 polarities. Well, it just so happens right down the
6 street I've got somebody running a link up to the top 7 of a mountain. 8 So vertical in that direction is shot.
So that takes vertical out of the loop for me in that So, if you do the math, you're down to
9 direction.
10 less than a handful of available channels. 11 So, if I throw up four 90 degree sectors and
12 use, say, 1, 4, 8 and 11 on 2.4, I'm out channels on 13 2.4. 14 If I wanted to place them 5.8, that uses up 5.8. I mean,
I have nothing for back hauls within reason.
15 there are others -- I don't have any WISP competition 16 to speak of. I've just got some use of a band, but
17 you start running out of available channels, if you 18 will, fairly rapidly. 19 So that's why more spectrum would be, from
20 my perspective, because I'm sitting here with all 21 these other sketches that I've got in this notebook. 22 I've been trying to brainstorm exactly how I'm going 23 to lay this out and there's a real shortage of 24 available frequencies for me to use because of 25 overlapping and things like that. Heritage Reporting Corporation (202) 628-4888
1
The only other thing I was going to mention,
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2 though, is if, you remember when we met a month ago, I 3 mentioned that OTARD water tower comparison. If we
4 could maybe carry that one step further to -- somebody 5 mentioned, I think this morning, but if the Commission 6 could come up with some kind of a template. 7 8 about -9 MR. KUNZE: OTARD is an acronym, On the Roof It's an FCC documents that COMMISSIONER MARTIN: I'm sorry. We talked
10 Access Devices, I believe.
11 preempts homeowner subdivision covenants from making 12 antennas on the roof illegal. So one of the obstacles
13 I've had that have consumed the better part of the 14 last eight months really is trying to explain exactly 15 what it is I'm doing. When I approach, whether it's a
16 city or a private owner of a grain elevator or 17 whatever, when I approach them and ask them to enter 18 into an agreement with me so that I can put an antenna 19 up there to serve another cell site, I'm inevitably 20 left with the deer in the headlights look and they 21 think I'm a telephone company. 22 deep pockets. 23 So suddenly I've got
That type of a problem.
So I suggested that, perhaps, the Commission
24 might look at something as OTARD is to homeowner 25 subdivision problems with the antennas. If the
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1 Commission could come up with some kind of a framework 2 whereby city managers who don't understand this stuff, 3 city councils, boards of supervisors, things of that 4 nature, they'd have something to hang their hat on. 5 There would be an official template or guideline, 6 maybe to follow, to move forward. That could maybe
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7 even be carried one step further to include a typical 8 model of a network, maybe. I mean, maybe not down to
9 types of equipment, but how it looks so that cities 10 could have more to help them understand what it is 11 that's about to happen. 12 Like I said earlier, it took me a long time
13 to convince the customers that broadband was something 14 that was going to be important and it's expedientially 15 difficult to try to get a building permit to put 16 150-foot tower when you need a zoning variance to do 17 so and you're talking to a planning commission that 18 hasn't got a clue what you're talking about. 19 COMMISSIONER MARTIN: Jean, I was going to
20 ask you whether or not, following up on Rick's points, 21 whether or not you all try to address the access to 22 rights-of-way of property owners or how do you try to 23 address those issues when you trying out deployment? 24 MS. RADCLIFFE: The ACA doesn't get involved
25 in that aspect.
We try to those sorts of things to
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1 industry to resolve itself.
We do, from time to time,
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2 hear, when we're talking to people in the industry, 3 similar sorts of experiences as you were saying. 4 depends, I guess, where you are though. It
In our rural
5 and regional areas, councils are very supportive of 6 broadband wireless roll out and are actually working 7 in partnership in a number of instances to actually 8 roll systems out using licensed and unlicensed 9 spectrum and work with private companies -10 consortiums with private companies and also using some 11 federal financial assistance to do that. 12 something that the ACA does. 13 MR. KREIG: Can I pass along a compliment to But it's not
14 the FCC that, in limited instances, they have taken 15 initiatives, including in this OTARD rule, which 16 helped give local providers a tool to use against 17 unreasonable local restrictions preventing the spread 18 of internet access and we're very pleased to have 19 taken a lead from the industry side in working with 20 the Commission, in which about three years ago did 21 create an important advance in the United States 22 against unreasonable antenna restrictions. So it's a
23 model that sometimes U.S. uses, but it's potentially 24 very important. 25 COMMISSIONER MARTIN: And I think what Rick
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1 was hoping for was to have even more aggressive an 2 extension into other areas beyond the local zoning, 3 but I appreciate the comments about the efforts we 4 have made. 5 Scott, I know you talked about the key to
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6 points of more spectrum, and I didn't know if you had 7 any thoughts on how we balance licensed and 8 unlicensed, particularly, going forward. 9 MR. SLATER: I'm not sure anybody has the
10 answer, but there are two other elements that are 11 worth considering and one is bites for hertz for 12 second for user and the cost for megabyte. So you've
13 got to get over the context of what the current market 14 is capable of delivering and what limits the growth of 15 that marketplace. 16 COMMISSIONER MARTIN: Charles, I was going
17 to ask you, you mentioned the proposal or approach you 18 might have soon of availing about ways to try to take 19 more advantage of 700 megahertz and the work that you 20 all have done to try to ensure that it wouldn't end up 21 creating interference and be able to have much more 22 efficient uses of it today. I was wondering if you
23 could give us a little more insight into that and talk 24 about whether it was going to be a widespread 25 proposal, whether it was going to be in test markets, Heritage Reporting Corporation (202) 628-4888
1 for example, and give us some insight, whatever you're 2 comfortable talking about at this table. 3 MR. TOWNSEND: Sure. I think our feeling is
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4 that we will take an individual market and we will use 5 it as like a test case to show what the interference 6 potential is so you can go and measure after we've 7 done the test to confirm what our suspicions are. 8 that proves to be as successful as I hope, we would 9 then either ask for a broader ruling or just add more 10 markets. 11 I had one other comment on your license But it seemed If
12 spectrum and maybe it's too simplistic.
13 to me that the unlicensed spectrum makes the most 14 sense for indoor applications. It's contained. It's
15 low power and the licensed spectrum makes the most 16 sense for outdoor application because you want 17 distance and building penetration. If you kind of use
18 those to run a metric, you would then say that, 19 generally, unlicensed spectrum should be over 20 3 gigahertz and licensed spectrum should be under 21 3 gigahertz and that's because of the propagation 22 characteristics at that point. Obviously, the lower
23 you go down on the spectrum totem pole, the better it 24 propagates. That would be what I would do if I were
25 in your shoes. Heritage Reporting Corporation (202) 628-4888
1
COMMISSIONER MARTIN:
There's about 10
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2 minutes left, so I did want to make sure we opened up 3 the floor to questions from anyone in the audience, 4 but, while anybody was thinking about their questions, 5 they can approach either of the microphones. But I
6 also did want to make sure I got the chance to ask if 7 any of the panelists have any views of the Homeland 8 security issues that are raised in this and how the 9 industry views its role in supporting critical 10 infrastructure and/or the Homeland security efforts 11 that are going on. 12 MR. KREIG: Well, within WCA, immediately
13 after 9/11 I found myself on the phone with one major 14 provider wanting to donate equipment and the phone 15 rang and another major provider, they were Excel and 16 Winstar, they wanted to hope and, in fact, they did 17 help a lot and just underscored to me how wireless is 18 as a critical part of this, both in public safety, 19 border patrol and military uses as well as disaster 20 recovery. And so we organized this phone tag into
21 some immediate communications helping situations, but 22 in an ongoing effort. 23 And, in fact, at our convention two weeks
24 from now for the third time in a row, we're co25 committing with the Homeland Defense Journal because, Heritage Reporting Corporation (202) 628-4888
1 basically, wireless broadband is such a key part of 2 what government procurement agents need that were 3 bringing the communities together. So there's lots
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4 going on and it's right on point with your question. 5 MR. TOWNSEND: One additional comment on As
6 this interference issue that I earlier brought up. 7 most of you know, the Blue Book safety groups have
8 spectrum at 700 megahertz and it's also incumbent by 9 broadcasters. If the Commission were to permit
10 adjacent channel operation on channels above Channel 11 51 where we operate, 80 percent of the country could 12 be clear in at least 12 megahertz of spectrum. So
13 public safety could get on the air really quick if 14 we're able to work this interference issue. 15 MR. KLANSI: Andy Klansi. It's a question And, if we
16 of policy or some thoughts towards policy.
17 think about the way the current infrastructure was 18 built over the past 100 years and it basically was 19 built on kind of a regulatory environment that 20 promoted risk adverse because, basically, it was a 21 business model that said you've got a certain hour 22 life of providing universal service. And, if I listen
23 to some of the arguments about going with license 24 spectrum, it sounds like that's a risk adverse model 25 and some of the bigger carriers and some of the people Heritage Reporting Corporation (202) 628-4888
1 that are used to that kind of model like that. 2 I hear the riskier side as being unlicensed
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3 spectrum, which a lower cost entry, has some risks to 4 it and, to me, from a policy, do we still look at that 5 basic, well, this is the way we've done it in the past 6 and licensed is the best way to go and that's the way 7 we do it. Or do we take a step back and say let's And, I think,
8 find a balance between the two?
9 Charles, you started to say even a simple template, 10 fill the boxes. Now I think though that template It's three dimensional.
11 isn't really two dimensional. 12
Now you've got to put the economic factors in, but
13 just a thought in terms of listening to licensed and 14 unlicensed and finding a balance because I think if 15 you go to licensed, I think the rural communities get 16 left out. 17 If you go too much with the unlicensed, I
18 think there's a lot of technical problems with 19 interferences and then you've got to set some rules, 20 maybe standards committees could help make those rules 21 better, but then you've got a problem with how long 22 it's going to take the standards committee to get 23 through those rules. So just some thoughts. I'd like
24 to hear your comments on that. 25 MS. RADCLIFFE: That's a balance that we
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1 grapple with or we're grappling with it in Australia, 2 which is how do we address the particular needs of our 3 rule in the rural communities and, at the same time, 4 preserve the kinds of arrangements that we feel work 5 best for our urban communities. I guess we're not
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6 thinking of it so much in terms of risks, although 7 that's an interesting perspective. But we're thinking
8 of enabling people to mix and match, depending on 9 different systems or different stages in their 10 deployment. For example, on wired in Australia, we
11 tend to roll out first in unlicensed spectrum, but 12 they have licensed spectrum and that is part of their 13 deployment plan and they will get to that, but it's 14 just not, at this point. 15 So I think, for us as a regulator, we're
16 trying to look at what do we need to do in both 17 licensed and our unlicensed spectrum in the rural 18 areas to get out of the way, if you like, to make it 19 possible for people to deploy there. We've looking at
20 something that you've done here, which is relaxing 21 power limits possibly in some of our licensed bands 22 because we're listening to what people are saying 23 about the importance of those for back haul. 24 I think it's horses for courses. We need to
25 think of what each setting
was and then come up with
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1 regulations that are sensible in the current settings. 2 COMMISSIONER MARTIN: Anybody else have any
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3 comments they want to make? 4 AUDIENCE SPEAKER:
I see another question. I've heard a lot today
5 about the value of goal, of spectrum flexibility and 6 market-based allocation of spectrum, but I'm really 7 confused about what that means, not the abstract, but 8 the implementation details. And, in particular, does
9 site-base licensing -- the regulators knows that 10 site-based licensing with significant technological 11 restrictions qualify as a market-based strategy to 12 spectrum allocation? For example, two of the bands
13 we've had highlighted today are the MDS/ITFS band and 14 the 71 gigahertz band. 15 Now with the MDS/ITFS folks, they've argued We need
16 that site-based licensing is terrible.
17 geographic service area licensing and that's what it 18 means to have market-based flexibility. But, up at 71
19 gigahertz, the 13 gigahertz the FCC just allocated, 20 they're we gone into an extraordinarily narrow 21 site-based licensing approach where everybody gets two 22 spots and a connection. And there, that band that's So we have
23 the height of market-based flexibility. 24 two completely different systems. 25
On the surface, when you read most of the Heritage Reporting Corporation (202) 628-4888
1 FCC procedures, you would think up at 71 gigahertz, 2 we're going back 50 years to command and control. 3 I'm just utterly baffled. I'm not saying one is So
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4 better than the other, but there seems to be a radical 5 inconsistent use of this language of market-based in 6 flexibility and I'm wondering if somebody can clarify 7 what appears to be quite a discrepant use of that 8 language. 9 Thank you. COMMISSIONER MARTIN: Why is everybody
10 looking at me? 11 12 13 context. 14
I'm just the moderator here.
(Laughter.) MS. RADCLIFFE: I can have a go from out
COMMISSIONER MARTIN:
I think the Commission
15 has been struggling valiantly trying to find the right 16 balance when we're talking about unlicensed and 17 licensed usages, but what actually does it mean to 18 provide additional flexibility and trying to respond 19 to those who are trying to come up with innovative 20 ways to use different pieces of spectrum, but I hear 21 what you're saying about the potential inconsistencies 22 in the approach. 23 MR. KREIG: Well, since we're a major
24 proponent, probably the major proponent to both of 25 these cases, I'm going to take a quick stab at showing Heritage Reporting Corporation (202) 628-4888
1 the actually consistency of that.
In both instances,
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2 virtually all of the people who are involved want the 3 Commission to do what -- in the case of 80 gigahertz 4 did and, also, in the case of MDS and ITFS, having 5 unified filing of the major stakeholders. And I think
6 what that illustrates is that this is not a kind of 7 academic let's imagine how it should be, but people of 8 real world who are trying to make things work will 9 when, frankly, a lot of things have not worked and 10 have gone very badly because of theoretical constructs 11 that somebody had an idea of and it seemed very 12 logical at the time. 13 I'll just take one example. Why not hand
14 out licenses by lottery?
It seemed very fair at the It created chaos
15 time, but it created a black market.
16 in the areas and some people went to prison over it 17 because it created incentives for illegal scheming 18 behavior and, in these instances, people are build 19 successful networks and have come together because of 20 the different needs, the different markets of those 21 bands. They're totally different markets and
22 customers and they have totally different constraints. 23 In the case of 80 gigahertz, this part I'll say, is
24 the U.S. Department of Defense shares of those 25 spectrum bands and so that was one of the major Heritage Reporting Corporation (202) 628-4888
1 reasons for that licensing scheme that in the time of 2 war the U.S. Department of Defense has some concerns 3 that policymakers in the business community have to 4 listen to it. So, again, it's not only an exercise,
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5 it's what's possible. 6 AUDIENCE SPEAKER: You're not disagreeing
7 that that does look like command and control up at 8 71 gigahertz and there's certainly a lot of 9 reconsideration and requests that modify the rules 10 which is a command and control type of follow-up on 11 the allocation. 12 That was the question I had. Thank you. We can get
COMMISSIONER MARTIN:
13 two more questions, I think, before our time is about 14 out. 15 AUDIENCE SPEAKER: Commissioner, Rick, and
16 Michael Anderson earlier, are only two examples of 17 what are thousands of wireless IPSs who have chosen to 18 take the risk and service areas where the big guys 19 won't go and have ample opportunity. One of the
20 things that frustrates them the most is that they're 21 willing to get a risk example of having a limited 22 amount of spectrum available to him on an licensed 23 exempt basis so he can service those customers. 24 yet, he's trying make a very effective us of the 25 83.5 megahertz or 2.4 gigahertz, when just above there Heritage Reporting Corporation (202) 628-4888 And,
1 it's 190 megahertz, two times as much for him that's 2 going completely unused in his service. Yet, someone
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3 is holding a license for that, which, apparently, has 4 no intention of deploying its service. 5 If they had intended in deployed service They would have There's essentially There's no,
6 base, they would have done it. 7 started to realize the revenue.
8 no penalty for spectrum squatting now.
9 Andy referred to a forced build out, but isn't there 10 - doesn't it make sense that there is some penalty for 11 essentially spectrum squatting where you buy a license 12 for a spectrum on the premise that you would build out 13 the world for PCS as it exist. 14 COMMISSIONER MARTIN: The Commissioner has
15 in the past had "use or lose it" type of policies 16 where they expect people to end up building them and 17 it's always a balance that the Commission is trying to 18 strike at what we should be trying to do in our 19 policies. 20 AUDIENCE SPEAKER: I would suggest that the
21 Commission consider some kind of a petition 22 arrangement where an operator like Rick could say, the 23 license is sitting there doing absolutely nothing. 24 It's not servicing the public good. 25 license and get equipment. I can take that
I can deploy services.
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1 I'm in the area.
I've got the financial backing.
Why
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2 can't I go and start using that spectrum since they've 3 essentially abandoned it? 4 5 question. 6 AUDIENCE SPEAKER: Thank you. For the COMMISSIONER MARTIN: Thanks. The last
7 gentleman that's fortunate enough to hold all of the 8 700 megahertz licenses -9 10 (Laughter.) AUDIENCE SPEAKER: I take a little
11 exception, by the way my name is Carl Stevenson, and 12 I'm speaking personally. I'm not speaking for any of I take
13 the constituencies that I normally represent.
14 a little exception with your premise that unlicensed 15 should be relegated up to into the regions of the 16 spectrum where it won't propagate very far and this 17 goes back to the WISPS and so forth. Where spectrum
18 can be used I'm sure these guys would be able to 19 provide even more economical service to their 20 customers in the areas where they're essentially the 21 only game in town if they had access to spectrum, 22 which didn't cost them a fortune to get into an 23 auction that would propagate far enough if the cost 24 was low, 2.4 is a fair distance in certain types of 25 terrain and other types of terrain it's fairly limited Heritage Reporting Corporation (202) 628-4888
1 and the lower spectrum like the Commission is talking 2 about where immediately relating the text of the MPRM 3 on this T.V. band sharing thing with a little bit of 4 cognitive radio technique. There's some spectrum
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5 there that could be very useful for the rural areas. 6 So, again, I take some exception with your concept 7 that everything below here where it propagates nicely 8 should be licensed and everything above should be 9 unlicensed. I think it's another question of
10 balancing the interest. 11 12 So, if you want to react to that. MR. TOWNSEND: Well, I can appreciate what
13 you are saying.
I mean, historically, as you know,
14 the rural area is the last areas to get any type of 15 technology innovation and the reason is because it's 16 so costly effective to do it. And, yet, there are
17 people like Rick who are out there right now doing it 18 way before anybody else. 19 with you. 20 painted it. 21 AUDIENCE SPEAKER: Well, thanks for So that's a balance. I'm
I don't think it's as black and white as I
22 clarifying that. 23 COMMISSIONER MARTIN: Please join me in
24 thanking all the panelists. 25 (Applause.) Heritage Reporting Corporation (202) 628-4888
1
MS. SEIDEL:
Thank you, Commissioner Martin
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2 and thanks to each of you. 3 We'll have a break until about 3:30. So, if
4 you'll come back at 3:30, we'll begin.
Also, the
5 technology demonstration room will be opened until 6 5:00 for those you that want to stop by between now 7 and then. 8 9 Thanks. (Whereupon, a short recess was taken.) MS. SEIDEL: Folks, if you want to take your
10 seats, please, we'll get started. 11 COMMISSIONER COPPS: Thank you very much.
12 Good afternoon. 13 today.
I'm pleased to welcome you all here
I understand that today's conference has
14 already been an interesting one and a productive one, 15 but I'm happy to tell you that we have saved the very 16 best for last. Our final panel of the day is entitled
17 "Looking to the Future" and that's always more fun. 18 Most of what you've heard today is about
19 what wireless broadband could be, the potential of the 20 technology and we all have high hopes in the future 21 this technology may bring some much needed competition 22 to areas where broadband is currently offered on a 23 monopoly basis or maybe, if we're lucky, on a duopoly 24 basis. In the future, it could even bring broadband
25 to the huge floss of our country and to the millions Heritage Reporting Corporation (202) 628-4888
1 of our citizens who currently have no broadband at 2 all. 3 In the future, we may no longer have to Instead,
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4 choose between mobility and through put. 5 maybe we can have both.
So, like each of you, I am
6 intrigued and excited by the possibilities but what is 7 going to happen. So what I hope we can do with this
8 panel is to kind of test the potential that you all 9 have been talking about today against this panel's 10 view of what is really feasible, what's doable and, 11 also, maybe what needs to be done to realize that 12 potential. What does the future really hold for For example, while this
13 wireless broadband?
14 technology may some day provide substantial 15 competition to DSL and to cable, it's not doing so 16 today. So we'll need to determine what needs to
17 happen that wireless broadband can maybe be an equal 18 competitor to these more established technologies. 19 The possibility that the same companies that
20 dominate DSL and cable today may end up dominating 21 wireless broadband is also something real and 22 something that we need to confront. We need to
23 understand the impact that would have on deployment 24 and innovation of wireless broadband. 25 Furthermore, our panel will discuss the Heritage Reporting Corporation (202) 628-4888
1 applications that wireless broadband innovators 2 believe are most likely to drive deployment. In
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3 addition, we have to understand the spectrum needs of 4 the future, which is an important part of any 5 discussion. We must determine how to find the path
6 that gives innovators and consumers and entrepreneurs 7 the spectrum resources they need going into the future 8 because if we fail on that one, obviously, we run out 9 of room or else we'll be left with bands that are so 10 crowded that interference will degrade reliability and 11 that will be that. 12 So we have to succeed.
These are all tough issues, but luckily we
13 have a diverse set of industry experts here to guide 14 us. We have six experts to serve as our
15 prognosticators this afternoon. 16 Martin Cooper of ArrayComm, Duncan Davidson
17 of Sky Pilot Network; Gary Grube of Motorola; Valerie 18 Holt of Reciva; Jose Rodriguez of the Hispanic 19 Information Television Network and Sai Subramanian of 20 Navini Networks. 21 Each speaker will have five minutes.
At the end of the last speaker's remarks, I'll ask a So
22 few questions and then we'll turn to the audience. 23 I trust you all will have some questions ready. 24 Let me just introduce each panelist right
25 before they speak and we'll start with Martin Cooper, Heritage Reporting Corporation (202) 628-4888
1 the Chairman of ArrayComm.
I think you know in the In fact, he
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2 wireless communications industry.
3 conceived the first portable cellular phone in 1973 4 and lead the 10-year process of bringing it to market. 5 During 29 years with Motorola, Mr. Cooper built and
6 managed both its paging and cellular businesses and 7 served as corporate director of Research and 8 Development. 9 Upon leaving Motorola, he co-founded
10 Cellular Business Systems, Inc. and today he runs 11 ArrayComm. Welcome, Mr. Cooper and you have five
12 minutes to get us started and sailing in the right 13 direction. 14 15 MR. COOPER: Well, thank you, Commissioner. Wireless does not
And you're quite right.
16 yet have a significant share of the broadband 17 marketplace, but Wi-Fi and Cellular Data have given us 18 a little bit of a taste of what it's like to get a 19 broadband signal with the freedom of being unleashed 20 from our desks and from the wall. And, as your
21 previous speaker mentioned, in Sydney today, there is 22 actually the full wireless broadband at where people 23 can take a PC card, plug it into a notebook computer 24 and literally move about the city always being 25 connected with broadband and at very, very low cost Heritage Reporting Corporation (202) 628-4888
1 and that is the image that we have for the long-range 2 future because we believe that people are 3 fundamentally mobile. 4 People start moving when they wake up in the
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5 morning and they keep moving all day long until they 6 go to bed at night and some of them keep moving even 7 thereafter. So I do take issue with the very first
8 comment that I read in the questions that were 9 postulated for this group that broadband wireless is 10 an alternate technology. 11 basic technology. It really isn't. It is the
We prove that 30 years ago when we Half the telephone lines in the So there's no
12 introduced cellular.
13 world today are, in fact, wireless.
14 question any more that being used to the wall -- the 15 only people that believe that you have to be are those 16 that can only provide you that service. 17 But even cellular is not finished yet
18 because, even though half the lines are wireless, most 19 of the phone calls in the world today are still made 20 over wires. Somehow we've got to fix that and there's
21 still a lot of penetration to happen. And then we have 22 this new service that's come along that's called the 23 internet and the same thing is exactly true as was 24 true for voice some 30 years ago. There absolutely no
25 reason why somebody should be leashed to a wall to get Heritage Reporting Corporation (202) 628-4888
1 internet service, just as there was not reason for 2 them to be leashed to a wall to get voice. Some how
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3 or other we have to give people the freedom to use the 4 internet without being plugged in. 5 And, when that happens, when you can do that
6 with very low costs and, when you can do it with 7 broadband always on service, we'll find that there are 8 a huge number of applications because the internet, we 9 already know, has the ability to educate people, to 10 improve productivity, to entertain them, to improve 11 their safety, to improve convenience. But it has to
12 be a low-cost system and, above all, it has be 13 spectrally efficient. Because the fact is that if you
14 look at all the potential applications, namely, 15 finishing the job of cellular, introducing all of 16 these new services that the internet offers, plus a 17 whole bunch of other ones in public safety and other 18 areas and you use the existing technologies, you 19 discover an amazing thing. There is not enough
20 spectrum, even if you took all the defense spectrum 21 and all of the spectrum away from the T.V. 22 broadcasters, and, of course, we'll never see that, 23 you still would not have enough spectrum to perform 24 all these services. So something has got to change
25 and that change is a better use of the spectrum and Heritage Reporting Corporation (202) 628-4888
1 this is a major challenge for the Commission and for 2 the Senate because there are two real serious 3 problems. One is spectrum hording. There are all
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4 kinds of people that own spectrum now that hold on to 5 it waiting for the spectrum to become more valuable or 6 waiting for some use that they might want to put it 7 for or maybe just keeping it just to keep other people 8 from getting it. 9 And the second one is there must be a way
10 that the Commission can require people to use the 11 spectrum efficiently. The fact is that technology has
12 improved the ability to extract value out of the 13 spectrum, improve the ability to conduct the 14 increasing numbers of telephone calls, increasing 15 amounts of data by a factor of every two and a half 16 years for over 100 years. And those of you that are
17 mathematically inclined can work that out and it turns 18 out to be a trillion times improvement for some 19 services in the ability to use the spectrum over the 20 last 200 years. 21 And then we take a look at some services,
22 and I guess I have to identify the broadcast industry. 23 It went for a period of 50 years with no improvement There must be a way that the Commission can
24 whatever.
25 take this extraordinary public resource, the spectrum, Heritage Reporting Corporation (202) 628-4888
1 and get control over it so that we, the public, can 2 benefit from it. So I think I've used my five minutes
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3 and thank you very much, Commissioner. 4 COMMISSIONER COPPS: I think you've opened
5 up some good areas for questions that we'll return to. 6 I'll have a few and I'm sure there's many more from Thank you very much.
7 our audience here. 8
Our second presenter is Duncan Davidson, the
9 venture partner of Vantage Point Venture Partners. 10 Previously, he was the founder and senior executive at 11 several startups, including Sky Pilot Network where he 12 is chairman, Intertrust Technologies and Covac 13 Communications. Sky Pilot Network, as many of you
14 know, provides broadband wireless access systems. 15 We've very glad to have you here, too. 16 MR. DAVIDSON: Thank you. Thank you.
And I must say I
17 was thrilled to here Chairman Powell's opening 18 remarks. He hit the nail on the head. The problem is I've
19 creating a third pipe or a fourth or fifth pipe.
20 spent most of the last 15 years working on the problem 21 of a third pipe. I worked with five phone companies
22 in Disney trying to create Americast, which was an 23 attempt to create a broadband system replacing copper 24 that fizzled. I worked with Hughes after direct T.V.
25 on Spaceway, a two-way satellite system which they Heritage Reporting Corporation (202) 628-4888
1 haven't launched. 2 I worked with a group at AT&T, which is now
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3 a part of Lucent, on what should they sell to local 4 phone companies in the future? What's the future
5 network and we came up with a wonderful approach, you 6 might think of as deep fiber. It wasn't bought. I So
7 was giddy with delight when the '96 Act came down.
8 thank you for the people here that contributed to that 9 and started Covac. And Covac went a long distance but
10 that, too, didn't every achieve the goal of becoming a 11 third pipe. 12 So, in 2000, I set down with some people and What would be the What would the third part First of
13 took a new look at this. 14 requirements to get there. 15 look like.
So this is what we found out.
16 all, it would be wireless and the most obvious reason 17 is economics, but the second reason we've heard today 18 from several people, including Marty, consumers 19 treasure mobility. 20 Now the great insight here is that, if you
21 think about the cell phone -- you're all cell phone 22 users. It turns out, statistically, 25 percent of the
23 time you're in an office next to a wireline phone. 24 Thirty-five percent of the time you're home next to 25 your phone. Sixty percent of your usage is next to a Heritage Reporting Corporation (202) 628-4888
1 wireline phone, but you like this better.
Of the
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2 remaining 40 percent, 20 percent is in a venue 3 somewhere, an airport, for example where you're 4 walking and not in the car. 5 So we then decided the second part of this
6 is the fixed wireless system we need to build must 7 cover both fixed and mobile uses, but mobile is 8 nomadic. We don't have to build a system to cover Because, when
9 people driving a car 80 miles an hour.
10 you do that, the tradeoffs you create orphan or create 11 the fixed side of the service. 12 The problem we looked at is energy dynamics If you
13 and there's been talking about this today.
14 look at the fixed wireless license bands, the L&DS 15 bands, all the major carriers went bankrupt. All the
16 major suppliers either are crippled or they also went 17 under. You look at the MMDS bands. We've heard talk It's not being
18 about this. 19 used.
It basically lies fallow.
I'm delighted that Nextel found a way to buy
20 about half of it and is going to look at Clarion, but 21 it's basically empty spectrum at the moment. 22 When you look deeper into it, you also find This is me talking from a venture If you create a new service to
23 another problem.
24 capital point of view.
25 go through a carrier, take the carrier selling data Heritage Reporting Corporation (202) 628-4888
1 services here, it's difficult. 2 every one. 3 paces.
You have to go to
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Every one puts you through a number of
Every time you end up with it, you have
4 something tweaked and fussed for that particular 5 carrier. If you try to launch something worldwide at
6 scale, it difficult to coordinate over all the people 7 you're dealing with. 8 To put it a different way, coming from the
9 Silicon Valley point of view, the carriers tend to 10 build prodigy. They tend to build a wall garden and
11 we saw with the internet that when the world wide web 12 occurred and we opened up the standards, that's when 13 the wealth creation actually occurred. So the
14 requirements we ended up with were a wireless system 15 that would handle fixed and nomadic, but compete with 16 fixed. That would be in an ecosystem that which
17 supported the internet type of ethic as opposed to a 18 traditional carrier ethics. 19 Now it turned out that ecosystem was
20 evolving at this very moment, 2000, which was called 21 Wi-Fi. So we started Sky Pilot to see if we could
22 actually build what a lot of people in this room 23 probably believe is infeasible, a carrier grade 24 system, a third pipe outdoors, using $5 chips, the 25 ecosystem of Silicon Valley using Wi-Fi. We concluded
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1 that there was a fourth element to make this work and 2 it's a different topology. The topology that Marty
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3 pioneered in the cell industry and is working on with 4 ArrayComm is point-to-multipoint, big base station, a 5 lot of people around it. That is risky in unlicensed
6 bands because of interference. 7 So we looked into this and decided that a In fact, a mesh is
8 meshed topology is much better.
9 the right topology for unlicensed just as 10 point-to-multipoint is the right topology for cellular 11 use. In a mesh system, all the major units talk to You have multiple pathways
12 all the other major units. 13 in and out of the unit.
Now, as a consequence, if any
14 particular direction is blocked because of 15 interference, you can always route around it. 16 And it has another wonderful attribute, in
17 that, if you design a mesh correct, as you scale the 18 density, you can decrease the size of coverage of each 19 one of the little mesh units. As a consequence, it
20 organically scales to very high levels of density by 21 creating, in effect, pico cells, and it solves the 22 problem Marty said is how do you use a spectrum. 23 We're going to use it all up if we try to put people 24 in it. Well, you can reuse the spectrum if you shrink
25 the size of the interference or the signal you're Heritage Reporting Corporation (202) 628-4888
1 dealing with. 2 So, at the moment, Sky Pilot is about to It's been doing data testing and
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3 launch equipment.
4 the good news is it appears to be achieving the goals 5 we've set out. It's targeting 3 megabytes and up So it's above where DSL and cable
6 service per users. 7 are right now.
It's got price points that are very
8 low, under $10,000 a square mile to start ramping up a 9 city or an area. It's able to go non-line-of-site a
10 fairly long distance even before you add in the 11 hopping. And, with hopping, you can go a long ways
12 non-line-of-site because you simply hop, hop, hop 13 through the units. 14 The company's getting somewhere between two
15 or three, even four miles in some places through 16 clutter and, in tree lands, suburbs where most of us 17 live, it's getting half a mile to well over a mile 18 going through trees, using extremely inexpensive 19 equipment. So my recommendation to the Commission or
20 the policymakers here is this experiment that was 21 started, unlicensed bands, let it continue. 22 change the rules. 23 an example. Don't
Sky Pilot and others will give you
We will try to show whether you can
24 actually trade a scalable carry rate systems on 25 licensed band and change the dynamic of the industry. Heritage Reporting Corporation (202) 628-4888
1 2
Thank you. COMMISSIONER COPPS: Thank you. Appreciate
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3 it.
Our next speaker is Gary Grube and I apologize
4 for the misstatement of your first name on the card 5 there, but I think most people here know who you are. 6 7 Motorola. Gary is a corporate vice president of He's the chief technology office at
8 Motorola's Commercial Government and Industrial 9 Solutions Sector. In that role, he directs research,
10 early development and business strategy formulation 11 with a focus on advanced Homeland security 12 communications and information solutions. He's a
13 board member of the Motorola Science Advisory Board. 14 In 1994, he was named a Dan Noble Fellow, which is, as 15 many of you may know, is Motorola's highest award for 16 technical achievement. He's authored more than 100
17 technical papers and he holds a lot of patents and 18 we're delighted to have him here with us this 19 afternoon. 20 MR. GRUBE: Thank you, Commissioner. It's a
21 pleasure for me to be here and to represent Motorola 22 in this discussion. As you know, we're both an
23 equipment provider and a solutions provider in a lot 24 of areas, including today's cellular and also 25 broadband and some of the emerging technologies. Heritage Reporting Corporation (202) 628-4888
1
I'd like to make two major points.
The
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2 first one is about technology and the next one is 3 about some actions to go forward. The first category,
4 we're really on this cusp of a see change in terms of 5 technology that will enable pervasive broadband to the 6 individual and that's a common theme that's been 7 coming up there today that I think is very important. 8 It's not just fiber. Yes, we need that that. It's
9 not just 3G. 10 just Wi-Fi.
Yes, that has a place.
And it's not
But really can wireless, the challenge
11 for wireless and for the technology is can it address 12 what we call the triple play in the industry -- voice, 13 internet access and entertainment? 14 15 The technologies are here now. We really want to focus this wireless The answer is yes.
16 solution, not only fixed but at mobile and portable, 17 nomadic and truly mobile over time. And I understand
18 the comments about do we need, and I've asked this 19 question every time I've talked to customers and 20 carriers, is what's the business case for the family 21 to receive a megabyte while they're driving down the 22 road on the expressway? That's a tough one to find.
23 I think in the area that I focus my day job on in 24 terms of public safety there is a use case there. 25 There is motivation to have that kind of service and Heritage Reporting Corporation (202) 628-4888
1 we've always been a leading indicator of some of the 2 heavyduty services. Push-to-talk has been around for
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3 60 years or something like that as a service. 4 Just recently in the last 10 and now just
5 the last couple of years, it's really becoming very a 6 popular service on carrier networks. So the
7 applications that we see in public safety in the 8 trials that we have done there really indicate that 9 pervasive multimedia broadband to the person, to the 10 individual, even in a car at 60 miles an hour, is just 11 going to be a matter of time. 12 You know there are relevant standards that
13 are emerging and technologies that come with them like 14 802.16 that's been mentioned, 802.20, 802.11 and I 15 think that it's really not so much a question of which 16 one of these is going to win or is the right one. 17 There's no silver bullet. It's really going to be a
18 hybrid of these things and it's going to be a hybrid 19 of these emerging technologies in conjunction with the 20 stuff that we have today. We have a lot of capital.
21 We've got a lot of things deployed today in our 2G and 22 3G networks. So the real innovative operators and
23 private entities are going to find combinations of 24 these. 25 They make a lot of sense. When I think about the enablers for this Heritage Reporting Corporation (202) 628-4888
1 space and for the mobile broadband and getting to the 2 person, it's cost-effective spectrum. It's the
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3 emerging standards so that we have an ecosystem and 4 it's smart technologies. We heard that term mentioned
5 earlier today, the adaptive modulations, the smart 6 antennas, absolutely, seamless mobility is a term 7 that's used in conjunction with moving between 8 multiple networks. Software defined radio, in the
9 beginning at least, offering a hardware platform so 10 that handsets and solutions can access multiple bands 11 and multiple access technologies. In time, we'll get
12 to the cognitive -- our view, cognitive radio, which 13 is on top of that software to find platform. You will
14 be able to smartly pick which network that you use, 15 maybe even negotiate the best way to spot when you 16 push the button. 17 Ad hoc and mesh architectures absolutely are
18 very important as well and they will have their place 19 in the ecosystem under certain circumstances to get 20 broadband out to the individual. 21 business models. And then new
We're certainly hearing a lot about
22 that today and I think for a lot of people their eyes 23 are opened in terms of there are places to make money 24 in this business were there aren't a lot of people and 25 it takes a lot of innovation and guts to go do that. Heritage Reporting Corporation (202) 628-4888
1 So that's really the technology statement that I have. 2 And then, number two, in terms of how we can I think the goal really, and since this
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3 go forward.
4 panel is talking about the future, we really ought to 5 have some goals that say how do we supercharge U.S. 6 economy by using broadband to the person and I think 7 there's absolutely a link between those two things. 8 And so, remember, focus to the person no matter where 9 they're at. It requires many technologies and it
10 absolutely requires wireless because that's the only 11 way to get to the person. 12 There's a lot of new competitive categories In some cases, they're going to
13 like voice-over IP.
14 find new customers for the incumbents that aren't 15 deploying it right away. 16 In terms of spectrum, I do have a couple of We do need to balance the
17 comments about that.
18 unlicensed allocations with more, in general, would be 19 my observation, with licensed segments to promote kind 20 of the carrier grade services to provide many segments 21 and including public safety. This one has not been
22 mentioned, as far as I know today, with much needed 23 spectrum that they need for many reasons. 24 The U.S. is actually a leader in allocations They should
25 for public safety, spectrum allocation.
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1 be proud of that. 2 gigahertz band.
The most recent is at the 4.9 4.9 gigahertz, we know, is kind of a It's broadband for sure and it
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3 local area solution.
4 will reuse technology from the nearby 5 gigahertz 5 spectrum to make it economical. But there's really no
6 wide area broadband allocation for public safety yet. 7 There is some allocation at 700 megahertz for what we
8 call high speed data or wide band data, but it's 9 really not broadband and it's incumbered by the T.V. 10 stations. As a matter of fact, if we do the math on
11 those allocations for public safety, that 24 12 megahertz, 5 percent of the nation's T.V. stations are 13 blocking use of those channels where 54 percent of the 14 population is and there are a lot of public safety 15 agencies that want to get their hands on that just 16 move their systems forward for voice and some high 17 speed data. 18 But, in addition to that, I would add some
19 more concrete goals in terms of what we should do for 20 spectrum and to have a voice for public safety in this 21 discussion as well. And that is, we should look to --
22 and, again, we're the future panel, clear the entire 23 700 megahertz band. Let me start with that. With an
24 immediate emphasis on that 24 megahertz that was 25 allocated back in 1997 for public safety, but not Heritage Reporting Corporation (202) 628-4888
1 cleared.
We need a date certain resolution to effect
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2 that and we need legislation to help that. 3 Point no. 2, we need to allocate and then
4 clear an additional 30 megahertz in the 700 megahertz 5 band to provide protected spectrum for wide area 6 public safety broadband. Yes, absolutely, 700
7 megahertz has been mentioned several times as kind of 8 sweet spot for propagation. It sure is and, for
9 public safety, it makes a lot of economic sense, too, 10 because at that band they can afford to deploy a 11 network that meets their needs. One of the things we
12 always talk about is should public safety use public 13 networks, the carrier networks and they do sometimes. 14 If you're talking about day-to-day,
15 mission-critical operation, they have proven time and 16 time again that the best way to do that is on their 17 own private network because they can tailor the 18 coverage and they can put the features and access 19 controls and reliability in it that they need. 20 If you take a look last year when we had the
21 unfortunate blackout in the eastern United States, 22 something around 50 percent for a rough number of the 23 carrier sites were down. That's not a real good
24 solution for public safety, especially, at those 25 times. Economics just don't justify having the type Heritage Reporting Corporation (202) 628-4888
1 of network for the average consumer to meet the 2 occasional needs of the public safety users. So
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3 private spectrum for private networks really go 4 hand-in-hand. And then I think that there is also
5 room -- point no. 3, expect them to allocate 6 additional licensed spectrum for the broadband service 7 providers. They really do, in some case, absolutely
8 can enjoy unlicensed spectrum and that makes a lot of 9 sense. But, when quality service is on the line and
10 you're in the urban jungle and you've got a lot of 11 users and we've looked at a lot of users using 2.4 12 gigahertz and every week they've got to turn an 13 antenna or this or that and licensed certainly is a 14 way to go. 15 Then I'll wrap up with why don't we look for
16 ways to have some partnerships with government and 17 industry to do some major trials to really bring some 18 of this under focus. I can think of four ideas. One
19 is the broadband neighborhood for the consumer in the 20 small enterprise; no. 2, the broadband enabled public 21 safety first responder being transformed with 22 broadband into the first preventor; point no. 3, 23 broadband enabled highway system and intelligent 24 transportation. 25 While we've had a chicken and egg problem Heritage Reporting Corporation (202) 628-4888
1 with ITS for quite a while and I think that if we look 2 at broadband as something that can really unleash the 3 power of what we could do with our highway systems to 4 improve safety and to improve the GDP once again of 5 less time spent in cars. No. 4 then and the final So I
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6 point, the broadband enabled wireless workers.
7 want to thank the Commission for this opportunity and 8 I look forward to the panel discussion. 9 COMMISSIONER COPPS: Thank you. Very
10 interesting. 11 Valerie Holt is next. From 1995 to 2000, Prior to
12 she was managing director of PSI Net U.K.
13 joining PSI, she worked for I2 Limited, which was a 14 Cambridge startup company producing investigative 15 software for police and customers and forensic 16 accounting. Today she's a consultant, advisor to the
17 internet in a number of high tech companies. 18 Currently, her principal interest is, I think, 19 Resolvable Aluminum, which is a startup company that 20 develops internet radio technology. 21 MS. HOLT: Thank you. Yes, and continues I must be
22 the tradition started in the '20s of radio. 23 careful not to call it wireless.
Radio that was I
24 developed, first of all, by Thorne and Cambridge. 25 feel a little bit similar now. I don't know how I
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1 felt in the mid-'90s when the internet was really just 2 beginning in the U.K. and it seems a little bit as if 3 wireless broadband is doing the same now for the 4 internet that the internet did for the telecaves in 5 the '90s. 6 I think the difference that will protect our
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7 futures is that the mistakes that we made in the 8 financial days, I don't will repeat themselves this 9 time around because I think the financial and economic 10 maturity of our whole industry will protect us. 11 What I think we're still weak on is
12 understanding exactly why, certainly, in the U.K., 50 13 percent of the population still is not 14 internet-enabled. Now I think Paul Berriman earlier
15 on gave you the figures that 55 percent of the U.K. 16 population is enabled to the internet, but only 10 17 percent of it is broadband enabled. And what we at
18 Reciva have been thinking about really was, what about 19 the other 45 percent or, indeed, what about the other 20 90 percent? Why has it not been appealing enough or
21 attractive enough to draw in subscribers, even if they 22 could be connected? And we came up with a fairly
23 simple analysis which pointed out that the 24 applications that were available were neither relevant 25 nor inclusive to the people who hadn't taken up the Heritage Reporting Corporation (202) 628-4888
1 prescriptions. 2 And so we then started to look at these Well,
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3 groups of people and asked ourselves why?
4 essentially, a large number of them were too far away 5 and wireless broadband will certainly enable us to 6 address that sector. It was too expensive for others
7 and I think our fears are probably in pounds as yours 8 are in dollars and the utility of our income is
9 somewhat different to yours because you tend to have 10 more -- a higher percentage of your income is 11 disposable, is disposable at your discretion where a 12 much lower proportion of ours is at our discretion and 13 the cost is huge. 14 And, again, if we do have competition with
15 the wireless broadband providers, certainly, as Paul 16 postulated this morning, that will drive the price 17 down so that the price becomes within the range of the 18 people who are currently outside. So, if you're in an
19 urban area and having broadband, you're probably 20 paying about a third of what you would pay in a rural 21 area and that, of course, makes it an uneconomic 22 proposition for most people. 23 The other group that we discovered in the
24 U.K. that had been largely untouched, as it were, were 25 what we called displaced persons. Within the U.K., a
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1 population shall we say of around 55 million, 2 somewhere around 5 million are people whose native 3 language is not English and who hasn't got a permanent 4 abode so that they're not having a subscription in 5 their native language. Equally, about 10 percent of
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6 our U.K. population is currently permanently or 7 semi-permanently overseas. So that gives you 10
8 percent of the population, possibly, that we could 9 address if we were in a position to find an 10 application which would appeal to displaced persons. 11 So we have identified displaced persons, we
12 have identified people who were too far away and we 13 also identified, sadly, the sector of the population 14 which Tom Peters amusingly calls the sector of the 15 population that are interested in the color of cars. 16 17 (Pause.) MS. HOLT: In 1998, I went to Tom Peters
18 presentation and he spent 20 minutes outlining the 19 socioeconomic group who were impressed with the color 20 or cars and who decided 54 percent of the decisions 21 with regard to the purchase of cars. He then went on
22 to discuss a large number of other things that they 23 controlled and nobody in the room guessed that this 24 was, in fact, women over 45. 25 Ladies, I'm here to tell you wireless Heritage Reporting Corporation (202) 628-4888
1 broadband and the kind of applications that we're 2 looking at are directed towards women and they are 3 easy to use. They're user friendly and they allow you So
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4 to do what you want to do where you want to do it. 5 I absolutely agree with the notion that the 6 applications that will gather momentum as we go
7 forward will be applications that are mobile enabled. 8 Again, it's greatly facilitated by wireless broadband. 9 So, by turning the economic model on its
10 head somewhat and asking ourselves why do the people 11 who are not connected, why are they not connected, we 12 actually came up with a product that is actually an 13 internet radio, which is easy to use and it address 14 the mobile issue. It address the language issue. If
15 you happen to French, you can listen to French radio 16 wherever you are in the world and that's the kind of 17 application that we are hoping to develop and that we 18 see markets for with the help of wireless broadband. 19 Thank you. 20 21 COMMISSIONER COPPS: Thank you very much.
Jose Rodriguez is the founder and chief
22 executive officer of the Hispanic Information and 23 Telecommunications Network, which is the first and 24 only Spanish language public television network in the 25 United States. Established in 1981, HITM is a
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1 private, nonprofit organization and it has three major 2 operating divisions. HITM T.V., the only 24/7 Spanish
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3 language channel that educates and empowers and 4 enriches Latinos. HITM, the provider of broadband
5 internet access services through satellite and 6 wireless telecommunications and the HITM Spectrum, the 7 largest holder of ITFS instructional television fixed 8 service spectrum. 9 Mr. Rodriguez's work is aimed toward
10 creating a national telecommunications network that 11 will fill the growing need for educational, 12 instructional information and cultural programming for 13 the Hispanic community. 14 MR. RODRIGUEZ: Thank you for providing me
15 the opportunity to participate here today in this 16 forum. 17 My name is Jose Rodriguez. I'm the
18 president of HITM.
HITM is a nonprofit organization
19 whose mission is to advance the social, economic 20 educational aspirations of Hispanics in the United 21 States and Puerto Rico. As Commissioner Copps,
22 indicated, we are the largest licensed IT holder in 23 the country and thanks to sound FCC policy and 24 technology we have been able to create the first PDS 25 like Spanish language network to other countries as of Heritage Reporting Corporation (202) 628-4888
1 June of -- next June 1st, we will be reaching, 2 hopefully, about 35 million households throughout the 3 United States, making us the largest cable network in 4 Spanish in the United States. 5 It is a pleasure for me to be here today to
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6 discuss how HIP and other ITFS licenses can play a 7 part in the roll out of wireless broadband services in 8 this country, especially, to underserved populations 9 and meeting those educational needs. I have been
10 involved in the telecommunications industry for more 11 than two decades, since 1983, when we first applied 12 for our first ITFS frequency. 13 HITM has committed substantial resources and
14 time over the years to make sure that educational 15 spectrum is preserved for educators and to create and 16 promote the educational usage of this spectrum. HITN
17 has been a leader in developing ITFS for broadband 18 educational usage. In January '03, HITN, in
19 conjunction with its commercial partner, Clear Wire, 20 rolled out a broadband wireless trial in Jacksonville, 21 Florida. This system is operating on two ITFS channel
22 groups licensed to HITN and to the Duvall 23 24 School, respectively, in that market. We're excited for Clear Wire to complete
25 plans to scale that trial to a full marketwide Heritage Reporting Corporation (202) 628-4888
1 deployment so HITN may begin to serve in the 2 educational and larger nonprofit community in 3 Jacksonville and we are aggressively moving into new 4 markets. In fact, today HITN is filing with the
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5 Commission a request for a special temporary authority 6 to construct a system in Four River area of 7 Providence, Rhode Island to test and promote to the 8 educational community the next generation of wireless 9 services. 10 We have received significant interest from
11 educational institutions in Providence for the 12 problem-plagued portable broadband wireless internet 13 access that HITM would be providing there, including 14 other services. We expect to have service up and
15 running before the next school year begins so the 16 schools in Four River may be some of the first in the 17 United States to enjoy and appreciate these new 18 services. 19 My message to the Commission today is that
20 HITM is fulfilling the mission of addressing the 21 educational needs of Spanish-speaking Americans and 22 delivering the reality of broadband, using the 23 spectrum to serve the underserved populations, many 24 underserved populations in this country. The 2.4
25 gigahertz spectrum that HITM utilizes can be a fertile Heritage Reporting Corporation (202) 628-4888
1 ground to the deploy wireless services and achieve 2 universal broadband and also a competitive 3 environment. For this to occur, it is imperative that first, it must
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4 the Commission do the following:
5 continue to permitting flexible use for assisting 6 licensees to utilize new technologies and to establish 7 partnerships to utilize these spectrum for broadband 8 deployment; number two, provide licensees an 9 opportunity to deploy new broadband uses on spectrum 10 not effectively used under the old rules; third, 11 minimize the ability of some licensees to delay the 12 introduction of new services by other licensees 13 through regulatory gainsmanship; and four, and last, 14 not to permit this spectrum to become embroiled in 15 litigation and delays that will impede the deployment 16 of much needed broadband services. Restricting
17 existing license holders from utilizing new 18 technologies or reclaiming the spectrum for a later 19 auction would thwart and undermine the potential of 20 the ITFS spectrum for wireless broadband services. 21 Auction of ITFS spectrum should only be
22 conducted to dispose of mutually exclusive application 23 and participation should be restricted to the regional 24 ITFS applicants. 25 As the Commission continues its evaluation Heritage Reporting Corporation (202) 628-4888
1 of the 2.5 gigahertz band in their RNPRM, I hope that 2 the Commission appreciates the contributions that ITFS 3 licensees can provide to roll out wireless broadband 4 services in the future. Communications policy in our
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5 country has always maintained a commitment to serve 6 education and the public interest. We hope that this
7 Commission adheres to these principles. 8 I would like finalize by saying that if we
9 get flexible use -- we aren't allowed to provide 10 flexible use in this spectrum. 11 things we want. That's one of the
We don't want auctions because that We
12 will certainly, most likely, create litigation. 13 want to provide services immediately. 14 is here.
The technology
We want to have an opportunity -- this
15 spectrum could be part of that third wire that we've 16 been talking about. Educators in this country, like
17 us, no commercial educators, we like to participate 18 and we are ready and willing to do it and we would 19 like for the Commission to help us do it as quickly as 20 possible. 21 22 next. Thank you. COMMISSIONER COPPS: Sai Subramanian is
He is the Vice President of Product Management He
23 and Strategic Marketing at Navini Networks. 24 previously worked at Nortel Networks in areas
25 including technology, development and marketing and Heritage Reporting Corporation (202) 628-4888
1 business strategy, network evolution and customer 2 planning and Sai currently serves on the board of 3 directors of the Wireless Communications Association. 4 5 6 Pleased to have you here. MR. SUBRAMANIAN: Thank you, Commissioner.
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As the last speaker, I can either try to be I will chose the latter.
7 captivating or brief. 8 9 (Laughter.)
MR. SUBRAMANIAN:
I don't think I have
10 tremendous amount of sage advice that is has not 11 already been dispensed of some fantastic new insight 12 into what will make wireless broadband in the future. 13 I, like most of the other panelists, believe that So the few minutes I
14 that is, indeed, the future.
15 have I'll take in describing how it is now for us at 16 Navini. 17 We're a four-year old startup up in Texas
18 and, for me, the journey started in late '99, early 19 2000, when a VC friend of mine from Austin Ventures 20 asked me, hey, I've got this crazy professor out of 21 U.T. Austin who claims all kinds of crazy things. 22 want to go check it out? So this is the middle of You
23 summer in '99 when I went down to Austin in a wild 24 ride in a camry and a bunch of chigger bites later I 25 was holding a laptop in a car that said we're eight Heritage Reporting Corporation (202) 628-4888
1 miles away from the tower and I got all this crazy 2 technology, smart antennas, TDD, this, that and the 3 other and you can get broadband wherever you go. So I
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4 said this is kind of cool and I did a little bit more 5 investigation and decided to sign on. 6 And starting from an office that had only
7 one cordless phone and we had a two-hour debate over 8 whether we should buy another cordless phone to where 9 now we're a company with about 115 employees with 10 offices in a bunch of different places, Asia, Europe 11 and equipment in 25 countries. We've quadruples
12 shipments from 2003 to 2004 and I've seen some pretty 13 amazing things. When one of our customers rolls out a
14 network in Holland, they had people waiting outside at 15 night to get the service the next morning. They put
16 up one base station and in one hour they had 400 17 subscribers, one hour. That's a part of wireless
18 broadband that's plug and play, mobile, portable, 19 doesn't require anybody to go do installations, et 20 cetera. 21 So that's what we're seeing. We have national networks roll out by If you go to Panama
22 customers, starting in Australia. 23 City now, you can get NUF.
In Holland, you can get
24 broadband, a number of places in the U.S., both in 25 unlicensed and licensed bands, using Navini. Heritage Reporting Corporation (202) 628-4888 There's
1 a lot of standardization activity starting in Wimax 2 and industry standards where we've already 3 standardized some of the stuff. So this is very, very As always,
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4 exciting for us and for the industry.
5 there are some fundamental technologies that are at 6 the core of this and some of the FCC folks have talked 7 about "way cool" and "interesting" alternative 8 technologies, smart radios, et cetera. So, obviously,
9 CTO at our forum and a number of other forum have done 10 some tremendous advances and the technology we believe 11 is here and we are seeing that in commercial 12 attraction now and we have an interesting experience 13 with FCC in certifying our gear in the unlicensed 14 band. It was very educational, very rewarding and It two years for us to get out of Code
15 took a while.
16 and Certified, but it was a very educational 17 experience. I believe, actually, this thing in the
18 United States for the sort of advances in how the 19 regulations get applied, how spectrum policy gets 20 decided is necessary. But one thing is certain this
21 is happening and one way or the other this is 22 happening and we're seeing it everyday. 23 24 COMMISSIONER COPPS: Thank you.
Thank you. We've heard, I
Let me just start off.
25 think, several recommendations of what needs to happen Heritage Reporting Corporation (202) 628-4888
1 to make this a reality.
But we have a hard time
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2 around here doing one thing at a time sometimes, leave 3 alone all these multiple things. If you folks had to
4 choose one factor that really would be the most 5 important to the successful deployment of wireless 6 broadband, what would that be and let's not limit it 7 just to the regulatory, but just economic or 8 technological or regulatory, just help me get a sense 9 of priorities for I need to view what needs to be 10 done. 11 We'll start with Martin. MR. COOPER: The biggest challenge, even
12 though you told us not to start with regulatory, is 13 spectrum and the nature of the way in which the FCC 14 allocates spectrum always has the spectrum going to 15 people who have a lot of money. And, generally, this Some how or
16 turns out to be the establishment.
17 another, there must be a way to get some segments of 18 the spectrum available to innovative applications, 19 innovative technologies, different ways of doing 20 things. Because we to be lot of spectrum because one
21 of the issues that several of us have brought up is 22 spectral efficiency and, if you are spectral 23 efficient, you can get a lot out of a little bit of 24 spectrum. But some how or another, there has to be
25 spectrum available for these innovative approached. Heritage Reporting Corporation (202) 628-4888
1 2
COMMISSIONER COPPS: MR. DAVIDSON:
Duncan?
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I would say keep the Don't change the rules.
3 unlicensed experiment going. 4 5
Let it play out and let's see where it goes. COMMISSIONER COPPS: Okay. Gary, also known
6 sometimes as Greg. 7 MR. GRUBE: Yes. That's my brother. I've
8 got to come back to spectrum.
I think I made a pretty
9 strong point about that for public safety and they 10 deserve, don't have, wide area of broadband spectrum. 11 We've done some trials with them. I think they can
12 show the rest of the nation.
They can show consumers,
13 carriers what the power of broadband out to the person 14 can be. We've seen it and we've done the trials with
15 them and, once they get a taste of it, they don't want 16 to go back. But there really isn't the key ingredient So, when I mentioned a 30
17 there yet to do that.
18 megahertz block, that was, in part, for broadband and, 19 in part, for interoperability, federal, state and 20 local. But a lot of these new technologies, they
21 require 5 megahertz channels and that is a foreign 22 language to public safety today. 23 take something new. So it really does
But I think that they can show
24 the nation what can be done with that. 25 And, as well, they've a tendency to buy Heritage Reporting Corporation (202) 628-4888
1 emerging technology, reachout technology and at a 2 premium to get the features that they need. So I
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3 think that while the industry may be higher on the 4 cost curves right now with a lot of things pegged into 5 it, that's a space that can help move it along. 6 7 Valerie? 8 MS. HOLT: Well, I think it's important to COMMISSIONER COPPS: Good. Thanks.
9 stay aware and wait through things that are new and 10 possibly look a little bit wacky, if that's an 11 expression that I can use, so that you can include 12 other groups that may otherwise may be ignored or that 13 haven't got a voice. So I think trying to stay aware
14 of niche groups that are, perhaps, niched within a 15 country, but not be nished in a global base. 16 17 groups? 18 MS. HOLT: Well, I'm thinking particularly COMMISSIONER COPPS: Who are some of these
19 of the group that we discovered almost by accident. 20 The people who are constantly on the move and, as 21 such, normally disenfranchised because they normally 22 aren't there long enough to vote and they possibly 23 speak a foreign language. And it also verges on some But the
24 of the things that you're talking about.
25 reality is that our populations are not homogenous and Heritage Reporting Corporation (202) 628-4888
1 we can't -- I mean, certainly, even in the U.K. we 2 tend to think about population as a homogenous group 3 and we look at the U.S. with what we thought was a 4 homogenous group 10 times bigger. But the population
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5 is not homogenous and those small groups cannot 6 justify financially the kind of services that they 7 want. 8 9 So I think staying aware is good. COMMISSIONER COPPS: MR. RODRIGUEZ: Thank you. Jose? One
I wear two hats here.
10 as an educator and one as an Hispanic American and I 11 would like to say that, as an educator, we need for 12 the Commission to continue having educators the run of 13 their own spectrum. We cannot have this spectrum to
14 be reallocated or auction away because that would 15 invite, immediately, litigation and that will delay 16 the broadband development, which is the main thing 17 that we want. We believe that by having the broadband
18 capacity to bring new services, not only the 19 educational system will benefit, but also underserved 20 groups as my colleague here very well mentioned, will 21 be able to use this technology to address some 22 services. 23 Let me give you an example, for instance,
24 when you look at the wire industry, it has been very 25 easy to redlight a number of areas, especially, in the Heritage Reporting Corporation (202) 628-4888
1 urban market.
Wireless, if anything, provides an
223
2 opportunity for the spectrum to get everywhere. 3 Redlighting is not possible and we're looking already 4 at ways to reach unreachable segments of our community 5 as Hispanic Americans that we have not been able to 6 reach before so that we're reaching for it, at least, 7 other traditional technologies. So now is the
8 opportunity to do it quickly because the opportunity 9 is here. The technology is here. So the Commission
10 to deliver the policy and do it quickly is something 11 that will help us a great, great deal. 12 13 14 economics. COMMISSIONER COPPS: MR. SUBRAMANIAN: Thank you. Sai?
I'll start at the
At the end of the day, there is a consumer
15 that has a certain amount of discretion of the income. 16 He or she does not care if it's wireless or a bunch They have broadband. So, if you look at
17 of donkeys.
18 wireless broadband or any other means of delivering 19 broadband or any other services, you have three things 20 you're looking at -- convenience, price and quality. 21 You have to find the right point in that triangle. 22 long a wireless broadband delivers like $90 a month 23 only 5 megahertz or two cents a megabyte, whatever, it 24 will remain in these technology. 25 Now a whole bunch of things contribute to Heritage Reporting Corporation (202) 628-4888 As
1 that.
Some of it is technology.
Some of it is
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2 regulation.
We believe that the technology piece of
3 the puzzle has been fundamentally solved by a number 4 startup companies, ourselves and a bunch of new 5 innovators. Now the next question is how do you What we have seen, at least, in a
6 unleash that?
7 number of countries outside right now is as soon as 8 some rationalization of spectrum happened, we were 9 able to unleash it immediately. In the 3.5 gigahertz
10 spectrum, for example, there are efforts underway now 11 in the U.K. There are efforts now underway in
12 Australia for wireless broadband networks that could 13 very well be national in scope and, at least, starting 14 as regional networks. 15 In the U.S., the innovation has been around Typically, by nature, there's this
16 unlicensed bands.
17 sort of regional networks or small communities, what 18 have you. From a national network basis, more than
19 likely, it's going to be in the licensed band, just 20 because of the economics and that would require some 21 level of spectrum rationalization, what is happening 22 to the MDS/ITFS band as to how that gets applied. 23 What may happen to the 3.5 band, cellular, all of 24 these things. 25 COMMISSIONER COPPS: It's interesting that a
Heritage Reporting Corporation (202) 628-4888
1 number of the people responding to this talked about 2 the regulatory or the rule of government and I'd like 3 to expand on that a little bit and see what is the 4 role of government your analysis in the spreading the 5 deployment of wireless broadband. We've already
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6 talked, a number of you, getting our spectrum act 7 together here at the FCC and making sure that the 8 unlicensed experiment continues, so and so forth. Is
9 that about the end role of government here or is there 10 a larger role in this deployment? I spent a lot of
11 time in the last couple years whenever a CEO comes 12 through my office, asking what does government need to 13 do to encourage the deployment of broadband? Can the
14 market do it itself and the answer I usually get from 15 a lot of these CEOs is, well, for the last 10 or 15 16 percent of Americans maybe not, maybe there's a more 17 active role for government. Maybe the appearance now
18 of wireless changes that or makes it different. 19 Let me ask Gary because you mentioned some You were talking about
20 kind of in between.
21 public/private partnerships, things that we could do 22 with industry. So help me get a fix on how should I
23 look at government's role, not just as regulator, but 24 just government generally. What government can do in
25 the deployment of wireless broadband. Heritage Reporting Corporation (202) 628-4888
1 2 dive into.
MR. GRUBE:
Yes.
That's a wonderful area to At the
226
I think there's different levels.
3 state and local level, we've seen a lot of examples 4 where cities have said, you know, it will help the 5 economic development of our downtown area, et cetera, 6 et cetera, if we help just get this going by putting 7 in Wi-Fi hotspots and those have been used by the 8 public and by enterprise workers. I think that kind
9 of seeds and sets the taste out there. 10 But I think that over time people will want They want to get into, well, you
11 a richer experience.
12 know, I went down in this building or this store and I 13 couldn't get access. That's something that a carrier
14 will come into with a mentality of I want to cover all 15 of those areas, not just a few hotspots. So I think
16 state and local can -- we've seen a lot of examples 17 where they're doing that, downtown areas, major 18 airports where there may not be a carrier already, 19 some of those state and locals have got involved in 20 that. 21 And, then, turning to the federal level, you
22 look years ago when the U.S. invented the super 23 highway system. We have the internet and there's
24 internet II and what's the other super highway system. 25 I think there's a information highway system that we Heritage Reporting Corporation (202) 628-4888
1 can help and the highway system that we have today and 2 the wireless broadband that we've been talking about, 3 there's a really neat marriage that's waiting there 4 which is intelligent transportation system, ITS, that 5 whole area is just ripe to go use broadband and that's 6 a way to start getting it into the consumer because 7 they'll see value having simple things like common 8 means to pay for toll collection because there are 9 multiple standards and protocols in the licenses out 10 there today. 11 But, getting, more importantly, information And, at some point, actually, having Those are the things So I think some
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12 about roads.
13 collision avoidance systems.
14 that people are working on right now.
15 trials and I know that there are some trials being 16 talked about, actually, in Michigan with some federal 17 help. They're thinking about something over there, So I think that
18 not surprising with Detroit and ITS.
19 would be a wonderful one for the federal government to 20 look at. It's been this chicken and egg. If we could
21 just see some broadband access along some of the super 22 highways and it's just one little area to start. 23 COMMISSIONER COPPS: Good anybody else want
24 to comment on that? 25 MR. COOPER: I guess there are two steps.
Heritage Reporting Corporation (202) 628-4888
1 Step no. 1 is should the government care?
Should the
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2 government care that the United States has an adoption 3 rate that is a 10th of the world compared to countries 4 that ostensively has less capabilities. When there's
5 availability to 80 or 90 percent of our population, 6 should the government care that countries like 7 Australia have two commercial systems running now, 8 maybe more and the United States, to my knowledge has 9 none, in the mobile broadband area. And I want to
10 postulate that, yes, the government should care a lot 11 and should really worry about the fact that the 12 internet alone has the ability to improve the 13 productivity of a nation and to improve the level of 14 education of people and a whole bunch of things that, 15 if we don't pay attention to it, I think we're going 16 to be in trouble. 17 18 COMMISSIONER COPPS: MS. HOLT: Go ahead.
I absolutely endorse that and I
19 know that there's a project going on in Virginia where 20 they've taken the internet, they've enabled the whole 21 village. They've enabled the whole area and they have
22 measured exactly the impact that that has on the 23 community. 24 In terms of the rural community it has, I The major one, from my
25 think, three major benefits.
Heritage Reporting Corporation (202) 628-4888
1 point of view, is keeping the local kids local for 2 long enough for them to understand and appreciate the 3 benefits of being there and not going to town and 4 causing the kinds of social problems that they might 5 otherwise do. So I think that you can't just lift the The reality is
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6 internet away and say can we do this?
7 now we must find ways -- I mean, the government must 8 think about the cost of not doing it. 9 COMMISSIONER COPPS: Whenever we try to
10 figure out how we're going to chart our own way, as a 11 government through this, I think it always instructive 12 to look at what other countries and other governments 13 are doing and maybe I'd ask both Valerie and Sai to 14 comment on how we fair. 15 Martin mentioned not so well.
How we fair against the rest of the world in
16 deploying wireless broadband and what accounts for the 17 differences. I know there's some lessons out there
18 for us to be of learning that we're not taking 19 cognizance of right now? 20 MR. SUBRAMANIAN: I just give you from a
21 Navini experience point of view, what we are seeing is 22 that there is a lot of movement now, especially, with 23 3.5 gigahertz band about reopening that up for 24 personal broadband access. Earlier on in the game,
25 3.5 was a wireless local low band in Europe and lots Heritage Reporting Corporation (202) 628-4888
1 of places and it saw some level of deployment but not 2 major deployment. In Australia, U.K. and in many
230
3 other places now, the governments have sort 4 rationalized this as what you can and cannot deploy in 5 this. And, in some complex ways, that has unleashed
6 sort of innovation from the operator side as to -- for 7 example, in Australia, one of our customers, Wireless 8 Australia has essentially launched the company on the 9 premise of providing wireless broadband across the 10 nation. They went public on this premise and they're
11 launching in that work all across Sydney, starting all 12 across Sydney. And, obviously, ArrayComm has Similar
13 something ongoing in Australia as well. 14 things are afoot in the U.K. 15
In the U.S., what we've seen is we've seen
16 an enormous interest in the products we have in the 17 unlicensed band, in the 2.4 gigahertz band, and lots 18 of people are deploying and that's a very interesting 19 portion of our business. In the licensed band, we
20 have not seen as much movement in the U.S. and some of 21 that is related to what some of the large established 22 players, where they are economically in terms when 23 they may or may not want to make a move. But some of
24 that is related to spectrum rules, especially, in the 25 2.4, 2.6 band. Heritage Reporting Corporation (202) 628-4888
1
Some of our customers find it tremendously
231
2 hard to go through getting all the regulatory 3 approvals to deploy in terms of side-by-side licensing 4 and so on and so forth. 5 The one thing I will close is sort of we
6 need to make happen in the broadband industry what we 7 saw happen in the wireless communications industry 8 where before PCS there was AB cellular. It was 30, 40
9 cents a minute and that's what it was and a few people 10 used to be able to make cell phone calls and they were 11 only business-types on cell phones. And then we
12 unleashed competition and things changed overnight 13 almost, not overnight. 14 did change very rapidly. 15 We have a similar situation in broadband, It best we ought to At least, when PCS came It took a few years, but they
16 actually, a little bit worse. 17 supply the shift to duopoly.
18 on board, pretty much everybody had access to landline 19 telephone, almost everybody. That is not the case
20 with broadband, so there's either no desire and need 21 for sort innovation and competition in this areas in 22 the U.S. 23 COMMISSIONER COPPS: Let me ask one more
24 question before I turn the panel over to the tender 25 mercies of our audience here. And I'd like several of
Heritage Reporting Corporation (202) 628-4888
1 you to comment on this, if you will.
What are the
232
2 chances that the very companies that dominate DLS and 3 cable broadband are going to end up dominating 4 wireless broadband and what are the implications of 5 that for either facilitating or retarding the progress 6 of this promising technology? 7 8 Let me ask Duncan? MR. DAVIDSON: Well, I think there's a
9 tendency here, determinate tendency politically right 10 now, to fall into the trap that, if only we can get 11 the phone companies to build out fiber, the broadband 12 problem is solved, but it won't. 13 deeper duopoly. It just creates a
The carriers will certainly do
14 everything they can to protect their franchise and 15 there's no way out of that. Right now, the unlicensed
16 bands in the U.S. are largely in the hands of a small 17 number of companies. So Nextel has about half MMDS.
18 Sprint still has about a third and then I think Craig 19 McCall is picking up the rest of it very quickly. 20 So, in effect, those three entities will
21 define what's going to happen in MMDS unless they turn 22 it over. And, at the moment, they're not really the
23 classic carriers doing cable or broadband, so we might 24 escape that particular fate. 25 In the unlicensed bands, anybody can go in Heritage Reporting Corporation (202) 628-4888
1 and do it.
Now the carriers will tend not to do it
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2 first because they are concerned that it will not be 3 carried right and it will eventually get in trouble 4 because of interference. However, they have the
5 resources and the customer base to want to go buyout 6 companies that might start doing it and then prove it 7 works and they can then incorporate it up. 8 Now I think, in a free economy, we're not
9 going to be able to stop that. 10 11 12 that. COMMISSIONER COPPS: MR. DAVIDSON: Be able to what?
We will not be able to stop
I mean, you can put in regulatory barriers of
13 people having too much ownership like we had in T.V. 14 and radio, but that is probably not the way to solve 15 this problem. I think the way to solve this problem We were talking about
16 is to sponsor the ecosystem.
17 sponsoring competition, but, I mean, sponsoring the 18 ecosystem. If you look at why the cellular industry
19 grew so fast, it's a very interesting story here. 20 People in the U.S. tend to think, why didn't we do 21 GSM? Why do we end up with a competitive world with
22 TDMA and CDMA and GSM and kind of a mess in terms of 23 standards? But, if you look at it now, the U.S. has Europe
24 more minutes of usage for user than Europe. 25 has been very flat.
The loudest wonderland has been
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1 flat in growth and the caldron of innovation is moving 2 to the U.S. or to Asia where you're seeing rapid 3 growth of people using this. So the approach the U.S.
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4 took is actually working in that area much better than 5 people recognize. 6 So my point is I think the best thing we can
7 do is sponsor the experiment, promote the ecosystem, 8 get the thing going, in effect, and not really worry 9 about how the chips may fall. And the way you will
10 stop that from happening is by being bias to protect 11 the franchise of existing people prematurely. In
12 effect, let the market just decide this thing as the 13 systems grow. 14 COMMISSIONER COPPS: Martin, you look
15 thoughtful over there. 16 MR. COOPER:
You want to say something? Yes, I do. I happen to agree
17 that the big carriers are not going to be innovators 18 because they never are, but there's a really important 19 issue here and that is the big carriers come out of 20 the monopoly culture and their fundamental culture is 21 we own the customer and they will want to do 22 everything and it's just impossible with broadband 23 wireless. And the reason that it's impossible is These Maybe
24 there are just many, many applications.
25 carriers are providing one application, voice. Heritage Reporting Corporation (202) 628-4888
1 they've got one other one, but the internet fosters 2 lots and lots of different applications and they only 3 business model that makes sense is a multi-media level 4 like every other business nonmonopoly business in the 5 world does where you have a bunch of people who 6 understand the needs of customers and they serve lots 7 of individual markets and then you've got a guy who 8 provides transport and is very good at that. And it's
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9 going to take a long time before these monopoly-based 10 carriers are going to understand that. 11 COMMISSIONER COPPS: Thank you. Anybody
12 else want to comment on that? 13 MR. GRUBE: The standard is IP. And so with
14 that technology base, with IP technology, you could do 15 internet access and data and voice and the whole 16 thing, multi-media entertainment. So these disruptive
17 technologies that are coming in right now, in Clayton 18 as we speak, are certain people who maybe want to 19 trade one thing for another to get something and I 20 think that over time a lot of the people that are 21 putting in these initial networks will be aggregated 22 into the carriers who can, through synergies and 23 acquisitions, back ends, building systems, et cetera, 24 et cetera. 25 But, back to IP, that really enables Heritage Reporting Corporation (202) 628-4888
1 splitting up the value chain.
There's going to be
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2 access and maybe there's a play for a national 3 broadband wholesaler here that we didn't see with 4 cellular telephony because it was so tightly bundled 5 the access and the service, which was a phone call. 6 That's undone with IP. 7 free up the value chain. So broadband access can really So you could have people
8 doing services applications through the internet like 9 Marty said and maybe the large carriers with main 10 knowledge will bring along the right applications and 11 bundle that very nicely with the access that they 12 provide or go to a wholesale for. So, really, the
13 whole business model can really change a lot because 14 it's IP. 15 COMMISSIONER COPPS: Let's go to the
16 audience and see what questions for our panelists you 17 might have and ask you to use one of the three 18 microphones here and identify yourself and the 19 panelist to whom your inquiry is directed. 20 MR. KLANSI: Andy Klansi. Unfortunately, I've been
21 I'm going to put it on the regulatory side.
22 working with a group and we've been looking the USDA 23 IUS funding and loan applications for doing broadband 24 access in underserved rural markets. And one of the
25 things we're looking at is there's been talk about Heritage Reporting Corporation (202) 628-4888
1 licensed spectrum and how some of it is capture, being 2 squatted. It's not really open. Would the FCC look
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3 at possibly offering licensed spectrum to a rural 4 operator sold on some caveat that they have to show a 5 construction permit or use it and open up that for 6 those rural markets so you do get better quality? 7 get some of the kind of benefits of the licensed 8 spectrum, but offered into those markets where, 9 typically, you won't see the major carriers? 10 COMMISSIONER COPPS: Well, I can't tell you Obviously, I Obviously, You
11 what the FCC would smile on or support. 12 think we're looking for innovative ideas.
13 you identify a terribly important part of what we need 14 to be focusing on, which is the rural area. 15 think nothing should be out of bounds. 16 studying and looking at these things. So I
We ought to be But as to where
17 my colleagues would come down on that, I wouldn't 18 hesitate to say. 19 MR. COATES: I'm David Coates from Dartmouth
20 College, probably one of the few academics in the room 21 today. I was actually hoping to hear a little bit
22 more about what the applications of broadband might be 23 in the future. At Dartmouth, we have a campus-wide
24 Wi-Fi network and have for the last three years and 25 almost 100 percent penetration among the students and Heritage Reporting Corporation (202) 628-4888
1 faculty in terms of laptop users.
And I've been
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2 monitoring what people do with our wireless network 3 now for three years and there have been a few 4 surprises. The no. 1 activity on the network, of But the no. 2 is peer-to-peer
5 course, is web traffic. 6 file sharing.
Now maybe that's not too surprising in
7 a college and I don't even want to know what they're 8 sharing in that, but I'm actually expecting, if I 9 measure it again next year, that web will no longer be 10 no. 1, file sharing will be no. 1 use of broadband 11 bandwidth and then fast and upcoming is worms and 12 viruses. They're taking up a tremendous amount of our
13 bandwidth and voice-over IP, Dartmouth is committed to 14 replacing all of its phone technology with voice-over 15 IP in the next two years, starting with the wired 16 voice and then wireless is catching up as big user of 17 bandwidth as well. So, anyway, I'm curious what you
18 think are going to be applications of broadband beyond 19 telephony. 20 21 Gary here. 22 MR. GRUBE: What we've seen is what has Lots of bandwidth but COMMISSIONER COPPS: Well, let's start with
23 broadband enabled technically?
24 low latency and I was just in Montreal at McGill 25 University and they've done some fascinating studies Heritage Reporting Corporation (202) 628-4888
1 where they put musicians in separate rooms -- I mean, 2 we're talking east coast/west coast, and when you get 3 the latency down, a phenomenon happens where they can 4 actually play their instruments together. Okay. And
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5 there's a curve, of course, if you have more, you need 6 a better latency. Lower latency if you have more And the
7 musicians is one of the other discoveries.
8 other thing they found was if you have a really big 9 screen, you really think you're there with that other 10 musician. So they're on to something and it's Telepresence can go into all the
11 telepresence.
12 segments that people think about from medicine to 13 enterprise, everything and I think broadband is going 14 to be a key enabler for that. Telepresence, how can
15 you work that into the enterprise so they can save 16 money, be more efficient, be a leg up on the 17 competition and things like that? 18 of course. And then, gaming,
Low latency just begs gaming and that's
19 probably a lot of work the university is doing that 20 they're monitoring that they're doing better in this 21 area, a couple of ideas. 22 COMMISSIONER COPPS: Anybody else have Jose?
23 anything additional on this? 24 MR. RODRIGUEZ:
Right now, we're doing, for
25 instance, in Puerto Rico, although we're not doing it Heritage Reporting Corporation (202) 628-4888
1 yet with ITFS, we are going to be doing it with 2 satellite technology, but definitely to be done with 3 ITFS and we're looking forward to doing it. We
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4 provided high speed internet access distance learning. 5 We look at our security services incorporating
6 security into that and, especially, being Puerto Rico 7 an island or it's hit by hurricanes or are at least 8 certain to be hit hurricanes two or three times a year 9 and a lot of the basic infrastructure, 10 telecommunication infrastructure disappears sometimes 11 for three- or six-month period when we're hit by a 12 hurricane. 13 We're looking at wireless having proven to
14 be more resistant, believe it or not, than wireland 15 communication to provide the faster kind of recovery 16 applications. We're looking at IP telephony as one These are
17 that could be used for disaster purposes. 18 applications that are very critical.
We also have
19 been approached -- as a matter of fact, last week, to 20 provide context, to repurpose our context to be 21 utilized in schools targeted to PDAs and laptops and 22 those are definitely applications that, as you 23 mentioned, we follow people everywhere -- you used 24 displaced. 25 Right? MS. HOLT: Yes.
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1
MR. RODRIGUEZ:
Displaced person.
Displaced
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2 persons or people that are mobile, we will be able to 3 reach, hopefully, with broadband wireless. 4 5 COMMISSIONER COPPS: MR. DAVIDSON: Anybody else?
Dartmouth is doing a very
6 interesting job here because one of the great 7 advantages of having the outside network be based in 8 the same technology as the inside, in this case Wi-Fi, 9 is that the innovation can occur inside and then go 10 outside. And so what we're seeing, for example,
11 Motorola is launching a dual-mode handset, Wi-Fi and 12 cell phone, initially, GSM. 13 enterprises and inside phone. 14 outside. It'll be used inside of It will spring over
You're doing things inside of Dartmouth.
15 You're going to start having toys like this people can 16 play with where they're going to use them inside and 17 then they'll spring over to the outside network. 18 this is a more likely path, I think, to get to the 19 type of internet vision that some of us have been 20 talking about, including Marty, than having a system 21 where the broadband outside is a whole different 22 technical foundation than the broadband on the inside. 23 24 COMMISSIONER COPPS: MS. HOLT: Yes. Valerie? And
I was just going to add to
25 what Jose said.
I think there will be some time-delay
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1 services or replaying for listening and watching.
One
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2 of the things that we see certainly with our National 3 Broadcasting Corporation, the BBC, is that there is 4 huge growth in the use of what I would commercially 5 call our back catalog. People missed something and
6 it's suddenly become either significantly in their 7 social life or in their educational life and so 8 watching back catalog or listening to back catalog is 9 becoming very significant now. 10 MR. SUBRAMANIAN: I'll take a slightly
11 different tact on this.
For a while, there used to be This is a key
12 this notion of what is the killer wrap.
13 term in Silicon Valley and lots of places and, if only 14 you found a killer wrap, people will start using this 15 by the droves and so on and so forth. I think It
16 broadband is primarily a communications means. 17 just happens to be data communication.
For the most
18 part, there will be a whole bunch of basic things that 19 people do today in sort close environments, wired land 20 environments that will automatically translate over, 21 getting my e-mail and all of those things. 22 be a huge piece of it. 23 24 know. And the other portion of it we really don't Nobody really knows. It's sort of worrying That will
25 about, when you're building a highway, what kind of Heritage Reporting Corporation (202) 628-4888
1 cars people will drive on it.
You know people think Your job is to
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2 of all kinds of cars on the highway. 3 build a good highway. 4 anyhow. 5 COMMISSIONER COPPS:
That's sort of my belief
It is really is
6 interesting.
Everybody does talk about the killer
7 wrap and all you have to do is be deprived of this 8 stuff for a day or two and you really the killer wrap 9 is here right now and the only killer wrap I can think 10 of maybe is to lower the cost so more people can 11 afford it and then we'll have it. 12 I think we're probably beyond our time and
13 our distinguished chief of our Wireless 14 Telecommunications Bureau, John Muleta is going to 15 wind this up, but first I'd like you all to join me in 16 giving a round of applause to this panel. 17 18 (Applause.) MR. MULETA: I'd like to thank Commissioner
19 Copps and the panelists for this very interesting 20 presentation. I'm going to show this. I don't know
21 if this is visible to the folks out there, but this is 22 Circa 1993, a cell phone, okay, and this is portable. 23 24 So I put this in my pocket and I walk around. I think when Marty was first working on this
25 stuff, he probably had a backpack and I believe, in Heritage Reporting Corporation (202) 628-4888
1 Washington, D.C., they have to walk around with the 2 backpacks sort of calling each other. The relative
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3 difference I carry two telephones because I'm a big 4 guy and I've got enough pockets. 5 the alternative. 6 In the cellular world, you have a difference You've got to This little So this is sort of
7 in 10 years in the sort the CPE.
8 remember this is just a phone, all right.
9 sucker that I have is actually a computer and it is 10 more than just a phone. The reason that I bring this
11 is, is because I think it shows you how far technology 12 could come if the right incentives are put in place. 13 And what I also want to talk to you about is a couple 14 of seminal events that happened for me that I thought 15 were very instructive. 16 I think I was working with Paul Berriman in It was a really momentous occasion
17 Hong Kong in 1999.
18 for me because it was April 14th and guess what 19 April 15th is the United States. It's tax day. I had
20 not done my takes because I was busting my tail on a 21 project that I was working with Paul. So I remember
22 sitting in my room in Hong Kong, logging on and 23 finished my taxes, sent them over, and I was getting a 24 refund, so it was sort of a good moment. So it was
25 all the positive extranalities that you can think of Heritage Reporting Corporation (202) 628-4888
1 were happening, right. 2 incredible.
And I was like, wow, this is
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I am so far away and, yet, I'm able to And, for those of
3 meet my obligation to pay taxes.
4 you that don't meet your obligations, there's still 5 time, I think, this year so long as you put the right 6 paperwork in. But that was phenomenal because I had Now I was
7 logged on, got on the application, I did.
8 constrained by a wired access, so I was doing it and 9 the amount of communications I could was limited 10 because I was in a room and the hotel, at that point, 11 had brought in internet access on its own. Can you I
12 imagine if I could have just used my cell phone? 13 could have done in OfTel, the Hong Kong regulatory 14 office, maybe that's where we're doing our pitch. 15 that's one thing. 16
So
The other seminal moment was later in around
17 2000 when I was with a company and Val and I were in 18 this business. We had, I think, a million and a half We had about And most of
19 U.S. wholesale customers for ISP access. 20 100,000 corporate customers worldwide.
21 our energies, between 1996 and 2000, were spent 22 building a backbone for IP traffic. The reason was we
23 had drank the Kool-Aid of the 1996 Act and we believed 24 the CLECS was going to give us an alternative for the 25 local group access because the basic business depended Heritage Reporting Corporation (202) 628-4888
1 on that. 2 The realization in '98 and '99, 2000 was it
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3 was very difficult because, not only were the ILECS 4 going to compete with us in the ISP business, the 5 CLECS was going to compete with us in the ISP 6 business. And so, as a company, their destiny was,
7 how do we get to this local leap, this way that we can 8 control our relationship with our customers. So,
9 worldwide, the solution was to look for wireless 10 solutions. And the experience was I spent some time We spent some time
11 with Marty's folks at ArrayComm. 12 with people in San Diego. 13 further up.
Some time with people
Some people in Bed Minister in New Jersey I mean, the spectrum was
14 and some people in San Jose. 15 there.
It was called 700 megahertz where we thought But the problem was it was a gear.
16 it was coming.
17 There wasn't anything available and we're talking base 18 stations and handsets and everything. So the capital
19 that was willing to invest needed a whole bunch of 20 other things to come into place. 21 So the basic message here today is, given
22 what my experience in 1999, and what we've heard 23 today, whether it's the broadband services through the 24 24 gigahertz line-of-site stuff or it's 2.5 or 3.6 or 25 2.1 or 1.9. The technologies and the capabilities are Heritage Reporting Corporation (202) 628-4888
1 all there for this to take off.
Not only that, it's
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2 with complimentary services on the low power, 3 unlicensed devices which really seed the market and 4 the appetite for broadband. 5 So the last thing that happened to me, as
6 from a personal experience, I think in 2000 -7 sometime in between '99 and 2000, I finally got sort 8 of high speed data in my house. The result in the
9 last four years has been significant within my 10 households. I went from having one computer in my
11 office to having four computers in my house and one 12 dedicated. One of the four is dedicated to my It's there machine, not mom's, We have another one
13 four-year old twins. 14 not dad's.
It's their machine.
15 for the grandparents that occasionally drop by. 16 But, anyway, what we've done, though, is
17 we've gotten this huge appetite for broadband, the 18 access that we can get out of that. 19 I'm going to close by kind of reviewing with
20 you very quickly some of the things that are 21 fundamental. And, for those of you that are not
22 familiar with the FCC or are not here from the FCC, I 23 want to talk about some of the things that we're 24 trying to achieve there through the forum and through 25 our day-to-day activities. Heritage Reporting Corporation (202) 628-4888
1
Folks, you've got to understand, the FCC is
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2 the spectrum manager for the United States for 3 commercial and public safety licensees. That's a vast The
4 universe and MTIA does it for the federal users. 5 spectrum is split between these two areas. 6
I think, as a regulator and, as a person who I used to
7 has been on the outside and on the inside. 8 do wireline stuff.
I came back now doing wireless.
9 But, as a regulator, the things that I believe the 10 overarching goals are to be transparent, to be as 11 efficient as possible in what we do and to be reliable 12 in our processes in what we achieve. So, part of it
13 is, if you're making an investment, you want to know 14 that it is reliable. That things won't change as you A lot
15 put your hard-earned capital into the process.
16 of what we heard today was about can I take away the 17 investment risk because I know the investment 18 environment or the spectrum environment is going to be 19 reliable. And I don't think this is a choice between It's about whether we are
20 unlicensed and licensed.
21 reliable in what do as we think about these things. 22 The bullet points that are in the chart are
23 about the sort of statutory goals that we have to live 24 with, highest and best use of the spectrum, advanced 25 spectrum reform by developing innovative ways of Heritage Reporting Corporation (202) 628-4888
1 assigning and allocating harmful interference, which 2 is the basis of all theology in the United States. 3 And then we also need to address the needs of public 4 safety, rural areas, educational groups and things 5 like that. So those are sort of inherent in our
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6 statutory bases. 7 I've spent a lot of time in the Bureau
8 trying to come up with what is it that we're trying to 9 do? And everybody talks about flexibility and I
10 think, if you look at the model that we're looking at 11 that we've been very successful with, which is we went 12 from 1993 from about 60 million subscribers to 160 13 million today in the cellular and PCS business. 14 There are three things that we did. We did
15 provide flexibility and those flexibility were 16 technical and operational autonomy for the licenses. 17 So every time you needed to add a site you didn't have 18 to come to the Commission. Those are great things.
19 Also, the ability for people to aggregate or 20 disaggregate their licenses. That was actually very
21 helpful in the 10 years after the deployment of 22 cellular. 23 Remember, the duopoly started in 1994 and --
24 we went to a very competitive model with many 25 licensees and these flexibility do matter. Heritage Reporting Corporation (202) 628-4888 But I
1 think a couple of other conditions are necessary. 2 is it's got to be in a competitive environment and
One
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3 part of what I mean by competitive environment is that 4 there's got to be somebody nipping at your heels to 5 make you use this very valuable resource efficiently 6 and the way that happens is when you have competitors. 7 And we used to think about just voice competition. I
8 think we have to about it's a different kind of world 9 we're moving to. 10 Paul and Scott Slater mentioned things that That's a
11 really are about mass media alternatives. 12 type of competition we're moving to.
In terms of our
13 policies, we've implemented a whole bunch of other 14 things that are creating competition for existing 15 spectrum users, both intermodule and intramodule. 16 The last and important part of our policy It
17 goal has always been, I think, to get it right.
18 has been to enforce the opportunity cost of using the 19 spectrum. So it's not about your relative rights in It's about making sure whether through
20 the spectrum.
21 auctions or through secondary markets, if you're 22 incented to use the spectrum to make the investment to 23 get that return on capital that has already been put 24 down. 25 One chart that I have -- I just want of sort Heritage Reporting Corporation (202) 628-4888
1 of very quickly -- there's an important rulemaking 2 that's coming up and many of the folks today had 3 mentioned this. We have two bands. One is in This is
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4 cellular and what we had is in 1993.
5 illustrative, so don't hold me to the numbers, the 6 exact numbers. In cellular, PCS, in 1984, we just We had only about 25 -- I'm In 1993, in
7 stated the service then.
8 sorry, in 1984, we only had 25 megahertz.
9 cellular and PCS, it went to an additional 190 10 megahertz, 180 megahertz, depending on how you count 11 it. 12 The other band is MDS/ITFS, which has been
13 around for 40 years and has been allocated 14 incrementally over the years above the types we 15 services we allow on it. The difference is a scale of What is taken place.
16 opportunities in the two bands. 17
The opportunity we have now, hopefully, in the
18 rulemaking is to provide flexible use and let 19 broadband wireless potentially take root in these 20 bands. But you do see dogmatic implications, based on
21 the kind of policy choices the Commission makes. 22 So I think that I wanted to pointed out in
23 this slide is a whole bunch of bands that we have that 24 could be used for broadband of different starts. 25 you'll look at the bottom, we've done MDS/ITFS. Heritage Reporting Corporation (202) 628-4888 If We
1 went to auction, 70/80/90, which is a hybrid. 2 fans that we have.
You see
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And what I did in there is I just Yes. Is
3 asked the question, is there a flexibility? 4 there competition? 5 for using spectrum? Yes.
Is there opportunity cost
I think those are the types of
6 questions we need to answer and I think the kind of 7 questions that Marty's been asking about all relevant 8 as we think about these issues. 9 Well, that's it. It's a good thing that I
10 ended on that.
The main point is that we have a lot
11 spectrum in the 3G area that's coming up, whether it's 12 90 megahertz that we claim from the federal users. 13 There's PCS spectrum still available and the 14 tremendous opportunity for deployment of broadband 15 services. Spectrum, I don't think is as a great a I
16 constraint, 2.5 megahertz is a great opportunity.
17 think something that people should take a look at and 18 I think it's an exciting time. 19 the cusp of something great. 20 So, with that, I want to extend my great I feel like we're on
21 thanks to all the panelists who have flown from very, 22 very far away or very close, but they've spent their 23 time to educate us about their opportunities, what 24 they're doing. I want to thank the people in the demo
25 room who have done great work teaching us about their Heritage Reporting Corporation (202) 628-4888
1 technologies.
I also want to thank, most of all, my
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2 staff who spent hours and hours getting this thing 3 together. And, finally, I want to thank the
4 Commissioners and the Chairman, whose leadership in 5 this area is going to be instrumental for this great 6 opportunity for broadband wireless. 7 So, with that, I'd like to close it and
8 thank you very much for your participation. 9 10 (Applause.) (Whereupon, at 5:04 p.m., the above-entitled
11 matter was concluded.) 12 // 13 // 14 // 15 // 16 // 17 // 18 // 19 // 20 // 21 // 22 // 23 // 24 // 25 // Heritage Reporting Corporation (202) 628-4888
254 REPORTER'S CERTIFICATE
CASE TITLE: HEARING DATE: LOCATION:
Wireless Broadband Forum May 19, 2004 Washington, D.C.
I hereby certify that the proceedings and evidence are contained fully and accurately on the tapes and notes reported by me at the hearing in the above case before the United States Federal Communications Commission.
Date:
May 19, 2004
Bernadette Herboso Official Reporter Heritage Reporting Corporation Suite 600 1220 L Street, N.W. Washington, D.C. 20005-4018
Heritage Reporting Corporation (202) 628-4888