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Spectrum: America’s Invisible Infrastructure Incentive Auctions and Broadcast Spectrum

Spectrum: America’s Invisible Infrastructure Incentive Auctions and Broadcast Spectrum CGB State and Local Government Webinar Rebecca Hanson Senior Advisor, Broadcast Spectrum Media Bureau, FCC October 5, 2011. Overview. Spectrum is a key driver of the economy and deficit reduction

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Spectrum: America’s Invisible Infrastructure Incentive Auctions and Broadcast Spectrum

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  1. Spectrum: America’s Invisible Infrastructure Incentive Auctions and Broadcast Spectrum CGB State and Local Government Webinar Rebecca Hanson Senior Advisor, Broadcast Spectrum Media Bureau, FCC October 5, 2011

  2. Overview • Spectrum is a key driver of the economy and deficit reduction • America is facing a spectrum crunch • FCC action to address growing need for broadband spectrum • Incentive auctions are a key policy tool

  3. 1. Spectrum: Economy and Deficit Reduction

  4. Spectrum: A National Resource • Spectrum is essential input to the provision of all wireless services • As new uses arise, such as mobile broadband, spectrum must be shifted from historic uses • Wireless is an economic engine • Consistent growth in subscribers, revenue, jobs

  5. U.S. Wireless Industry Highlights • Contributed 16% to U.S. GDP annually from 1992 to 2007 (vs. 3% growth in rest of economy) • 12% job growth since 2000 (vs. 1% for U.S. economy) • Capital investment over $20 billion per year • “Apps” have generated $6 billion globally in 2010 alone • Significant indirect economic benefits • Education, health care, energy, civic engagement

  6. Budget Benefits from Spectrum Spectrum receipts to U.S. Treasury • Over $50 billion since 1993 • Over $30 billion in past 5 years Demand for spectrum remains strong

  7. 2. The Spectrum Crunch

  8. Why the Spectrum Crunch is Important • We are running out of unoccupied spectrum for broadband • Without action, the spectrum crunch will mean: • Higher prices for consumers, rationing • Poorer service • Dropped calls • Slow texting and web browsing • Lost opportunities for innovation

  9. Mobile Broadband: More Users… Source: CTIA

  10. PCs/Aircards consuming gigabytes per month Smartphones consuming hundreds of megabytes per month Feature phones consuming tens of megabytes per month …and More Usage per User Mean Mobile Data Usage per User, 2009-2010 Megabytes per Month Source: Validas

  11. Challenge – Keeping Up with Mobile Data Growth Projected Increase in Mobile Traffic - Analyst Forecasts 35X growth by 2014 Source: Cisco VNI; Yankee Group; Coda Research

  12. Spectrum Implications

  13. 3. FCC actions to meet broadband spectrum needs

  14. Opportunities for New Broadband Spectrum

  15. 4. Incentive Auctions: A Key Policy Tool

  16. Incentive Auctions Most of the attractive spectrum is currently occupied today Some allocations may not be currently used to fullest potential Incentive auctions would share auction proceeds with the current occupant to motivate voluntary relocation of incumbents Otherwise, no incentive for current occupant to give back spectrum Modification of FCC auction authority needed from Congress 47 USC 309(j) does not permit sharing of auction proceeds Many bipartisan bills circulating through Congress

  17. Potential Applications of Incentive Auctions to TV Bands Excellent propagation characteristics (travels long distances, in-building penetration, wide through-put) Adjacent to 700 Band (recently auctioned for 4G LTE mobile broadband) Opportunity to strengthen television sector with cash infusion Industry poised for new approaches to station operations that are more spectrally efficient

  18. Broadcaster Options – All Voluntary In an incentive auction, a broadcaster could: Contribute one or more 6 MHz channels, in exchange for a share of auction proceeds; Share spectrum with another broadcaster, in exchange for a share of auction proceeds, and stay on the air; Relocate from UHF to VHF, in exchange for a share of auction proceeds, and stay on the air; or Choose not to participate! Broadcaster participation in incentive auction is voluntary

  19. Incentive Auctions Benefit All Stakeholders US economy wins Global leadership in innovation, job creation, economic growth US consumers win Continued advancements in wireless products and services US taxpayers win Multiple $ billions in cash to Treasury and deficit reduction Contributing licensees win Capital infusion to support new business models

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