 Welcome to New America Foundation. My name is Michael Calabrese. I direct the Wireless Future Project here at the Open Technology Institute at New America. And this is a, of course, an invitation, only press briefing on spectrum holding limits and specific, and in particular in relation to the incentive auction proceeding. I think that's really the hot topic for today, although it has obviously a broader context as well. So we're going to have a few speakers to make brief remarks at the opening, and then the rest of us, those you see here as well of a few others, will be chiming in with brief remarks and to handle Q&A. And we really have an incredibly diverse cast of company and association representatives, consumer and public interest representatives, really reflecting the broad ad hoc coalition that's come together to try to promote competition through this auction, in addition to folks at the table, also sitting just off camera, but they'll hop on whenever they speak. Mark Cooper from Consumer Federation of America, Peter Kramp, and the Economist from University of Maryland and Greg Whitaker from Herman and Whitaker are also right at the front table here. So I'll just give some background, which is that we are one day away from the FCC's Sunshine Notice for the May 15th Open Agenda meeting, likely a historic meeting that will address rules governing the 600 megahertz incentive auction and related issues of spectrum aggregation. The Sunshine Notice, of course, triggers a quiet period prior to the meeting. FCC staff briefings on the items circulating have really helped to focus the final days of this months-long debate, but it has also generated rumors and misleading information. The purpose of today's briefing is to clarify those issues and clearly state the principles and policies that we believe are critical to advance consumer interests in wireless broadband innovation, investment, and deployment. As we understand it, the major features of the current FCC staff plan for the 600 megahertz incentive auction that is circulating with the commissioners are as follows. The FCC will auction the 600 megahertz band in 10 megahertz increments, five by five fungible blocks, on a partial economic area basis. A bright line rule will apply on a P by P basis concerning eligibility to acquire a low-band spectrum in the auction. The FCC will adopt a threshold price level to be determined after a future notice and comment. And once that threshold bidding amount is satisfied during the auction, the FCC will then separate these fungible five megahertz blocks into one of two categories, a pool of reserved spectrum and a pool of unreserved spectrum. Carriers that exceed one third of low-band spectrum in a PEA will qualify only for bidding on unreserved spectrum. This by no means is a radical or exclusionary set aside. Under the proposal, as we understand it, in each market, both AT&T and Verizon would be able to gain substantial spectrum regardless of any screen. Less than half of the spectrum in each market would be reserved for competitors under the chairman's proposal. For example, a 30 megahertz reserve in a 35 by 35 megahertz auction would permit the two dominant carriers to acquire at least 40 of the 70 megahertz, leaving the overall foreclosure of sub-1 gigahertz spectrum largely unchanged from its levels today. So this is hardly a very severe limit on any participant in the auction. AT&T and Verizon, on the other hand, are not pleased that this set aside trigger will prevent them from completely foreclosing additional facilities-based competition. And that's pretty incredible when you consider they already control more than 2 thirds of all low-band spectrum nationally and more than 80% in major markets. They are throwing every argument against the wall from threats not to participate to claims that winning anything less than 20 megahertz isn't worth the cost of deployment. Nothing they've thrown has stuck. We're happy to address any and all questions, but we want to focus on the fundamentals, namely the pressing need for and compelling public policy benefits of allowing competitive carriers to gain access to low-band spectrum to advance the public interest in investment, innovation, and competition. It's very important, I think, to emphasize that all spectrum is not alike. As Commissioner Rosenwurzel said in her speech yesterday at the Wi-Fi Forward Conference at the museum, the TV band below 1 gigahertz is truly super spectrum, able to leap tall buildings in a single bound to cover huge areas more cheaply and to penetrate obstacles and see through walls. We'd like to begin by discussing the ample authority the FCC has to address market power for the benefit of consumers. We'll discuss how the Spectrum Act expressly authorizes the commission to adopt general rules like this on spectrum aggregation. With the FCC's jurisdiction and authority firmly established, we intend to review a few key policy considerations as well, including the value of low-band spectrum for coverage in rural and in urban markets, the substantial risk of consumer harm from anti-competitive foreclosure by the two dominant market players, the likelihood of robust, even record-setting auction revenues from an auction design that encourages the two dominant players to bid against each other, and the domestic and international consensus in support of reasonable spectrum aggregation limits that stimulate investment, encourage innovation, protect public safety, and expand broadband deployment. We support the chairman's approach in general. If anything, the holdings limit in this auction could promote competition to a greater degree. As our public interest spectrum coalition stated in an exparte filing just yesterday, a better approach would be to ensure that all carriers can bid but to structure the auction so that the dominant carriers bid against each other in all circumstances, driving revenues higher while promoting competition. To that end, the commission should, and this is just our view of some of the public interest groups, the commission should at a minimum designate only at most 30 megahertz as non-reserve spectrum with the rest reserved to enhance competition. In other words, if there's going to be a limit on either category of spectrum in the auction, the cap should be on non-reserve spectrum available to carriers controlling more than one-third of the low-band spectrum in a market and nationally, and not on new entrants and competitive carriers seeking sufficient sub-one gigahertz spectrum simply to find a foothold to compete. So I'm gonna turn it over now to first the chip pickering and then to Steve Berry and then Mark Cooper. We asked that questions be held until after they speak for kind of our big panel of diverse experts and interests here. So turning it over to former congressman Chip Pickering who really needs no introduction, but I'll introduce in many ways, currently the CEO of Comtel and serve six terms as a member of the US House representing Mississippi's third district and as vice chairman of the House Energy and Commerce Committee from 2002 to 2006. And of course, as a leader on the Telecommunications Subcommittee, he became known as an expert in telecom issues. Chip? Michael, thank you and thank, I wanna thank the New American Foundation for putting this together. I wanna start today. Many of you all may have seen Ken Burns' recent special on the Gettysburg address as he tries to teach students to memorize and to recite it as part of the civic history, the always relevant defining of such clarity and with such brevity of the meaning and purpose of our nation. Abraham Lincoln started the address four score and 20 years ago. And so if you think of the meaning and the purpose of competitive auctions and what it has meant for our country for 20 years, we celebrate the 20th year of competitive auctions this year. And we have not four score, but we have four generations of technology, of networks and the wireless marketplace that because of competitive auctions drove four generations of new technologies, new services, probably no policy has generated as much economic growth, investment, innovation, and no policy has transformed our economy, our way of life, our culture. You could even say our democracy as much as competitive auction policy. And we need to remind ourselves what was the first purpose, the beginning mission, the first basis for going to competitive auctions. It was to end a duopoly and a wireless marketplace. You had an incumbent and you had one competitor per market. You had a duopoly policy set by law, set by policy. And so for 20 years, every auction since has been to have at the beginning up to seven per market. Every auction since has always been structured to promote as much competition for the rule, the regional, the new entrant, the midsize, the large for every size company in the wireless marketplace and all of the people around the country that they serve to have multiple choices, multiple options, and that competition has never been such effectively demonstrated to give benefit to our country. It was to clearly end duopoly and promote competition. So all the authority and all the precedent that the FCC has in Congress has granted is to not go back to a duopoly. So I think the history is clear. The meaning is clear. The purpose of what our competitive auctions have brought to the country and why they were brought is if you look over 20 years, no one could argue, both with the reason, the purpose, and the clear evidence of the good it has brought to the nation. So as we talk about competitive auctions going forward, I think we can summarize that it is very clearly not the intent to have a duopoly reemerge, to reestablish and to close out the great benefits that competition has brought. And so as we look at the specific issues of how to structure it, we think that the FCC and Chairman Wheeler is clearly within their authority. They're clearly within the historical precedent and they have a clear purpose defined by two decades and four generations of technologies to show the benefit of competitive auctions. All right, thanks, Jeff. Next we have Steve Berry, the president and CEO of the Competitive Carriers Association, which represents the non duopoly carriers striving to survive and compete in a consolidating mobile broadband marketplace. Thank you, Michael. And thank you to New America Foundation for sponsoring the event. I'm very glad to be here, Chip. Good to see you again. I appreciate your comments, forescore. You know, Mr. Wheeler, Chairman Wheeler, should be commended for keeping his eye on the bouncing ball. And its competition and competition policy is his number one priority. We share that priority and FCC has constructed what I think is a competitive auction. It's a conceptually, a sound auction. It allows every carrier to bid and every carrier to potentially win spectrum in its auction. And it's critical that every carrier get access to this ecosystem, the 600 megahertz ecosystem. You mentioned four generations, what we're moving into is a fourth wave also because the services, the digital world services that are gonna be provided on this 4G, advanced 4G and 5G networks are bringing us into the fourth wave of competition in the, and not only the wireless, but the telecommunications world. And it's just, and it's incredible that especially the AT&T suggests that the FCC doesn't have the authority to craft this auction the way they have. And I wanted to bring along the actual language. So it's got a few blood, sweat, and tear marks on it because we fought hard to get this language. This was a language AT&T opposed during the House and Senate process. They didn't win. Congress won by creating a competitive auction authority for the FCC. And if they don't believe it, then go to 308J and read the savings college language in there, which actually strengthened the authority that the FCC had before. And I'll just read it because nothing in this subsection A affects any authority that the commission has to adopt and enforce rules of general applicability, including rules concerning spectrum aggregation that promote competition. And that's what we are here today. We're talking about competitive auction that hopefully allows every one of these smaller carers to continue to compete. And we did mention it's low value, low band spectrum and that's critical for everybody. We do not want to create the same mistake we did in the 700 megahertz auction by freezing out small carriers in an ecosystem that they can't compete with and can't get devices and can't build infrastructure. I want to say thank you to the FCC for adopting our proposal of PEAs, partial economic areas. You know, the FCC default was EAs, economic areas. And then even REAGS, 176 economic areas, even fewer REAGS. We proposed CMAs, cellular market areas, 723 of those in the United States. But the FCC said the complexity of the complexity of the reserve, reverse forward auction and for other reasons they were not going there. So we have to compromise. We propose to compromise very much along the same lines as the structure of the auction. Setting 30 megahertz aside in reserve, it's a compromise to accomplish all the goals. And we appreciate the FCC's taking the PEAs. Anything larger than a PEA would have been the equivalent of a regulatory execution of every small carrier in the United States. And so the FCC should be commended for having the guts to stand up and recognize that competition will flourish because of these small geographic areas. And it's absolutely extraordinary when you think about it, what AT&T's position has been and large carriers has been on the auction itself. Not only the reserve, but the unreserved option. Every carrier, including AT&T Verizon, can bid in every market. Everybody can bid. And what is even more incredulous is the AT&T's proposal suggestion that this freezes them out. AT&T can actually bid in two thirds of all the markets under this proposal in the reserve, the reserve part. So two thirds of every market in the United States, AT&T can actually bid under the reserve. And they can bid in every market in the unreserved as well as Verizon, not as much as two thirds, but they can bid in the reserve markets. So we have a possibility of an auction that can actually bring as much on the reserve as it does on the unreserved. And everyone can bid as much as they want. And the way that the auction is constructed, once you get to a certain point, we're gonna meet our expectations of revenue stream from the auction itself. So the local and national eligibility test is one of the proposals we've made. And that is to make the same arguments that the Department of Justice makes in a merger acquisition review. It should be a market dominance power, national market dominance power test, and a local market power test. And if you're an AT&T or a Verizon, if you meet both either or you can bid in those markets and you still have a spectrum aggregation limit that allows every carrier an opportunity to bid and allows every carrier an opportunity to get in this ecosystem. It's just not about how much spectrum you get. It's about getting into an ecosystem that allows you to compete in these fourth generation services. So again, I don't wanna repeat the same mistake of the 700 megahertz. And I think this auction is well designed to bring maximum revenue. And I hope that we can continue to work with FCC as we find our way through the rest of the eligibility rules. And thank you. Thank you, Steve. Next we have Mark Cooper, who, Mark, I don't know if you can take the microphone out of there and come up here so we see you on camera. Okay, I thought I was on camera over there. Oh, is he? Oh, okay, you're fine then. Okay, I'm sorry. Wow. Have me stumbling around over here. Yeah, we have better AV here in America than I even knew. Thank you, John. So Mark Cooper from Consumer Federation of America. With a room full of experts, I wanna focus on a little bit on the political economy of this. Although the sympathy, the sentiment is the same. I mean, the FCC has really come up with a simple and a genius approach to the upcoming auction that balances the multiple objectives under the Communications Act as amended of creating a, it's created a pool for non-dominant fringe competitors and an open pool for all bidders. And it's simple. If you saw some of the things that were proposed, they got pretty convoluted, right? And so they saw through this and came up with this relatively simple approach. And AT&T's frantic efforts to derail that simple pool approach strikes me as a pretty good evidence that it's a darn good device that the commission has come up with. And it certainly does sort of amplify what we have said in our comments to the commission and the Congress on this issue. First, the fact that AT&T is claiming that it cannot make effective use of low frequency spectrum unless it has access to much more of it. When everybody else in the world makes a lot more of it with a lot less is testimony to the gross inefficiency of the dominant carriers. And we stress that in our comments. Second, the fact that AT&T proposes a structure that would squeeze competition into a smaller space than the dominant incumbents is testament to their desire to foreclose and prevent competition. They want the biggest possible scope for foreclosure. As we argued, that's their primary economic motivation here. Third, their desperation to squeeze the competitors suggests to us that if the FCC actually stands its ground, the dominant incumbents will have to bid vigorously for whatever spectrum they have access to. And we will have more bidders for more spectrum in the aggregate. And so the conclusions of our earlier analysis really do bear repeating at this key moment because someone read the act and the act is this approach is perfectly consistent with the act as written. Well-crafted pro-competitive auction rules will not only promote the public interest through competition, they can also be expected to generate revenues that equal or exceed revenues that would be expected from auction rules that allow the incumbents to bid for the acquisition of all high-quality, low-frequency spectrum. The dominant wireless carriers are allowed to bid on some, but not all of the high-quality spectrum, low-frequency spectrum will in fact flow to competitors and maximize revenues. This is a really ingenious approach. I wanna add one thing. I don't wanna disagree with Chip Pickering, the 20-year-old decision to auction spectrum is certainly the most important driver of competition. But this year is also, I believe, the 30th anniversary of an extremely important decision that has driven dynamism in the spectrum. The decision to create what Darrell Issa called yesterday, public access spectrum that used to be called unlicensed spectrum. I will adopt and accept Darrell Issa's words and I will never use the word unlicensed again. And the simple observation, when CFA and Darrell Issa agree on something, that ought to be a no-brainer for the FCC. Thanks, Mark. So, and if we wanna have, so we wanna make sure we get to questions from reporters as quickly as possible. Should we go to that first? Okay. So, let me start with asking if any of the reporters in the room have a question. And then we're already accumulating questions that are coming from those who are tweeting and watching the live stream, of course. So is there any, yes, right here. And then tell us who you're with, obviously. Hi, Phil Goldstein from Fierce Wireless. If the FCC does approve rules for the incentive auction that are along the lines of what the staff proposal is as we understand it in terms of the set aside, what do you guys think is the likelihood that AT&T and Verizon, which over the past week have made very plain in ex parte filings that they are not pleased with the direction things are going in, what do you think is the likelihood that they either file petitions for reconsideration or any other kind of formal protest to try to get these rules reversed or changed in some way? And how would you guys react to anything like that? Well, let me say that that's clearly the right. They clearly have an opportunity to do that should they so desire. That's their decision. I really don't see where they have much legal ground to stand on on whether or not the FCC exercised its authority properly. So I mean, that's something that they have to consider. We all need 600 megahertz spectrum. We'd like to get the spectrum out in the marketplace as soon as possible. Any delay on this side of the eligibility and finalization of the rules are gonna delay the availability of the spectrum in the marketplace. So I would hope that they wouldn't do that. As I said, there's a lot in this structure of this auction for everyone. And there's been at least one of the large carriers have cried wolf on more than one occasion. But I think everyone recognizes the need to participate in the auction. So I think speculating what they may or may not do is not very healthy. I would just add, I mean, I think this, the question's a good one and it lays bare the contradictions in AT&T's advocacy here. They've told people time and again that low band spectrum isn't really that important after all. And they also desperately need it as soon as possible. So put those two together and see how those add up. Oh, and by the way, if the FCC doesn't assure them a certain take from the auction, they just won't show up or perhaps they'll try to delay it in some other way. So I just don't get it. I mean, I understand what they're driving at. They want everything to flow to them for quote unquote their customers. They're not their customers, they're consumers who need choices. And so I take these threats from AT&T to be not worth very much but mainly to show just how self-contradictory they are and all their different tools they're trying to use in this auction to game the system in their favor. I wanna go one step further with this. And some of us have heard the chairman in public and in private make the point that he thinks this structure is pretty darn good for the incumbents. And both the wireless incumbents, the dominant incumbents and also the broadcasters. And I actually agree with him. I'm not sure I would have liked it to end up there but that's where it is. But I think the important point that both the incumbents and the broadcasters need to understand is that this may be the high watermark for them. That is if this doesn't go because they don't come to play or the broadcasters don't come to play, I suggest that the next statute is gonna be a lot less friendly to the incumbents because the world outside the incumbents is growing fast, they need spectrum. And I wouldn't be surprised that the next time the Congress is forced to address this if people don't play, the rules are gonna be a lot more friendly to the folks in this room than the rules that were written a couple of years ago. So I think there's another side to this threat they're playing but I think it's a very real risk that they're taking if they go too far down that path. All right. Bryce, did you have anything to add to that? Bryce Paschek with Bloomberg DNA. Thanks for coming, this is a great conversation. I actually just wanna touch on something that Mark just said. You mentioned the concern that broadcasters may not come to play and that's something that a Republican congressional letter to Tom Wheeler mentioned. Wonder if you might be able to comment on that whether these rules might, whether you think these rules might prevent broadcasters from participating. Well, I've heard Tom Wheeler describe it in the public meetings and then he's gone and explained it to the folks in this room is what myself in private meetings. His point is that if you think about a broadcaster who's being offered a range of choices to preserve their business model to take the money and run, guaranteed to stay in the business with a pocket full of money, how is it gonna get better for you? Why should you not come in? Now, they may think they can get more money next time but my point is that in point of fact, this is the best it will get in my opinion because these people in this room is a lot of edge companies who wanna get access to it. All those folks may come together. So from my point of view, I think he's properly described the outrageously friendly offer that's been made to the broadcasters. And if they turn it down, they may get their comeuppance. That's my point. I think this is really good for the broadcasters and I agree with Mark. There's two things going on here. The problem Chairman Wheeler is trying to solve is foreclosure. So AT&T and Verizon don't gobble up 100% of the spectrum. His proposal prevents that from happening. The result of that is not just Sprint and T-Mobile but Dish and the hundreds of members of CCA will show up for the auction. Why show up and invest the time and raising capital? Billions of dollars are at stake here if the incumbents can walk away with anything. So the structure I think incentivizes more participants. That's the first point. The second point on the revenue is this trigger point that Matt was talking about. The reserve only kicks in when the auction has raised sufficient revenue to pay off the broadcasters to pay for relocation and repacking. And so you're going to generate sufficient revenue before there's any reserve. If sufficient revenue is not generated there will be no reserve. That's a really important point. So you're going to have sufficient money to make a successful auction. And at that point Chairman Wheeler is proposing we're going to do things to promote competition. We're going to prevent foreclosure. So first you're solving the revenue issue and then second once the revenue issue is solved the trigger guarantees greater participation for competition. It is a critical point that Jeff just made that I think gets lost sometimes is that when you think about the broadcasters what comes first is a reverse auction. First the broadcasters say this is how much money we need. And the commission can then determine a threshold at any level they want. If they want to include what they think they might need for first net which is probably zero after the auctions after the AWS three auctions at the end of this year the commission sets a threshold. Then you go to the forward auction and this trigger for reserve spectrum for competition is never is never hit right. It's never triggered unless the commission's threshold is met by the bids of these folks. So it's just you know it's completely red herring to think that this issue affects broadcasters any broadcaster in any way because they go first they say we need this much money the commission sets a threshold. These carriers decide whether the threshold is hit or not. And this is great what if you're here now I would like to also emphasize that what Jeff made we represent herring we represent over a hundred independent companies small companies like Sheridan Valley Wireless in Macon, Missouri or public service wireless in Reynolds, Georgia. And it's critical to have the competitive rules that will encourage the maximum participation of the auction. And as Jeff said, what the FCC has proposed and particularly the adoption of P's but also avoiding foreclosure in the auction is what it's going to take to encourage those hundreds of independence to show up which then in turn help to drive the revenue as well as the competition issue critically. Question here or yeah, let's get Josh you have something online you can relay. Yes, we have a question from John Egerton of Broadcasting and Cable. AT&T has made the argument that in a data rather than a voice driven world low bands beachfront status is mooted by the fact that capacity rather than propagation is the key. Do they have a point? Larry? You? No, Larry. No, they do not have a point. It is beyond question and it's astonishing to continue to make that argument. It is beyond question that different spectrum bands have very different characteristics and whether you're doing voice or data and in fact it's more significant in data, low band spectrum goes further and it goes into buildings better. Everyone knows that it's a well established fact of physics and the result of that is that when you're trying to cover a country as big as this and as diverse as this and rural areas and get in building penetration so that your phone works in a building and you can make a 911 call in a building for example, you need low band spectrum. Yes, we're also dealing with capacity now but still if you look at the landmass of this country and you look at everybody besides the two dominant carriers we're all still also dealing with coverage and coverage is enhanced by low band not just because it makes the coverage but by needing less infrastructure your cost structure is more competitive as we've shown many times if you take a 700 megahertz site and it covers this area and then you go to 1.9 you need eight sites to cover it in general. If you go to 2.5 you might need 10 to 13 sites to cover it or 13 to 15 sites to cover it. The math never crosses over. The operating expense of so many more sites to provide the same coverage keeps you at a competitive disadvantage. So to argue that in the new world of capacity it doesn't matter is just completely wrongheaded. Yeah and I'll just point out that there's another auction coming up the AWS three auction in the fall that is higher band frequencies and if AT&T has issues with capacity go at it. You can bid it for all the spectrum you want in that auction there's no limits there. If that's the issue with their network go solve it. I think the low band issue is something unique. This is the last opportunity for this type of spectrum to be rolled out that any of us are aware of and so it's easy for AT&T when they're sitting on so much low band spectrum to sit there and say no problem. Don't need it okay. Well for T-Mobile to effectively compete in this very large country where we do need coverage and to be able to, as Larry said, build out in a cost effective way to compete against AT&T and Verizon. Low band spectrum is needed and so I think we don't doubt that AT&T may have some capacity issues and they need high band spectrum go for it. Go out and buy it. There's plenty of it coming up for sale. This will be my one note for today I guess which is it for AT&T. Low band spectrum is now moot or they need a 20 megahertz chunk handed to them or else they won't even show up at the auction. They should argue with themselves first and maybe figure that out and then come back to the rest of us. I mean the industry members are a little bit too polite here. Let's be clear. AT&T always does things on the cheap until either competition or regulators force them to make the investment in infrastructure. So when we looked at their build out they under invested in towers. Dumped their traffic into one licensed. First ones to do that. Everyone now has discovered that. They were the first ones to do that. They dramatically reduced their investment in towers and infrastructure per subscriber at exactly the moment broadband was coming. Some of us say they did the same thing in the U-verse space and later on realized they had to pull some more fiber. The simple fact of the matter is that that's what they always say. That's what's in their economic interest and unless someone either a regulator or a competitor stands up to them they will get away with that stuff. We have the next question online. Sure. From Howard Buskirk of Comdaly to what extent do you expect to see competitive carriers take part in the auction and are there any remaining policy decisions that could limit participation? Well, tough question Howard. I fully expect every competitive carrier to want to get access to this ecosystem. I mean it's not just about spectrum it's about getting into an ecosystem that allows you to compete in this new generation of services and everyone's gonna have to have Volte. I mean we talked about the efficiency of spectrum. Well the efficiency of the fourth generation technology is also five times more efficient. So I think the competitive carriers are gonna show up and thank goodness with the structure of the auction you have PEAs, you have carriers that want to bid in the footprint of their current coverage area and they have an opportunity now to do that and win. So I think they're gonna show up. Obviously did we get everything we wanted? No, I'd love to see a national market screen. Dominant power so that every small carrier can bid and spectrum in their own footprint. That would, I would like to see that. There are a few exceptions out there that under the current rules that doesn't quite fit but I think they're going in the right direction and I think it will be a successful auction. And especially for the small carrier that has to avoid getting into a trap of not having partners to roam with and infrastructure and devices. And I think they've done a good job of making sure we have interoperable spectrum and leaving those opportunities for the competitors. I would reverse the question and say, AT&T has in particular done everything they could to really undermine this auction and are continuing to do that. They've pushed for less spectrum in the auction. They have opposed any sort of reasonable competitive limits and so I think really AT&T I think would like to really see this auction fail. And we're up here saying no, we don't want it to fail. We think the commission's come up with a reasonable construct and the point of which is to attract broad participation in the auction. That's what's gonna make for a successful auction. Not an auction where just AT&T show up but an auction where more than AT&T and Verizon show up. Lots more. So some policies that we've been briefed that the commission is considering in addition to the auction specific rules are some changes to the overall spectrum aggregation policies and it's definitely a cause of concern for me at least that you would start counting more high bandwidth spectrum towards the denominator of the screen, counting it towards the screen without applying a discount that takes into account the different value of the different bands that we're talking about before because that would make it seem like if you're a carrier, Sprint is the obvious example that has a lot of high bandwidth spectrum. It makes you look worse for the purposes of the screen which could not only discourage your participation in this auction but in future auctions without also getting the benefit of having the spectrum that the other carriers have. So that's an item for concern for me as well as the vague statements that the commission has made on the sub one gigahertz cap or enhancement factors issue. So we have this auction but we also have to consider making trade-offs with spectrum aggregation that could apply to future auctions as well. And this is going to occur again. We see tremendous interest from the competitive carriers. My expectation is that they will certainly be showing up in mass if the commission gets this right. There's no more important competitive policy or factor though for the small carriers than getting the geographic area the size of that correct. And so we certainly want to see the P proposal adopted and the CCA D proposal adopted. There's no more critical factor for us but if CC gets that correct as it appears they are then I expect to see great interest. We certainly also like to see the national trader apply as well for a few of the situations. Okay. That's it. Going back to John's point, there's this sense that I get that the FCC has tried to do a little kind of two-step as they sometimes do between the incentive auction rules and the spectrum holdings proceeding with the spectrum screen. On the one hand the incentive auction rules seem to really benefit competitive carriers by having this set aside. On the other hand as John was saying with the spectrum screen they've contemplated adding quite a bit of Sprint's 2.5 giga spectrum, the spectrum that dish controls now. And that seems to potentially benefit AT&T and Verizon in the future in terms of what the headroom is for future transactions. So I just would like either Sprint or Dish or anybody on the panel to comment about whether or not you think the FCC is trying to split the baby here. I would say to start with if the commission's goal is to basically pay off, not pay off, but counterbalance what you're doing for AT&T to get them to accept the whole package. I mean it doesn't work, they'll just fight everything. So it doesn't really matter what other good things you give to AT&T because if there's the tiniest little detail that they're not happy with they'll fight you on it. Let me take it a little different way, that's a good point. But certainly we don't think that the way the commission is proposing to do the screen is the optimum outcome. The commission has very clearly identified that as we were discussing earlier different spectrum bands have different characteristics. Low band is particularly important competitively yet the proposed screen treats all spectrum the same. That just seems to fly in the face of the record and really of the economic arguments underlying the auction. So we certainly think that the commission should treat different bands differently. I don't quibble with adding more spectrum to the screen going forward as additional bands are available for broadband use but their utility in a broadband network and their cost to make them useful in a broadband network affect their competitive impact. And the screen is all about being a diagnostic tool to identify when does aggregation create or present a competitive concern that warrants further competitive scrutiny. And I think the proposed screen loses its effectiveness to the extent it has any left. It doesn't get any more effective and perhaps worse at doing that job. So while I would certainly agree the overall auction framework is very well thought out and innovative and brought to its logical conclusion could really stimulate competition and additional competitors getting critical low band spectrum. I do think they missed the boat on the screen and we hope they'll rethink that. Do you enter the meeting to the spectrum holdings proceeding? I can't say. We and others are certainly suggesting it and hopefully as they think about the overall package and the integrity of the overall package and the different puts and takes in the package that that would be the outcome. And I would say that the predictive value of the screen could actually be enhanced if you had, for example, three buckets that you waited differently to reflect the utilization. And I hope that they take a look at it and consider modifications. As you probably know, we have filed a number of filings recently on the three bucket concept which is really a simplification or condensing down of our original proposal which had a waiting for every band that's available in broadband. And we've suggested that the three bucket low, medium and low, mid and high actually would be a nice simplification. It's very transparent, very simple to apply. And it's a terrific outgrowth of the commission's own rhetoric in the competition reports and recent analysis of other transactions in notices of proposed rulemaking in which it consistently says that wireless broadband carriers should have a mix of low, mid and high band spectrum taking advantage of the different capabilities and intrinsic physics of each to best serve their customers. So we think that would make a lot of sense and it would balance really the screen. Your headroom result would be very reasonable. No one would be foreclosed from doing additional transactions in the future. Everyone would have some headroom to do them in the future but a large transaction would as it should trigger a more in depth competitive review by virtually any carrier and then the commission can go through the many factors it looks at. At the end of the day, the commission looks at many factors and reaches a public interest determination of whether the benefits of the proposed transaction outweigh potential harms of the proposed transaction. So we think that would make a much better screen and a better result. At this point, we believe the best outcome would be if the other four commissioners would force the spectrum holdings proceeding back to the drawing board. It should be removed from the agenda. I mean, it really is not useful, you know, as proposed. I mean, as John said earlier, they should not be adding mid band spectrum to the denominator of a screen to benefit Verizon and AT&T without adding weightings. To that, it's just not a good approach and, you know, when it's so vague as far as enhancement factors and other things that it's almost a meaningless exercise. So we hope that they withdraw, you know, withdraw that item and really revisit and do something that's meaningful for competition. I think from T-Mobile's standpoint, we, you know, to the extent that they're integrated with the auction rules, and we'll see on May 15th, I think we would prefer to see the spectrum holdings matter go forward and not upset the apple card of any of the actions around the incentive auction rules. So, but I understand some of the current concerns that have been raised. Okay, do we have another question online? Two questions from Paul Kirby of TR Daily. One, are you getting any traction on the suggestion that the FCC should reserve 40 or even more megahertz per market for reserve bidding? And second, do you think you'll be successful in your proposal that the FCC adopt both local and national spectrum aggregation threshold triggers? Well, let me address the second one first. I hope that they will adopt both the national and the local trigger. And I think it makes a lot of sense, especially since some of the pundits of AT&T is suggesting that the auction is not constructed in a way that would enure to the benefit of rural America. And it's, you know, it's sort of, it's tiresome. And if not tiring to hear those pundits of AT&T that this doesn't help rural America, when in fact the structure itself is, we couldn't ask for a better economic, I mean geographic build other than CMAs. So I think that if you have both, AT&T is gonna find, and I don't think you've heard AT&T say this anywhere, that they actually get to bid on two thirds of the reserve spectrum under this proposal that we would propose a national and a local screen. And like Kathleen said, they can go for it if they need more spectrum in those markets. But, you know, to hold the rural card hostage to promote a policy benefit, immediate policy benefit from AT&T is, like I say, we've heard it before. I mean they've had since 1984 to build out rural America if they wanted to really do it. And we represent 100 wireless carriers that are actually out there, building it out, providing service to the customers and consumers in rural America. And I think that's sort of the proof is in the pudding there. And just, there's a scenario where AT&T Verizon can actually walk away with all of the spectrum. If no one else bids and the trigger is hit and there's no one else bidding, AT&T Verizon could walk away with 100% of all 600 megahertz. It's only when the trigger's met, revenue is sufficiently generated that the reserve comes into play. And AT&T doesn't seem to acknowledge that scenario, but that could happen. I hope it doesn't. I hope a lot of people show up. And I think because of what Chamberlain Wheeler's proposing, a lot of people will show up as a result. And you look at it, door A is what AT&T wants. Unrestricted, they could foreclose and buy all of it with no competitive protections. Door B is what Chamberlain Wheeler has proposed. And I think common sense, history, look at other auctions around the world. Door B is the more successful auction. More people will show up. The broadcasters will end up getting more money. It will be good for competition. AT&T Verizon will walk away still with a lot of spectrum. But they won't walk away with all of it. I think that's a good policy. Fill you, no one else has anything. So Kathleen, you mentioned earlier that AT&T can just go ahead and participate in the AWS-3 auction, which has no restrictions in terms of reserve bidding if they really care about capacity. There's been this sense that, okay, AWS-3 will produce a whole lot of revenue that will take care of FirstNet's funding requirements and that will relieve pressure on the FCC to make sure that revenue from the incentive auction covers those requirements. I'm just curious to get either your sense or Steve's sense or Larry's sense about whether or not competitive carriers view the 600-megahertz auction as the auction to participate in as opposed to AWS-3. Well, I think both auctions. We've been very active. T-Mobile's been very active. It's Steve Sharkey in the back of the room. He's the guy who single-handedly has been working on this for T-Mobile. But we've been working actually very well with Verizon and AT&T on that proceeding. There's a lot of issues there around clearing the federal government users. And the spectrum also happens to be adjacent to the existing AWS-1 ban. So I think there's a lot of opportunity there for people to participate, to achieve some of the things that AT&T's worried about, which is capacity. So I think you'll see some healthy participation in that auction. And indeed, I think it has to hit certain thresholds in order to clear the federal government users. And I think that auction is, many believe will make sufficient spectrum to meet all the FirstNet needs. And that problem will be solved with that auction. The low-ban spectrum auction presents other opportunities. And again, I think low-ban spectrum, for all the reasons that have been put in the record, that I don't think AT&T and Verizon can deny, and even Verizon runs ads saying this, the benefits of low-ban spectrum in terms of coverage, and also in terms of indoor penetration. There's a reason why public safety, for example, likes low-ban spectrum. There's a reason why your television set works indoors. As we push more and more data usage through our networks, and people want to view video and data indoors, low-ban spectrum also becomes important for that purpose. So very critically important for competition, and so very unique spectrum. There's really no other opportunity like it on the horizon. So I think, yes, I think you'll see a lot of interest in that auction. And I think you'll especially see interest given the framework that the FCC has come up with here. So, yeah, we should, we're at the hour. Unless there's, is there any other reporter question right now, then, yeah, then I think we should wrap it up so that we stay on schedule. And I want to thank the press who attended, both in the room and online, as well as all our speakers. So thank you very much. Thank you.