 So I want to introduce Tom Power, who actually has, you know, like everyone, a bio in the, in what we hand it out, but I will just make this brief then. Tom is deputy chief technology officer for telecommunications at the White House in the Office of Science and Technology Policy. Tom helps to develop and coordinate administration policy on spectrum and telecom issues, among other issues. And he came to the White House from the Department of Commerce where he was chief of staff at NTIA. Thanks, thanks, Michael. Good morning, everybody. I had to see you all here. Michael told me that he thought you all would be hungry for my remarks. I think I misunderstood that actually. You know, he's hungry, right? Because lunch is next, so. But I'm really happy to be here and talk about I don't know if it's the role of competition in auction policy or the role of auctions in competition policy. Did I just say the same thing twice? I meant it the other way. But either way you put it, I think, you know, we can all agree that promoting competition and sustaining the benefits of competition is the preferred default approach over anything overly prescriptive or ad hoc regulation. And that's important in any area of the economy. But it's really important in this area that so many of us are so fortunate to work in. It's been a great area over the last few years, even in the worst parts of the recession. The wireless ecosystem was very productive. And you can find these numbers in lots of different places. I stole a few from the letter that CTIA sent to Chairman Wheeler the other day. US wireless carriers invested $30 billion in their networks last year. And just to put that in scale, they pointed out that that works out to $94 per customer, as opposed to an average in the rest of the world of $16 per customer. We have at least half of the world's LTE subscribers in this country. We're about 5% of the population, but half the subscribers. And all of this is driving productivity and job growth, of course, not just for the carriers, but for all the related industries, whether it's towers or operating systems or app developers, a really great American success story where American innovation is leading the way for the world. I should also point out yesterday we had a great event over at the White House, celebrating the launch of an initiative called Warriors for Wireless, where lots of folks in the wireless industry are stepping up to hire veterans as they come back from Afghanistan and Iraq. It's a great initiative. They've set up because they found funding through the VA for the training programs that trains them to climb the towers and do the networking. And for the industry where there's a great demand for this kind of labor, these returning vets who are hungry to get back into a domestic way of life, it's been a wonderful opportunity. And it was the, I still don't know what research is looking into this, and whether it's Sprint or T-Mobile or Verizon Myles, any of the carriers, you can read about their great efforts to hire vets. PCIA was their American Tower in the 18T, who has really stepped up doubling their commitment to hire veterans. So congratulations to all of them on that great initiative. All of this good news, of course, is why Spectrum Policy has been a great focus and priority for the administration. Going back to 2010, when we issued the first president's memorandum directing the FCC, they're directing NTIA and the agencies to work with the FCC to find 500 megahertz of Spectrum to repurpose for Loyola's broadband. The president came up with a menu of Spectrum revisions in his American Jobs Act, which then largely were enacted in the form of the middle class tax relief and Job Creation Act of 2012, authorizing and directing more auctions at the FCC. Of course, the reverse incentive auctions. So we can hopefully have a win-win-win there, in terms of reallocating Spectrum, but also compensating broadcasters who relinquish their Spectrum, preserving FCC authority over on-licensed Spectrum. And Michael, I know others, but Michael in particular, recently issued his report pointing out the huge productivity gains through on-license. And of course, first net, setting up first net with proceeds from the auctions. And then this year, the president issued another memorandum on Spectrum, really promoting more efficient use of Spectrum by federal agencies and focus on Spectrum sharing, borrowing somewhat rather heavily, I would say, from the report last year from the president's Council of Advisors on Science and Technology put out a report on more efficiency in federal Spectrum use. The PECAST happens to be in town this week, actually. Talking to some of the folks over there yesterday to update them on what we've been doing. And of course, the FCC, really busy in talking about the PECAST, though I just would mention the 3.5 gigahertz proceeding over there, again borrowed largely from one of the PECAST's big recommendations. And I also want to say it's been really encouraging to see how the federal agencies who are huge, in some cases, huge holders of Spectrum, how they have been pitching in here when the consensus started to build that it was time to look very hard at the 1755 band and figure out how DOD and the other agencies can move out of there and make room for wireless broadband. DOD, their first reaction working with NTIA was to look at a couple different options, including the 5 gigahertz band, the 2025 band. And the response, not surprisingly, from the incumbents in those bands was some nervousness at having to consider the prospect of sharing with DOD. And what DOD did was really get down to the weeds and figure out what are their real needs. And as a result of that work, they actually then said, you know what, we don't need to be in 5 gigahertz. And they are working now with the broadcasters in particular on the 2025 band to figure out a way that that sharing can work. And I think there's sort of this perception or caricature of the relationship between the agencies and the industry as being this tug-of-war on spectrum with both sides not acting reasonably in the agency and supporting spectrum and all that. But if you look at the work that these folks are doing, and I'll single out DOD and Terry to Kai and her team over there, it's really, really been impressive. And they've got important missions to execute on in fact, but they are also focused on the economy as well. So I congratulate them as well. But it's never easy, and Chairman Wheeler and his fellow commissioners and his staff are focused on all sorts of things spectrum related, including the auctions mandated by last year's legislation. It's very comforting to know that he's got folks over there like Gary Epstein and Ruth Milkman on the job. But a lot of complex moving parts, including the focus of today's event, the intersection of auction design and competition, you may be aware that the administration has files and comments in an FCC proceeding touching on this issue in the proceeding where the FCC is looking at the possibility of reinstituting spectrum caps in the wireless market. I was amused, Michael, that the invitation you sent out included as one of the topics here does the administration fully support the DOJ's findings, because I had always thought that DOJ was the administration. And it turns out it is. I looked it up. Congress now gets creative when they come up with names of bills, so you've got a clever acronym. They didn't used to be, but there was the Act to Establish the Department of Justice. And the words from the statute described as an executive department of the government of the United States. So we can put that one to bed. So just for, of course, I just started looking at this, I got to throw in one more point. The Antitrust Division was actually formed in 1933. The DOJ was formed in 1870. Antitrust Division was formed in 1933. The first head of it, the first assistant attorney general in charge of Antitrust was Harold Stevens, who later went on to be the chief judge of the DC Circuit. And remarkable thing there, he was nominated to the DC Circuit by President Roosevelt on July 23rd, 1935, and confirmed on July 24th, 1935, the good old days. So yes, we support DOJ's findings. They are our findings. So what did the DOJ say? Well, you remember in Animal House, knowledge is good, well, competition is good. Pretty controversial. And we have seen the effects of good competition. Some of the numbers I just reeled off are a result of that. But DOJ also pointed out what we learned in Econ 101, which is that market power can lead to higher prices and it can insulate a company who has market power from the competitive pressures to expand service or improve quality. DOJ recognized that the four largest carriers compete nationwide on a variety of levels, whether it's coverage or network speed or price. And we want to sustain that with carriers having to reposition and react to each other in a dynamic competitive marketplace. Obviously, spectrum is key input in this marketplace. And DOJ recognized that auctions are generally the default approach, the best way to maximize the chances of spectrum being put to the best use for consumers. And I think we all know that when the issue of spectrum auctions was first developed, the goal was not raising revenue. The goal was efficient allocation of spectrum. So that's still in the statute. It's still the default preferred approach. But in some markets, a rational actor with market power would assign a value to spectrum that reflects not just the revenue potential, but also the ability to foreclose competition. And that means insulating itself from the competitive pressure that it would otherwise feel. So DOJ asked the commission to keep that rather basic economic theory in mind as they consider auction design. And this is not to say that the big carriers or anybody are bad guys. If you talk to the big carriers, they will tell you they welcome competition and it makes them better. But they're not in it to promote their competitors. Their legal obligation is to promote their shareholder value. That's their job. And so that creates incentives. That will be largely good. But DOJ and the I Trust Division were created in part to make sure things stay on the right track. DOJ also pointed out that not all spectrum is created equal. And they chose the 1 gigahertz dividing line to make the point that spectrum below that line is better in terms of coverage, better in terms of building, getting inside of buildings. And that's one of the arguments you hear is, well, if the lower spectrum is better for coverage, that means it's going to cost more or cost more. The higher-range spectrum, less coverage, so it will cost less. You'll have to pay more for the tower, for installing towers and other infrastructure. It all kind of comes out the same. But that doesn't take into account the propagation of spectrum, the lower gigahertz spectrum, in inside buildings. Another thing that we've pointed out. There are just a ton of factors here, right? You want to take into account equipment, devices, and other infrastructure. Operating on lots of bands gives your customers more flexibility, but it also makes the devices more expensive because you've got to build that in. But the comments reflect that we know this is not a one-way street, and they actually pointed out in the comments that there may be substantial efficiencies associated with ownership of relatively large blocks of spectrum. Given the high fixed costs of building out a network, the cost of acquiring new spectrum and deploying it may be relatively low for the incumbent versus a new entrant. So the bottom line is essentially that the FCC needs to balance the economies of scale against the risk of a foreclosure strategy. It's a little more complex than that, but that's kind of the way I see it. Easier said than done, of course, but I think that's the way forward if we want to promote competition and consumer welfare. There were a few other topics covered, including the need to maximize predictability up front as much as possible. Folks going into an auction, like any consumer, want to be as educated as possible about the scenario they're walking into. That will itself help drive up revenues. And of course, for each carrier, it's going to be different. They have to consider the bands being auctioned in the context of their own holdings and how complimentary they are, whether in terms of the band or geography. So I would sum it up as follows. We think the FCC should consider the potential for an anti-competitive foreclosure, particularly in the low-frequency bands. But we recognize the efficiencies of scale. And there has been no call for any particular limit or cap, recognizing there are just a lot of details and a lot of complexity to this. Nobody has called for any carriers to be excluded. And as I said, we've even pointed to the benefits of scale. So then the question is, what about revenues? The auctions that are being designed now are being carried out pursuant to a statute that, among other things, seeks to fund FirstNet and other priorities. And of course, we'd all like to see further deficit reduction. But it seems to me that even if your sole objective is revenue maximization, economic theory can take you in different directions. I don't think that's a big headline. I think that is part of economic theory. So you say, well, let's just eliminate all restrictions and just let it be a free-for-all. And everybody can buy as much as they want and spend as much as they want, and that'll maximize revenues. Well, OK, I hear that. But there are the theories, right? There's the theory that says if you've got two big competitors who have 78% or whatever it is of the sub-1 gigahertz spectrum, that they will have an incentive to essentially overbid, that that will discourage smaller folks from competing, then you actually end up with fewer, not more competitors. And that could drive revenues down. So our urging to the FCC was you have to take all of this into account. And of course, everything that you said would be true if revenue maximization was your sole objective. But we know it's not. Congress has instructed the FCC that in designing auction rules, the expectation of revenues can't be the sole or predominant factor. And in the 2012 Act, authorizing and directing the very auctions we're talking about, they recognize the FCC's authority to adopt rules of general applicability, including rules concerning spectrum aggregation that promote competition. So there are no guarantees in any of this. There is uncertainty. And I think essentially what we've heard the FCC to do is what market actors do in the face of uncertainty, which is you've got to hedge your bets. You buy stock because you want it to rise, but you know it might fall. So you buy a put option so you can sell it at a particular price before it falls too far. You're on both sides of it. That's kind of what we're doing here is we're saying we need to get revenues. There's not like a directive. I don't think there's a legal obligation to raise a certain amount of money, but clearly we want to fund first net. We want to fund deficit reduction. And that's important. But competition is important too. And the folks at DOJ and at the I Trust Division, I think I have a pretty good track record at making these calls. And with the actions we've seen over the last few years in promoting a really healthy environment, we've circling back to the top, we have a great ecosystem here. It's a true American success story. It is productivity. It's jobs. And it's the competition that's driving that that we want to preserve. So thank you for listening. And I'd be happy to take a few questions unless you're hungry. Yeah, there's a few minutes if you are willing to take a couple questions. I don't know if you want to decide who it is. The press of any anything? We're going to have an auction to decide who gets to ask questions, so. Yeah. Sure. The question is, who owns the property that the government is going to answer? We own 100% of this factory, not just the six megahertz that each of us have for APSD TV services, but the windfall that is part of the auction, the inspection flexibility for cellular to restaurant. So let's say that it shows up the total value of their spectrum as a result of this incentive auction is 100 billion, I think that's quite low. And that maybe 50 billion of it is the windfall from the inspection flexibility that goes along with the auction process. Does the public have any residual rights to those properties? Or as the broadcasters say, this is our property. Any money at the end really goes to the public. We're being screwed. Do you accept that view? And that's basically the whole subcontext, this man and the way the FCC and Congress is befriending it. Broadcasters have already won all the rights, it's just a matter of allocating efficiency rather than getting a fair return to the property owner, which might be the public. So basically, do you believe the public actually has any residual rights? You do, that's quite different than the administration has been saying and acting so, to do the spectrum in the auction process. You know, I guess if I were at the FCC and we're in the weeds of trying to figure out how to approach this, I don't think I would jump to trying to resolve questions of high-minded principle. I think I would be focused more on figuring out what are the implications as I move the needle back and forth. Okay. I would put it the way I just put it. In fact, I did. Well, there is a spectrum act after all, I guess that needs to be implemented. Yes, Paul? What was the last part about a rapper? Yeah, somewhat. I mean, that happens. People need to stick out their positions, but I will point out that it was AT&T and Google who came together to pitch a proposal in support of the 3.5 gigahertz proceeding, which was largely modeled on the PCAST. So, you know, I think views evolved. I think I'm very happy to see where we've come since the release of the PCAST report, the 3.5 gigahertz NPRM, the presidential memorandum, and I think folks are calming down a little bit in terms of seeing how those recommendations are really playing out. Okay. But it doesn't seem to be burning questions and we're a few minutes behind. So thanks for doing this. My pleasure. Thanks.