Remarks of Deputy Assistant Secretary Baker at the 3G Americas Meeting

October 17, 2007

3G Americas Keynote Address, Washington, DC
October 17, 2007

Meredith Attwell Baker
Deputy Assistant Secretary for Communications and Information

Thank you for the kind introduction and for the opportunity to address you this morning.  I’m delighted to be here with 3G Americas.
 
I’d like to discuss some of the incredible growth we’ve seen in the wireless market, and then focus on what we in the Administration view as our top priorities in this dynamic area.  If you can last through that, I’ll then update you on a few hot issues that you care about.

Wireless Growth

In the past decade, wireless technologies have proliferated at an unimaginable pace across the globe. More so than ever before, the swift delivery of information turns the wheels of commerce. Telecom is 10% of our economy and is a driver for our overall economic growth.  And wireless services are playing an increasingly important role in that regard. 

Consider the market numbers:

  • Today, just for GSM and its related services, there are over 2.6 billion subscribers worldwide
     
  • HSPDA is advancing the cellphone speed limits up to 7 megabits per second.
  • Mobile phone content, including music, gaming and video, is accelerating at a breathtaking pace.  Revenues from this content are expected to reach $43 billion worldwide by 2010, up from $5.2 billion in 2004.

In the US, competition in the wireless marketplace has resulted in a vibrant marketplace:

  • The U.S. wireless services market is valued at more than $127 billion dollars.  And it is growing at approximately 10% each year.
  • There are 233 million U.S. subscribers that cover 76% of the U.S. population.

And these figures don’t even factor in the massive growth of Wi-Fi hotspots – as of this week, there are over 63,000 hotspots around the country – or the promise of WIMAX technology.

Competition

What is the catalyst behind this amazing technological growth?

Here in the U.S., competition has driven the proliferation of various broadband access platforms. The deployment of those platforms – wireless, wireline, cable, fiber, satellite, powerline – rests on policies such as deregulation, liberalization, opening services to competition, and pro-competitive trade policies.

These policies have unleashed enormous competitive pressures. We no longer live in a world where consumers are limited to buying discreet services from monopoly providers. Consumers now choose from multiple service providers based on price, performance, mobility and associated services. 

In the face of this new competitive marketplace, we need to continue to remove regulations that stand as a barrier to innovation and investment. Governments shouldn’t pick winners and losers.

Accordingly, we look with great concern when any country (including our own) obstructs or creates a standard that hinders competition and impedes the creation of open markets.  I’m going to read you a quote that causes concern:

Hold the champagne. Before you start celebrating America’s global dominance in technology… the United States is lagging significantly behind Europe and Japan.  The reason for European and Japanese dominance is a stunner: They’ve been helped by coherent government planning… The United States … has been hindered by a chaotic free market.  Bureaucratic rule-setting and centralized economic planning – as opposed to US laissez-faire – has enormous economic benefit.

Is this a quote from last week’s broadband hearings? No, it’s from Nov. 21, 1999 about our wireless market.  Technology neutrality and competition has made the US the most competitive market in the world and the same is happening in the broadband space.  

We are seeing this move away from tech neutrality in many markets and it causes us some concern.  For example, the European Commission released this summer a communication on mobile TV that calls for the selection of a single European standard. 

The United States continues to support a technology neutral approach and advocates for the inclusion of competing technologies to the global marketplace to meet future 3G user needs.

So the question for policy makers is this: how does the government establish a stable legal and regulatory framework for innovation that promotes the public interest?   

We believe the best way to achieve this goal is through pro-growth information and communication technology policies in which innovation can flourish. 

Many of you are aware that President Bush has established a national goal of universal, affordable broadband access by 2007. As we come near to the end of 2007, one thing is astonishingly clear – wireless services are the fastest growing broadband technology in our nation.

What policies have we put in place encourage broadband deployment, specifically with regard to wireless services?

This Administration has advocated and been implementing a comprehensive, integrated package of fiscal, technology, and regulatory policies, which have stimulated investment and accelerated innovation and deployment of new broadband services.  Just a few examples:

  • The Internet tax moratorium, an extension of which passed the House yesterday, has increased the flow of capital into the broadband sector.  From December 1999 to June 2006, broadband deployment increased from 2.7 million lines to over 64.6 million lines, including wireless, a 2300% increase.  Preventing the taxation of Internet access and keeping the Internet free of multiple or discriminatory taxes will help sustain an environment for innovation, help ensure that consumers continue to have affordable access to the Internet, and strengthen the foundations of electronic commerce as a vital and growing part of our economy.   We urge the Senate to act before it expires on Nov. 1st.
  • The President signed an economic security package that allowed companies to speed depreciation schedules for capital-intensive broadband equipment.
  • In the regulatory area, we have also worked to free broadband infrastructure from unnecessary legacy regulation.

We have also made significant amounts of new radio spectrum available for licensed and unlicensed usage.  I am referring to the 255 MHz allocated for unlicensed devices, the 90 MHz AWS spectrum that was auctioned summer before last and all of the work we are doing to bring the digital transition to a conclusion to free up the 700 MHz band.

We want to encourage competing technologies for broadband and foster a climate that will speed infrastructure investment and deployment.

In 2003, President Bush introduced a new spectrum management policy for the 21st century.  Much of the work that is being done in the Spectrum Policy Initiative will enable more efficient and dynamic use of the federal spectrum which in turn will result in more spectrum for commercial uses.  For example,

  • NTIA is working to create a spectrum Test-Bed where both laboratory and field measurements will be performed  (with provisions implemented to protect incumbent users.)  Our Spectrum Advisory Group shared their recommendations with us this summer. We are looking at the 410-420 range and hope to make an announcement soon.
  • NTIA has measured usage of specific land mobile radio bands in the Washington D.C. area – one of the most heavily congested areas in the country. The results demonstrate that there are realistic and practical ways to significantly increase channel usage efficiency.
  • NTIA has studied federal frequency assignment processes and concluded that by using different analysis tools, federal spectrum users could identify more than three times the number of interference-free frequencies.

Both the usage measurement and the frequency assignment studies are available on our website.

In the near future,

  • NTIA will release a report that shows how shared trunked land mobile radio systems can be designed to use less spectrum resources.

And,

  • NTIA will release a Federal Strategic Spectrum Plan that for the first time ever will provide information on how federal government agencies use spectrum and how they plan to use it in the future.

As you can see, we are actively working to implement the President’s initiative and the results are having an impact on this valuable resource.

AWS

I mentioned the AWS spectrum and I’d like to give you an update on the relocation plan.  NTIA has been very active to ensure a smooth transition of federal operators out of the 1710 – 1755 MHz band.  The funds to cover the estimated costs of the one-billion, eight-million, five-hundred, fifty-two thousand, five hundred and two dollars were provided to the agencies in late March 2007. 

The agencies are in the process of establishing contracts for new equipment and/or modification of existing equipment.  NTIA has provided new frequencies and is working with agencies and equipment manufacturers to eliminate delays in the federal equipment certification process. 

We are critically focused on making this transition successful so that both federal agencies and bidders will want to repeat it.

NTIA and the FCC jointly released voluntary coordination procedures for commercial licensees to start operations during the transition process without causing interference to federal operations.  NTIA is committed to ensuring that the spectrum is utilized to the greatest extent possible during the transition and is working to resolve any coordination issues that arise. 

For the vast majority of federal operations, primarily fixed microwave operations, this coordination is moving forward without incident.

Dialogue between agencies and commercial providers will be critical to resolve any challenges.  NTIA maintains current agency relocation information on our website, which is available to the public.  Among other things, NTIA is also holding monthly meetings with the agencies on relocation activities.  Timely relocation is a priority both to winning bidders in the auction who are eager to begin offering new services on the spectrum, and to federal agencies which in many cases are modernizing their communications systems.  We will continue to ensure an expeditious relocation.

We have no indication at this time that the agencies will not meet their relocation timeline estimates.

WRC

I would be remiss if I didn’t mention the World Radio Conference that begins on Monday in Geneva.  Our delegation will be led by Ambassador Richard Russell who has spent the last 6 months literally traveling the world advocating U.S. positions.

And he’s just done a terrific job.  There are still a few things to hopefully wrap up at the Radio Assembly this week, including an “IMT-2000” issue. It will not surprise you that we continue to advocate that identification of spectrum for advanced wireless services such as 3G be flexible enough to accommodate new technologies such as WiMax.  As you’ve heard me say in this speech, the United States supports a technology neutral approach and advocates for the inclusion of competing technologies to the global marketplace.  The more options that are out there, the better.  

  • WRC-07 provides an opportunity to establish a regulatory framework for future 3G technologies for use in frequency bands, such as the 700 MHz, while preserving the necessary flexibility for individual administrations.   We continue to support the goal of identifying global spectrum for 3G services, but it is increasingly difficult.  As the search for additional spectrum for 3G applications continues, protection of incumbent services will also be critical at WRC-07 and beyond for the United States.  

Ensuring flexible access for advanced wireless services to spectrum currently allocated to other services will be the challenge of the global 3G community and governments in the next decade.

In today’s world made ever smaller by information and communication technology, we need policies that will promote and enhance an environment in which the entrepreneur can flourish, in which minds can expand, and in which technologies can reach new frontiers.

Thank you.