Panel II of a Hearing of the Telecommunications and the Internet Subcommittee of the House Energy and Commerce Committee - Oversight of the federal Communications Commission (FCC): The 700-MHZ Auction

Interview

REP. MARKEY: (Sounds gavel.) Ladies and gentlemen, thank you so much, and we thank everybody for your patience.

This subject is -- merits the quality of the panel which has been assembled to discuss it, and there has never been a more distinguished panel assembled before the telecommunications committee in my 32 years here.

And I just want to thank all of you for being here, and the magnitude of the problem, I think, is matched by the expertise of the witnesses, and I very much appreciate your attendance.

We're going to begin by hearing from Chief Harlin McEwen, who is the chairman and interim chief executive officer of the Public Safety Spectrum Trust Corporation. He has nearly five decades of experience as both an advocate for public safety communications issues and as a career law enforcement officer and administrator.

Mr. McEwen, we welcome you, and whenever you're ready.

Each of you will have five minutes, and please try to keep it to five minutes because it will otherwise make it very difficult for the members to get a chance to ask questions.

So we'll recognize you first, Mr. McEwen. Whenever you're ready, please begin.

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REP. MARKEY: Thank you, Mr. McEwen, very much.

Our second witness is the retired Rear Admiral Robert Duncan. He serves as senior vice president of the business development and government services of Rivada Networks. Prior to joining "Rivahda" -- or "Rivada" --

MR. DUNCAN: "Rivahda," yes, sir.

REP. MARKEY: "Rivahda" -- Mr. Duncan served as a -- I've learned that you don't say "Nevahda," you say "Nevada," and I unfortunately learned that in the presidential race helping somebody, and they don't appreciate the mispronunciation -- served as a rear admiral of the United States Coast Guard in a career that spanned more than 34 years.

We welcome you, sir, and we thank you for your service to the country.

MR. DUNCAN: Mr. Chairman, thank you for allowing me to appear, Ranking Member Stearns.

And I did serve in Boston and (eagle ?) from Boston College, so your pronunciation is probably the correct one. I'll defer to that.

REP. MARKEY: And how about winning the Frozen Four, huh?

MR. DUNCAN: We could have a whole hearing on that stuff, I think.

REP. MARKEY: Isn't that amazing?

MR. DUNCAN: I know our time is limited, sir, but I --

REP. MARKEY: I will extend your time. (Laughter.)

MR. DUNCAN: Thank you, Mr. Chairman.

REP. MARKEY: For any additional comments. You know?

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REP. MARKEY: Yeah.

Now all time for opening statements has been completed, so we'll turn to questions from the subcommittee members.

Mr. Zipperstein, you state in your testimony that the D block concept fails because its economics are fundamentally flawed, and that is that the cost of building a network to 99.3 percent of the country exceeds the value of the spectrum. Mr. Duncan suggests that the interoperability can be achieved using Rivada's technology on existing networks.

When you consider the current economic conditions, is it likely that a new, non-incumbent provider will show up and build a national network from scratch?

MR. ZIPPERSTEIN: I think it would be very expensive and very costly. It would be difficult for a new entrant to secure the financing.

In the prior panel there was a figure of 6 to 7 billion dollars used. Our estimates would be to build from the ground up it would cost orders of magnitude higher than that, Mr. Chairman.

REP. MARKEY: So you're saying it's highly unlikely --

MR. ZIPPERSTEIN: Highly unlikely.

REP. MARKEY: -- that a new company's going to come along and build a national network.

MR. ZIPPERSTEIN: Correct.

REP. MARKEY: So then is it useful to look at regional D block licensees who could all be interoperable if the FCC compels it to be interoperable and also promotes greater wireless competition? Is that possible, Mr. Zipperstein?

MR. ZIPPERSTEIN: Yes, although I would also defer to the opinions of the more expert law enforcement people on the panel. But yes, Mr. Chairman, it's possible.

REP. MARKEY: Okay, thank you.

Let me get on to you, Mr. Duncan. What do you think?

MR. DUNCAN: I think exactly so, sir. The written testimony that Mr. Zipperstein submitted pointed to a $50 billion investment at his company in eight years. That's a mature system putting on add-ons.

The opportunity of incremental improvement directed by the needs of first responders to meet their needs I think is very attractive rather than, you know, create a whole new system from the ground up.

I think Congressman Eshoo's observation that the spectrum is owned in trust to the public, you know, gives us some room to examine just how that would work, and our own experience is that the carriers have been very receptive in providing access to that spectrum in times of emergency to provide services for first responders.

And it would not be possible but for spectrum ownership cooperation, organizations like ourselves and the Department of Defense certifying that we could even tie into their systems and the FCC being open to new and novel approaches.

REP. MARKEY: Well, let me go to -- okay, let me go to Chief Dowd, then.

Thank you, Mr. Duncan.

What do you think?

MR. DOWD: I think a regional approach is a good idea. You know, one of the big stumbling blocks for widespread interoperability has been the simple fact that, you know, spectrum over the last seven years was kind of doled out very haphazardly. There's an opportunity now here with different network-type platforms to build interoperability because of the commonality of the availability of this spectrum nationwide.

So having that spectrum available, that green space spectrum available across the country makes it much easier, particularly on the individual cop or firefighter's side, because now it'll be easier to build, you know, subscriber units, portable radios, that will allow them to be interoperable from the system.

REP. MARKEY: Thank you.

Mr. Irving, what do you think?

MR. IRVING: I think a single national operator would face enormous capital requirements, and I think that the possibility of a regional approach is something that should be explored.

REP. MARKEY: Thank you.

Now, you know, one of the -- I think this is the direction we're heading in, actually, where this conversation is taking us right now, but I want to hear other views as well.

Here's something, Mr. Zipperstein, that bothers me. In the Sunday Boston Globe just -- the Saturday Boston Globe just three days ago, the headline on the front page is "Dead Zones Frustrate Drivers." Verizon, AT&T, the other cell phone companies have yet to figure out how to put wires through the Tip O'Neill Tunnel and some of the other tunnels in Boston. And people, as they hit the tunnel, all have to say "Honey, I'm going into the tunnel, we're going to lose the connection."

So you can imagine how three years after we dedicate the Tip O'Neill Tunnel how very skeptical I am of the ability of Verizon or AT&T to solve a public safety problem, if they can't solve a simple problem like this. And if I hear it once I hear it over and over again, you know, that people are very frustrated with the cell phone companies.

And so this headline basically says it's going to take much, much longer, all the cell phone companies are saying, the incumbents, to be able to figure out how to put a wire through the tunnel so that people can continue to talk as they hit the tunnel.

So of course this has public safety implications, Mr. Zipperstein, huh? That's just one little link that's a couple of miles long, and Verizon and AT&T can't figure out how to do it. So what do I tell my constituents about public safety if the major -- major companies can't figure out how to do something this simple?

MR. ZIPPERSTEIN: Mr. Chairman, we're frustrated as well, and I thank you for raising the point.

We have been very active in trying to improve the process of placing facilities, new towers, to improve coverage. It is a public safety issue, but every so often we have to wind up waiting years and years and years for approval.

In the case of the Tip O'Neill Tunnel and the Big Dig, we have worked with the state of Massachusetts for a long time behind the scenes, individually and together with other carriers, to be part of the process to enable the placement of facilities in the tunnel, and we look forward to continuing to be able to -- (inaudible) -- to achieve that.

REP. MARKEY: But can I say this, Mr. Zipperstein? It's just unacceptable. It's just unacceptable.

This is a deep insight, you understand, post-9/11, six years later? This is a deep insight as to the failures on 9/11 and the failures today, okay? It's a deep insight, and it reflects, actually, the flawed policy of the FCC even in how all of this auction has gone, to be honest with you. Okay? We don't get down to these core issues of whether or not the public is being served and what our expectations are of the telecommunications countries -- companies.

And what do you do in the Lincoln Tunnel, Chief Dowd, in New York City? Do people lose their connection in the Lincoln Tunnel?

MR. DOWD: No, there is cabling that carries the signal into those tunnels -- the Brooklyn Battery Tunnel, the Lincoln Tunnel, the Holland Tunnel.

REP. MARKEY: Yes, and you know that we don't like this New York- Boston differential being publicly exposed, but --

MR. DOWD: As long as you don't try to put a jersey in any one of those tunnels. (Laughter.)

REP. MARKEY: Well, you know, Chief, honestly, we're quite proud of the fact that we were able to secure $15 billion to build the tunnel in Boston and name it after --

MR. DOWD: A fine Irishman, yes.

REP. MARKEY: You know, name it after Tip O'Neill. And it seems it should be a lot simpler, in other words, than building a tunnel under a city. You know, Barney Frank once said it would be simpler to put the city of Boston on stilts than to put this tunnel under the city of Boston, but we did it, okay?

And so I really -- I continue -- I hear so many complaints about the phone companies, and all of my fire departments, police departments, they complained to me about the cooperation they have with the local phone companies and how quickly they respond and give them access to what they need.

And so I'm going to say to you, Mr. Zipperstein, that -- I'm going to use this as an example. Okay? If you can't solve this, you know, then really, I'm dubious as to whether or not we should be trusting the big phone companies to be playing a meaningful role in providing -- in a time that's reasonable -- a public safety solution for our country.

Let me stop there and recognize the gentleman from Florida, Mr. Stearns.

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