1 National Spectrum Managers Association Industry Round Table Christopher Guttman-McCabe Vice President, Regulatory Affairs CTIA – The Wireless Association® May 22, 2007

2 233 Million U.S. Wireless Subscribers at Year-End 2006 Source: CTIA Semi-Annual Wireless Survey

3 More Minutes of Use Overall – 1.8 Trillion in 2006 Source: CTIA Semi-Annual Wireless Survey

4 Multiple Wireless Licensees Compete Nationwide Source: FCC 11 th CMRS Competition Report

 98%+ digital nationwide networks  1.8 trillion MOU in 2006  Avg. Data Rates up to 500 kbps  Contribution to the economy  Revenues of $125 billion annually  253,000 employees  $223 billion cumulative capital investment  In 1993 dollars, average monthly bill $35.34  Nationwide coverage – plans with no roaming charges  No long distance charges  Subscribers’ phones on 24/7 Summarizing Growth and Innovation Over the Years 1993  Service on local/regional analog networks  11 billion MOU*  Data Rates of 4.8 kbps  Contribution to the economy  Revenues of $8 billion annually  31,000 employees  $12.75 billion cumulative capital investment  Average monthly bill – $67.31  Local, long distance, roaming charges  Landline surcharge Source: CTIA Research * Minutes of use

6 High-Speed Line Growth In 1H06, total high-speed lines grew 26%, from 51.2 million to 64.6 million lines, and 59% of all adds were mobile wireless subscriptions. From June 2005 to June 2006: –ADSL’s share of total broadband lines fell from 38% to 35%, –Cable modem’s share fell from 56% to 44%. –Mobile wireless’ share of total broadband lines rose from 1% to 17% of total broadband lines. –The share of “other” forms of broadband (including fixed wireless, satellite, fiber, and broadband over power line) remained at 4% of total broadband lines – although their total line count grew 39%. Sources: FCC Report on “High-Speed Services for Internet Access,” Jan High Speed Net Adds by Type, Dec – June 2006

7 OFDM MIMO Evolution of Wireless Technologies CDMA GSM Other Technologies Availability:NowNow through Mid Benefits:Higher Speeds, Lower Costs, Greater Efficiencies 1X RTT EV-DO Rev. 0 EV-DO Rev. A UMB EDGEHSDPAHSPA+LTE WiMAX (802.16e) New Entrants 4G3G2G

8 Wireless “3G” Network Deployment Alltel: Axcess SM Broadband service (EVDO) offers speeds of kbps (more than 100 cities, 44 million pops). Cingular/AT&T Wireless: BroadbandConnect (HSDPA) service offers speeds of kbps (165 cities, including 73 of the top 100 markets). Sprint Nextel: EVDO service offers speeds of kbps (covers more than 200 million pops now, rising to 280 million by YE2008). EVDO Rev A network now covers more than 95 million people, and expansion of network upgrade continues. Rev A offers upload speeds of kbps, and download speeds up to 600 kbps-1.4 Mbps. T-Mobile USA: Offers mobile Internet access through its GPRS/EDGE network, with a typical EDGE download speed of 100 kbps, and operates a network of more than 8,000 wireless hotspots; T-Mobile's HSDPA network is currently in deployment. Verizon Wireless: EVDO-based broadband service offers speeds of kbps (242 cities, 200 million pops). Verizon is upgrading to EVDO Rev. A.

9 Wireless licensees are deploying “4G” networks Sprint Nextel will deploy a 4G broadband network, using mobile WiMAX technology with data rates of 2 to 4 Mbps. Sprint Nextel intends to launch a mobile WiMAX broadband service capable of serving 100 million people by year-end 2008, using the 2.5 GHz band. Trial markets to be launched later this year include Washington, DC, Baltimore and Chicago.

10 Key Wireless Spectrum Issues Additional Spectrum Needs AWS-1 Auction 700 MHz Auction Analog Transmission Sunset Illegal Repeaters/Jammers Skype/Carterfone PCS H-Block ( / MHz) PCS J-Block ( / MHz) MHz

11 Additional Spectrum Needs Industry continues to serve our more than 230 million subscribers on less than 200 MHz of spectrum – AWS auction just completed. The Advanced Wireless Service auctions – including the 700 MHz auctions – are the key to the continued success of the U.S. mobile wireless industry. U.S. mobile wireless industry is working to deploy mobile wireless broadband services that have the potential to break the cable modem and DSL duopoly. The spectrum that is in the pipeline over the next two years will begin to put the United States on par with the rest of the world in terms of spectrum allocated for commercial mobile wireless uses.

12 AWS-1 Auction Nearly $14 billion raised through the auction of 1,087 licenses to 104 licensees. The auction effectively created three new nationwide licensees - Leap Wireless, MetroPCS, and SpectrumCo. Existing carriers gained valuable spectrum to continue expanding their service offerings. Clearing issues – both commercial and government agency – still remain. – MHz (government clearing); CTIA is facilitating meetings between new licensees and incumbents in the 1.7 GHz band. – MHz (commercial clearing); CTIA is a clearinghouse for the AWS spectrum and coordinates relocation reimbursements in the 2.1 GHz band.

MHz Auction Pursuant to the DTV transition, this valuable portion of the spectrum is scheduled to be licensed for commercial use. Key issues: –The spectrum must be brought to auction by the statutory deadline of January –The auction must be free and open to all eligible bidders and should not limit the pool of eligible bidders to the detriment of consumers. –Open access and Net Neutrality obligations on the spectrum must be avoided to allow the spectrum to be used to its fullest potential. –Buildout obligations should be population-based. –The proposal by Frontline Wireless to burden a block of spectrum with a number of public policy obligations should not be allowed to devalue the 700 MHz spectrum.

14 Additional Sources of Spectrum PCS H-Block ( / MHz) PCS J-Block ( / MHz) MHz –M2Z Networks proposal for a spectrum give-away in this band was rightly denied by the Commission. –This spectrum should be auctioned to the highest bidder as they are most likely to put the spectrum to its highest and best use.

15 Current Spectrum Issues Analog Transmission Sunset –The Commission must maintain the analog transmission sunset date in the face of the alarm industry’s request for an extension. –Spectrum efficiency suffers on networks of carriers forced to maintain analog capacity. Most carriers have fewer than 1% of their subscribers using analog equipment. –Some carriers are spending as much as $15,000 per subscriber per year to maintain analog capacity. Illegal Repeaters/Jammers –Use of illegal repeaters and jammers by consumers causes interference to other handsets in the vicinity of the illegal equipment as well as the carriers network.

16 Current Spectrum Issues Skype/Carterfone –Carriers need to be able to control the spectral environment for their network in order to maximize efficiency. –Proposals for technical standards and open access to carriers air interfaces will freeze innovation in spectral use and ultimately prevent the considerable gains in efficiency that are realized with each successive wireless standard. –Wireless handsets are a crucial part of the spectral environment and as such must be carefully managed by carriers.