1. ©Lehr, 2007 The 700MHz Auction -- What role does wireless play in a liquid world? (2:00PM-3:20PM)  William Lehr (MIT)  Dale Hatfield (UofColorado, Boulder) “Applying New Technologies to Old Spectrum Mgmt Problems”  Andy Lippman (MIT) “Spectral Opportunities” CFP Meeting hosted by Cisco San Jose, Ca January 21-22, 2008

2. ©Lehr, 2007 2 (4) Public Safety national broadband network -- Emergency response coverage (post-Katrina, 9-11 world) -- Interoperability -- Govt/Commercial sharing (pre-emptible models) -- Frontline, Cyren Call… Why 700MHz auction? “Digital Dividend” : DTV-transition of 62MHz of prime spectrum -- $10B reserve ($0.54/MHz-POP) “C” block $0.70/MHz-POP, “D” block $0.44/MHz-POP Mobile ($1-$4+/MHz-POP, 2000-2007 transactions) AWS (1.7-2.1GHz, 2006) $0.73/MHz-POP -- Starts January 24th (2) Convergence -- Satellite (DBS, MSS-ATC) -- Cable (value of AWS licenses?) Potential implications for Telecom/Internet value chain? (1) National broadband competitor -- Ubiquitous coverage (“Digital Divide”) -- New (more open?) plaform (“Net neutrality”) -- Google? Frontline? (3) 3G/4G services: AT&T, VZ (roaming)

3. ©Lehr, 2007 3 “D Block”  National broadband network to interoperate with and support public safety/emergency responsiveness  UHF (700MHz) spectrum: good distance, NLOS performance  Adjacent to 12MHz public safety-dedicated spectrum  Interoperable, national BB platform  10MHz with reserve price $1.33B ($0.44/MHz-POP)  $128 million non-recoverable down-payment  Must reach negotiated agreement with Public Safety folks  Lots of additional (and unclear) provisions  Frontline shuttered doors on January 11, 2008  Reed Hundt, John Doerr, et al.  Vision: open wireless platform, shared commercial/public safety  Ubiquitous BB (others….M2Z, etc.)

4. ©Lehr, 2007 4 FCC Commissioner Michael Copps (1/21/08 @ New America Foundation panel): “Wireless needs to be as open as the Internet if that industry wants to be as “vibrant” as consumer electronics… A “handful” of wireless carriers now pick devices and content, limiting consumer choice and hampering handset makers from selecting features. The system is set up so each carrier can protect [its] revenue stream. European wireless designers think our system is nuts… Maybe they’re right. Recent carrier support for openness “sounds good,” but the FCC has to do more, Copps said … urging a “trust, but verify” stance at the [FCC] agency. He plans to study industry open initiatives’ price, portability, certification requirements and effects on the wholesale market, he said. The FCC also must ensure that wireless networks are neutral, making sure carriers don’t “selectively downgrade” service for applications. The commission should conduct a “rigorous investigation” of how well the wireless wholesale market is functioning. A proposed wholesale mandate intended for the 700 MHz auction was dropped after carriers said they would encourage wholesaling on their own. The FCC should hold them to it.”

5. ©Lehr, 2007 5 Wireless Research Questions of Interest? What is the value of spectrum? -- Elasticity of demand? -- What is value of flexibility (e.g., ATC for satellite)? -- Economic impact BB, wireless, …. (data informed analyses…)? -- Issues: band planning (e.g., paired v. unpaired, national v. regional,.. ) When will spectrum regime no longer determine industry structure? -- How to get to robust secondary spectrum markets? Enable technology innovation (entry, re-purposing of spectrum) Promote competition (avoid hoarding) -- How to separate interference management from industrial policy? Minimize regulatory distortions to market processes Building the ecosystem for open wireless? -- Liquid market for spectrum: supply and demand -- Frequency agility: Unbundling frequency, services, and business models -- Agile devices (software radio)

6. ©Lehr, 2007 6 Building the Ecosystem: making wireless resources liquid Observation: need to access intelligence, resources at edge -- Smarter wireless edges are a fact -- Interference is a local phenomenon (lots of “white” space) -- Empower end-users (viral growth) -- Analogy: P2P taps CPU resources in edge…. Challenges: unbundling the wireless edge Spectrum management reform -- Flexibility instead of harmonization -- Anti-hoarding provisions -- Shared/open access Frequency Agile Devices -- Global Scale economies -- Unbundle devices (open interfaces) -- Not provider subsidies -- iPhone, GooglePhone, etc. Secondary Markets -- Liquidity! -- Sellers? (anti-hoarding) -- Buyers? (chicken/egg => bus cases) -- Transaction costs -- Markets are a public good -- Too cheap to meter => open access

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