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“While I’m not about to micromanage how the FCC operates the auction, I do expect the FCC will follow the law, including maximizing the proceeds from the auction,” said Rep. Greg Walden (R-Ore.) at the House Communications and Technology subcommittee, which he chairs.

At Wednesday’s hearing, Republicans worried that the commission will reserve too much unlicensed spectrum, which can be used by any company for free.

Democrats were largely supportive of the FCC’s plan to provide both unlicensed and licensed channels in the new frequency band.

The main purpose of the hearing today was how best to utilize TV Channels 30 – 50, the 120 Mhz that will be refarmed and auctioned off for broadband wireless services in the next year or two. Revenue from that spectrum auction will be used to pay for building a nationwide cellular network for first responders.

“What I cannot support is the unnecessary expansion of unlicensed spectrum in other bands needed for licensed services, especially at the expense of funding for public safety,” said Chairman Walden.

Walden estimated that the FCC’s plan to reserve unlicensed spectrum blocks could cause the federal government to forgo an estimated $7 billion in revenue.

It was Walden, of course, who backed the hugely expensive FirstNet plan to build a duplicate cellular network, nationwide, dedicated solely to first responders. The FCC favored incorporating the service into current cellular networks — saving $7 billion.

“Unlicensed spectrum has a powerful record of driving innovation, investment and economic growth – hundreds of billions of dollars of value creation for our economy and consumers,” FCC Chair Julius Genachowski told the committee on Wednesday.

The FCC will auction spectrum around 600MHz, in the UHF-TV region. Separating the licensed bands will be guard bands. Those will be available for lower power, unlicensed “white spaces”. Separately, the FCC plans to set aside 100 MHz of spectrum in the 3.5 GHz band (3550-3650 MHz) for small cells. By using the same database technologies of unlicensed whites spaces, the FCC believes it will spur innovation throughout the economy, while protecting incumbent users in the band.

Democrats voiced support for the FCC’s mix of licensed and unlicensed spectrum.

Rep. Henry Waxman (D-Calif.), the ranking Democrat on the full Energy and Commerce Committee, said (pdf) unlicensed spectrum has been an “incredible economic success story” and that additional unlicensed spectrum will allow businesses to “invent things we can’t even imagine.”

Rep. Anna Eshoo (D-Calif.), the subcommittee’s top Democrat, said Republicans were putting too much emphasis on maximizing government revenue at the expense of pursuing policies that would benefit the industry and consumers.

The F.C.C.’s five commissioners, all of whom testified before the subcommittee Wednesday, are split 3-2 along party lines over the issue of unlicensed spectrum, reports the NY Times. Commissioner Robert M. McDowell, a Republican, said he believed it is “premature” for the commission to reserve newly available airwaves for unlicensed use.

FCC Commissioner Ajit Pai expressed reservations (pdf) about the lack of revenue in the current FCC plan, which he believed would threaten FirstNet funding.

Economist Richard Thanki (pdf) found that the economic value generated even by a subgroup of unlicensed broadband applications is between $16-$37 billion per year.

Virtually every laptop, tablet and smartphone depends on three channels on a 2.4 GHz “junk” band.

  • Personal area networks, local area networks, and municipal wireless networks are all forced to use the same spectrum that is now so overcrowded it’s a marvel that any device can function at all.
  • City utilities like pump stations, remote monitoring, the smart grind, smart meters, medical, automotive, and first responder applications depend on the ability to establish networks quickly and cheaply. White space technology enables inexpensive rural broadband and backhaul, when and where you need it.
  • The explosive, world-wide app economy, as well as health and fitness sensors, WiFi, Bluetooth, and home entertainment depend on unlicensed spectrum.
  • Mobile operators are rapidly taking over “free” WiFi networks. Their WiFi “Hetnets” are available only to subscribers. Other users must comply to tracking by advertisers.

The revenue generated by unlicensed spectrum is almost incalculable.

It enabled the app economy, ebooks and magazines, innovative devices and products of all kinds.

Walden appears to share a philosophy similar to that of his former State Senator, turned NAB lobbyist, Gordon Smith (right).

Stop competition. Tax the air.

See: Spectrum War: Unlicensed, Shared and Auctioned

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