“Wire Less Is More”

An Address by 
Chairman William E. Kennard
Federal Communications Commission
to the 
Cellular Telecommunications Industry Association
New Orleans, Louisiana
February 28, 2000

(As Prepared for Delivery)


A New Challenge for a New Century

	Thank you, Tom, for that introduction. 

	This is the third time I have addressed CTIA as Chairman.

	In my first two speeches, I challenged this industry to think of wireless as a 
substitute for wireline – to break out of the mindset that wireless will always be a 
complement -- an appendage -- to the wireline network.

And I said that wireless had become the poster child for competition.

	This year, I realize that my original vision was much too limited.

 	This year I come with a different message, and a different challenge.  This year, 
my message is that thinking of the wireless network simply as an alternative to the 
wireline network is too limited a vision.

Because you have the potential to be much more than a substitute.  You are much 
more than an add-on, an adjunct, a niche-filler, whether to wireline or any other service.

It’s time for us to think of wireless as the premier network for the 21st century. 

	Its time for you to stop defining yourself by reference to the wireline network.  
Maybe your slogan should be . . . “Wire-Less-Is-More, Not Less.”
	
	You have been so successful with the American people that you have actually 
changed the way we live. 
		
	We are safer.  Parents sleep better at night knowing that they can reach their 
children, wherever they are.

	 We are more efficient.  Business people on the road can stay connected 
anywhere, anytime.
 
	And wireless is helping to bridge the digital divide.  From the bush country in 
Alaska to the Gila River Indian Reservation in Arizona, wireless companies are bringing 
phone service to Americans in remote locations.  Many of whom never had wireline 
service.
 
	Of course, America is also adjusting to the wireless world.
 
	One restaurant in Manhattan has a special dining room called the “cell-phone 
room” where diners can use their wireless phones with impunity.  You come in and they 
ask you “smoking or non-smoking”, “wireless or not?”
	
	School teachers have to tell elementary school kids to turn off their phones in 
class.

	And Peggy Post, the great granddaughter of etiquette guru Emily Post, has drawn 
the line at funerals.

	But clearly, America is cutting the cord.  And this is only the beginning.

	I believe we will look back and remember this as the time when the Internet 
migrated out of clunky, cumbersome machines called PCs and into a wide array of 
handheld wireless devices.

	It’s an exciting future, and I congratulate you on your successes. 

But success always brings bigger challenges.
 
Today I want to talk about what I believe to be the most serious challenge facing 
your industry today:  the need for more spectrum.
 
	The demand for spectrum is simply outstripping supply.  

Spectrum is the life-blood of your business.  Without it, your businesses can’t 
grow.

So my challenge is a straightforward one.  We simply have to redouble our efforts 
to manage the spectrum resource in ways that make more spectrum available.

It’s as simple as that.  Spectrum scarcity is the ultimate spectrum cap.

Building on Past Successes

	Now, government has made tremendous strides in recent years to improve 
spectrum management.

	And our biggest successes have come when we have used market-oriented 
methods, such as auctions, to assign spectrum.

When we have put our faith in the marketplace to choose the best uses for 
spectrum.

	When we have allowed you the flexibility you need to choose the products and 
services your customers want.

When we have helped you become more efficient - -  through refarming, through 
partitioning and disaggregation.

And when we have explored new ways to create even greater efficiencies, like 
band managers with the freedom to lease spectrum to third parties. 

         During my tenure as Chairman, we have stepped up our efforts on spectrum 
management. 

	Last year we held hearings on the future of spectrum management.  And I thank 
Commissioner Susan Ness for spearheading the hearings and for her solid leadership on 
spectrum issues. 

	We also issued a comprehensive blueprint for spectrum policy.  We are looking to 
the future.

	We established a high-level Spectrum Policy Executive Committee to bring 
increased focus to the issue. 

We plan to hold two major auctions later this year:   one for spectrum to be 
returned by television broadcasters (channels 60-69), and another for C-block licenses 
that we plan to reclaim from bankruptcy.

These auctions will provide wonderful new opportunities for wireless data 
services.
 
	And we continue to work closely with our colleagues in other federal agencies in 
our search for more spectrum for Third Generation wireless.

 	But despite all of these efforts, we are running out of new spectrum, particularly 
in the valuable range below 3 GHz.

	I believe that spectrum management should be at the very top of your public 
policy agenda, because government can’t prevent a spectrum drought without you.

	We will head off a spectrum drought if we build on the successes of the past:  
expanding on the market-based approaches of the last decade; finding more ways to 
create a fluid market in spectrum.

	How do we do this?  Here are some ideas that I would like to see us develop with 
your help.
 
	First, we need to encourage secondary markets for underused spectrum.

	The demand is there.  Parties come to the Commission all the time seeking 
spectrum on a short-term basis for sporting events, like the Super Bowl, or for use in 
major metropolitan areas.
 
	We know that there are blocks of spectrum that are not being used. 
	
	We can create a secondary market for that spectrum.  We can find ways to allow 
potential "buyers and sellers" to come together.

Today in America, there is a spot market for  wireline bandwidth.  If it can be 
done there, why not for wireless? 

	I have directed the Commission staff to convene a forum on this issue.  I want us 
to be ahead of the curve. I want to have rules and policies that allow a secondary market 
for spectrum so that it flows as freely in the marketplace as any commodity.  

	In a fluid marketplace, information about available  goods and services flows 
freely.  
 
I  envision a web site that lists both licensees with available spectrum and 
companies looking to use or buy it.   I want the Commission to work with industry to 
make this happen. 
 
	We also need to harness technology to head-off a spectrum drought.  I believe that 
software defined radios may hold the key.  They allow users to operate over wide areas of 
spectrum in efficient ways.  So I am announcing today that the Commission will begin a 
proceeding on this promising technology.

	Nowhere is the need for a more fluid spectrum market more pressing than in the 
auctions for television channels 60-69, scheduled to begin May.  This is prime spectrum 
that can jumpstart wireless competition to cable modems and DSL.  But, while much of 
this spectrum currently is unoccupied, TV broadcasters will continue to use much of the 
band until the end of the transition to digital television.  That is, unless we let the market 
work and permit negotiations between the auction winners and the incumbent 
broadcasters so that  broadcasters complete their transition to digital sooner rather than 
later.
 
So I urge incumbent broadcasters to voluntarily negotiate with incoming 
licensees, so that this valuable spectrum can be used quickly to its maximum capacity.  
While negotiations and voluntary agreements to accelerate moving to new assignments 
can be accomplished under existing case-by-case waivers, I would like to see an easier, 
more market-driven process. 

One industry proposal even calls for a private auction to run parallel with the 
FCC's auction in which local broadcasters would be able to auction the right to move 
their stations to their lower permanent channels.  This is a very interesting and creative 
idea that deserves consideration.  But even more may need to be done to clear this band 
to make it useable everywhere in the near term.  We need your help to come up with 
creative, market-driven approaches that will serve the public's interest in having new 
high-speed wireless services as well as maintaining local television service. 

This is an important first step in the development of a true spot market for 
spectrum.

Second, I want to talk about spectrum sharing.  This presents our biggest 
challenge in spectrum management today.  It is key to meeting increasing demand, yet it 
also raises extremely difficult interference issues.

We are seeing a troubling increase in interference today.  Everyone is affected.  
Police, firefighters, average consumers. 

One solution is to improve the quality of receivers.  In a perfect world, market 
forces alone would force improvements in receiver quality.  But, again, that works only if 
consumers get the information they need to make informed choices. 

One way to leverage the market is to ensure that buyers of receivers know what 
they're getting. Equipment manufacturers could adopt voluntary labeling to give their 
customers a clearer idea of the interference they should expect from different types of 
receivers. 

	You also must intensify your talks on interference with other segments of the 
industry.  Technical solutions for terrestrial-satellite sharing are becoming more difficult 
at the very time we want to rely on the marketplace to make those decisions. 

We also need to explore better ways to license satellite systems.  The current 
process takes too long to work out these complex sharing issues. Although the global 
nature of some satellite services poses unique issues, all of our spectrum management 
tools - -  including auctions - - should be available.  

	I envision a future in which wireless bandwidth is as plentiful as restaurants in 
New Orleans and as reliable as the wireline dialtone.

	And when we get there, wireless will take its rightful place as one of the nation’s 
premiere networks.

	And many good and necessary things will flow from this.
 
	Wireless will get its rightful share of universal service funding.

	Wireless will be better able to break down barriers to building access.

	Wireless will be better able to serve the public safety needs of our communities.
 
And wireless will be better able to close the digital divide – to bring the Internet 
into the lives of millions of Americans through inexpensive handheld devices.

Conclusion

	In past years, I and former FCC chairmen have come to this convention heralding 
your industry as the poster child for competition.

	Well, this year, its time to grapple with the question: what happens when the 
poster child for competition grows up?
	
	For one thing, you have to begin to face the challenges of your own success.
 
	For your industry and for the Commission, the biggest challenge is the dwindling 
supply of quality spectrum. 

	It’s a challenge that we must tackle together in the months ahead. 

	When we do, we will demonstrate to the American people what you know and I 
know.

	That wireless must no longer be defined by its relationship to the wireline 
network.  That wireless is not less.  It is much, much more.

	Thank you.				

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