Getting to a more market based allocation of spectrum rights is something that a great many of us have cared about for a long time. And, I am very pleased that both of these items are positive steps in the right direction.
I think, they are, to be quite frank, baby steps. We need to take some much greater strides. These are difficult issues. Much more work needs to be done. And, on, I don't even necessarily agree with each and every statement that is items, but I found that they're definitely positive and in the right direction. All of the Commissioner operatives have been fully engaged on these for the past two weeks. And, it has been a very lively debate, a very productive debate, and I know that, at least one of my colleagues, Commissioner Tristani, still has some concerns, particularly in the broadcast area, very legitimate concerns, that I very much look forward to working with you, to review and address those concerns, Commissioner Tristani.
Every day, each of us on the Commission receives pleadings from individuals. Many of them seek additional spectrum rights, to buy or lease, portions of spectrum rights. Other who seek to sell, or to lease, spectrum rights that they already have, others simply seeking to transfer licenses from one party to another. That is practically all of what we do. There are consistent themes throughout these meetings:
These parties do not meet in markets across America. They don't go to New York. They don't go to Los Angeles. They don't go to small towns across America. They come to Washington DC to say: "I want to buy; I want to sell."
They hire fancy lawyers. They come to the FCC with very complicated matters. And we at the FCC make spectrum rights extraordinarily complicated. We tie them in knots. We throw in a bag. And then we asked the following question. What is the range of possible outcomes of the spectrum rights associated with this particular particular license? What is the likelihood associated with each of these possible outcomes? What are the potential remedies if the parties are unhappy with each of those potential outcomes? And, how long can it possibly drag on?
And then we give different answers in each of many different proceedings. We leave a world in which parties must continue to come to the FCC to say, time and time again, "I want to buy spectrum. I want rights." And the only place I can go to do that is Washington.
There is much wisdom in the old country saying, "Don't buy a pig in a poke." Narrowly, the expression admonishes the potential buyer to have responsibility for diligence before purchasing a good or service. More broadly, the expression means that a person should not blindly enter into situations without having some knowledge of the possible outcomes, the likelihood of those outcomes, and any remedies that might be available for bad outcomes. Where the range of possible outcomes is unknown, the likelihood associated with any outcome is unknowable, the remedies are bad outcomes, where bad outcomes are unavailable. Individuals should be wary. They should not find _____.
Look around America, in urban canyons, in country fairs, you will still not find a market for a pig in a poke. It is not the difficulty of supply. While difficult, putting a pig in a bag is not impossible. But there is no market because no one wants to buy one. And it is consumer demand, not the ease of supply, that creates a market. In general, few markets have products with a range of possible outcomes is unknown, the likelihood associated with each outcome is unknowable, and remedies for bad outcomes are unavailable. But if there is such a pig in a poke market, it is generally the market, and more particularly the secondary market, for spectrum rights in the United States.
This NPRM and the Policy Statement take important steps in the right direction, to make those markets a little less obscure, a little less complicated, a little bit more efficient. But, there is still a lot of underlying problems that need to be addressed. We must not kid ourselves. We are still going to be spending most of our time dealing with parties coming before this agency pleading, parties that are going to be continually frustrated with delay, parties that are going to continually be puzzled by the complexity of our rules, parties that are going to be mystified by the range of possible outcomes and unaware of any way of evaluating the likelihood of those, and parties that are going to be at the end of the day dismayed because there is no remedy.
The solutions to this problem, I believe, lie in three areas:
Until we do these things, until we make the bundle of rights that exist with spectrum, clear and predictable, less a pig in a poke and more a bundle of rights that can be traded in markets throughout America, we will not have solved the problem of secondary markets for spectrum.
This is an important item -- these are important items. I am enthusiastic support of them. But, I recognize we still have an awful lot of work ahead of us.
Thank you Mr. Chairman.