FEDERAL COMMUNICATIONS COMMISSION
August 3,2011
cJULIUS GENACHOWSKI
CHAIRMAN
Honorable John D. Dingell
U.S. House ofRepresentatives
2328 Raybul11 House Office Building
Washington, D.C. 20515
Dear Congressman Dingell:
Thank you for your recent letter regarding the Commission's work to· free up spectrum
i1ecessary to help drive our economic growth and ensure that our nation continues to lead
the world in mobile broadband. I am pleased that you have proposed legislation that
grants the Commission authority to conduct voluntary incentive auctions to help meet
these goals. If authorized with the proper flexibility, voluntary incentive auctions will
provide a market-based mechanism to address the Nation's rapidly growing need for
spectrum; strengthen free, over-the-air television; yield many billions ofdollars for the
U.S. Treasury and lead to the creation ofthousands ofjobs and billions ofdollars of
private investment.
Without incentive auction legislation, we will soon face a desperate shortage ofspectrum
for mobile broadband and, as a result, will fall behind our global competitors in this area
ofvitally important economic and teclmological opportunity. Without more spectrum
for mobile broadband, hundreds ofmillions ofconsumers who rely on wireless devices
every day for business, conu11l1l1ications with family and friends and enteliainment will
experience dropped connections, slow data speeds and needlessly high prices for data.
.' Mobile broadband can power innovations in areas like public safety, education, health
care and energy - including 21 5t century devices that can help police and firefighters save
lives - digital textbooks and software that can help teachers teach and students leal11 
remote monitoring technologies for people with diabetes or heart disease - and smart-grid
teclmologies that can reduce energy costs and increase energy security. This is why 112
economists from across the political spectrum have endorsed incentive auctions, stating
that giving the FCC incentive auction authority "with flexibility to design appropriate
rules would increase social welfare."
In your letter, you posed a number of questions about the Commission's Allotment
Optimization Model (AOM). As you know, the AOM is a tool that Conunission staffis
developing to assist the Conul1ission in conducting voluntary incentive auctions, should
Congress grant us the requisite authority. As you may also be aware, the Commission
first unveiled the AOM concept in June 2010, with a detailed description in Ollli1ibus
Broadband Initiative (OBI) Teclmical Paper No.3. We have enclosed a copy ofthat
" .:, :paper for your review..
"~j'
445 12TH STREET S.W. WASHINGTON, D.C. 20554 • 202-418-1000
At this point, the AOM remains very much a work in progress, and I am deeply
concerned that disclosure ofpredecisional information would potentially damage the
Commission's deliberative processes, as well as result in needless public confusion about
the status ofthe Commission's work on the voluntary incentive auction concept. While
the process ofrefining the AOM continues, the Commission has an interest in ensuring
that deliberative infornlation is not disseminated outside the agency and, more
importantly, that candid internal discussions are encouraged.
Commission staff is experimenting with the model as part oftheir work to prepare for the
possibility that Congress will provide the Commission with the authority to conduct
voluntary incentive auctions. At this stage, any sample AOM model runs would be
imprecise and potentially lead people to have an incomplete and misleading snapshot of
the post-auction broadcast marketplace. Moreover, releasing model runs with
hypothetical assumptions about which pmiicular television stations might choose to
participate in a voluntary incentive auction would likely lead to destabilizing speculation
in the marketplace, thereby creating unfairness and potential harm. In short, it is too
early in our process to release what is still a partial work product, because doing so would
not add to (and could harmfully detract from) the guidance already provided in Technical
Paper No.3, which remains the touchstone ofthe Commission's work and is available for
all public parties to use to conduct hypothetical modeling.
Should Congress grant the Commission the ability to conduct voluntary incentive
auctions, I commit to you that we will put the then-current (and further refined) version
ofthe AOM out for public comment before setting the rules for the auction. The result
will be a full, fair and open process that will allow for a complete review ofthe
methodology, data and assumptions the Commission will ultimately use to implement
that authority.
Please know that I am fully committed to a robust future for over-the-air broadcasting, as
well as for mobile broadband. Economic growth and consumer interests are our
touchstone. If flexible legislation is crafted to optimize the ways in which broadcasters
can voluntarily pmiicipate in an incentive auction, the post-auction broadcast industry
will be financially stronger, and those broadcasters that decide to take full advantage of
offering new technologies to consumers, such as mobile DTV, will be able to do so.
With such auction legislation, consumers will be rewarded on both the broadband and
broadcasting fronts, and we will be assured that we will be making the most ofour
nation's spectrum, a vital and scarce national resource.
If I can be of further assistance, please do not hesitate to contact me.
Sincerely,