WASHINGTON, DC — Verizon Wireless President and CEO Dennis Strigl today testified before the U. S. House Telecommunications Subcommittee on the subject of the NextWave spectrum settlement. Following is his testimony.
Mr. Chairman, and distinguished members of the Committee, thank you for holding these hearings today. I am concerned that much of the recent discussion of the NextWave settlement has focused on the lobbyists, lawyers, and investors. The big picture for the wireless industry and our economy has been missing from the dialogue.
I'm not a lobbyist, lawyer, or self-interested investor. I'm a wireless network operator. I come before this subcommittee for the third time in 18 months to talk about the need for more radio spectrum - the lifeblood of the growing wireless communications business. In many ways, I'm here today to deliver the same message.
I believe the legislation proposed by the Administration is strongly in the public interest:
- First, the proposed legislation ends five years of legal controversies that have prevented this spectrum from being put to use. Continuing the legal fight is not productive. Even assuming that the FCC would win every legal battle going forward, renewed litigation in the Supreme Court and the D.C. Circuit would take at least two or three more years.
- Second, the proposed legislation will benefit consumers. This is because the additional spectrum is needed by carriers to introduce wireless service to new markets, to fortify existing systems that are approaching capacity limits in major markets, and to roll out high-speed wireless data services.
- Third, the proposed legislation will stimulate investment and create jobs. Verizon Wireless will invest billions of dollars over the next 5 to 7 years for infrastructure to use the NextWave spectrum. Assuming other auction winners make proportionately similar investments, the settlement will yield a substantial stimulus to the economy. The wireless carriers, equipment manufacturers, and others involved in building out the infrastructure will create or sustain thousands of good-paying jobs across the country.
- Fourth, the proposed legislation produces net receipts of $10 billion for the U.S. Treasury in fiscal year 2002. Without the settlement and the authorizing legislation, the licenses would generate few receipts this year under NextWave's installment payments, and U.S. taxpayers would lose the benefit of the much higher prices that prevailed in the reauction of the licenses. The effect in fiscal year 2002 would actually be a negative outflow of funds, because without the settlement the Treasury would have to immediately refund more than $3 billion of deposits to the Auction 35 bidders.
- Finally, there has been a suggestion that Congress should not act on the proposed legislation because there may be bankruptcy-related or other problems affecting past or future auctions. I urge the Subcommittee to take advantage of the solution at hand. The legal foundation for doing so is well cited in my written testimony. More important, this settlement and the authorizing legislation can avoid several more years of legal limbo for these licenses that can be working for the American people. Putting to use almost $16 billion worth of spectrum licenses across 40 States now --rather than later-- is a pretty good day's work.
And on a separate track, with respect to the problem presented by bankruptcies in future spectrum auctions, Verizon Wireless will be happy to come back next year and participate in crafting a solution.
In summary, I appreciate the Subcommittee for promptly holding this hearing. I urge the Subcommittee to do everything it can to move this legislation through Congress before the end of the year. It is the best result for the industry and the economy.
About Verizon Wireless
Verizon Wireless is the largest wireless communications provider in the U.S. with more than 28.7 million wireless voice and data customers. The coast-to-coast wireless provider was formed by the combination of the U.S. wireless businesses of Verizon Communications (NYSE:VZ) and Vodafone (NYSE and LSE: VOD). Verizon Wireless has a footprint covering more than 90 percent of the U.S. population, 49 of the top 50 and 97 of the top 100 U.S. markets. The company, headquartered in Bedminster, NJ, is 40,000 employees strong. Reporters and editors can find more information about the company on the Web at http://www.verizonwireless.com.