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Cisco Welcomes Congressional Action on Free Trade

Cisco welcomes Senate Finance Committee Chairman Max Baucus’ (D-MT) announcement yesterday that the Committee intends to move legislation to implement pending U.S. free trade agreements with South Korea, Colombia and Panama, as well as to renew Trade Adjustment Assistance. Cisco also appreciates the bipartisan approach taken by Committee’s Ranking Member Orin Hatch (R-UT), who has been instrumental in helping build consensus and create momentum in Congress to pass these agreements. As I’ve indicated in previous posts, Cisco supports Congressional passage of trade agreements as soon as possible, and we expect implementation to increase market access in these growing markets.

Coming to Grips with the Coming Spectrum Crisis in the United States

For all of you who rely on your smartphone, tablet or laptop, your elected representatives have given you  something to cheer about. Mobile data traffic is projected by Cisco to grow 21 times between 2010 and 2015, from about 45 petabytes per month to over 900 petabytes per month.  All those “bytes” need radio spectrum – and lots of it.  More spectrum than is available today.  And more spectrum than what the US government can provide based on current inventories.

The Senate Commerce Committee looked the mobile future in the face and today approved Senator Jay Rockefeller’s (D-WV) and Senator Kay Bailey Hutchinson’s (R-TX) bill to make available significant new spectrum for commercial wireless networks (both licensed and unlicensed) and for public safety.  While there is likely to be a long and winding road before Congress sends a spectrum bill to the White House, a committee vote is an important milestone in moving from policy ideas to concrete legislation.

The Senate Commerce Committee’s action today, if it becomes law, would open a minimum of 84 MHz, and quite possibly more, spectrum for licensed carrier use in spectrum now assigned to broadcast television.  It would also require the FCC and the National Telecommunications and Information Agency to consider opening an additional 120 MHz of spectrum in the 5 GHz band – now increasingly used for Wi Fi.  Public safety would get more spectrum, too, from a 10 MHz piece of spectrum previously assigned to commercial uses but not auctioned.

Is all this spectrum really necessary? Yes.  With demand soaring at unprecedented rate, carriers are increasingly offloading data traffic to Wi Fi.  The wireless technologies that are used to deliver broadband access require broad blocks of spectrum to work efficiently.  More spectrum provides a path forward for innovation – for newer, faster and better devices and applications.  And the action helps each of us in our daily lives – more spectrum will be a huge help in avoiding future congestion so that we can enjoy all those powerful (and fun!) devices and applications.

Cisco joined with the tech industry to advance this legislation, and we will continue to champion the cause of more spectrum as the bill continues to wind its course through Congress.

Trade Progress: Movement on the US/Colombia FTA

The White House announced today that it had reached agreement with the government of Colombia on labor rights, which will “…clear the way for the U.S.-Colombia Trade Agreement to move forward to Congress.”

Cisco applauds both governments for agreeing on a path forward and is pleased that the U.S. Congress will soon consider implementing legislation for the U.S.-Colombia Free Trade Agreement (FTA).

Cisco strongly supports passage of the FTA, whose implementation will provide meaningful commercial benefits. For example, Colombia has agreed to adopt the Information Technology Agreement (ITA), which will result in the elimination of import duties ranging from 5% to 15% on information & communications technology products exported to Colombia, providing economic stimulus to both economies.

Cisco detailed these and other benefits of the U.S.-Colombia FTA in remarks to Congressional staff during a high-tech industry briefing last week.

As a member of the Latin America Trade Coalition and of the U.S.-Korea FTA Business Coalition, Cisco joins our colleagues in the high-technology industry and broader business community to support swift Congressional passage and implementation of the pending FTAs.

Winning the Future with Radio Spectrum

At a White House event today, 112 economists — including Nobel Laureates, distinguished academics, and former government officials from both parties — presented a letter to President Obama on radio spectrum.  The message?

The President should support, and Congress should pass, legislation granting the Federal Communications Commission voluntary incentive auction authority.

In fact, the President’s economic team, and many Congressional Republicans and Democrats, are of the view that this new type of auction is the best path forward to transforming how we use radio spectrum in the 21st Century.  And there is broad consensus that the demand for mobile broadband is rising.  Cisco believes that from 2010to 2015, the United States will see mobile data rising by a factor of 26.

So, there is little controversy about the concept of voluntary incentive auctions, an idea that was born from the FCC’s analysis that it needed to find spectrum quickly to meet the sharply increasing demand for mobile broadband data.  Simply put, incentive auctions provide a financial incentive that allows incumbent spectrum holders to sell existing spectrum so that it can be repurposed for broadband.

The debate is now over the details. How much money would such an auction raise? How much “incentive” do you provide?  Can this voluntary mechanism provide enough spectrum to address the looming spectrum crunch?

Today’s letter makes it clear that the time is now to get those questions answered.  The stakes are too high not to do so.

Consumers, who want high quality data services and who are increasingly buying more and more mobile devices have a stake. So do businesses which depend upon mobile workers and wireless M2M in their future.  So do taxpayers, who should see a significant contribution to the federal treasury – the last significant auction of spectrum raised $19 billion.

This issue isn’t partisan. Market-based mechanisms like incentive auctions are the best way to allow radio spectrum to be placed to its highest, best use and to do so with a minimum of transaction costs.

Congress should move this item to the top of the agenda, and take action soon to give the FCC the authority it needs.

Can 112 economists be wrong? I don’t think so.

Free Trade Update: Korea, Colombia, Panama

On Monday, I offered remarks to approximately thirty staff in the U.S. House of Representatives on the benefits of the U.S.-Korea, U.S.-Colombia and U.S.-Panama Free Trade Agreements (FTAs), along with high-tech industry colleagues from IBM, Microsoft, HP and Intel. It was great to have an opportunity to talk about how Cisco and our customers would be impacted by implementation of these agreements, and for the industry to emphasize the importance of open trade policy to help fuel international competitiveness. Most trade analysts expect Congress to pass the U.S.-Korea FTA first, as American companies would be at a market disadvantage vis-à-vis European-based competitors after July 1, when the EU-Korea FTA goes into effect. Cisco supports passage of all three agreements, and we’re hopeful that the Obama Administration is able to work through any remaining issues on the FTAs with Colombia and Panama as soon as possible.