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Mr. Chairman and Members of the Committee, I am pleased to appear before you to discuss the Congressional Budget Office's (CBO's) estimates of the receipts that might be generated by two proposals associated with television broadcasting technologies. For simplicity, I will refer to those proposals as Option I, technically known as the "analog return proposal/ and Option II, sometimes called the "second-channel auction." My testimony today makes three points.

• First, the radio spectrum is a valuable public resource. Auctioning licenses permitting use of the spectrum ensures that those licenses are granted to the parties who value them most and makes a substantial contribution to federal receipts. The Congress may choose among many different options in trying to capture those receipts to reduce the deficit. Prominent among the options are two proposals that direct the Federal Communications Commission (FCC) to pursue different strategies in moving the nation to a new television broadcasting technology.
  
  
• Second, we stand at a fork in the road to the television of the future. The proposals discussed here today will lead to different allocations of a valuable part of the radio spectrum. The most important factors in choosing a course for the future are that the ultimate allocation of the spectrum produce the most value for society and that the benefits of transition be equitably shared among broadcasters, viewers, and taxpayers.
  
  
• Third, although federal receipts are an important factor in choosing a strategy for transition, the uncertainties involved in estimating spectrum receipts make CBO's estimates for the two proposals so close as to be indistinguishable.

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