[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
                     HOW INTERNET PROTOCOL-ENABLED
                     SERVICES ARE CHANGING THE FACE
                     OF COMMUNICATIONS: A VIEW FROM
                          GOVERNMENT OFFICIALS

=======================================================================

                                HEARING

                               before the

          SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET

                                 of the

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 27, 2005

                               __________

                           Serial No. 109-69

                               __________

       Printed for the use of the Committee on Energy and Commerce


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house

                               __________


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                    ------------------------------  

                    COMMITTEE ON ENERGY AND COMMERCE

                      JOE BARTON, Texas, Chairman

RALPH M. HALL, Texas                 JOHN D. DINGELL, Michigan
MICHAEL BILIRAKIS, Florida             Ranking Member
  Vice Chairman                      HENRY A. WAXMAN, California
FRED UPTON, Michigan                 EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida               RICK BOUCHER, Virginia
PAUL E. GILLMOR, Ohio                EDOLPHUS TOWNS, New York
NATHAN DEAL, Georgia                 FRANK PALLONE, Jr., New Jersey
ED WHITFIELD, Kentucky               SHERROD BROWN, Ohio
CHARLIE NORWOOD, Georgia             BART GORDON, Tennessee
BARBARA CUBIN, Wyoming               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
HEATHER WILSON, New Mexico           BART STUPAK, Michigan
JOHN B. SHADEGG, Arizona             ELIOT L. ENGEL, New York
CHARLES W. ``CHIP'' PICKERING,       ALBERT R. WYNN, Maryland
Mississippi, Vice Chairman           GENE GREEN, Texas
VITO FOSSELLA, New York              TED STRICKLAND, Ohio
ROY BLUNT, Missouri                  DIANA DeGETTE, Colorado
STEVE BUYER, Indiana                 LOIS CAPPS, California
GEORGE RADANOVICH, California        MIKE DOYLE, Pennsylvania
CHARLES F. BASS, New Hampshire       TOM ALLEN, Maine
JOSEPH R. PITTS, Pennsylvania        JIM DAVIS, Florida
MARY BONO, California                JAN SCHAKOWSKY, Illinois
GREG WALDEN, Oregon                  HILDA L. SOLIS, California
LEE TERRY, Nebraska                  CHARLES A. GONZALEZ, Texas
MIKE FERGUSON, New Jersey            JAY INSLEE, Washington
MIKE ROGERS, Michigan                TAMMY BALDWIN, Wisconsin
C.L. ``BUTCH'' OTTER, Idaho          MIKE ROSS, Arkansas
SUE MYRICK, North Carolina
JOHN SULLIVAN, Oklahoma
TIM MURPHY, Pennsylvania
MICHAEL C. BURGESS, Texas
MARSHA BLACKBURN, Tennessee

                      Bud Albright, Staff Director

        David Cavicke, Deputy Staff Director and General Counsel

      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

          Subcommittee on Telecommunications and the Internet

                     FRED UPTON, Michigan, Chairman

MICHAEL BILIRAKIS, Florida           EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida                 Ranking Member
PAUL E. GILLMOR, Ohio                ELIOT L. ENGEL, New York
ED WHITFIELD, Kentucky               ALBERT R. WYNN, Maryland
BARBARA CUBIN, Wyoming               MIKE DOYLE, Pennsylvania
JOHN SHIMKUS, Illinois               CHARLES A. GONZALEZ, Texas
HEATHER WILSON, New Mexico           JAY INSLEE, Washington
CHARLES W. ``CHIP'' PICKERING,       RICK BOUCHER, Virginia
Mississippi                          EDOLPHUS TOWNS, New York
VITO FOSSELLA, New York              FRANK PALLONE, Jr., New Jersey
GEORGE RADANOVICH, California        SHERROD BROWN, Ohio
CHARLES F. BASS, New Hampshire       BART GORDON, Tennessee
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE FERGUSON, New Jersey            BART STUPAK, Michigan
JOHN SULLIVAN, Oklahoma              JOHN D. DINGELL, Michigan,
MARSHA BLACKBURN, Tennessee            (Ex Officio)
JOE BARTON, Texas,
  (Ex Officio)

                                  (ii)




                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Billings, Hon. Lewis K., Mayor, Provo City, Utah.............     7
    Davidson, Charles M., Commissioner, Florida Public Service 
      Commission.................................................    58
    Fellman, Hon. Kenneth, Esq., Mayor, Arvada, Colorado, on 
      behalf of National Association of Telecommunications 
      Officers and Advisors Board of Directors...................    27
    Munns, Diane, Commissioner, Iowa State Utilities Board, on 
      behalf of National Association of Regulatory Utility 
      Commissioners..............................................    49
    Perkins, John, Iowa Consumer Advocate, President, National 
      Association of State Utility Consumer Advocates............    80
    Quam, David C., Director, Federal Relations, National 
      Governors Association......................................    91
    Strauss, Karen Peltz, KPS Consulting, on behalf of Alliance 
      for Public Technology......................................   100

              Additional Material Submitted for the Record

Hon. Joe Barton, prepared statement..............................   138
Hon. Barbara Cubin, prepared statement...........................   141
Hon. Edward J. Markey, prepared statement........................   143
Hon. Cliff Stearns, prepared statement...........................   146
Billings, Hon. Lewis K.:
    Written response to questions from Hon. Cliff Stearns........   148
Davidson, Charles M.:
    Written response to questions from Hon. Marsha Blackburn.....   154
    Written response to questions from Hon. Cliff Stearns........   156
Fellman, Hon. Kenneth, Esq.:
    Written response to questions from Hon. Cliff Stearns........   163
Munns, Diane:
    Written response to questions from Hon. Marsha Blackburn.....   166
Perkins, John:
    Written response to questions from Hon. Cliff Stearns........   168
Quam, David C.:
    Written response to questions from Hon. Cliff Stearns........   171
Strauss, Karen Peltz:
    Written response to questions from Hon. Cliff Stearns........   173
High Tech Broadband Coalition, prepared statement................   175
Intel Corporation, prepared statement............................   178
National Association of Regulatory Utility Commissioners, 
  prepared statement.............................................   181
United Telecom Council, prepared statement, prepared statement...   183

                                 (iii)

  


                     HOW INTERNET PROTOCOL-ENABLED
                     SERVICES ARE CHANGING THE FACE
                     OF COMMUNICATIONS: A VIEW FROM
                          GOVERNMENT OFFICIALS

                              ----------                              


                       WEDNESDAY, APRIL 27, 2005

                  House of Representatives,
                   Committee on Energy and Commerce
        Subcommittee on Telecommunications and the Internet
                                                   Washington, D.C.
    The committee met, pursuant to call, at 2:22 p.m., in Room 
2322 of the Rayburn House Office Building, Hon. Fred Upton 
(chairman) presiding.
    Members present: Representatives Upton, Stearns, Gillmor, 
Whitfield, Shimkus, Pickering, Bass, Terry, Blackburn, Markey, 
Engel, Wynn, Gonzalez, Inslee, Boucher, Gordon, Rush, and 
Stupak.
    Staff present: Howard Waltzman, Chief Counsel; Neil Fried, 
Counsel; Will Nordwind, Policy Coordinator; Jaylyn Jensen, 
Senior Legislative Analyst; Johanna Shelton, Telecommunications 
Counsel; Peter Filon, Counsel, Alec Gerlach, Staff Assistant; 
and Anh Nguyen, Legislative Clerk.
    Mr. Upton. Sorry about the delays. I think most of you 
know, we had a series of votes that started right about the 
time that we were supposed to be here, so I appreciate you all 
waiting patiently.
    Today's hearing is entitled ``How Internet Protocol-Enabled 
Services are Changing the Face of Communications: A View from 
Government Officials.'' This hearing is a finale of sorts in a 
series of hearings that this subcommittee has held in regard to 
IP-enabled services. Previous hearings have explored how, 
without a doubt, IP-enabled services are dramatically changing 
the face of communications.
    Many of these hearings have underscored the need for 
Congress to modernize our communications laws in order to 
account for this new technology and to ensure its speediest 
deployment as widely as possible, and bring true intermodable 
facilities based competition to the American consumer.
    At the close of this hearing, it is my intention to get to 
the business of legislating along those very lines, which 
brings us to why we are here today. The FCC has held that 
Internet services are inherently interstate in nature, and that 
even if there is also an intrastate component, it is not 
technologically feasible to separate it for purposes of State 
versus Federal jurisdiction. So Federal jurisdiction and the 
unified Federal broadband policy trumps State jurisdiction.
    I have to say that I agree with that approach to creating a 
Federal policy for IP-enabled voice, video, and data services, 
and that that will serve as my guiding principle for 
legislating in this arena. What that means for how we approach 
the traditional role of State public utility commissions and 
local franchise authorities in an IP-enabled world is what we 
will be exploring today.
    I want to thank today's distinguished panel of witnesses 
for being with us this afternoon to help us explore that very 
important subject, and I will yield to Mr. Gordon for an 
opening statement.
    [The prepared statement of Hon. Fred Upton follows:]

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    Mr. Gordon. Thank you, Mr. Chairman, and thanks again for 
these continuing very informational hearings you are having.
    First, let me take just a moment. I would like to recognize 
a friend from Tennessee, Ms. Debbie Tate. She is the chairman 
of our Tennessee Regulatory Commission. More importantly, a 
native of Murfreesboro, Tennessee, often thought of as a dead 
hole in the universe by many folks.
    As we consider legislation to create a Federal framework 
for regulating IP-enabling services, it is critically important 
for us to consider what role State and local governments have 
to play in this new scheme. State and local governments have 
traditionally implemented and enforced issues such as consumer 
protection, CLEA, and the 911. While the technology may have 
changed, consumers and providers will continue to expect full 
government--local governments to fulfill these functions. I am 
particularly interested in hearing from the panel on the 911 
issue. I am working with my colleague, Chip Pickering, on 911 
legislation for IP-based services.
    I look forward to hearing from the panel, how they think 
the States can partner with the Federal government to make sure 
that all IP-enabled telephony providers can provide full 911 
services as quickly as possible.
    I yield back my time. Thank you.
    Mr. Upton. Mr. Stupak for an opening statement.
    Mr. Stupak. Thank you, Mr. Chairman. Thanks for holding 
this hearing in the series that you have held on--in-depth 
hearings on the IP-enabled services. I think the committee now 
has a better understanding of where both the opportunities and 
challenges lie as we look at the Telecommunications Act.
    There are opportunities to update the Act to recognize and 
promote the promise of IP-enabled services, but we must do so 
with an eye on rural America, and with an understanding that 
these services can only go where broadband takes it.
    We heard last week that the U.S. has fallen further behind 
in the industrialized world with regard to the deployment of 
broadband. Yes, new technologies will stimulate demand for and 
deployment of broadband in the U.S., and yes, regulatory 
certainty will help with the deployment of broadband as well. 
But will the market alone get broadband to rural America? I 
think this is a central question this committee needs to 
address. We need to graft our telecom laws in a way that 
embraces these new technologies, while helping all communities 
become connected to the future.
    Broadband is coming to my district by cable, DSL, wireless, 
and satellites. It is being provided by national companies, 
locally owned companies, local governments, and public 
utilities. For instance, the City of Gladstone in my district, 
with a population of 5,000, offers wireless broadband. The 
citizens of Gladstone benefit; so do those who live outside the 
city in very rural areas. They receive their broadband through 
a privately-owned wireless system that connects to the 
Gladstone system. Other municipal utilities in my district may 
soon be offering DSL quality satellite broadband.
    Some have suggested that local government should not have 
the ability to offer broadband, and several states have 
implemented laws prohibiting it. I look forward to hearing from 
the witnesses today about what role they think local government 
should play in broadband deployment.
    I am also very interested in hearing from local governments 
about local franchise agreements for cable providers. We heard 
at last week's hearing that cable franchise must meet a series 
of local obligations, and I look forward to hearing from you 
why these obligations are necessary, especially the build-out 
requirements.
    I look forward to hearing from today's distinguished panel. 
As this distinguished panel knows, you work very hard, often 
thankless work, including answering consumer complaints, 
arbitrating disputes, and maintaining critical infrastructure. 
There is reason why the Act gives State and local governments 
the responsibility they have today, and the committee needs to 
tread carefully when looking at moving some of the 
responsibilities to the Federal level.
    With that, I will yield back, Mr. Chairman. Thank you.
    Mr. Upton. Thank you.
    Mr. Inslee.
    Mr. Inslee. I just want to thank you for being so great at 
serving the local government. We are Congressmen and we don't 
have that kind of pull.
    Mr. Upton. Mr. Gonzalez.
    Mr. Gonzalez. Waive opening. Thank you.
    Mr. Upton. Thank you. There are a number of subcommittees 
that are meeting today. I have talked to a number of members 
that I know that are going to be coming for this hearing. 
Again, I apologize it is starting on a delayed basis. But at 
this point, we are prepared to listen to our witnesses.
    We are joined by a distinguished panel, as all of us have 
indicated. We will start with the Honorable Lewis Billings, the 
Mayor of Provo City, Utah. Honorable Ken Fellman, Mayor of 
Arvada, Colorado, on behalf of the National Association of 
Telecommunications Officers and Advisors Board of Directors. We 
will hear from Ms. Diane Munns, Commissioner of the Iowa State 
Utilities Board. Mr. Charles Davidson, Commissioner of the 
Florida Public Service Commission. Mr. John Perkins, Iowa 
Consumer Advocate, President of the National Association of 
State Utility Consumer Advocates. Mr. David Quam, Director of 
Federal Relations, the National Governors Association; and Ms. 
Karen Peltz Strauss, KPS Consulting, on behalf of the Alliance 
for Public Technology.
    I want to start off by saying we appreciate you submitting 
your testimony in full so we could take it home last night. 
Your statements are made as part of the record in their 
entirety, and we would like to limit your remarks now to no 
more than five minutes. And I believe--I think there is a 
clock. Do you all have--is there a clock that you all see in 
front of you? No. Well, I have one, so when you hear this, that 
means your five minutes is done, and there is a clock in these 
lights above that clock that will tick down as well. So we 
apologize you don't have a clock to see, but I will try to 
signal you in there. If you can wrap up at that point, that 
would be terrific.
    We will start with you, Mr. Billings. Welcome.

STATEMENTS OF HON. LEWIS K. BILLINGS, MAYOR, PROVO CITY, UTAH; 
HON. KENNETH FELLMAN, ESQ., MAYOR, ARVADA, COLORADO, ON BEHALF 
  OF NATIONAL ASSOCIATION OF TELECOMMUNICATIONS OFFICERS AND 
 ADVISORS BOARD OF DIRECTORS; DIANE MUNNS, COMMISSIONER, IOWA 
  STATE UTILITIES BOARD, ON BEHALF OF NATIONAL ASSOCIATION OF 
    REGULATORY UTILITY COMMISSIONERS; CHARLES M. DAVIDSON, 
COMMISSIONER, FLORIDA PUBLIC SERVICE COMMISSION; JOHN PERKINS, 
  IOWA CONSUMER ADVOCATE, PRESIDENT, NATIONAL ASSOCIATION OF 
  STATE UTILITY CONSUMER ADVOCATES; DAVID C. QUAM, DIRECTOR, 
 FEDERAL RELATIONS, NATIONAL GOVERNORS ASSOCIATION; AND KAREN 
PELTZ STRAUSS, KPS CONSULTING, ON BEHALF OF ALLIANCE FOR PUBLIC 
                           TECHNOLOGY

                 STATEMENT OF LEWIS K. BILLINGS

    Mr. Billings. Thank you, Chairman Upton, members--
    Mr. Upton. Use that mic for everyone, sir.
    Mr. Billings. Is that better?
    Mr. Upton. That is much better. Thank you.
    Mr. Billings. Thank you, Chairman Upton, members of the 
subcommittee. As has been said, I am Lewis Billings. I am the 
Mayor of Provo, Utah. Thank you for the opportunity to appear 
before you today on behalf of the American Public Power 
Association, APPA, to discuss the important role public power 
systems are playing in the deployment of affordable broadband 
services.
    APPA is the national service organization representing the 
interest of the Nation's more than 2,000 State and community-
owned electric utilities that serve over 43 million Americans. 
The vast majority of these utilities serve communities with 
populations of 10,000 people or less. Provo is one of APPA's 
larger members with approximately 33,000 metered customers, and 
a population of 113,000.
    Many of these public power systems were established largely 
due to the failure of private utilities to provide electricity 
to smaller communities, which were viewed as unprofitable. In 
these cases, communities formed public power systems to do for 
themselves what they viewed to be of vital importance to their 
quality of life and economic prosperity. Today, many public 
power systems are meeting the new demands of their communities 
by providing broadband services where such service is 
unavailable, inadequate, or too expensive. Over 600 public 
power systems now provide some kind of advanced communication 
service, whether for internal or external purposes. This is a 
10-fold increase since Congress enacted the Telecommunications 
Act of 1996, and the number of public power systems providing 
or planning to provide services continues to increase. Using 
technologies such as fiber to the subscriber, hybrid fiber 
coaxial broadband over power lines, and wireless, community-
owned electric utilities provide a wide variety of services to 
their residents, either directly or in partnership with private 
sector providers.
    The types of services APPA members provide fall into two 
categories. The first is internal service, which is usually a 
municipal data network that connects municipal governmental 
entities to each other. As of the end of 2004, 247 public power 
systems offered municipal data networking.
    The second category is external service that is offered to 
individuals or entities outside of the utility and municipal 
government. External services include fiber lacing, high speed 
Internet access, broadband resell, cable television, local and 
long distance telephoning, and VoIP. As of the end of 2004, 102 
systems were providing cable television service, 167 were 
lacing fiber, 128 were Internet service providers, 42 provided 
long distance telephone, and 52 provided local phone service. A 
handful of systems are either providing or testing voice-over 
Internet protocol service. In addition, public power has been a 
leader in BPL, with Manassas, Virginia, being the first city in 
the nation to provide broadband over the power line service. 
Based on the success of Manassas' project, other APPA members 
are now testing that technology, including Hagerstown, 
Maryland; Princeton, Illinois; and Rochester, Minnesota.
    Many communities have decided to provide residents and 
businesses with critical broadband infrastructure because they 
recognize the growing importance of broadband for commerce, 
healthcare, education, and improved quality of life. Looking to 
early pioneers of municipal broadband that have been models to 
other communities, they have seen the many benefits of 
providing access to an essential 21st century service. Some of 
the key benefits of municipally provided broadband service 
include lower prices, increased competitiveness in the 
communications marketplace, responsiveness to local needs, 
economic development, and universal access.
    Local governments are not the only entities that recognize 
the benefits of municipal broadband systems. A large number of 
organizations representing private industry, educational 
interests, and consumers support the availability of 
municipalities to provide broadband services. Included with my 
testimony are the statements of support from such organizations 
as the High Tech Broadband Coalition, Consumer Federation of 
America, the Free Press, Educause, and New America Foundation, 
as well as Intel. The United Tele Council and Fiber to the Home 
Council also plan to express their support by sending a letter 
to the subcommittee for inclusion in the record.
    The story of Provo's entry into the communications 
marketplace is similar to those of other municipalities across 
the country, which my written testimony discusses in more 
depth. Eight years ago, we undertook a careful study to 
determine how we could use technology to benefit our residents. 
After our thorough analysis, we decided we need to reconstruct 
our traffic control signal systems, make major upgrades to our 
utility monitoring and control systems, and bring about 
broadband interconnectivity between all city owned and operated 
facilities. As it turned out, all of these initiatives would be 
dependent upon our ability to obtain high speed data 
interconnectivity at various locations throughout our city. As 
we launched this--is my time up?
    Thank you. I will be happy to respond to questions.
    [The prepared statement of Lewis K. Billings follows:]

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    Mr. Upton. Man, if everyone was that responsive, that would 
be terrific. Thank you. You went a little bit long, but it was 
good. Thank you. Again, your full statement is part of the 
record.
    Mr. Fellman.

                  STATEMENT OF KENNETH FELLMAN

    Mr. Fellman. Thank you, Chairman Upton, Ranking Member 
Markey, members of the subcommittee. Thank you for the 
opportunity to testify this afternoon.
    I am the mayor of Arvada, Colorado, a city of 104,000 
people located just outside of Denver, and I appear today as a 
representative of the nation's local elected leaders and their 
advisors. Because many local elected officials serve with 
little or no compensation, I have another job as well. In my 
professional capacity, I am an attorney and I work with local 
governments on a wide variety of communications and other 
issues.
    I am also here today, like you, as an elected official who 
looks at new technology with a great deal of excitement, and 
one whose constituents and businesses want more choices at 
lower prices. And like all of you, I am seeking the best 
balance for our citizens, our economy, and our local 
communities.
    Today, on behalf of local governments, I ask this committee 
for three things.
    First, recognize the inherent police powers of local 
government, and its right to manage and charge for the use of 
public rights of way.
    Second, please take a deliberative approach as you consider 
the appropriate scheme for addressing IP services, and ensure 
that any new regulatory regime recognizes the core social 
obligations of our service providers.
    And third, appreciate the unique neighborhood-by-
neighborhood expertise that local government has to oversee 
these social obligations, which include public safety, 
broadband deployment, and preventing economic red-lining.
    Additionally, because I know this committee has heard some 
negative characterizations of the franchising process, I draw 
the committee's attention to the detailed written testimony 
which we believe demonstrates a more accurate representation.
    We support a technology neutral approach that promotes 
broadband deployment and competitive service offerings. But 
Internet innovations are meaningless if the networks used to 
deliver them are not widely available to our citizens. As 
technology improves, most of the infrastructure for these new 
services resides in the public rights of way. Local officials 
must ensure that the infrastructure does not interfere with 
other infrastructure, is safe, and we must preserve fair 
opportunities for all competitors who use the rights of way. As 
fiduciaries, we must make sure that the public is compensated 
when private actors use public land.
    To exercise our core police powers, local government must 
manage the right of way, and we thank Chairman Barton for his 
historic work in support of the existing Section 253, which 
preserves local authority and control over the public rights of 
way.
    We believe that federalization of all IP services would not 
serve the public interest, and would violate the principle of 
technology neutrality. It would create disparate treatment of 
entities, solely on the nature of the services provided. 
Functionally equivalent services that compete with one another 
in the eyes of consumers should face the same government 
obligations. Local governments want to ensure that we can 
continue to require that social obligations of providers be 
met, and that consumers be protected.
    There are several important obligations of today's video 
providers that are enforced at the local level. These include 
access channels, institutional networks, and prohibitions on 
economic redlining. Many members of Congress are frequent 
guests or hosts on cable access channels. Congressman Markey 
is, Congresswoman Myrick is, my own Congressman, Bob Oprey, has 
his show appearing on access channels in Colorado's seventh 
district. Access programming serves a vital role in our 
communities. Institutional networks provide redundancy in terms 
of emergencies. For example, in New York City's network 
remained operational during the events of September 11, 2001. 
And as this committee has noted, prohibitions on economic 
redlining are critical to ensure all citizens will benefit from 
competition.
    Finally, I would like to briefly explain the current 
franchising process, which unfortunately, is misunderstood by 
many. Cable franchising is essentially a light touch national 
regulatory framework with local implementation. The Cable Act 
authorizes local governments to negotiate for a relatively 
limited range of obligations imposed upon cable operators, and 
virtually none of those obligations are mandatory. The 
framework for economic regulation of video providers utilizes 
that light touch economic regulation that the telephone 
companies seek. And while the current economic regulation is 
limited, it still plays an important consumer protection role. 
Recently, it disclosed a $5 million overcharge by one cable 
operator.
    My written testimony covers franchising in more detail.
    In conclusion, we believe that any new national 
communications policy should preserve local government's 
authority to ensure public health, safety, and welfare, allow 
us to support important policy goals, enable us to address our 
communities' communications needs. What this means is that we 
are asking you to preserve our local control and management of 
the public rights of way, and the ability to impose and collect 
taxes and fees necessary to fund essential services. Please 
take a deliberate approach, even as you seek to update economic 
rules, and do not eliminate the core social obligations of 
video programmers, regardless of the technologies they use. We 
urge you to appreciate and preserve the neighborhood-by-
neighborhood expertise that local government brings to 
overseeing these social obligations, like public safety, 
broadband deployment, and the prohibition of economic 
redlining.
    And I thank you, and look forward to answering your 
questions.
    [The prepared statement of Kenneth Fellman follows:]

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    Mr. Upton. Thank you very much.
    Ms. Munns.

                    STATEMENT OF DIANE MUNNS

    Ms. Munns. Thank you. Mr. Chairman--
    Mr. Upton. I think you have got to hit that button.
    Ms. Munns. Technology. Mr. Chairman, Ranking Member Markey, 
and members of the subcommittee, thank you for the opportunity 
to testify today. My name is Diane Munns and I am the President 
of the National Association of Regulatory Utility 
Commissioners. NARUC represents State public utility 
commissions in all 50 States and U.S. territories, with 
oversight over telecommunications, electricity, gas, water, and 
other utilities.
    Since the Telecommunications Act of '96, the Federal and 
State governments have been involved in a cooperative effort to 
bring local competition to markets. There have been dramatic 
technological changes that have strained in the interstate 
distinctions on which regulations have been based. The State 
commission tasks have also changed from primarily economic 
regulators to facilitating wholesale markets and local 
competition.
    With the changes in technology, we are being asked ``What 
is the function and relevancy of State commissions in today's 
telecommunications market? Is there any role or need for State 
regulation? And won't 50 different regulatory bodies with 
authority over new services impede rather than enhance the 
delivery of services?'' These are fair questions as we must 
continually ask whether government oversight or regulation is 
necessary, and secondly, what level of government stands in the 
best position to deliver value?
    We believe the States have core competencies that are 
necessary in this new world. State commissions excel at 
delivering responsive consumer protection, assessing market 
power, setting just and reasonable rates with markup power, and 
providing fact-based arbitration and adjudication. States are 
also laboratories of democracy for encouraging the availability 
of new services and fashioning workable remedies for abuses and 
market failures.
    State experiments are often the basis for Federal policy. 
While competitive new technology, such as Voice-over Internet 
Protocol, are hesitant to be classified as telecommunications 
service providers because of regulatory requirements, in order 
to do business and compete against incumbent services, many 
seek the rights that that classification confers: guarantees of 
non-discrimination, interconnection rights to the public switch 
network, rights to interconnect for e911 delivery, local number 
portability, access to pole attachments, receipts of universal 
service funds. While the rights are granted under a national 
framework, enforcement of the rights requires a fact-intensive 
adjudicatory capability, and State commissions offer a timely, 
cost effective forum for resolution of these disputes. The 
State of Maryland handled 40 interconnection and inter-carrier 
disputes last year alone.
    Consumer issues is another area where State capabilities 
are relevant. No one disputes that State commissions or that 
level of government stands in the best position to answer 
complaints or inquiries about service. Our citizens call us, 
not Washington, for information. If services do not meet 
expectations, or when a new abuse arises, we know first. The 
debate goes to the discretion that States should have to 
fashion consumer protections outside a Federal framework or 
outside laws of general applicability. Companies rightfully 
argue that different requirements cause transaction costs that 
impede competition. For example, different bill formats raise 
prices and do not bring additional value to customers. They 
argue for national standards with no discretion at the State 
level.
    I would like to raise the other side of the issue and use 
the example of slamming and cramming. After passage of the '96 
Act, the new, unprecedented practice of slamming and cramming 
began. States were first aware as their customer hotlines 
became loaded with complaints. States began to experiment with 
remedies for these abuses, which eventually resulted in a 
national approach. This practice is under control today, but 
the answer to consumers had been, we must seek a rule at the 
Federal level before we can act, or act through general 
consumer protection rules, many more people would have been 
harmed individually and it would have taken much longer to 
control this abuse. Confidence in competitive processes would 
also have been harmed. Just last week, my commission 
successfully addressed a novel cable modem hijacking complaint.
    In addition, sometimes raising issues through State 
processes spurs voluntary industry solutions where if hands 
were tied while a lengthy Federal process ensued, incentives to 
find solutions would be significantly reduced. Finally, some 
issues are local and do not need national attention.
    We need to have discussions on processes that can be used 
so States can effectively protect consumers, while not creating 
a patchwork of requirements that slow down competitive 
offerings and offer no value to consumers.
    We look forward to continuing this dialogue, and are 
hopeful that the benefits of these new technologies will bring 
our States and believe practical pragmatic regulation must be 
employed at each level of government to achieve that end.
    Thank you.
    [The prepared statement of Diane Munns follows:]

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    Mr. Upton. Thank you. Mr. Davidson.

                STATEMENT OF CHARLES M. DAVIDSON

    Mr. Davidson. Thank you, Chairman, Ranking Member Markey, 
representatives. It is an honor to be here today, and I 
appreciate the opportunity.
    During these discussions, you often hear that the 1996 Act 
was a failure and it needs to be reformed. I don't think it 
should be viewed as such. Congress should be proud of the 1996 
Act and stand behind what it did. Competition is here. It may 
be outside the context of the ILEC versus CLEC competition 
anticipated, but it is here.
    But for the '96 Act, we might not have seen DSL come off 
the Bell's shelves as quickly as it did. We might not have seen 
the tremendous investment in the cable infrastructure that we 
have seen. We might not be the beneficiaries of probably the 
most robust, dynamic, competitive wireless network in the 
world.
    The 1996 Act had a purpose and many positive effects, but 
the world in 2005 is very different from the world even in 
2000. Just since 2000, the telecom sector, as you know, has 
lost some $2 trillion in market capitalization, and hundreds of 
thousands of jobs. Other platforms are aggressively competing 
with wire line for market share. Estimates are that by 2006, 
cable captures 7 percent of wire line customers, and 20 percent 
over the next decade. On the flip side, traditional telecoms 
have a very real potential to compete with cable and the 
delivery of video. All of this is great news for consumers and 
all of this might not have occurred but for the Act.
    Getting the model right going forward is critically 
important to the economic and social advancement of the Nation. 
One, it is important to both--it is important to help the 
telecom sector recover, and it is also important to encourage 
these new entrants to come into the market and deliver their 
services and invest in these new technologies for consumers. 
Regulatory reform means jobs. The wireless industry generates 
more than $9 million a year in payrolls. We need to patent that 
formula, somehow. Getting the model right means billions of 
dollars in new capital spending and new choices for customers. 
Getting the policy right means a stronger America.
    In deregulating VoIP in Florida and in providing that 
broadband shall not be subject to a patchwork of local 
government regulations, Florida is hoping that Brighthouse 
Cable will compete with Verizon in the voice segment, and that 
Verizon will compete with Brighthouse in the video segment. 
This competition that we hope for in this building out of 
networks is extremely capital intensive. Cable has invested 
some $95 billion in the past decade to build out its networks. 
Verizon is currently spending over $60 million in one year 
alone to build out fiber networks to bring video to customers 
in Florida. Wireless has invested some $175 billion in its 
networked, and reinvests, as CTI estimates, about $20 billion a 
year for upgrades.
    We need a new regulatory paradigm. The current model is 
focused on the wire line market, on the ILEC versus CLEC 
debate. The rules distinguish between telecom and everything 
else. Existing rules that served a very valid purpose when the 
market was just telecom and the providers were just the phone 
companies doesn't work in this new market.
    In crafting sort of a new regime, the first question that 
often arises is ``What are the respective roles of State and 
Federal government?'' I respectfully submit that this is not 
the first question to ask. Far more often than I hear the 
question of ``How do we maximize consumer welfare? How do we 
bring these new technologies to customers?'' I hear the 
question ``How do we make sure States continue to have a role 
in regulating these issues?'' States will have a role. They 
should have a role. But our first concern ought to be bringing 
these new technologies to customers.
    Chairman Upton, despite Michigan beating Florida in the 
broadband survey, and despite Michigan actually kicking the 
Gators' tail a few weeks ago in lacrosse, you represent--
    Mr. Upton. We won a big ballgame against Florida.
    Mr. Davidson. I am leaving that out.
    But you represent me as a citizen of the United States. 
Representative Stearns represents me. Representative Markey, 
you represent me. We are not just a loose coalition of States; 
we are a Nation with sort of a shared interest in economic and 
social advancement. And just like with the airlines industry or 
the shipping industry or the railroad industry, we truly need a 
national policy.
    Some of the core ingredients that ought to be included in 
that national policy, a clear and simple quid pro quo, an 
articulation of what a social contract is to provide certainty 
to market participants, and a clear benchmark for regulators. A 
straightforward social pact might be, if you use North American 
numbering resources, for example, you are going to be subject 
to certain obligations. It doesn't matter whether you are pure 
VoIP, cable telephony, wire line, wireless. If you use a North 
American number, you are going to have to meet certain social 
obligations. That keeps the model platform agnostic, and 
everyone clearly knows, okay, if we go get a number, we are 
going to have this universal service commit, we are going to 
have an inter-carrier comp issue, we are going to have to 
provide 911. There are certain things we do.
    We also need a truly national set of rules to govern terms 
and conditions of service. A patchwork of potentially 50 
different State rules in this emerging IP market will deter 
some entrants from entering the market, and it will also cost a 
lot of money for folks already in the market to comply with 
those rules. States have a lot of good ideas. Let us 
nationalize those ideas and bring them forward at a Federal 
level.
    And finally, one final point, if I may, tax reform. The 
sectors that are driving the economy are being taxed at double-
digit rates. Let us put some of this money back in the hands of 
consumers. Let us do something to create jobs and encourage 
investment and innovation.
    Thank you, Chairman.
    [The prepared statement of Charles M. Davidson follows:]

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    Mr. Upton. Mr. Perkins.

                   STATEMENT OF JOHN PERKINS

    Mr. Perkins. Thank you, Chairman Upton, Ranking Member 
Markey. My name is John Perkins. I am the consumer advocate 
from the State of Iowa. I am also currently the President of 
the National Association of State Utility Consumer Advocates.
    The NASUCA is an organization comprised of 42 States whose 
consumer advocates are generally--and the District of 
Columbia--whose consumer advocates are generally charged with 
representing their individual residents in their States before 
their public utilities commissions. As such, we also usually 
have the authority to appear in State and Federal courts, to 
appear before Federal agencies, such as the FCC and FERC, and 
also to appear before legislative bodies, such as Congress and 
our State legislatures.
    As you look at this new legislation involving new 
technologies, I think there are a couple of issues--a couple of 
points I would like to make for you to keep in mind. And maybe 
they don't need to be said, but as a consumer advocate, I guess 
we feel we need to keep making those points as often as 
possible. The first is that the overarching--the overriding 
principle behind all telecom legislation historically and into 
the future is that the public interest has to be the 
overarching principle that we reach for. We have to make sure 
that telecommunications are made as widely as accessible, as 
accessible as possible at the most reasonable cost that we can. 
That should govern any legislation, whether it is Federal 
legislation or State legislation, and it is as applicable to 
the old POTS network as it is to our new Internet 
telecommunications that we are looking at.
    I think the other issue that I would like the 
subcommittees--and this is not just this subcommittee, but the 
subcommittees that are also looking at the competition issues, 
the merger issues, universal service funding, those issues, 
should keep in mind that IP doesn't necessarily mean it is on 
the Internet. Just because it is called Internet Protocol 
doesn't mean that it is--somehow should become an information 
service, and deregulated or unregulated. A lot of the new 
switching that the LECs are using, so-called IP switching, the 
so-called soft switching, those are Internet protocols, but 
they still use the public switch telephone network. My 
telephone call using my wire line Quest telephone may go 
through an IP-enabled switch, but it doesn't make it an 
Internet-based telephone. So as this committee looks at 
definitions of IP, I hope it keeps in mind that just because IP 
is attached to a phrase, that it is not defined so broadly that 
the LECs are going to be able to come in later and say ``We 
have IP switching. We are an information service. You can't 
regulate us.'' I think that is an important issue.
    I think another point that should be made is if we follow 
the media and advertisements, it would appear that every 
American has a computer, and probably most of us have a 
broadband connection to that computer, and that is just not 
true. The latest figures that I have seen show that 30 million 
Americans have a broadband connection, but 170 million 
Americans have wire line access. That is not a very big 
percentage of people that have a broadband connection. And when 
the LECs start saying well, broadband bypasses 70 to 80 percent 
of the American homes. That is a fine statistic, but it is 
really meaningless, because the simple fact of the matter is, 
broadband connections are still expensive, and many Americans 
can not afford a broadband connection. So to say that a cable 
runs right outside their home doesn't mean a thing. They are 
still not going to buy a computer. They are still not going to 
get a broadband access because it is too expensive.
    I think that the last thing was one that was touched on by 
Chairman Munns, and that is the issue of preempting States' 
rights. I think the States have a very legitimate interest in 
consumer protection issues and safety issues, and the Internet 
is really no different than an interstate highway. We have--
States have the ability to regulate the speed and size of 
traffic on its interstate highways. They need that same 
ability. These new technologies are going to be a trap for the 
unwary by the unscrupulous, and State consumer protection 
statutes are uniquely designed to protect their citizens from 
any type of action in that regard.
    We have attached a VoIP resolution that our association did 
a year and a half ago, and I think that the points in that 
resolution are still applicable today.
    Thank you, Chairman.
    [The prepared statement of John Perkins follows:]

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    Mr. Upton. For not looking at the clock, you did exactly 
perfect, so--
    Mr. Perkins. I have got my watch right here.
    Mr. Upton. Oh, is it? All right. Mr. Quam.

                   STATEMENT OF DAVID C. QUAM

    Mr. Quam. Mr. Chairman, members of the committee, thank you 
very much for the opportunity to testify.
    This is a topic of great interest to governors, both IP-
enabled services and really the future of communications. But 
as we look at it, sometimes it helps to step back. And one way 
I can view communications and where we stand is to actually 
look at what has happened to coffee. Back in 1984, coffee was 
just that. It was coffee. Today's consumers must pick size, 
tall, grande, bente, roast, light or dark, caffeine or no 
caffeine, drip, latte, espresso, Americano, frappachino, milk 
or soy, fat or no fat, foam or no foam.
    Communications service today is much the same. Before 1984, 
a phone was a phone. Today, it is analog or digital, landline, 
wireless, or VoIP, text messaging, paging, e-mail, world wide 
web, call waiting, caller ID, dial-up or broadband, cable, DSL, 
or Y-fi, IP video, satellite, cable, or broadcast. And who 
knows what is to come. That is the challenge that is before 
governors. It is before Congress. It is before local elected 
officials. How are we going to set up a regulatory scheme that 
fits that world of consumer choice?
    The bottom line for NGA: full and robust competition 
requires a light touch approach that ensures nondiscriminatory 
access to essential facilities, to acknowledging neutral 
policies, and consumer protection safeguards to serve the 
public interest. This can only be effectively accomplished by 
having the Federal government partner with and grant State and 
local governments the authority to promote competition and 
innovation, encourage economic development, protect the public 
safety, and ensure consumer protections.
    As Congress works to reform the Nation's communications 
laws, governors encourage this committee to work with State and 
local governments to create a regulatory framework that does 
several things.
    First, one that would employ a balanced federalism approach 
that grants States, territories, and localities the authority 
to protect the interest of their constituencies.
    Second, would create a level playing field for all industry 
participants in any given service area, regardless of the 
nature of the technology used to provide that service.
    Third, it would be sufficiently flexible and technology 
neutral to respond to any new developments in the industry. It 
would also continue to emphasize reliability standards on all 
communications systems, ensure that States, territories, and 
localities retain the authority to manage public rights of way 
consistent with State laws and policies, support States' 
abilities to provide for all their citizens with access to 
communications services, and it would not preempt the 
sovereignty to determine their own tax policies.
    As I have stated before and it has been stated repeatedly 
by this distinguished panel, any rewrite of the communications 
laws should recognize and retain an active role for State and 
local governments in communications policy. In particular, 
Congress should preserve State and local authority in the 
following key areas: public safety would be the first. State 
and local law enforcement and public safety agencies rely 
heavily on communications services and operators to protect the 
public interest. States must continue to have the authority to 
collect these, and run a ubiquitous e911 system within their 
borders. In addition, national communications policies should 
not hinder law enforcement efforts by creating technological 
safe havens to communicate or plot criminal activity. 
Consequently, governors support Congressional efforts to extend 
necessary components of COLEA to all advanced communications.
    Second, consumer protection. Consumers require a practical 
way to resolve common complaints, service outages, and 
deceptive behavior. States have a long track record of serving 
that role. States should retain the regulatory flexibility in 
enforcement authority to effectively and creatively respond to 
consumer concerns.
    With regard to access, the value of the network--and that 
is what we are talking about, a communications network--is 
directly related to the number of people who use it. Twenty-
four States have instituted their own State universal service 
funds to help ensure that all their citizens can access 
communications services. Governors feel that any changes to 
Nation's communications laws should not hamper a State's 
ability to continue its state universal service fund or prevent 
States from developing new programs to supplement any 
corresponding Federal plan.
    And finally, with regards to competition. Governors welcome 
and support competition. Communications networks are the next 
great economic driver for States and for the Nation, but when a 
competitive market does not exist, States should still retain 
the authority to manage communications infrastructure and 
competition in local markets.
    The 1996 Act ushered in a new era of cooperative federalism 
in communications. This framework took into account the 
responsibilities of each level, based on their core 
competencies. Federal government used its authority to develop 
national communications goals. States were given regulatory 
flexibility and enforcement powers to promote competition, 
manage public safety networks, protect consumers, and help 
ensure access to communications services. Governors look 
forward to working with the Congress to build upon our Federal/
State partnership and use our collective strengths as a basis 
for any new regulatory structure.
    Thank you, Mr. Chairman.
    [The prepared statement of David C. Quam follows:]

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    Mr. Upton. Thank you. Ms. Strauss.

                STATEMENT OF KAREN PELTZ STRAUSS

    Ms. Peltz Strauss. Thank you. Good afternoon, Mr. Chairman, 
Ranking Member Markey, and members of the subcommittee. My name 
is Karen Peltz Strauss, and I am pleased to appear today before 
you to talk about disability issues on behalf of Communication 
Services for the Deaf and the Alliance for Public Technology, 
on whose board I serve. In addition, I am privileged to have 
this testimony endorsed by a number of disability organizations 
that represent millions of Americans of a vital interest in 
making sure that the new regulatory structure adopted for 
Internet-enabled technologies will meet their communication 
needs. We thank you for this opportunity to present our views.
    The last time that this disability community came before 
your committee was when you were considering the 
Telecommunications Act of 1996. That Act put into place various 
requirements for access to telecommunications and television, 
culminating nearly 30 years worth of efforts to secure equal 
access. Through this and other laws that your committee was 
instrumental in passing over the past few decades, people with 
disabilities now have greater access than ever before to 
communication. These laws and new mainstream technology, such 
as paging and text messaging, have made a dramatic difference 
in the lives of people with disabilities by opening up new 
opportunities to employment, education, and commerce, and 
making it easier for these individuals to become productive 
members of our society.
    As IP technology has changed the way our Nation 
communicates, people with disabilities are again presented with 
remarkable opportunities to enhance their independence and 
productivity, but consumers will only be able to reap these 
benefits if these technologies are made accessible through 
universal design. People with disabilities don't want to be 
relegated to obsolete technologies or depend on specialized 
devices that are hard to find. They want an equal opportunity 
to benefit from the full range of functions and features of 
mainstream products that the rest of our community enjoy.
    I just refer to people with disabilities as ``they'', but 
really, I should be saying ``we''. We, as a Nation, are living 
longer, and as we do, building products and services to be 
accessible are taking on an even greater significance. 
According to the U.S. census, 42 percent of people aged 65 to 
74 report having some type of disability. This number jumps to 
64 percent for people over 75. Many of us are already finding 
out that advanced years brings reduced vision and hearing. 
Unfortunately, history tells us that without clear directives 
from Congress to provide access, the companies developing IP 
services are unlikely to make their products accessible. This 
is because competitive market forces have not been responsive 
to the needs of people with disabilities. Your response to 
these market failures has been a string of legislative acts, 
the Telecommunications for the Disabled Act, the Hearing and 
Compatibility Act, the ADA, the Decoder Circuitry Act. You have 
seen the need to impose these disability safeguards, even where 
you have otherwise sought to apply a light regulatory touch in 
order to foster competition and innovation.
    Now, to highlight a few areas where specific legislative 
action is needed. First, we ask that you extend the access 
provisions of the 1996 Act to IP technologies now, when it easy 
to do so, rather than later, when retrofitting is expensive and 
burdensome. An accessibility mandate is needed to ensure that 
IP communications services are inter-offerable, so that people 
using text and video have the same ability to talk to each 
other as voice telephone users do. The deaf community has 
already faced problems with instant messaging and video relay 
services not being inter-offerable. Video relay allows people 
who are deaf to talk directly to hearing people with 
interpreters over the Internet. In addition, companies that are 
making IP technologies need to ensure that the interfaces used 
with these products are accessible. Last week, this committee 
watched demonstrations of innovative IP TV systems that would 
allow viewers to scroll through various channels, use Internet 
services, and make the TV experience truly interactive. But 
think for a minute how a blind person can know which channel is 
on, or how to choose among menu options if onscreen menus are 
used. I will tell you, they can't, at least not now. But if a 
speech-enabled chip and an output device are used to connect 
the TV to a PC, the blind person could use a handheld device to 
control the menus with the assistance of a screen reader. If a 
device requires one sense, such as hearing, sight, or voice to 
control its operation, it should offer the option of using 
other senses.
    Second, universal service programs need to be reformed to 
address the needs of people with disabilities in the IP-enabled 
environment. Right now, only common carriers are required to 
fund relay services. Contributions from IP service providers 
are also needed to sustain the viability of these services. 
Conversely, as people with disabilities migrate from using the 
public switch network to IP telecommunications, they should be 
able to use USF subsidies that go directly to end users, for 
example through Lifeline and Link-up programs, to help defray 
the costs of broadband or high priced specialized devices.
    Third, Congress needs to take measures to expand access to 
television programming, first by extending closed captioning 
obligations to IP TV providers, and second, by restoring the 
FCC's rules on video description. And we wish thank Congressman 
Markey for introducing a bill to achieve just this.
    Finally, we urge that State governments be permitted to 
retain some authority over telecommunications relay programs, 
even where these programs use IP services. Several local 
programs have been directly responsive to the needs of their 
communities in ways that can't be matched by a Federal agency 
located across the country.
    In conclusion, mandates are critically needed to preserve 
the extraordinary gains achieved by more than two decades of 
Congressional efforts to promote full telecom access as our 
Nation now migrates from legacy technologies to more versatile 
and innovative IP technologies. All of the prior mandates were 
created with the understanding that the costs to society of not 
providing access in terms of unemployment, dependence, and 
isolation would far exceed the cost of providing such access.
    We look forward to working with your committee to carry the 
legislative progress made in the past into the IP-enabled world 
of the future.
    Thank you.
    [The prepared statement of Karen Peltz Strauss follows:]

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    Mr. Upton. Thank you all. Thank you all for your testimony.
    Any idea--at this point, we will do questions from members 
of the subcommittee, under the five-minute rule as well.
    Any idea how many different franchises there might be out 
there, Mr. Fellman? I have a guess, but I don't know if anybody 
really knows.
    Mr. Fellman. Are you talking about cable franchises, Mr. 
Chairman? You know, I--
    Mr. Upton. Franchise authorities.
    Mr. Fellman. Oh, franchising authorities. You know, I know 
that there are 36,000 units of local government in this 
country, approximately. I know a number of States, I think 
about 10, franchise through the State, many of which still give 
local authorities some role in the process. But I couldn't tell 
you how many actually do the franchising itself.
    Mr. Upton. My guess is there is probably about--my guess is 
probably about 10,000. Might be a little bit more, might be a 
little bit less.
    What does the average franchise agreement cover? What type 
of different arrangements do they have?
    Mr. Fellman. Average cable franchise, again, you know, I 
will tell you some things that I think most cable franchises 
cover, but in some ways, they are as different as the community 
needs that the address.
    Many cable franchises cover right of way access kinds of 
requirements. Oftentimes, in my experience, those are 
regulations that one finds in a local ordinance addressing 
rights of way, as well as in the cable franchise. Many will 
contain access requirements for public education or government 
access channels. Some will have requirements for institutional 
networks that I mentioned briefly in my testimony. There will 
be internal uses of that institutional network for various 
local government-related issues, public safety, communications 
internally and otherwise. There are public safety related 
concerns in a franchise requirement for emergency alert systems 
on the local level. General categories of programming, the 
Cable Act, as you know, precludes the requirement of individual 
channels, but does allow a local franchising authority to 
address community needs by requiring categories of programming. 
Franchise fees for the use of the public property are covered. 
Bonding requirements so that damages costs to public property 
can be replaced without cost to local taxpayers. Most good 
franchises will have some enforcement mechanisms in there. In 
the last 10 years, I am very happy to say that many franchises 
have provisions for addressing transfers and mergers, so that 
the local community knows the company that they are dealing 
with, because many of these have turned over a few times.
    So a lot of different things, but those are just a few of 
the major ones.
    Mr. Upton. Mr. Billings would you expand on that at all, 
based on your mayorship in Provo?
    Mr. Billings. I would agree that the things he has touched 
on. I guess for us, as a community, we look at what are the 
goals? What is it we are trying to bring about in our 
community, and certainly as we have negotiated those kinds of 
agreements, we have sought to have universal access. We want 
everyone in our community to be able to be serviced. We have 
talked about what is important in public safety kinds of 
settings, and what needs to be done to serve those needs. And 
then we have talked about other things we want to accomplish, 
and have tried to factor those in. And I think that our focus 
of legislation, perhaps even at the Federal level a lot of 
focus on those broader goals in trying to do things that allow 
those goals to be fulfilled as we do whatever it is we do.
    I just think we have to remember that it is going to be a 
little bit different in every community. Those subsets of 
undergoals will be a little bit different in every community, 
and we need to accommodate that.
    Mr. Upton. It is different. I have--I am aware of one 
community, not in my district, by the way, or even in my State, 
that is currently negotiating an agreement, and they are trying 
to look at a number of different channels. I think they are 
actually looking at two or three of the public education 
governmental channels. They are looking for equipment that they 
can, themselves, use to broadcast. They actually are also 
trying to get a calling center located within the jurisdiction 
of the community, and it is just difficult for--help me through 
this argument. If you have got a wireless provider that is 
going to compete with that same cable company that is not going 
to use the same right of way. They are not going to need poles 
or dig up streets, yet they want to compete, offering the same 
services. What are your thoughts as to whether they will have 
to comport with the same types of arrangements that that cable 
company will be for that particular village, in terms of the 
services that Brecken-Morter Building personnel, a whole host 
of things that otherwise they, frankly, wouldn't need as they 
look to expand their services and actually compete to bring 
down some of the costs of the services that they would 
otherwise provide?
    And I am out of time, so I will let you answer before I 
pass to Mr. Markey.
    Mr. Billings. I am sure that--there is a long answer and a 
short answer, and my attempt to the short answer would be that 
it is true that they are different. But even those wireless 
providers still have to have access to our rights of way to 
connect up that equipment that provides that wireless 
connectivity.
    And so while there are differences, there are some very 
similar components to that as well.
    Mr. Upton. Mr. Fellman.
    Mr. Fellman. Mr. Chairman, if I could add to that.
    I think the particular specific rights of way obligations, 
obviously, you couldn't apply to a company that doesn't use the 
rights of way, at least on the same level. But the social 
obligations of providing government, public, and educational 
access, there already are set-aside requirements for the 
satellite companies. I think Congress ought to extend the 
public, educational, government access requirement to 
satellite, so like you say, they are all playing by the same 
set of rules, and the community can get the benefit of that 
local programming, regardless of whether they are a satellite 
subscriber or a cable subscriber.
    Mr. Upton. Mr. Markey.
    Mr. Markey. Thank you.
    Ms. Strauss, in closed captioning, back in the early '90s, 
the industry opposed closed captioning. They said it would be 
too much of a burden on them. We said well, we need it to help 
out those 10 or 20 million people who are hard of hearing in 
America who use the TV as to--so we mandated it out of this 
committee, and the television industry did its best. Who would 
have thought the greatest use for it is people in bar rooms 
just watching basketball or football games?
    But unintended consequences of sometimes Congress acting, 
and in fact, it turns out that most immigrant families turn on 
the TV with closed captioning so that their children can see 
the language, because the parents can't speak it. So there are 
tens of millions of others that use it in different ways. So it 
is a real burden. We had to mandate that. And then there is 
others where we created a readily achievable standard for the 
industry to meet in different areas.
    What would you recommend for the IP services? Which 
approach should we take?
    Ms. Peltz Strauss. Well, I would recommend the approach of 
an undue burden standard, which is the standard that is used 
with closed captioning. And the reason for this is that we are 
now at the outset. We are at the beginning of a new technology, 
and with the new technology, it is much easier to incorporate 
access, rather than retrofitting it later on.
    The readily achievable standard was originally created in 
the Americans With Disabilities Act to make it easier for mom 
and pop in small stores not to have to retrofit with their--to 
put in elevators, to put in stairs. Not to have to incur great 
expenditures in retrofitting small establishments.
    The undue burden standard, which basically says that an 
accessibility feature has to be incorporated, unless it is 
undue burden, is easier to meet when you are at the outset of a 
technology. And here, we have software-based technologies that 
are very easy to incorporate access.
    Mr. Markey. Thank you. With the municipalities, back in 
1992 when this subcommittee--we actually had to pass a law 
because cable companies were coming to communities and saying, 
you have got to give us an exclusive contract. If you want us 
to come to your community, the promise is you will never have 
another cable company in town but us. And so 95 percent of all 
municipalities had guaranteed a monopoly in perpetuity to the 
cable companies. So our subcommittee had to void all of those 
monopolies so that we could have some competition.
    Now, we come to 2005, and a lot of people are now saying, 
well, maybe we should pass a law prohibiting the local 
communities from actually providing telecommunications services 
to their own community, in competition with the cable company, 
the telephone company, or whomever.
    Can you give us your views on the appropriateness of 
Congress telling you that you can not have your own system to 
compete with a cable company or telecommunications company, as 
long as you provide equal access to everyone that would want to 
use it?
    Mr. Billings. I am a private sector player, came out of the 
private sector. Believe government shouldn't go where the 
private sector will go, and as I have in my testimony said, 
eight years ago we set out to do a number of things. I said we 
wanted to bring about the benefits of technology to bless our 
residents' lives. And we fully expected and fully intended to 
use private sector provided connectivity. We had five franchise 
agreements in place with fiber providers. When it came time to 
hook up our traffic lights and our scada and our buildings, 
none would do it.
    Mr. Upton. No.
    Mr. Billings. None would do it. None would step up. And so 
we did. And I hope--
    Mr. Upton. You did it? The city did it?
    Mr. Billings. I would hope that you wouldn't preclude 
cities, especially small cities, especially rural cities, from 
being able to do what they need to do when others are unwilling 
or unable to do it.
    Mr. Markey. I agree with you. Mr. Mayor--Mr. Fellman.
    Mr. Fellman. Congressman, thank you for asking that 
question. Let me talk about a legal issue that piggybacks. I 
agree with everything that Mayor Billings said. In the existing 
Telecom Act in '96, you have got language in Section 253 that 
says ``States and localities shall not pass any laws 
prohibiting any entity from providing telecommunications 
services.'' And a number of States have passed laws, and in my 
opinion, in violation of the Act, by prohibiting their units of 
local government from providing telecommunication services. The 
FCC ruled that while municipalities are creatures of the 
States, they can do to them what they want, that case, as you 
know, got to the U.S. Supreme Court and the United States 
Supreme Court said that Congress was not clear on what it meant 
by any entity. So we thought that it was clear that ``any'' 
meant ``any'', but the U.S. Supreme Court did not agree, and--
    Mr. Markey. I drafted, the provision, so you can tell them 
I meant ``any''--
    Mr. Fellman. Okay.
    Mr. Markey. --in its usual use of the term.
    Mr. Fellman. Had we known that, we would have brought you 
to the oral argument, but there is an opportunity this year to 
fix that problem, because the court would have ruled the other 
way if there was clearer language in the statute and clearer 
legislative record that ``any'' meant ``any''. So I would 
encourage Congress to fix that problem in the next iteration.
    Mr. Markey. We will pay tribute to all of the municipal 
light companies across the country. We will pay tribute to the 
Bonneauville Power Company, to the Tennessee Valley Authority. 
There is a lot of times when they want to do it, the government 
can do it well. But if you don't do it well, they can vote you 
out of office, too. Okay? So you try to do this and it doesn't 
work, you have an accountable, you know, job that the voters 
can exercise their right. But I don't think it should be this 
Congress that tells you, our running municipalities that you 
shouldn't try to undertake these endeavors.
    I thank you, Mr. Chairman.
    Mr. Upton. Ms.Blackburn.
    Ms. Blackburn. Thank you, Mr. Chairman, and I want to say 
thank you to each of you for taking the time to come and--
    Mr. Upton. Could you just put the mic a little closer? 
Great.
    Ms. Blackburn. These chairs are bigger than I am, Mr. 
Chairman.
    Mr. Upton. You are correct. A lot bigger.
    Ms. Blackburn. Yes.
    And while I do have the microphone, since I was in a 
meeting downstairs, I do want to recognize Debbie Tate, who is 
out of Tennessee. I think she was recognized a little earlier 
by my colleague from across the way, but she does a great job 
and I am proud to have her here.
    I have got a series of questions. I am going to try to clip 
through these as quickly as I possibly can.
    I think, Mr. Perkins, I am going to start with you. Or let 
me ask all of you this by Mr. Perkins' testimony. And I am on 
page four of his testimony. This is what he says. ``Most people 
now agree the Internet is truly an interstate phenomenon, and 
individual States should not be in the business of regulating 
the rates charged for Internet services.''
    Do any of you disagree with that statement, and if so, why? 
Go ahead.
    Mr. Fellman. I will jump in.
    Ms. Blackburn. Thank you.
    Mr. Fellman. Congresswoman, I think that when you say 
Internet services, I am not clear on exactly what that means. 
Cable services today are regulated in a very limited way for 
basic cable. If video programming is provided over Internet 
protocol, I would take the position that it is a cable service, 
and therefore, would be subject to regulations.
    Ms. Blackburn. All right. I am reading from his testimony, 
and that is why I wanted to see where you all stand on this, 
you know. Internet service is anything that is going to come 
over the Internet, and as we look at the Telecom Act, one of 
the things I look in terms of is we talk voice-over IP. We also 
know that everything is going to come over IP, and I just 
wanted to see if you all were in agreement or disagreement. It 
sounds like looking at your faces in the response--and knowing 
we are short on time now, that you probably would rather 
respond to that later. Am I reading that right from you all? 
And that maybe you would like to give me a written response? Am 
I reading that right from you all?
    Mr. Davidson. I will jump in, Charles Davidson with the 
Florida Commission.
    I agree with the statement that States should not be in the 
business of regulating the rates charged for Internet service--
    Ms. Blackburn. Okay.
    Mr. Davidson. --so I would agree wholeheartedly with that 
statement.
    Ms. Blackburn. Okay. Thank you. Mr. Perkins also--in the 
same paragraph a little bit further down, you--to allow the 
rates--
    Mr. Perkins. Clearly, offers made about the technology of 
why a person should switch to VoIP and get rid of their wire 
line, you hare going to have VoIP providers coming in with the 
new technology advertising and saying you should chuck your old 
wire line. You should have voice-over Internet. It is the new 
wave of the future. There will be advertisements for that. 
People who are unfamiliar with the technology, you may end up 
with the tragedy that you had in Houston, Texas.
    Ms. Blackburn. Okay.
    Mr. Perkins. They simply didn't realize the limitations. 
Consumer protection laws are needed--are in place and can cover 
this new technology to make sure that those ads are not 
promising more or less than they should.
    Ms. Blackburn. Okay, excellent.
    And Mr. Chairman, with that, I will yield back since we are 
in the middle of a vote.
    Mr. Stearns. [Presiding] Gentlelady yields back.
    Mr. Stupak.
    Mr. Stupak. Thanks.
    Mr. Stearns. I think what we are going to do, my colleagues 
are just going to continue here, and if Chairman Upton comes 
back, he will take it. So if you want to come vote and come 
right back, we would like to seamlessly go through.
    Mr. Stupak. Very good.
    The two mayors there, you talked about local governments 
providing broadband services you have, and we do it in my 
district quite a bit, because we are the only ones who will do 
it.
    But do you have any opinions on a private public 
partnership for broadband deployment, and where a local unit 
government would give rights of way to private companies to 
offer broadband? Have you been approached with anything like 
that or any opinions on that? Mr. Fellman.
    Mr. Fellman. Congressman, I think that happens all the 
time, and again, that is one of those areas that there is as 
many different variations of that as the creativity of cities 
and the private sector can come up with.
    I have a client in Colorado, a municipality, who is 
negotiating presently with a wireless provider to put wireless 
broadband throughout a very large city, many square miles. The 
city council is fairly conservative. They believe the city 
should not be in the business of providing service, but the 
city clearly wants to find a partner in the private sector to 
come in and get the city wired for wireless broadband. They are 
doing it in such a way where it is not exclusive. Anybody else 
can come in. They have looked at competing companies to see who 
they could get the best deal with. They have regular rights of 
way regulations so the next company that comes in will still 
have access to the poles. So it is not, by any stretch of the 
imagination, putting a stop to future competition, but it is a 
city that is saying we don't want to be in the business, but we 
want to find an industry partner who can come in and provide 
these additional broadband services to our community.
    Mr. Stupak. Anything you want to add, Mr. Billings?
    Mr. Billings. I was just going to say, in Utah, our State 
legislature has not caused it to be so that municipalities can 
not be in the business of deploying broadband, but we are not 
allowed to deploy the retail service ourselves. We provide the 
pipe, and then we enter into retail provider partner contracts. 
And so while it is a little different--
    Mr. Stupak. Right.
    Mr. Billings. --I think we are specifically touching on--
that is how it is currently being done in Utah.
    Mr. Stupak. Okay.
    Ms. Munns, what do you think would be the role of the 
States in a universal service reform? Can you speak to that a 
little bit about what role USF funds and a need for Congress to 
take those funds into account?
    Ms. Munns. Yes, I think that there are things, again, that 
we have particular capabilities. We know the networks in our 
States, we are pretty good at knowing who needs what. We are 
good at accountability and doing auditing and that kind of 
thing. We recognize the issues with the universal service funds 
and we want to be a part of giving them out where they need to 
be.
    Mr. Stupak. Do you think VoIP and broadband should be part 
of the USF?
    Ms. Munns. I think, you know, that is something you are 
going to have to struggle with as you look at the size of the 
fund.
    Mr. Stupak. Just thought I would ask.
    Can anyone give me a real world example of why it may be 
necessary for there to be State consumer protection laws until 
there is a Federal law? I am talking about, you know, the 
States have over VoIP or anything else to deploy that. Do you 
think States should be getting involved in this until there is 
a Federal law to sort of smooth this thing all out or mark it 
up even more?
    Ms. Munns. I will take that.
    You are talking with respect to--
    Mr. Stupak. Yes.
    Ms. Munns. --consumer protection--
    Mr. Stupak. Yes.
    Ms. Munns. --issues, and that gets back to what I was 
talking about before, which is when consumers are harmed when 
their expectations are not met, we find out about that first. 
They come to us for relief. To have to say we need to forward 
that to Washington so they can look at it, to the FCC or 
whoever to fashion a remedy for this. A lot of the 
experimentation, a lot of dealing with it, trying to find 
something that works is done first at the State level, and then 
the Federal government acts. I don't think you want to take 
away the capability to address those things and find a solution 
that works. It may be something that you want to federalize, 
but to say that you can't do that and that it has to start at 
the Federal government, I think is backwards.
    Mr. Stupak. Okay.
    Mr. Fellman. Congressman, there is a great example of that 
today that is pending that consumers are hanging out there, and 
that is do customer service standards and privacy protections 
apply to a cable modem service? And when the FCC decided a few 
years ago that cable modem service was not a cable service, but 
was an information service, one of the questions was ``What 
about our customer service standards?'' And at first, the FCC 
said well, we said it was an information service, so send your 
complaints to us. They quickly realized they didn't have the 
staff to deal with consumer complaints at the FCC, so they said 
no, continue sending them to your local governments, but it was 
not clear.
    They have had a pending proceeding at the Commission for, I 
believe, it is over two years to determine whether customer 
service standards, either of the Federal standards that the FCC 
adopts, or local customer service standards, apply to consumer 
protection and privacy rights on cable modem service. It has 
been open for two years. Now, some communities have taken the 
issue into their own hands. Montgomery County, Maryland, is 
working on it, the City of Seattle has very robust standards 
that protect the privacy of their consumers on cable modems. 
But the industry, the cable industry, is fighting it, and they 
are saying you have got to wait for Washington to come up with 
an answer. We don't think you have legal authority. So 
consumers are hanging out there on privacy protection related 
to cable modem.
    Ms. Peltz Strauss. If I can add for disability issues, 
States have been very responsive to the needs of their specific 
communities, especially on relay services and designing 
services specifically for people with speech disabilities and 
people who are deaf who use sign language interpreters.
    And that is not to say that the Federal government 
shouldn't have a role in setting some standards. Right now, we 
have a dual system where States are allowed to set standards 
that exceed Federal minimums, and that would be the best 
result.
    Mr. Stearns. I thank the gentleman. I think we have about 
six minutes left. I will take the liberty to ask a few 
questions here. If the chairman doesn't come back, then we will 
adjourn temporarily the subcommittee.
    Mr. Davidson, we appreciate you being here. You have been 
kind enough to work with myself and my staff, and of course, 
from Florida, we appreciate your input. You have some very good 
ideas.
    I noticed in your statement, you said ``Efforts to 
pigeonhole new technologies into regulatory constructs will 
service primarily to delay the development and deployment of 
these technologies for the consumer.'' I think that is 
something I wouldn't mind you elaborating on. You know, I think 
it has been reported the United States has dropped from 13th to 
16th in broadband penetration, and one of the main reasons was 
lack of competition, vibrant competition. But the term 
``pigeonhole technology'' might just elaborate, if you could.
    Mr. Davidson. Well, I will. That new statistic is 
troubling. I sometimes think, though, as a country we are not 
as bad as sometimes it is portrayed. We have an absolute sort 
of high level of penetration in terms of people, and when you 
compare the U.S. to China, they have got a lot more people, so 
the percentages are going to be off.
    When I said ``pigeonhole'', the regime that exists was 
designed around telecommunications, and it distinguished 
between telecom and just everything else. And everything else 
includes, according to some, cable modem service. Some will 
argue that as a telecommunications component, it would include 
the VoIP service that I use at home. I don't have a telephone; 
haven't for a year. And when you tell sort of these new 
entrants, whether it be Vonage or someone else, that you are 
going to have to comply with the telecommunications 
obligations, the regime that exists now, I think they are not 
going to be able to raise the capital. They are not going to 
offer the service. It won't come to market. There may be some 
providers, really large, established providers, who may vary an 
offer and say you know what? We can comply with the 
telecommunications regulations and we will do that. But we want 
sort of the dynamism that we see with a lot of folks out there 
competing with their services and offerings in the market. And 
we need to somehow encourage that and we need to empower the 
consumers to be able to make the choices they want for their 
new technologies.
    I, as a consumer, made a choice. I do not want a telephone, 
so I made a choice to go with VoIP service. I might not have 
had that option. I might have had such a really low bill for my 
voice service at home had the company been pigeonholed into the 
telecom box.
    Mr. Stearns. I think I am going to have to go vote, so I 
think I will temporarily suspend the committee, and the 
chairman should be here and we will resume. So I appreciate 
your patience here.
    [Recess.]
    Mr. Upton. When we left, there were going to be two votes, 
and they changed it to one. So if it is two, we are going to be 
running pretty fast, so I told the other members that, but in 
order to keep going, we will go a little bit out of turn, I 
guess, and go to Mr. Bass for questions.
    Mr. Bass. Thank you, Mr. Chairman, and I want to first 
apologize for--I assume obviously everybody has given their 
testimony. I am not familiar with everything that you have 
said, but I understand the gist of the subject matter here 
today. And I just want to ask one question.
    I think that there were some that talked about the issue of 
core social obligations. Maybe it was you, Mr. Fellman. And I 
guess the question is core social obligation or economic 
redlining, I think you mentioned--I don't know whether you 
mentioned it or not, but 911 consumer advocacy, and so on. 
Local PUC's and local communities have traditionally had the 
responsibility of monitoring these functions. Is there any 
problem with having that responsibility handled on the Federal 
level? Universal service might be another issue, I think, 
because 911 in community A is no different from 911 in 
community B or in State A versus State B and so forth. Is that 
a--do you understand that question?
    Mr. Fellman. I understand the question and I think for each 
of the core social values, you have to look at them 
differently. Some may make more sense to be dealt with on the 
State level, and I am not an expert in telling you whether 911 
would be negatively impacted if it was all Federal versus all 
State. I would tell you, particularly with respect to the 
access channels, which is a core social obligation, in my 
opinion, there is no way that the needs of Detroit are the same 
as the needs of Kalamazoo or the needs of some small community 
in the upper peninsula of Michigan. And to have a Federal rule 
that says here is what the local needs are and here is what the 
obligation of a video provider is going to be, there is just no 
way to have that work on the Federal level.
    Customer service standards, which I mentioned briefly while 
you were out of the hearing room, again are something that some 
communities are active in the way they enforce them. Others 
have a much lighter touch. In large part, they are a function 
of the history of the service providers in the community and 
what kinds of problems they have had, which is why I think the 
system we have today with cable and customer service works. We 
have Federal standards that communities can adopt and in fact, 
most do. They just adopt the Federal standards. But they also 
have the ability, if there are particular problems in 
particular communities, to adopt different, and in some cases, 
more stringent local standards that can be enforced at the 
local level.
    Mr. Bass. Make it quick, because I want to ask one more 
question before--go ahead.
    Ms. Munns. Well, I think, you know, who should be subject 
to e911 is certainly a Federal decision, because you don't want 
that to differ from State to State. But it is something that 
should be clarified is of these services, who has to provide 
e911, so that we all know.
    With respect to complaints, we did a quick survey of 20 
States who processed over 200,000 complaints in 2004. That was 
20 States, not including California. This is something that I 
don't think the Federal government really has the capability to 
do.
    Mr. Bass. Different question.
    What is your--what are your observations concerning 
government action, if any, when the day comes that non-cable 
providers start providing cable services in communities without 
paying franchises, if that happens? Franchise fees.
    Mr. Fellman. Well, I guess that can't happen unless 
Congress changes the law, because the way video programming is 
defined in Title VI of the Communications Act right now, when 
non-cable providers begin providing video programming over 
facilities that are located in the rights of way by statutory 
definition, that becomes a cable system and they are prohibited 
from providing those services unless they have a cable 
franchise. So clearly, Congress could, if it chooses, change 
that system and eliminate cable franchising. I think that would 
be a terrible mistake, again, for the reasons that I went into 
in great detail in my written testimony, because there are so 
many elements of cable which are purely local, and community 
needs on a local level will not be met if cable franchising is 
taken away or general national rules are imposed at the Federal 
level.
    Mr. Bass. Okay. Chairman, I don't have any other questions. 
Thank you.
    Mr. Upton. Mr. Boucher.
    Mr. Boucher. Thank you very much, Mr. Chairman. I want to 
extend thanks to our witnesses for their illuminating testimony 
today.
    I was particularly pleased to hear the comments of Mr. 
Fellman and Mr. Billings concerning the appropriateness of 
community networks, just as electric utility service was 
provided by municipal utilities beginning in the 1880's, 
because the commercial providers bypassed a lot of communities.
    We have a parallel situation today with regard to 
broadband. We saw a disturbing report this week that says that 
the United States has now dropped two more positions from 13th 
to 15th in ranking internationally among nations that have 
broadband penetration, measured as a percent of the population 
using broadband. We stand at 11 point something percent of our 
population currently using broadband, and we are now 15th in 
the world. And I think local governments have a role to play, 
particularly as you suggested, Mr. Fellman, in rural areas and 
in some cities which have small populations in offering a 
service that the commercial sector either has not provided, or 
only provides at such a high price that it is effectively 
unavailable for residents and much of the business community.
    I have two municipalities that I represent that have 
deployed fiber optic networks, and these are very popular 
services with my constituents. One of those only provides 
broadband high speed Internet access. The other one provides 
comprehensive telecommunications services. And both are 
treasured in the communities where they are located. And the 
penetration rates for broadband there are higher than the 
national average. So I think there is a role to play. I was 
glad to hear your testimony.
    I want to follow up on the inquiry that I believe Mr. Bass 
was opening. I didn't hear all of what he said, but we need to 
have a delicate and serious conversation about franchising. And 
let me sort of state a couple of principles.
    First of all, there are a lot more franchising authorities 
than I think we are acknowledging. In the Verizon service 
territory alone, I am told there are 10,000.
    And so the real number nationally is some multiple of that. 
And Mr. Fellman, I think you suggested 36,000 local franchising 
authorities across the country. That is probably a more 
accurate figure. Let us say 40,000 for sake of conversation. If 
a company like Verizon, that has to get 10,000 franchises in 
order to offer video, whether it is IP-based or whether it is 
just digital cable, is able to average one franchise a day, it 
would take about 40 years in order to get them all. This is 
every business day of the week getting one. Now maybe they 
could do a little better than that, but I kind of doubt it, 
given the necessity of devoting a lot of manpower to the 
effort, and whatever the cost of that might be.
    And I think, you know, to the extent we have delays, 
consumers in these communities are denied the benefits of 
competition, more varied services, the pricing competition that 
inevitably comes when you bring new providers into the market. 
And that is an undeniable benefit for residents across the 
Nation.
    In addition to that, the local governments are denied that 
second or third or fourth franchise fee, which would multiply 
by orders of magnitude the amount of revenue that you get from 
your franchise. And I am just wondering if we can't embark on a 
conversation. I don't have a fully formed view of this. If I 
did, I would announce it and tell you what it is. But I am 
persuaded that we need to do something different than what we 
are doing. The opportunity for telephone companies to get into 
the market, for fixed wireless providers to get into the 
market, I think really argues for a new construct.
    So let me just try out on you a set of principles. And I 
would like your response to this potential.
    Let us suppose that we had a national franchise, and it 
contained certain elements to be discussed and agreed upon. But 
among those elements would be that you get paid. That whenever 
a multi-channel video provider offers a service in your 
community, you get an amount of money tantamount to the 
existing franchise fee. So we take money off the table, you get 
paid. And you get paid every time another provider comes in.
    Let us also assume that one of the elements of this 
national franchise is public access channels. So public 
educational, governmental access would be afforded by the new 
entrants just as it is by existing cable.
    Now if we do this, I mean, first of all, you get a lot more 
money real fast. The companies are able to role out their 
services very fast. Your consumers get a lot of advantages very 
quickly, in terms of competition, new kinds of video being 
offered, better pricing.
    What would you think about that, just for starters. What is 
your response?
    Mr. Fellman.
    Mr. Fellman. Thank you, Congressman.
    You had said that you don't have a fully formed opinion. I 
have a partially formed opinion.
    Mr. Boucher. Okay. That is better than fully formed. 
Partially formed on both sides is good.
    Mr. Fellman. You know, I think it is a conversation worth 
having. I am not in a position today to say this is a great 
idea, or this is a lousy idea. I think the conversation would 
have to try to define what are those elements that are purely 
local. What are the local police powers? But I think if there 
is a way to streamline the process, it is absolutely 
appropriate to be talking about it.
    There is an analogy that is taking place right now, which 
is an initiative started by the National Governors Association. 
It talks about telecommunications taxation where the governors 
and the State legislators and local mayors and the 
telecommunications industry are talking about telecom tax 
reform. I think that has been a good process yet, and I hope it 
will be successful at some point.
    On the issue of franchising, however, I think there is a 
lot of people that need to be at the table and discussing it. 
And I want to make one clarification when I said 36,000. It is 
units of local government. Not all of those are franchising 
authorities, so I am not sure that I would agree with you that 
we have got 40,000 franchising--
    Mr. Boucher. I don't know either. I am just taking a number 
I know to be reasonably accurate in the Verizon territory and 
extrapolating from that.
    Mr. Fellman. You have mentioned two key issues, the 
compensation for the public rights of way and the peg channels, 
and if those were guaranteed to address local issues or local 
needs in some way, you know, that is a great start. I think 
there is--the only problem with public access issue that you 
mentioned that jumps right out at me, that when you say it 
would be guaranteed at the Federal level. Again, what is 
necessary in a small municipality that you represent may not be 
the same thing that is needed in a larger municipality. So 
somehow, there has got to be that local negotiation for what 
community needs are. Otherwise, in order to protect local 
franchising authorities, you have to error on the high side. 
And that is something that is not fair to the industry.
    Mr. Boucher. Well, this is open for discussion. I mean, 
obviously we would have to learn a lot more than we know today 
before we go forward. But I am encouraged by your response. I 
mean, it sounds like this is a conversation we might be able to 
have, and I look forward to working with you.
    Mr. Chairman, with your indulgence, let me just ask Mr. 
Billings, and then I see Mr. Davidson wants to respond, too.
    Mr. Billings. Thank you very much. I believe it is a 
conversation that if you do have it, we want to be a part of 
it. I guess I am sitting here in my mind wondering if there 
isn't sufficient manpower commitment to come into my community 
and negotiate a franchise agreement with me, is there going to 
be sufficient HR commitment to put in a system and service that 
system once it is franchised and be responsive to my customers.
    So I see your point and I know what you are driving at, but 
I think it is one we would thoughtfully want to reflect upon 
and be a part of the conversation as well.
    Mr. Boucher. Let me just add one more element to this. This 
could go on until dark, and I am not going to carry it on until 
dark, but it wouldn't upset me at all if you came back with a 
proposition that said we love being paid, we love the idea of 
peg channels, but clarify our authority to offer community 
networks at the same time, and now we might have a deal.
    And so if you came back with that kind of response, you 
wouldn't upset me in the slightest.
    Mr. Davidson.
    Mr. Davidson. Thank you, Congressman.
    Conversation is a great idea that has to occur. I also 
think that national rules would provide certainty to a whole 
host of new entrants who are wondering what is going to happen 
in various States. The government getting paid is a good thing. 
State and local governments need money.
    My concern is if right now in a region, hypothetically, a 
franchise fee revenue is $1 million. If new entrants come in to 
offer services, any sort of extension in franchising fee 
payment obligations, in my view, ought not reflect the new tax. 
The revenue ought not go up to $2 million; rather, it ought to 
be some allocation of that $1 million across a pool of 
similarly situated participants, unless the actual cost of 
local government goes up.
    Another sort of challenging area is you have got 
traditional cable, video-over IP, which has a capacity to 
compete with cable, and you have video-over fiber to the home 
or fiber to the node, which cable will say is closer to cable. 
What do we do, for example, when turn key programming--and it 
is out there, sort of full programming comes just over the IP 
network and it is not based upon any sort of location of 
facilities in an area, and there is just a company that is 
providing programming over the Internet.
    Mr. Boucher. I think we impose the same rules. I mean, that 
is my initial response to you.
    And by the way, let me add, I believe that whatever we do 
for telephone companies, we also have to do for cable. We have 
to be even handed about this.
    So there are real challenges in this subject matter. This 
may prove to be one of the most interesting and challenging 
aspects of our reform effort, but it is one I am sure we are up 
to, particularly with your participation.
    Mr. Chairman, my time expired a long time ago.
    Mr. Upton. Yes.
    Mr. Boucher. Thank you very much.
    Mr. Upton. And for a little while you were safe, because 
the other members hadn't returned, but they now have. And I 
would recognize Mr. Inslee for five minutes.
    Mr. Inslee. Thank you.
    Mr. Fellman, I just came in the last part of your answer to 
Mr. Boucher's question. I just wonder if you can flesh out a 
little bit for me, if we were going to go to, let us say, you 
knew today there was going to be a statewide or national kind 
of franchise standard. What are the parameters of where you 
would put in how many access channels, how many hours, how 
many, you know, build-outs, how many miles--I mean, what 
parameters would you have to have to meet sort of the menu item 
of where you are right now?
    Mr. Fellman. Congressman Inslee, your question, I think, 
discloses why this would be so hard to accomplish. Because the 
answer is different in every different community, so I don't 
know.
    Congressman Boucher asked if we can start that discussion, 
and I think I am always willing to talk about anything, you 
know. ``No'' is always an appropriate answer in any kind of 
debate or discussion, but I think it is inherently difficult, 
extremely difficult to come up with a national rule on how to 
meet the local needs of every municipality and county in this 
Nation.
    Mr. Inslee. So I am trying to get a flavor of how far the 
spread is, like in your State, what is the smallest number of--
let us start with number of access channels in a franchise--
    Mr. Fellman. That is easy, zero.
    Mr. Inslee. Zero.
    Mr. Fellman. Right.
    Mr. Inslee. Okay. So zero in your State? There is no access 
channels in--
    Mr. Fellman. Well, no, the smallest number.
    Mr. Inslee. Smallest number.
    Mr. Fellman. There are communities in my State that have no 
access channels.
    Mr. Inslee. And what is the highest number?
    Mr. Fellman. Well, I think Denver has eight or nine. Some 
of them are used internally for internal communications. It is 
somewhere in that range, maybe a few more or maybe a few less.
    Mr. Inslee. If you went around the country--I am just 
brainstorming here. I haven't thought through this. It doesn't 
mean I have bought any of this Kool-Aid at all, but I mean, if 
you were to go through and say well, if you looked at 
communities based on population size, when you get over a 
million you have--I wonder if you would find sort of fairly 
consistent patterns between population bases and number of 
access channels. Do you think you would, or not?
    Mr. Fellman. I don't think you would, and here is why: 
because it is not simply a function of population. And the 
example that I can give you from my State is the City of 
Durango in southwestern Colorado. A stand alone city, about 
40,000 people. They are out there by themselves. They are the 
big metropolitan area in southwestern Colorado. They have an 
incredibly robust government access and public access broadcast 
operation. They get private donations as well as city money and 
cable money that promotes this kind of programming, and it is 
widely watched in that community.
    The City of Lewisville, Colorado, same population, about, 
in metropolitan Denver. A very different community; part of a 
much, much larger metro area of two to three million people and 
growing, and the needs in that community are different. So the 
number of channels, the amount of money that you would want for 
equipment, the type of programming that you would want to be 
producing, you know, you can say that all councils are going to 
want to broadcast their city council meetings and their 
planning commission meetings, but beyond that, it changes 
dramatically from community to community, regardless of the 
population.
    Mr. Inslee. In the States, I am told that some States have 
statewide franchising protocols now. How would you characterize 
the differences there than other States that have really local 
decision making? Is there any way to generalize there or not?
    Mr. Fellman. A little bit. But now, we are getting a little 
bit out of my area of expertise. I know some States have more 
control in their local franchising. Others, like New York and 
New Jersey, the State will approve the franchise but the local 
government is allowed to and does, indeed, do the community 
needs assessment and negotiate based upon their local needs and 
ultimately, it just is given to the State to be adopted in 
accordance with State rules. So there are some heavy State 
control operations, and there are some partnerships where the 
local governments have a lot more control. So it just varies 
from State to State.
    Mr. Inslee. Does anyone else want to add to that at all?
    Ms. Munns. I will just add. I have a list of the States 
that do that. I know that they have varying models, and we 
would happy, if it would help the subcommittee, to try to 
provide that information.
    Mr. Inslee. That would be interesting. Thank you.
    Mr. Upton. Mr. Gonzalez is recognized for eight minutes.
    Mr. Gonzalez. Thank you very much, Mr. Chairman.
    Let us see if I can try to make sense of it all. Well, that 
is kind of impossible in Congress, but technology moves 
forward. Old technology is replaced or augmented or whatever by 
the new technology, and that is what we are really facing here.
    In the old days, what was a telephone company, what was a 
Bell, what was a cable company, and they call this--they had 
all these fancy names about convergences and such. But we have 
to find some answers working with the States and localities 
that have very legitimate interests.
    My concern is it really a monetary interest, the fees in 
any kind of form, or is it really what you all have referred 
to, public requirements, social needs, social regulations. And 
some of it can be very reasonable and legitimate, and others 
can really be quite burdensome and really interfere with what 
we have to do in this country in order to utilize that 
technology to its fullest and its greatest advantages.
    So I guess my question--and Mr. Fellman and Mr. Davidson in 
particular, because I was reading your testimony. I think you 
all touched on it more than anyone else. Is it--when you say 
local needs, social needs, social requirements, is that really 
the main consideration, or is it really one of fees? In other 
words, revenue sources. Because it is--I don't know how we 
reconcile some things, to be real honest with you. So that is 
the first question.
    And the second one, because what happens is time gets all 
used up, except I did get eight minutes here. Second question 
would be to Mr. Fellman. You said something that was really 
interesting, and I believe before we broke for votes, something 
to the effect that, I guess, if it is video coming in on IP, 
then it is cable. In other words, what is the final product 
that is being delivered or whatever it is, determines its 
nature, not the means or the method or whatever.
    And so when you all get through the first question about 
not the competing, but what weight do you put on fees, revenue 
sources, than these other needs, social needs and requirements?
    Mr. Fellman. Congressman Gonzalez, thank you.
    You know, I could be flippant and say the answer to your 
first question is yes, because they are both important. 
Clearly, if my city were to lose the franchise fees that we 
generate from cable, basically the rent that we charge private 
entities who use public property in order to generate a profit, 
it would be a huge hit on our general fund. It translates into 
police officers, it translates into library hours and rec 
centers and it would be a real hit on the local essential 
services that we provide. And frankly, I think it would be 
analogous, too, if the Congress said, you know, if it is all 
just about money, maybe we shouldn't option spectrum anymore. 
We want these services, maybe we should just give it away to 
the companies. It is the same thing. We are talking about our 
local public property; you are talking about Federal public 
property that the Congress has responsibility for. So the money 
is very, very important.
    But the social obligations are, as well, and I am intrigued 
by your comment that there are some that are very, very 
burdensome, and I think if we are going to have a discussion, a 
conversation going forward, I would be interested in if you 
have more specific questions of what those are and how they 
work, we would be happy to follow up with you and get you and 
the subcommittee more additional information.
    I think cable has been very successful. There is more 
broadband through cable systems than any other method, and they 
are the ones that have been following and abiding by these 
social obligations for many years, and yet, they have more 
penetration than any other source of broadband, as far as I am 
aware, in this country. So I don't think that they are too 
burdensome in order to allow our consumers to utilize these 
technologies.
    You have got to remember, cities and counties are some of 
the more larger and sophisticated users of these technologies 
as well. We don't want to slow down the process. We want the 
competition and the new technologies in as quickly as we can 
get them, but we think it is also important to maintain these 
social obligations. And I think they are all equally important, 
but would be happy to get more details to you if you have 
questions about specific ones.
    Mr. Gonzalez. Mr. Davidson.
    Mr. Davidson. Thank you.
    On the social requirements, my answer too would be yes to 
the question. But on the social requirements, I think what 
Congress has to ask itself is okay, what is the social pact 
that we are engaging into? Certainly, a 911 obligation or 
certain consumer protection regime wouldn't necessarily apply 
to a sky technology that you and I might just download on our 
computers to chat. But society has determined aside from the 
fact that telecommunications was provided by monopolies, that 
911 service is important. It is an important component of our 
society, so going forward, for those providers that may engage 
in a social contract may use North American numbers or do 
something else that is utilizing a public resource, it is fair 
to say, you know what, you probably need to come with a way to 
comply with a 911 standard.
    I think the money issue is very important, and I look at 
that from two angles. One angle, in Florida, State and local 
governments--local governments are scared to death that as 
these new technologies emerge and as customers move to these 
new technologies, they are going to lose revenue. They want--
many want to be able to tax VoIP that is a substitute for plain 
old telephone service, because they are afraid they are going 
to lose the revenue from that. Cable franchising authorities 
are really concerned about losing the franchising-free revenue 
as video over IP rolls out. If I disconnected my cable, and 
lots of folks in my area disconnected their cable because they 
could get the programming they want, whether it is all sports, 
all entertainment, whatever, over their IP network, that scares 
folks because cable is going to have a hard time competing. And 
if these new providers aren't paying the funds, government 
loses.
    But I look at the money issue from another angle as well. 
That, to me, is one compelling reason why we need a national 
policy on these issues.
    California just went through what, in my view, is a failed 
experiment with their California Bill of Rights. With all the 
best intentions, they came up with this regime that went all 
the way down to the detail of saying you must put your contract 
in 12 point Times Roman font. If every State engages in that 
type of regulation, well intentioned, you are going to have 
millions, if not billions, of additional costs that in a 
competitive market will get passed on to the consumer. It is 
going to come out of our pockets. I don't want my bills to go 
up because States have lots of good ideas. If we have good 
ideas, let us nationalize those. Let us have the conversation, 
talk about what the good ideas are, move forward with those, 
and perhaps have a safety valve so that when unanticipated 
situations come up, States do have the flexibility to address 
those issues.
    Mr. Gonzalez. Thank you. It is only one minute, and I can 
talk to Mr. Fellman later about the cable and voice and such, 
but I think I have other witnesses that wish to respond.
    Ms. Munns. I would just like to respond to what 
Commissioner Davidson just said about the failed experiment in 
California with the Bill of Rights.
    California began looking at a Bill of Rights for wireless 
because of the significant increase in complaints that they 
had. Their customer expectation was not being met, and they 
started looking at a Bill of Rights in order address this. As a 
result of that, the industry came forward and said let us take 
a crack at getting this solved voluntarily, and made 
significant strides to addressing some of the issues that had 
been raised. That Bill of Rights, that idea I don't think is 
going forward in California. And to that extent, I think that, 
you know, you can call it a failed experiment, but it did have 
a good result, and we didn't have to go to national standards 
to get some voluntary compliance on behalf of the industry.
    Mr. Gonzalez. Thank you all very much.
    Mr. Upton. Mr. Engel.
    Mr. Engel. Thank you, Mr. Chairman. Before I ask my 
question, I would like to acknowledge that Tom Dunlevey of the 
New York State Public Service Commission is in the room. I 
would like to welcome him.
    Obviously, we are soon moving to draft legislation to 
update our telecommunications laws, and as new technologies 
have made older ones obsolete, the rules and regulations that 
govern this industry need to be updated as well.
    The introduction of VoIP has really made a profound change 
in the industry and it is introducing rapidly a new level of 
competition to the voice market. Now soon, we will have a new 
level of competition in the video services market as well, and 
I am committed to personally getting this new competition 
swiftly into the market. But I believe that we need to ensure 
that there is a level playing field, a fair and level 
regulatory playing field, such as must carry public access 
channels and franchise fees and rates. I believe very strongly 
that consumers will benefit when there are multiple entrants 
into the market for communications services, whether it is 
voice or video. Cable is the dominant provider of video, and 
telephone companies are the dominant power of voice.
    So in line with that, I have a question I would like as 
many people who would like to answer it as possible to answer.
    So any of you see where we can streamline the process for 
getting more competitors into the voice and video markets, and 
specifically, what steps are your States or organizations 
taking, and what should we and the FCC--we meaning Congress and 
the FCC should be doing? If anybody would care to answer that, 
I would be grateful.
    Mr. Davidson. I will jump in just briefly on Florida's 
approach.
    Florida has taken the approach that if we remove some of 
these regulatory hurdles that market conditions will be created 
and folks will be encouraged to enter. So Florida has 
deregulated VoIP as provided that broadband, regardless of the 
provider platform is not subject to local government control. 
Recent legislation that is sort of making its way through both 
chambers makes clear that both of those platforms, however, 
remain subject to the State's generally applicable deceptive 
trade practices, consumer business protection, statutes, fraud 
statutes, so that customers sort of are protected and have a 
remedy.
    But what we have seen with that now is that the State is a 
target market for Verizon to come in and build out fiber to the 
home to deliver video. It is one of the largest markets for 
Vonage. We have numerous cable companies offering telephony, so 
we are trying to just sort of as a market principle, remove 
some of those hurdles to competition, and we are seeing in 
Florida that that competition is, in fact, occurring. And I 
know everyone would like to have it all here immediately, but 
there are clearly progressive steps that are occurring in 
Florida, and the competition is coming.
    Mr. Engel. Thank you.
    Mr. Perkins. Congressman. I am sorry.
    Mr. Engel. Go ahead.
    Mr. Perkins. I think as we pursue that area, we need to 
keep in mind that there are large rural areas in this country, 
including Iowa, where it is not economically feasible for cable 
providers or telephone providers to come in and put in DSL. In 
Iowa, we recently--our legislature passed legislation that 
deregulated over time the rates that Quest could charge for its 
residential phone rates, but as a quid pro quo, Quest was told 
you have to get DSL into a lot of different exchanges where you 
don't have it. Quest wouldn't go in there. It wasn't 
economically feasible.
    So while it is great to say in some of these areas, large 
metropolitan areas where everybody wants in, there are a number 
of areas where nobody wants in. The cable provider doesn't want 
to extend its cable out for four customers out in the 
countryside. DSL has limitations on how far it can go. I live 
in the City of Des Moines and I can't get DSL because I am more 
than three miles from a switch, but I am not certainly out in 
rural Iowa.
    So I think as the committee looks--the subcommittee looks 
at legislation, it is important to keep in mind that there are 
economies that these providers look at that dictate how much 
they want to do, and there needs to be incentives, I think, 
such as the Iowa legislature just provided to Quest, if you 
want this extra money, you better get your DSL in all of the 
exchanges in Iowa, rather than just the ones that you think you 
can make a lot of money at.
    Mr. Engel. Thank you.
    Mr. Fellman.
    Mr. Fellman. Congressman, I would like to give you an 
anecdotal example of what doesn't work, and then give you--
reiterate something that I said earlier that I think will.
    In Colorado in 1996, the same year that the Telecom Act was 
passed, our general assembly passed legislation that prohibited 
local governments in Colorado from being in the franchise 
business, if you will, with respect to any communications 
service other than cable television. No franchises on any kind 
of communications service other than cable, no charges for 
permit fees, other than the actual cost of administering the 
permit process. No requirements. Companies had the right to be 
basically on public property for free. Do we have more 
broadband in Colorado today than you have in New York or that 
you have in Iowa? Of course not, we don't. The market is going 
to dictate where these services are deployed, and rural 
Colorado ain't the market where they are being deployed first. 
Even outside of the highly concentrated metro area, that is not 
where they are. So to simply say we have got to make 
franchising go away is not going to solve the problem, because 
the companies are going to go where they can make a profit.
    And that brings me back to what Mayor Billings talked 
about, what I mentioned earlier. One way to encourage more 
deployment and more competition is for Congress to make 
absolutely clear in the next piece of legislation that comes 
out of this city that no legislation shall be passed that 
prohibits States or their political subdivisions from 
participating in a provision of telecommunications 
infrastructure and services. And when smaller rural communities 
start getting into the business and showing that it can be done 
and it can be done profitably, then the industry will follow.
    Mr. Engel. Thank you.
    Unless there is anybody else who cares to do--
    Mr. Upton. If you have another question, go ahead.
    Mr. Engel. Well, let me ask Mr. Quam.
    In your testimony, you mentioned the 911 systems and the 
need for new services to work with them. We all agree. I don't 
think there is anyone on this subcommittee or committee who 
wouldn't agree.
    But I want to ask you about the allowing the States to 
impose a fee on these services to support the 911 services. We 
had a situation in New York, you know, Congress has passed 
legislation to clean up the abusive 911 funds, but States can 
opt out if they forego Federal funding.
    So I would like to know, what are the States doing to 
ensure that taxes collected on these existing technologies are 
actually going to upgrade the 911 networks? Has the National 
Governors Association undertaken any kind of creating a 
transparent audit process for States to use? There was an 
instance in New York, actually, where I am from in the Bronx 
where there were four young boys who drowned off City Island. 
They called 911 on their cell phones, but they got through to 
911 but the center couldn't locate them because the 911 funds 
weren't used for their intended purpose. And so that is why I 
am asking this question. Have there been any studies or 
anything you can care to shed some light on this?
    Mr. Quam. The 911 services are absolutely critical to 
governors and States and having systems that work so when a 
consumer calls, they actually find an emergency provider that 
can find them. I think it is a priority issue for all 
governors.
    The National Governors Association, although we haven't 
taken on anything like auditing authority or that type of 
oversight, because these really are State programs, we have 
partnered with the FCC to try to help build some best practices 
and have e911 operators and implementers really talking to each 
other and see if we can't get these programs going.
    With regard to some of the issues regarding the fees that 
are collected, because they are State issues, really those 
decisions for the levels and the fees need to be made by the 
State. I do know that several States have made attempts to 
streamline that process or simplify those systems to make sure 
the money that they are collecting is the money that is needed 
to implement those systems. But from a national governor's 
perspective, the most important thing is actually getting 
systems up and running that work. And that is where most of the 
focus is.
    I think last year's legislation sent an important message 
from Congress regarding the use of those 911 fees. I think 
governors are on board with that being a real priority to have 
a system that is up and running, and that works.
    Mr. Engel. Thank you. Thank you, Mr. Chairman.
    Mr. Upton. Mr. Bass, you don't have further questions?
    Mr. Bass. Can I ask one more?
    Mr. Upton. Yes, you can.
    Mr. Bass. This may be pretty fundamental.
    Why do we need franchising for new cable services when we 
don't seem to need it for anything else that we provide, for 
example, wireless voice data? Anybody have some observation? 
What is the difference?
    Mr. Fellman. Congressman, the primary difference in at 
least some of the examples you just--comparison examples you 
mentioned are the use of public rights of way. We need to 
remember that the facilities that most of the cable systems are 
located on public property whose primary purpose is to safely 
and efficiently move traffic of all kinds. And when streets are 
dug up and not repaired properly, there is a whole host of 
problems from the surface problems with traffic safety issues 
to the problems caused by cuts in electric lines and gas and 
water pipes. So there is a whole lot of regulatory oversight 
inherent in the use of public rights of way for a private 
company to operate its business, when that clearly is not the 
primary use that that property was intended for.
    The other issues--and we have talked about them, so I don't 
want to be redundant--
    Mr. Bass. Yes.
    Mr. Fellman. --but the five percent franchise fee is not 
the only compensation for the use of that rights of way. I 
think Congress has, for a long time, recognized whether it be 
broadcasting where there were public interest obligations in 
return for use of the public airwaves, or the public set asides 
for satellites now, or the social obligations I have talked 
about and some of the other witnesses have talked about. With 
cable, a part of this is compensation and a recognition and a 
policy in this Nation that these media are essential tools for 
the use of our democracy by our citizenry. And I think that is 
an important concept to remember and to ensure that it 
continues with the new technologies we are going to be 
utilizing in the future.
    Mr. Bass. Okay.
    Mr. Upton. Well thank you. Thank you all for your 
testimony. We have had a number of hearings on this issue, as 
you and those in certainly the press know, but others that have 
watched. I think we have had four lengthy hearings over the 
last two months. I think that the record is a good one. Our 
goal is to have a bipartisan effort for sure, and continues 
that we will try to get this legislation to the House Floor by 
our August break. I am committed to seeing that we do that in a 
timely manner. And we appreciate your thoughts and interests, 
and the participation of all the members of this subcommittee.
    And with that, we stand adjourned.
    [Whereupon, at 4:19 p.m., the subcommittee was adjourned.]
    [Additional material submitted for the record follows:]

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