[Senate Hearing 109-855]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-855
 
                      NOMINATIONS TO THE FEDERAL 
 COMMUNICATIONS COMMISSION AND TO THE DEPARTMENT OF COMMERCE (NATIONAL 
                  TELECOMMUNICATIONS AND INFORMATION 
                            ADMINISTRATION)

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

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 12, 2006

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation



                    U.S. GOVERNMENT PRINTING OFFICE
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                     TED STEVENS, Alaska, Chairman
JOHN McCAIN, Arizona                 DANIEL K. INOUYE, Hawaii, Co-
CONRAD BURNS, Montana                    Chairman
TRENT LOTT, Mississippi              JOHN D. ROCKEFELLER IV, West 
KAY BAILEY HUTCHISON, Texas              Virginia
OLYMPIA J. SNOWE, Maine              JOHN F. KERRY, Massachusetts
GORDON H. SMITH, Oregon              BYRON L. DORGAN, North Dakota
JOHN ENSIGN, Nevada                  BARBARA BOXER, California
GEORGE ALLEN, Virginia               BILL NELSON, Florida
JOHN E. SUNUNU, New Hampshire        MARIA CANTWELL, Washington
JIM DeMINT, South Carolina           FRANK R. LAUTENBERG, New Jersey
DAVID VITTER, Louisiana              E. BENJAMIN NELSON, Nebraska
                                     MARK PRYOR, Arkansas
             Lisa J. Sutherland, Republican Staff Director
        Christine Drager Kurth, Republican Deputy Staff Director
             Kenneth R. Nahigian, Republican Chief Counsel
   Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
   Samuel E. Whitehorn, Democratic Deputy Staff Director and General 
                                Counsel
             Lila Harper Helms, Democratic Policy Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on September 12, 2006...............................     1
Statement of Senator Boxer.......................................     5
Statement of Senator Burns.......................................    10
Statement of Senator DeMint......................................     6
Statement of Senator Dorgan......................................     4
Statement of Senator Pryor.......................................    35
Statement of Senator Rockefeller.................................     3
Statement of Senator Stevens.....................................     1
Statement of Senator Sununu......................................     3

                               Witnesses

Burr, Hon. Richard, U.S. Senator from North Carolina.............     2
Kneuer, John M.R., Nominee to be Assistant Secretary for 
  Communications and Information; Administrator of the National 
  Telecommunications and Information Administration (NTIA), 
  Department of Commerce.........................................    17
    Prepared statement...........................................    19
    Biographical information.....................................    20
Martin, Hon. Kevin J., Renominated to be Chairman, Federal 
  Communications Commission......................................    10
    Prepared statement...........................................    12
    Biographical information.....................................    15

                                Appendix

Inouye, Hon. Daniel K., U.S. Senator from Hawaii, prepared 
  statement......................................................    41
Response to written questions submitted to John M.R. Kneuer by:
    Hon. Conrad Burns............................................    43
    Hon. Jim DeMint..............................................    45
    Hon. Daniel K. Inouye........................................    45
    Hon. Frank R. Lautenberg.....................................    47
    Hon. Bill Nelson.............................................    49
    Hon. Ted Stevens.............................................    42
Response to written questions submitted to Kevin J. Martin by:
    Hon. Conrad Burns............................................    84
    Hon. Maria Cantwell..........................................    76
    Hon. Jim DeMint..............................................    86
    Hon. Daniel K. Inouye........................................    52
    Hon. Frank R. Lautenberg.....................................    82
    Hon. Bill Nelson.............................................    61
    Hon. John D. Rockefeller IV..................................    58
    Hon. John E. Sununu..........................................    87
Wright, Frank, Ph.D., President/CEO, National Religious 
  Broadcasters (NRB), letters, dated September 11, 2006, to:
    Hon. Daniel K. Inouye........................................    41
    Hon. Ted Stevens.............................................    41


                      NOMINATIONS TO THE FEDERAL 
      COMMUNICATIONS COMMISSION AND TO THE DEPARTMENT OF COMMERCE 
                   (NATIONAL TELECOMMUNICATIONS AND 
                      INFORMATION ADMINISTRATION)

                              ----------                              


                      TUESDAY, SEPTEMBER 12, 2006

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10 a.m. in room 
SR-253, Russell Senate Office Building, Hon. Ted Stevens, 
Chairman of the Committee, presiding.

            OPENING STATEMENT OF HON. TED STEVENS, 
                    U.S. SENATOR FROM ALASKA

    Senator Stevens. Good morning. We have a hearing this 
morning on nominations from the President for the Chairman of 
the Federal Communications Commission and the nominee for the 
Assistant Secretary of Commerce for Communications and 
Information. We welcome all of you and thank you for coming, 
and thank the nominees for their willingness to serve.
    Kevin Martin is currently serving as Chairman of the FCC, 
and has been with the agency since 2001. Prior to joining the 
FCC, Mr. Martin served as a Special Assistant to the President 
for Economic Policy, as well as an advisor to FCC Commissioner 
Harold Furchtgott-Roth.
    Mr. Martin, I understand Senator Burr is here to introduce 
you this morning, and we look forward to his remarks.
    As many of you know, this Committee recently passed the 
communications reform bill which would address many of the 
policy issues that are also before the FCC, and we look forward 
to hearing from Chairman Martin about the agency's activities.
    John Kneuer has been nominated to be an Assistant Secretary 
of Commerce for Communications and Information. If confirmed, 
Mr. Kneuer will oversee the National Telecommunications 
Information Administration, which we call NTIA, and that is the 
principal advisor to the President on telecommunications 
information policy. Mr. Kneuer was named Deputy Assistant 
Secretary of NTIA in 2003, has been the Acting Assistant 
Secretary since Mr. Gallagher stepped down.
    NTIA is charged with carrying out a number of provisions in 
last year's budget reconciliation bill that impact both the DTV 
conversion and the $1 billion for interoperability grants for 
first responders.
    We understand that the nominees have family and friends 
today. We ask them to introduce their families as they come to 
the table.
    First, however, we'll hear from our colleague Senator Burr.

                STATEMENT OF HON. RICHARD BURR, 
                U.S. SENATOR FROM NORTH CAROLINA

    Senator Burr. Mr. Chairman, thank you. It is a good 
morning, and it's my pleasure to introduce the Chairman of the 
Federal Communications Commission, and my friend, Kevin Martin.
    I want to take this opportunity--and I will be brief--to 
strongly recommend that you confirm Kevin Martin as the next 
Chairman of the FCC.
    As the FCC Commissioner, Kevin's consistently served as an 
ambassador on behalf of the Commission at a time of great 
change and uncertainty in the world of telecommunications. He 
has a unique ability to bring together diverse groups, be they 
urban or rural or of opposing philosophies, and to forge 
consensus on complex issues. I've always found his door, as 
well as his mind, to be open to all who have had issues and 
concerns before the Commission.
    Throughout his tenure at the FCC, Kevin has had the best 
interest of the Commission at heart. And although our policy 
views have differed at times, he's always been thoughtful and 
diplomatic at exploring these differences. Kevin's vision of 
the industry he currently regulates, and his attention to 
details, make him eminently qualified and the best person to 
lead the Commission and help move this industry forward in the 
21st century.
    Hailing from my home State of North Carolina, I'm proud to 
call Kevin Martin a fellow North Carolinian, and also a friend. 
I will also be proud to call him Chairman, once again, when 
this committee acts. I trust, Mr. Chairman and my colleagues, 
that all the members of this committee will confirm Kevin 
Martin as the next Chairman of the FCC as expeditiously as we 
can.
    I thank the Chair, and I thank the Committee for their 
attention to what I believe is absolutely one of the most 
crucial sectors of our economy, and that's telecommunications, 
and the rules and the legislation that it takes for that to 
flourish in the days, weeks, months, and years ahead.
    I thank the Chairman.
    Senator Stevens. Thank you very much, Senator.
    Do you have any questions, Senator Rockefeller, of our 
colleague?
    Senator Rockefeller. No.
    Senator Stevens. We'll not ask you any questions, my 
friend. We appreciate your coming to join us.
    Senator Burr. Thank you, Mr. Chairman.
    Senator Stevens. Now, let me turn to Senator Rockefeller to 
see if he has an opening statement, first.

           STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Rockefeller. I'll make this very quick, Mr. 
Chairman.
    I guess I just need to say this directly--I don't think 
that we've had a real concentration on communications policy in 
this Administration. The President outlined a goal of universal 
broadband connectivity by 2007. Clearly, we're not going to 
meet that goal. We've fallen much farther behind Europe and 
Asia in the next-generation broadband deployment. I know that 
many in the industry say that they're doing all that they can, 
but I, frankly, would disagree. I think access to broadband 
communications has to be a matter for rural areas, as well as 
for urban areas. That is not an impossible thing. Wireless will 
one day take care of that, but it doesn't yet. But a full 25 
percent of my constituents in West Virginia have absolutely no 
access to any form of broadband. I think that Japan is now 
producing over 90 percent of the world's fiberoptic broadband 
deployment. However you want to look at it, it's very, very 
dramatic.
    So, I think we have to have an aggressive group of folks on 
the FCC. Chairman Martin is that, cares very much about these 
things. I fully support not only his nomination, but also the 
nomination of Mr. Kneuer.
    And I thank the Chairman.
    Senator Stevens. Thank you.
    Senator Sununu, do you have any opening comments?

               STATEMENT OF HON. JOHN E. SUNUNU, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Sununu. Yes, I do, Mr. Chairman.
    I appreciate the opportunity for the hearing--this is an 
important position--and certainly appreciate the introduction 
of Senator Burr, and would agree with Senator Burr that 
Chairman Martin, among the nominees that we're going to be 
hearing from today, is amicable, is thoughtful, and has tried 
to lead the Commission to the best of his ability.
    My concern, though, and the questions that I have today, 
have to do with policy and what kind of policies we're going to 
pursue, what kind of vision and leadership we're going to have 
at the FCC, given the current dynamic environment in 
telecommunications and Internet policy today.
    Chairman Martin will have an opportunity to provide 
testimony. I hope we have an opportunity for questions and 
answers. But, without a doubt, he has pursued policies to 
restrict marketing of Internet services in an age where those 
Internet voice services are growing and providing new 
opportunities for customers today. He's pushed to establish 
must-carry regulations for multicasting. He's advocated price 
controls on cable television. And all the while, I think it's 
fair to say, the Commission has failed to address some of the 
enormous inequities we see in the universal service system 
today. And this committee has had hearing after hearing about 
those problems, about the contribution factor, about weaknesses 
in distribution, about limitations in access in rural areas. 
And I think many of those problems fall on the shoulders of a 
Universal Service Fund that is failing to meet the valuable 
objective for which it was established. We've failed to address 
the access-charge regimes, which are antiquated. We have access 
charges of 10, 12, and 14 cents a minute, in parts of the 
country, that make no economic sense whatsoever.
    So, I do think these are significant problems in the policy 
direction that's been established for the FCC. They're issues 
that I've been outspoken on, but I think others in the House 
and Senate have raised them, as well. And these policies are 
particularly problematic in an environment where we have 
enormous growth in services, choices, options for customers, 
and new entrants. As a result, it's particularly problematic 
when the FCC seeks to protect existing business models or 
enforce specific business models on the industry. It's a 
dynamic environment; there are some people that don't like 
that. It's a very fragmented market; there are some people that 
don't like that.
    But I think it's good, from a consumer standpoint, that we 
have such a proliferation of services and choices on the 
Internet, choices and--channels and new products and new 
content being provided by satellite and by cable and by DSL. 
And it's a mistake to look at what we've had in the way of 
market structure in the past, or rules or regulations in the 
past, and say we automatically need to enforce these business 
models on any future competitors.
    There's a great deal of power vested in the FCC, and I 
think that that power needs to be used very judiciously. And I 
would hope that, in the comments and the responses we hear from 
the Chairman, it's made clear that in a dynamic environment we 
ought to exercise the utmost restraint in imposing new 
regulations that will adversely affect the competitive 
structure.
    Thank you, Mr. Chairman.
    Senator Stevens. Senator Dorgan, do you have any opening 
comments?

              STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. Mr. Chairman, I do.
    Mr. Chairman, the position of the Chairman of the Federal 
Communications Commission is an incredibly important position. 
I like Kevin Martin, the Chairman. We've had a chance to meet 
and talk. I hope to be able to stay; we have an Energy 
Committee hearing going on, and I hope to stay long enough to 
ask a series of questions--I'm very concerned about what 
happens at the Federal Communications Commission, for reasons, 
perhaps, in some cases similar, in some cases different than my 
colleague has just explained.
    In 2003, the FCC began revising media ownership rules. They 
came up with a rule that would have said in America's larger 
cities it's OK for one company to own eight radio stations, 
three television stations, the dominant newspaper, and the 
cable company, all under the same ownership. It's not all right 
with me. I don't think it's all right with other people in this 
country. That is vesting far too much power in increasingly 
concentrated media.
    It's vesting far too much power in a few hands. We have 
about four or five hands in this country in which most of the 
media exists, and this would further concentrate it. I think 
it's a horrible mistake.
    Chairman Martin has announced that he intends to begin new 
media ownership rule considerations now. Senator Trent Lott and 
I have sent him a rather lengthy letter about that. My hope is 
that this committee will address that very aggressively. 
Chairman Martin was a part of a majority that created those 
rules that the Court had stayed. My hope is that we will see a 
different type of ownership rule proceeding come out of the 
FCC, and a different result, because I think the result they 
were headed toward is a result that increases concentration, 
increases the power in the hands of a few, and is, I think, 
devastating to the future of communications in this country.
    So, I hope to be able to be here long enough to ask 
Chairman Martin a series of questions. I appreciate him being 
here. I welcome his family. And I look forward to the 
discussion.
    Senator Stevens. Senator Boxer?

               STATEMENT OF HON. BARBARA BOXER, 
                  U.S. SENATOR FROM CALIFORNIA

    Senator Boxer. Thank you very much, Mr. Chairman, for 
holding hearings on these two very important nominations.
    I would like to welcome Chairman Martin. And I hear his 
daughter is communicating very freely or--is that your daughter 
or--OK, your son.
    The FCC has the vast responsibility of regulating 
interstate communications. And now, more than ever, Americans 
rely upon various forms of communications to enrich their lives 
and to conduct their daily business. Whether watching TV or 
making a call or accessing the Internet, consumers rely on the 
FCC to be the watchdog over the companies providing these 
services. And I think that's really worth repeating. Consumers 
are counting on the FCC to be the watchdog over the companies 
providing these services. Companies have a voice. The consumers 
often find they don't.
    Currently, there are a number of communications and media 
issues before the FCC that are of particular interest to the 
public. These include the FCC's media ownership proceeding, 
reports that companies are turning customer phone records over 
to the Federal Government without a warrant, and net 
neutrality. All of these are very hot-button, tough issues.
    I'm deeply concerned that a loosening of the media 
ownership rules will allow already-large media corporations to 
grow. These media giants already use--I kind of want to play 
with the baby--is what's going on.
    [Laughter.]
    Senator Boxer. I am deeply concerned that a loosening of 
the media ownership rules will allow already-large media 
corporations to grow. These media giants already use multiple 
media outlets to promote their views and dominate public 
debate. Americans have made it clear that a diversity of 
viewpoints and localism are extremely important to them, and I 
hope the Commission listens.
    On August the 10th, I sent Chairman Martin a letter urging 
him to conduct a public hearing in California regarding its 
recently released media ownership Further Notice of Proposed 
Rulemaking. I'm very pleased that the Commission just announced 
that its very first field hearing will be held in Los Angeles 
on October the 3rd. And, having said that, I hope the 
Commission will now pay attention to the public at these field 
hearings.
    It's also vital that the FCC aggressively protect the 
privacy rights and reasonable expectations of consumers. 
Reports that telephone companies are handing customer 
information over to the government without a warrant are very 
troubling, and I hope that the Commission will examine any 
allegations of such activity.
    As the head of the FCC, Chairman Martin is in a unique 
position to influence the Commission's activities. I have a 
number of questions regarding these issues and other issues, 
and look forward to hearing his answers.
    And I also welcome Mr. Kneuer. He's been nominated to head 
the National Telecommunications and Information Administration, 
an agency less known to the general public. But as a result of 
the Deficit Reduction Act, the NTIA has been charged with a 
number of new and important projects, including the 
establishment of a $1 billion program to promote interoperable 
communications, something I think we all agree has to happen, 
and the establishment of a program to distribute analog-to-
digital converter boxes, another very important project. So, 
I'm very interested in hearing from Mr. Kneuer about NTIA's 
progress on implementing these important programs.
    Mr. Chairman, again, thank you for holding these hearings, 
and I look forward to hearing from these nominees.
    Senator Stevens. Senator DeMint, do you have an opening 
statement?

                 STATEMENT OF HON. JIM DeMINT, 
                U.S. SENATOR FROM SOUTH CAROLINA

    Senator DeMint. Thank you, Mr. Chairman.
    Chairman Martin, I commend you on your renomination to the 
FCC. I am very interested in a lot of what you've been involved 
with, but I want to mention one thing, particularly, today, 
very quickly, if I can skip around in my statement.
    I have been working on, along with a number of members of 
this committee for the last year, an emergency alert upgrade 
system called the WARN Act. It has passed the Committee here, 
and, with the help of Chairman Stevens and Ranking Member 
Inouye, Ben Nelson, and others on this committee, it is headed 
for the floor today to be added to the port security bill. The 
same bill is being done on the House side by Congressman John 
Shimkus.
    And my concern, at this point, is, the FCC has proceeded 
with rulemaking on an emergency alert system, similar to the 
WARN Act, which would set up a mandatory structure which we 
believe would diminish the potential of a new emergency alert 
system using wireless technology all across the country. In a 
number of hearings and meetings with the wireless networks 
across the country, the potential of competition for the best 
system is clearly there. And my fear is, if the FCC moves ahead 
with its own mandates, that we'll end up with another 
government top-down, one-size-fits-all system that does not use 
the innovative possibilities that we have.
    As many of you know who have worked on this bill, the 
ability, in the event of a terrorist attack or a hurricane, 
tornado, earthquake, to use wireless technologies to not only 
be warned of a possible disaster, but to use NOAA information 
of wind directions and other available information to tell 
people which way to evacuate, where food and shelter is, a lot 
of other information that we've seen in Katrina and other 
problems, that is not currently available. I believe that if 
this Federal Government sets up the infrastructure to provide 
these signals and warnings, that our free-market economy can 
create the best delivery systems that the world has ever seen.
    And my request today, as we have done to your folks 
already, is to delay this rulemaking until we see what Congress 
finishes here before the end of the year, so that we can 
capture the will of the Congress instead of a mandate of the 
FCC.
    And, again, I look forward to your confirmation, but would 
request, I think, as others have today, that we let the free 
market work and use government mandates only as the last 
resort.
    Thank you, Mr. Chairman. I yield back.
    Senator Stevens. Senator Pryor, do you have any comments?
    Senator Pryor. I don't, Mr. Chairman, thank you.
    Senator Stevens. Would the Chairman and Mr. Kneuer please 
come to the table? Thank you.
    As Senator DeMint has just said, his amendment is pending 
on the floor at 10:30, and I will have to leave at that time.
    Mr. Chairman, would you please introduce your family for 
us?
    Mr. Martin. Yes, Mr. Chairman.
    Let me start with my mother, who's here with us today and 
my older sister, Pam. And my wife and our new son, Luke, have 
just come back in the room, as Senator Boxer was indicating. 
He's been anxious to communicate with all of you, as well.
    [Laughter.]
    Mr. Martin. So, I'm sure that he will probably continue to 
try to do so. But I do want to thank my mother and my sister 
for being here, and for all of their support in the past, and 
certainly my wife for all of her support, without which I 
wouldn't be able to be here and do the things at the Commission 
that are required. And I do want to make sure and emphasize 
Luke, whose birth has certainly been the most exciting thing 
over the last year to happen to our family.
    Thank you.
    Senator Stevens. Thank you.
    Senator Burns. How old is Luke?
    Mr. Martin. He's 10 months old.
    Senator Burns. Send him up here. I know how to quiet him 
down.
    [Laughter.]
    Senator Stevens. You can give him to me. You could have 
more; I can't.
    [Laughter.]
    Senator Stevens. Mr. Kneuer.
    Mr. Kneuer. Thank you, Senator.
    I've got a cast of thousands here. First and foremost, my 
lovely and very patient wife, Mimi, my daughter, Christine. 
I've got the two Josephs, my son and my father. My mother is 
here--they came from New Jersey--as well as my brother and 
sister-in-law, Paul and Melissa Kneuer. And, by a happy 
coincidence, my mother-in-law's sisters were in town from Texas 
to see Washington. They're getting a bit of an interactive tour 
they weren't expecting, but I'm glad that they could be here, 
as well. We also have our children's nanny, Margaret Bedawa, 
who is a dear member of the family, as well. And my sister, 
Ann. And my sister Ann.
    [Laughter.]
    Senator Stevens. Well, you're very fortunate to have such a 
lovely family. We welcome you.
    And I want to take the prerogative of the Chair to turn 
this over to Senator Burns in just a minute. If I may, I'd just 
like to ask a couple of questions before I go manage the bill 
on the floor.
    Mr. Chairman, net neutrality was the most hotly debated 
portion of our communications bill. And it is the subject 
that's holding up the communications bill, and may well lead to 
its total defeat this year, after 19 months of work on that 
bill.
    I want to ask you, Have you seen any abuse by cable 
companies or telephone companies in providing access to the 
Internet? And do you have a system in place for monitoring and 
identifying any such abuses?
    Mr. Martin. Well, Mr. Chairman, as you know, the Commission 
adopted a set of net neutrality principles last August in which 
we talked about the importance of consumers being able to have 
access to all of the information that's available for free over 
the Internet. And we continue to make sure and monitor the 
situation in the marketplace to see if we've identified any 
particular problems. And there has only been one instance 
that's been brought to the Commission's attention, where there 
was a telephone company that had been preventing consumers from 
getting access to some of the content that's available on the 
Internet, and the Commission took action in that instance. We 
were able to reach an enforcement agreement with them to stop. 
So, we reacted swiftly to it.
    And so, I think that the Commission has continued to 
monitor the marketplace, has been vigilant about it, has tried 
to continue to make sure that we are enforcing the net 
neutrality principles, to make sure that consumers aren't 
having access blocked.
    I am, obviously, aware of the debate that has occurred 
within this Committee on net neutrality. Certainly one of the 
helpful proposals that I think was included in your bill was 
the prospect of the Commission continuing to do ongoing 
monitoring, including officially issuing a notice asking for 
people to comment and identify any other problems that might be 
occurring, even if they haven't been brought to us in the 
context of a complaint. And so, I have asked the staff to 
prepare a notice seeking public comment on that, just as the 
draft legislation that came out of this committee would 
propose.
    But I think we do have in place some steps to monitor the 
situation.
    Senator Stevens. Do you think you have any existing 
authority to take action if a problem develops before this bill 
becomes law?
    Mr. Martin. I do. The Commission, I think, does have 
authority, under Title I of the Communications Act. And, 
indeed, last summer the Supreme Court, in affirming the 
Commission's Brand X decision determining that cable modem 
service is an information service, stated that the Commission 
had ancillary authority to adopt additional rules over the 
infrastructure providers of broadband access, if they needed 
to. So, I think we do have that authority.
    Senator Stevens. In our bill, we develop a new concept for 
universal service and eliminate the concept that only long-
distance users pay into the Universal Service Fund. You have 
discussed a reverse auction concept whereby rural telephone 
companies, wireless companies, and other competitors would 
compete for the right to use the Universal Service Fund's 
support. The rural telephone companies in my state have serious 
problems with that concept. Could you explain that? And is this 
something you believe you could do without any further 
authorization?
    Mr. Martin. Well, there are significant problems with the 
Universal Service Fund, both with the number of carriers and 
providers that contribute into the fund and with the way that 
the current resources are distributed. The Commission has tried 
to take action on both. And I think that there are additional 
steps we need to take on both, both broadening the base of 
people that are contributing, to make sure that we've got an 
assessment rate on a broad base that's as low as possible. 
There are various proposals in front of us. I've talked, in the 
past, about trying to assess fees based upon telephone numbers. 
But I also think we need to do some additional work on the 
distribution side.
    Currently, we've seen a significant increase, just during 
my time at the Commission, on the number of carriers that are 
receiving so-called ``competitive Universal Service grants.'' 
When I arrived at the Commission, those grants totalled less 
than a million dollars. There is close to a billion dollars 
being distributed to competitive carriers today. That's putting 
an incredible strain on the Universal Service Fund, and I think 
that we need to make sure that we are distributing Universal 
Service resources in the most efficient manner possible.
    I grew up in a rural area of North Carolina. My mother 
still lives on the gravel road where I grew up. My address was 
Rural Route 3, Waxhaw, North Carolina, when I was growing up. 
So, I appreciate and understand how important it is to make 
sure that people in rural areas don't get left behind, but we 
have to do so in the most efficient manner possible. I think a 
reverse auction methodology is a serious proposal we should 
consider.
    Senator Stevens. Well, by definition, an entity with a 
fixed system, embedded system, having a wireless competitor 
would always lose. If you put it on a competitive basis, I 
don't see how existing technology can possibly survive against 
new technology, so you automatically have a revolving door, as 
far as Universal Service is concerned.
    Mr. Martin. I hope that we develop a system that actually 
encourages the development and deployment of the best new 
technologies. We should be determining the adequate level of 
service that people in rural areas deserve to have. But then, 
we want to make sure that we have a system that doesn't freeze 
in place one set of technologies, but, rather, encourages the 
most efficient technology to be able to go in and serve those 
consumers. So, I think that we need to make sure that we don't 
do so in a way that causes significant problems for carriers. 
We need to have it over a lengthy enough period of time to 
allow them to recover the resources that they've invested. But 
I think that we want to have a system that encourages the 
deployment and moving to new, more efficient technologies.
    Senator Stevens. But if a small rural carrier in a small 
community that's met the needs of that community for years is 
facing a national company that comes in and wants just to 
replace it completely with a wireless system, and do that 
nationally, the larger company has got enormous advantage over 
the local provider. I would hope you really take a look at the 
concept of continuity and, really, community presence, because 
the absentee owner, once they get the ability to serve, they 
have no further interest in that community, as the local 
provider who started the system, does. And I really think that 
it's going to be a system whereby the existing local providers 
are just going to be wiped off the map. And I hope that's not 
the case.
    Mr. Kneuer, I do apologize for mispronouncing your name at 
the beginning. I have a question for you concerning the 
question of the DTV converter boxes. I'll give it to you and 
hope you'll answer it for the record.
    And, again, I must go and turn this over now to Senator 
Burns, who will chair the Committee.
    I failed to do this. Commissioner McDowell and Commissioner 
Adelstein, we appreciate your being here. I think it's one of 
the few times you've been present at the same time.

                STATEMENT OF HON. CONRAD BURNS, 
                   U.S. SENATOR FROM MONTANA

    Senator Burns. [presiding] Well, did we have opening 
statements by the appointees?
    Mr. Martin. No.
    Senator Burns. Do you have an opening statement, Mr. 
Chairman?
    Mr. Martin. I do.
    Senator Burns. Maybe we should go to those opening 
statements. And could you keep them short, while I attain the 
batting order up here?
    Mr. Martin. OK.
    Senator Burns. If you would, please, and thank you very 
much. Your full statement will be made part of the record.

STATEMENT OF HON. KEVIN J. MARTIN, RENOMINATED TO BE CHAIRMAN, 
               FEDERAL COMMUNICATIONS COMMISSION

    Mr. Martin. Thank you, Mr. Chairman and all the Members of 
the Committee, for this invitation to be here with you this 
morning. I want to thank Senator Burr for his introduction, and 
Commissioner McDowell and Commissioner Adelstein for their 
presence this morning.
    I do have a brief opening statement and then look forward 
to answering your questions.
    Senator Burns. You might want to pull that microphone a 
little closer.
    Mr. Martin. I've been fortunate to serve on the Federal 
Communications Commission for over 5 years, and I've had the 
opportunity to serve as the agency's chairman since March of 
last year. The job is not easy, and is, at times, a very 
humbling experience, but it has also been an enormous 
privilege, and it would be an honor to continue to serve the 
American people for a second term.
    As I told this Committee 5 years ago, I recognize that the 
FCC is an independent agency and a creature of Congress. Our 
highest priority, therefore, is to implement the will of 
Congress. If reconfirmed, I'll continue to look to this 
Committee and to Congress for advice and guidance.
    When I came before this committee for my first confirmation 
hearing, I was asked to make several commitments, all of which 
I feel I have fulfilled. Senator Stevens asked me to visit 
Alaska. Over the last few years, I've had the privilege of 
visiting Alaska several times. The vast beauty was 
breathtaking, and the communication challenges facing its 
citizens were eye-opening. Senator Rockefeller, you made me 
promise to protect the Schools and Libraries Program, which I 
have faithfully done. And finally, Senator Dorgan, you asked me 
to have children so that I could fully understand the 
importance of media from the perspective of a parent. Senator 
Dorgan, I'm proud to introduce you to my son, Luke, who was 
born last November.
    [Laughter.]
    Mr. Martin. As you know well, the communications industry 
is going through a time of unprecedented change. Television 
programs are sold on the Internet and streamed wirelessly to 
mobile devices. Teenagers use IM and MySpace, not the 
telephone. DVRs mean you can watch your favorite TV program 
whenever you want. And mobile phones show movies, play songs, 
and photograph your kids. In this fast-paced technological 
environment, regulations often struggle to keep up.
    If reconfirmed, I would continue to make decisions based on 
the fundamental belief that a robust, competitive marketplace, 
not regulation, is ultimately the greatest protector of the 
public interest. Competition drives prices down and spurs 
innovation, creating better products, and at lower prices.
    Government, however, still has an important role to play. 
We should focus on creating a regulatory environment that 
promotes investment and competition by setting the rules of the 
road so that players can compete on a level playing field. And 
we must be vigilant in our protection of the consumer interest, 
quick to act when it might be harmed.
    In the last 18 months, the Commission has worked hard to 
create a regulatory--or, rather, a deregulatory environment 
that promotes broadband deployment. We have removed legacy 
regulations, like tariffs and price controls, which discourage 
investment in broadband networks. We have also worked to create 
a level playing field among broadband platforms so that high-
speed Internet access offered by phone companies is treated the 
same as high-speed Internet access offered by cable companies. 
And we have begun to see some success as a result of these 
policies.
    A recent Pew research report found that the number of 
Americans with broadband at home has increased by 40 percent 
from March 2005 to March 2006, twice the growth rate of the 
year before. And according to the study, the prices of 
broadband service have also dropped.
    But perhaps most important, the study found that the 
significant increases in broadband adoption were widespread, 
increasing by 70 percent among middle-income households and 
those without a high school diploma, and by over 120 percent 
among African Americans.
    I also believe that the government must act when doing so 
is necessary to achieve broader social goals. While eliminating 
economic regulations, we must recognize that there are issues 
that the marketplace alone might not fully address. Government 
should ensure that people with disabilities still have access 
to communications, that people in rural areas, schools, and 
libraries have access to affordable current technology, and 
that the local police and fire department can communicate 
seamlessly during a crisis.
    As memories of Hurricane Katrina and 9/11 continually 
remind us, basic public-safety requirements must be met. We 
must ensure that the public has the tools necessary to know 
when an emergency is coming, and to call for help, that the 
police, fire, and rescue can communicate seamlessly, and that 
commercial services can be quickly restored when a disaster 
strikes. The Commission has taken important steps to ensure 
that public safety keeps pace with the technological 
advancements in communications.
    During my tenure as Chairman, the Commission has taken a 
balanced approach to policy, eliminating burdensome economic 
regulations while protecting consumers and preserving our 
broader social goals. But I am perhaps most proud of the fact 
that my colleagues and I have been able to achieve such a 
balanced approach in a bipartisan, collegial manner.
    Thank you very much for your time and for your attention 
this morning. I appreciate the opportunity to share with you 
some of the recent progress the Commission has made, and I look 
forward to your questions.
    [The prepared statement and biographical information of Mr. 
Martin follow:]

Prepared Statement of Hon. Kevin J. Martin, Renominated to be Chairman, 
                   Federal Communications Commission

    Good morning Chairman Stevens, Co-Chairman Inouye, Members of the 
Committee. Thank you for this invitation to be here with you this 
morning. I have a brief opening statement, and then I look forward to 
answering any questions you may have.
    I have been fortunate to serve at the Federal Communications 
Commission for over 5 years, and I have had the opportunity to serve as 
the agency's Chairman since March of 2005. This job is not easy; it is 
at times a very humbling experience; but it also has been an enormous 
privilege. It would be an honor to continue to serve the American 
people for a second term.
    As I told you 5 years ago when first before this Committee, I 
recognize that the FCC is an independent agency and a creature of 
Congress. Our highest priority, therefore, is to implement the will of 
Congress. If reconfirmed, I will continue to look to this Committee and 
the Congress for advice and guidance.
    As you know well, the communications industry is in a time of 
unprecedented change. Technological advances, converging business 
models, and the digitalization of services create unparalleled 
opportunities and considerable challenges. Television programs are sold 
on the Internet and streamed wirelessly to mobile devices; teenagers 
communicate over IM, SMS and MySpace, not the landline phone; DVRs mean 
you watch your TV when and where you want; mobile phones show movies, 
play songs, photograph your kids, and even send you emergency messages. 
In this fast-paced technological environment, regulations struggle to 
keep up.
    If reconfirmed, I would continue to make decisions based on a 
fundamental belief that a robust, competitive marketplace, not 
regulation, is ultimately the greatest protector of the public 
interest. Competition is the best method of delivering the benefits of 
choice, innovation, and affordability to American consumers. 
Competition drives prices down and spurs providers to improve service 
and create new products.
    Government, however, still has an important role to play. The 
Commission should focus on creating a regulatory environment that 
promotes investment and competition, setting the rules of the road so 
that players can compete on a level playing field. For example, high-
speed Internet access offered by a phone company should be treated the 
same way as high-speed Internet access offered by a cable operator.
    Government also must act when necessary to achieve broader social 
goals. Thus, while I support eliminating economic regulations, I 
recognize that there are issues that the marketplace alone might not 
fully address. For instance, government should ensure that people with 
disabilities have access to communications in the same manner as all 
Americans, that people in rural areas, schools and libraries have 
access to affordable, current technology, and that the communications 
needs of the public safety community are met.
    During my tenure as Chairman, the Commission has taken important 
steps to remove economic regulations and encourage the deployment of 
new technologies while protecting consumers and preserving these 
broader social goals.
Increasing Broadband Deployment
    I have made broadband deployment my highest priority at the 
Commission. Broadband technology is a key driver of economic growth. 
The ability to share increasing amounts of information, at greater and 
greater speeds, increases productivity, facilitates interstate 
commerce, and helps drive innovation. But perhaps most important, 
broadband has the potential to affect almost every aspect of our lives. 
It is changing how we communicate with each other, how and where we 
work, how we educate our children, and how we entertain ourselves.
    During my tenure as Chairman, the Commission has worked hard to 
create a regulatory environment that promotes broadband deployment. We 
have removed legacy regulations, like tariffs and price controls, that 
discourage carriers from investing in their broadband networks, and we 
worked to create a regulatory level playing-field among broadband 
platforms.
    We have begun to see some success as a result of the Commission's 
policies. A recent report from Pew Internet and American Life Project 
found that the number of Americans with broadband at home increased 40 
percent from March 2005 to March 2006 (from 60 million in March 2005 to 
84 million in March 2006), twice the growth of the year before. And, 
according to the study, the price of broadband services has also 
dropped in the past 2 years. But perhaps most important, the study 
found that the significant increases in broadband adoption were 
widespread and cut across demographics. According to this independent 
research:

   Broadband adoption grew by almost 70 percent among middle-
        income households (those with incomes between $40,000 and 
        $50,000 per year).

   Broadband adoption grew by 120 percent among African 
        Americans.

   Broadband adoption grew by 70 percent among those with less 
        than a high school education.

   Broadband adoption grew by more than 60 percent among senior 
        citizens.

   Broadband growth in rural areas was also brisk (39 percent), 
        although overall penetration rates in rural areas still lag 
        behind those in urban areas.

    In addition, wireless services continue to grow dramatically. 
Today, wireless competition is robust, with over 90 percent of the 
people in this country living in areas where there are at least four 
cell phone providers. And increasingly, wireless is not just voice, it 
is also data. Blackberries, hand-held devices, and laptops are 
increasingly providing broadband connections using traditional 
cellular, WiFi, and WiMax technologies.
    While we continue to further reduce the burden of economic 
regulation on the telecommunications sector, the Commission has worked 
also to ensure that law enforcement, public safety, and other public 
interest needs are met.

Ensuring Public Safety and Emergency Preparedness
    When I first became Chairman, I identified public safety and 
emergency preparedness as another top priority. As memories of 
Hurricane Katrina and 9/11 continually remind us, one of our most 
important objectives is to ensure that basic public safety requirements 
are met. We must make sure that the public has the tools necessary to 
know when an emergency is coming and to contact first responders. And 
we must enable first responders to communicate seamlessly. We have 
taken steps to ensure that public safety keeps pace with the 
technological advancements in communications.
    For instance, last year the Commission expanded its emergency alert 
system rules to include a broader array of technologies, including 
providers of digital broadcast and cable TV, digital audio 
broadcasting, satellite radio, and direct broadcast satellite services.
    In addition to making sure that people are alerted to impending 
emergencies and disasters, we must also ensure that Americans are able 
to call for help when they need it. That means that new technologies 
must be able to communicate with emergency operators.
    As these new communications technologies come into use, the 
Commission also has worked to ensure that law enforcement continues to 
have the necessary tools to obtain appropriate access to them.
    Finally, we recognize that wireless communications are vital to 
Federal, state, and local emergency first responders. We have taken 
steps over the past year to help ensure that public safety authorities 
have access to sufficient spectrum to meet their needs.

Serving Those With Disabilities
    Accessing communication services is vital to the ability of the 
individuals with disabilities to participate fully in society. With the 
passage of the Americans with Disabilities Act in 1990, the Commission 
was directed to ensure that hearing or speech disabilities not pose a 
barrier to participating in today's communication revolution.
    The Commission has taken a number of important actions over the 
past year to fulfill our statutory goal of ensuring that every person 
has equal access to this Nation's communications services. These 
actions include initiating a proceeding to explore solutions for the 
disabled to access 911 services; extending video relay services; 
providing Federal support for the provision of Spanish video relay 
service, allowing persons who communicate in sign language to 
communicate with those who speak Spanish; and providing for the Federal 
certification of carriers, which increases competition and facilitates 
more provider choices for consumers.

Maintaining Universal Service
    The United States and the Commission have a long history and 
tradition of making sure that rural areas of the country are connected 
and have the same opportunities for communications as urban areas. In 
the 1996 Act, Congress explicitly required that the Commission ensure 
that consumers in all regions of the Nation have access to services 
that ``. . . are reasonably comparable to those services provided in 
urban areas.'' Specifically Congress required the Commission to 
establish Universal Service Fund mechanisms that are ``. . . specific, 
predictable and sufficient . . . to preserve and advance universal 
service.''
    Changes in technology and increases in the number of carriers who 
are receiving Universal Service support have placed significant 
pressure on the stability of the fund. Over the past year, the 
Commission has taken several steps to ensure a sufficient and 
sustainable mechanism to collect and disburse funds in an efficient 
manner. As a result of our actions, the Universal Service contribution 
rate has decreased from over 11 percent to 9 percent. The Commission is 
also actively considering establishing a contribution system that is 
more technology neutral, and a distribution mechanism that is more 
efficient. The Commission remains committed to pursuing fundamental 
Universal Service contribution and distribution reform as needed.

Managing the Agency
    Since becoming Chairman last year, I have been most proud of the 
collaborative manner in which my colleagues and I work. For the first 
14 months of my tenure, we had two Republicans and two Democrats, and 
we were able to tackle extremely complex and controversial issues in a 
collegial, bipartisan manner. Even since we have had a full complement 
of Commissioners, almost every Commission item has had bipartisan 
support. We continue to work together effectively to address the broad 
range of day to day management issues and respond to the more 
extraordinary challenges we face.
    For example, the Commission is responsible for managing spectrum, 
an invaluable public resource. We have worked hard to improve our 
auctions processes to ensure more efficient distribution and use of 
spectrum resources. This market-driven approach maximizes the benefits 
to American consumers by making spectrum available for widespread 
deployment of new innovative wireless services. Today, the Commission 
is currently auctioning 90 MHz of spectrum for advanced wireless 
services. To date, the auction has raised more than $13.85 billion. The 
Commission had sold nearly all of the available licenses (1,082 out of 
1,122) to 105 different bidders, more than half (57) of which are small 
businesses. The licensing rules for this spectrum included some 
smaller, more manageable license areas that can facilitate access to 
spectrum by entities seeking to provide service to rural areas.
    During the past year, the Commission has also met unprecedented 
management challenges. In the face of Hurricanes Katrina, Rita, and 
Wilma, the agency responded quickly and comprehensively in meeting 
government, industry, and consumer needs. The Commission staff worked 
around the clock to cut bureaucratic ``red tape,'' reach out to the 
impacted industries, and help identify resources for use by disaster 
personnel. We granted more than 90 requests for Special Temporary 
Authority and more than 100 temporary frequency authorizations for 
emergency workers, organizations, and companies to provide wireless and 
broadcast services in the affected areas and shelters around the 
country. In most cases, these requests were granted within 4 hours, 
with all requests approved within 24 hours. We are working hard to 
implement the lessons learned from Hurricane Katrina.
Conclusion
    Thank you for your time and attention today. I appreciate the 
opportunity to share with you some of the recent progress the 
Commission has made. With that, I would be happy to answer any 
questions you may have.
                                 ______
                                 
                      A. BIOGRAPHICAL INFORMATION

    1. Name (Include any former names or nicknames used): Kevin Jeffery 
Martin.
    2. Position to which nominated: Member, Federal Communications 
Commission.
    3. Date of Nomination: April 25, 2006.
    4. Address (List current place of residence and office addresses):

        Residence: (Information not released to the public).

        Office: 445 12th Street, SW, Washington, DC 20554.

    5. Date and Place of Birth: December 14, 1966; Charlotte, North 
Carolina.
    6. Provide the name, position, and place of employment for your 
spouse (if married) and the names and ages of your children (including 
stepchildren and children by a previous marriage).

        Catherine Jurgensmeyer Martin. Deputy Assistant to the 
        President and Deputy Communications Director for Policy and 
        Planning, Executive Office of the President.

        Luke Jeffery Martin, son, age 8 months

    7. List all college and graduate degrees. Provide year and school 
attended.

        Bachelor of Arts, University of North Carolina at Chapel Hill 
        (1989).
        Masters in Public Policy, Duke University (1993).
        Juris Doctorate, Harvard University (1993).

    8. List all management-level jobs held and any non-managerial jobs 
that relate to the position for which you are nominated.

        Chairman, Federal Communications Commission.

        Commissioner, Federal Communications Commission.

        Special Assistant to the President for Economic Policy, 
        Executive Office of the President.

        Deputy General Counsel, Bush-Cheney Transition Team.

        Deputy General Counsel, Bush for President.

        Legal Advisor to Commissioner Harold Furchtgott-Roth, Federal 
        Communications Commission.

        Associate, Wiley, Rein & Fielding.

        Judicial Clerk, United States District Judge William M. 
        Hoeveler.

    9. List any advisory, consultative, honorary or other part-time 
service or positions with Federal, State, or local governments, other 
than those listed above, within the last five years: None.
    10. List all positions held as an officer, director, trustee, 
partner, proprietor, agent, representative, or consultant of any 
corporation, company, firm, partnership, or other business, enterprise, 
educational or other institution within the last five years: Executor/
Trustee, Richard H. Martin Estate (father's estate).
    11. Please list each membership you have had during the past ten 
years or currently hold with any civic, social, charitable, 
educational, political, professional, fraternal, benevolent or 
religious organization, private club, or other membership organization. 
Include dates of membership and any positions you have held with any 
organization. Please note whether any such club or organization 
restricts membership on the basis of sex, race, color, religion, 
national origin, age or handicap.

        Member of the District of Columbia Bar Association (1996-
        present).
        Member of the Florida Bar Association (1995-present).
        Member of the Federal Communications Bar Association (1998-
        present).
        The University of North Carolina Alumni Association (1989-
        present).
        The Federalist Society (1998-1999); Vice Chair of the 
        Telecommunications Committee.

    12. Have you ever been a candidate for public office? If so, 
indicate whether any campaign has any outstanding debt, the amount, and 
whether you are personally liable for that debt: No.
    13. Itemize all political contributions to any individual, campaign 
organization, political party, political action committee, or similar 
entity of $500 or more for the past 10 years: Bush for President, 
$1,000.00 (1999)
    14. List all scholarships, fellowships, honorary degrees, honorary 
society memberships, military medals and any other special recognition 
for outstanding service or achievements.

    Phi Beta Kappa; University of North Carolina Tuition Scholarship; 
UNC Honorary Societies (Orders of the Golden Fleece, Grail & Old Well): 
Pi Sigma Alpha; UNC James J. Parker Award for Student Achievement.

    15. Please list each book, article, column, or publication you have 
authored, individually or with others, and any speeches that you have 
given on topics relevant to the position for which you have been 
nominated. Do not attach copies of these publications unless otherwise 
instructed.
    Articles and Editorials:

        ``Make Cable A La Carte,'' with Senator John McCain, Los 
        Angeles Times, 5/25/06.

        ``Why Every American Should Have Broadband Access,'' Financial 
        Times, 4/3/06.

        ``Broadband,'' The Wall Street Journal, 7/7/05.

        ``Family Friendly Programming: Providing More Tools for 
        Parents,'' Federal Communications Law Journal, 5/03.

        ``What's Next: Competition's Future,'' Telephony Magazine, 5/
        13/02.

    Speeches: I have delivered numerous speeches in my official 
capacity at the Federal Communications Commission.

    16. Please identify each instance in which you have testified 
orally or in writing before Congress in a non-governmental capacity and 
specify the subject matter of each testimony: I have not testified 
before Congress in a non-governmental capacity.

                   B. POTENTIAL CONFLICTS OF INTEREST

    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients, or customers.

        Federal Thrift Savings Plan.
        Executor/Trustee. Richard H. Martin Estate (father's estate).

    Spouse:

        Federal Thrift Savings Plan.
        Steptoe & Johnson 401K (no further contributions being made).

          Russell Aggressive CI D.
          Russell Equity Aggressive CI D.

        Texas Thrift Savings Plan (no further contributions being 
        made).

    2. Do you have any commitments or agreements, formal or informal, 
to maintain employment, affiliation or practice with any business, 
association or other organization during your appointment? No.
    3. Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated: None.
    4. Describe any business relationship, dealing, or financial 
transaction which you have had during the last 5 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated: None.
    5. Describe any activity during the past 5 years in which you have 
been engaged for the purpose of directly or indirectly influencing the 
passage, defeat, or modification of any legislation or affecting the 
administration and execution of law or public policy: None other than 
in my work as FCC Commissioner and Chairman.
    6. Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items.

        To the extent that a conflict of interest arises of which I am 
        not currently aware, I plan to consult with agency ethics 
        counsel and comply with all appropriate laws and regulations.

                            C. LEGAL MATTERS

    1. Have you ever been disciplined or cited for a breach of ethics 
by, or been the subject of a complaint to any court, administrative 
agency, professional association, disciplinary committee, or other 
professional group? No.
    2. Have you ever been investigated, arrested, charged, or held by 
any Federal, State, or other law enforcement authority of any Federal, 
State, county, or municipal entity, other than for a minor traffic 
offense? No.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in an administrative agency proceeding or 
civil litigation? No.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? No.
    5. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be disclosed in 
connection with your nomination: None of which I am aware.
    6. Have you ever been accused, formally or informally, of sexual 
harassment or discrimination on the basis of sex, race, religion or any 
other basis? No.

                     D. RELATIONSHIP WITH COMMITTEE

    1. Will you ensure that your department/agency complies with 
deadlines for information set by Congressional committees? Yes.
    2. Will you ensure that your department/agency does whatever it can 
to protect Congressional witnesses and whistle blowers from reprisal 
for their testimony and disclosures? Yes.
    3. Will you cooperate in providing the Committee with requested 
witnesses, including technical experts and career employees, with 
firsthand knowledge of matters of interest to the Committee? Yes.
    4. Are you willing to appear and testify before any duly 
constituted committee of the Congress on such occasions as you may be 
reasonably requested to do so? Yes.

    Senator Burns. Thank you very much, Chairman Martin.
    Mr. Kneuer?

         STATEMENT OF JOHN M.R. KNEUER, NOMINEE TO BE 
          ASSISTANT SECRETARY FOR COMMUNICATIONS AND 
          INFORMATION; ADMINISTRATOR OF THE NATIONAL 
              TELECOMMUNICATIONS AND INFORMATION 
         ADMINISTRATION (NTIA), DEPARTMENT OF COMMERCE

    Mr. Kneuer. Thank you, Mr. Chairman and Members of the 
Committee. It is my distinct honor and privilege to be before 
you today as the President's nominee to serve as the Assistant 
Secretary for Communications and Information at the Department 
of Commerce and as the Administrator of the National 
Telecommunications and Information Administration.
    Since 2003, it's been my privilege to serve in the Commerce 
Department under the leadership of both Secretary Evans and 
Secretary Gutierrez. I'm also honored to have had the 
opportunity to work alongside the dedicated men and women who 
have devoted their careers to NTIA and to the American people. 
If confirmed, I'm committed to working every day to follow the 
example they set through their dedication and to give them the 
leadership that they deserve.
    As you know, among its responsibilities NTIA provides 
telecommunications policy analysis to the Secretary of Commerce 
and the President, and manages the Federal radio waves. 
Throughout the Bush Administration, this intersection of 
telecommunications policy and spectrum management has been the 
key focus of NTIA. Working with our partners in industry and 
across government, we have made large amounts of spectrum 
available for wireless broadband, and other innovative 
services, as well as maintaining access for critical Federal 
and public-safety services.
    Indeed, as we meet here today, the FCC is in the final 
stages of an auction of licenses for 90 megahertz of spectrum 
for advanced wireless services. As of last night, that auction 
had generated net high bids of nearly $14 billion. More 
important than the money being raised, however, is the 
potential for this new spectrum in the marketplace. Once 
deployed, this spectrum will allow every licensed wireless 
carrier to be a broadband provider, as well. Carriers that are 
currently providing broadband services would be able to expand 
and improve those services. New market entrants will enter the 
marketplace for the first time. Together, these broadband 
services and other new technologies are critical to bringing 
competition to the incumbent cable and fixed-line broadband 
services, and extending services to rural and other hard-to-
serve markets.
    Now, while this auction is an important event, the process 
that made it possible is also as significant, as it represents 
a real model of intergovernmental cooperation. Before this 
spectrum could be made available for auction, more than 50 
Federal agencies needed to coordinate relocation to alternative 
spectrum. In order for the agencies to be reimbursed for the 
costs of this relocation, Congress had to act to pass the 
Commercial Spectrum Enhancement Act. I'm grateful for the 
leadership of this committee in passing this important piece of 
legislation. Finally, the FCC, in addition to making 45 
megahertz available from their own allocations, has obviously 
done the laboring work in issuing service rules and conducting 
the auction.
    As this process demonstrates, new technologies no longer 
fit easily into regulatory stovepipes. The introduction of new 
services and new innovative technologies requires cooperation 
amongst the Administration, the FCC, and Congress. If I'm 
confirmed, I'm committed to repeating that example and working 
with my colleagues across government, at the FCC, and Congress 
so that we can continue to have an environment for future 
American innovation and competitiveness.
    In addition to its traditional role, NTIA has also recently 
been entrusted with significant responsibilities related to the 
digital television transition. These include providing 
financial assistance to consumers to acquire digital-to-analog 
conversion devices, as well as funding for state and local 
governments' acquisition and implementation of interoperable 
communications equipment. We are currently working to ensure 
these critical programs are executed as efficiently and 
equitably as possible. And, if confirmed, I'm committing to 
working with the Congress to make the DTV transition a success 
for all Americans.
    Thank you, again, and I'll look forward to any questions.
    [The prepared statement of Mr. Kneuer follows:]

    Prepared Statement of John M.R. Kneuer, Nominee to be Assistant 
  Secretary for Communications and Information; Administrator of the 
  National Telecommunications and Information Administration (NTIA), 
                         Department of Commerce

    Chairman Stevens, Co-Chairman Innouye, Members of the Committee, it 
is my distinct honor and privilege to appear before you today as the 
President's nominee to serve as the Assistant Secretary for 
Communications and Information at the Department of Commerce, and 
Administrator of the National Telecommunications and Information 
Administration (NTIA).
    Since 2003, it has been my pleasure to serve in the Commerce 
Department under the leadership of both Secretary Evans and Secretary 
Gutierrez. I am also honored to have had the opportunity to work 
alongside the hundreds of dedicated men and women within NTIA who have 
devoted their careers to serving the American people. If confirmed, I 
am committed to working everyday to follow the example they have set 
through their dedication and to provide the leadership they deserve.
    As you know, among its responsibilities, NTIA provides 
telecommunications policy analysis to the Secretary of Commerce and the 
President, and manages the Federal Government use of the radio 
spectrum. Throughout the Bush Administration, this intersection of 
telecommunications policy and spectrum management has been the key 
focus of NTIA. Working collaboratively with our partners in industry 
and across government, we have made large amounts of spectrum available 
for wireless broadband and other innovative services while continuing 
to provide access for critical Federal and public safety systems.
    Because of technology and competition policies, American consumers 
have access to a wide array of innovative services and American 
companies continue to lead the world in the development and deployment 
of new technologies, creating global markets for American products.
    Today, American consumers have access to licensed wireless 
broadband services offered by multiple providers, using competing 
technologies at higher speeds than are available to consumers in Europe 
or Japan. At the same time, American companies continue to innovate 
with new unlicensed technologies like WiFi and WiMax. Now these 
services are rapidly evolving from small local ``hot spots'' in places 
like airports and coffee shops to large area networks that cover 
hundreds of square miles and provide service quickly and cheaply to 
entire rural communities.
    Indeed, as we meet here today, the FCC is in the final stages of an 
auction of licenses for 90 MHz of spectrum for Advanced Wireless 
Services. As of last night, this auction had generated net high bids of 
nearly $14 billion dollars.
    But more important than the money being raised is the potential for 
this new spectrum in the marketplace. Once deployed, this spectrum will 
enable every licensed wireless carrier to be a broadband provider. 
Incumbent wireless carriers already offering broadband services will be 
able to expand and improve their services; other carriers will enter 
the wireless broadband marketplace for the first time. Together these 
wireless broadband services and other new technologies are critical to 
bringing competition to incumbent cable and fixed-line broadband 
services especially in rural and other hard-to-serve communities.
    Now while this auction is an important event, the process that made 
it possible represents a model of intergovernmental cooperation and 
coordination. Before this spectrum could be made available for auction, 
more than 50 Federal agencies needed to coordinate plans to move to 
alternative spectrum. In order for the agencies to be reimbursed for 
the costs of their relocation, Congress needed to act to pass the 
Commercial Spectrum Enhancement Act. I am grateful for your leadership 
and the efforts of this Committee in moving this critical legislation. 
Finally, the FCC, in addition to making 45 MHz of spectrum available 
from its own allocations, has drafted service rules and is conducting 
the auction. As this process demonstrates, new technologies no longer 
fit easily into defined regulatory stovepipes. To enable future 
innovation, we need to work collaboratively together. If confirmed, I 
am committed to work with the Congress and my colleagues at the FCC and 
across government to ensure that we continue to create an environment 
for future American innovation.
    In addition to its traditional role, NTIA has recently been 
entrusted with significant responsibilities related to the digital 
television transition. These include providing financial assistance to 
consumers for the purchase of digital-to-analog conversion devices, and 
funding state and local government's acquisition and implementation of 
interoperable communications equipment. We are already working to 
ensure that these critical programs are executed as efficiently and 
equitably as possible. If confirmed, I am committed to working with the 
Congress to make the DTV transition a success for all Americans.
    Thank you again for the opportunity to testify before you today. I 
look forward to any questions you may have.
                                 ______
                                 
                      A. BIOGRAPHICAL INFORMATION

    1. Name: John M.R. Kneuer.
    2. Position to which nominated:
        Assistant Secretary for Communications and Information, 
        Department of Commerce;

        Administrator, National Telecommunications and Information 
        Administration.

    3. Date of Nomination: May 1, 2006.
    4. Address:

        Residence: (Information not released to the public).
        Office: 1401 Constitution Ave., N.W., Rm. 4898 Washington, DC 
        20230.

    5. Date and Place of Birth: October 7, 1968; Long Branch, New 
Jersey.
    6. Provide the name. position, and place of employment for your 
spouse (if married) and the names and ages of your children (including 
stepchildren and children by a previous marriage).

        Spouse: Mimi Simoneaux Kneuer, Executive Vice President, 
        Pharmaceutical Research and Manufacturers Association.

        Children: Joseph K. Kneuer, 3; Christine A. Kneuer, 1.

    7. List all college and graduate degrees. Provide year and school 
attended: Catholic University of America, B.A. 1990; J.D. 1994.
    8. List all management-level jobs held and any non-managerial jobs 
that relate to the position for which you are nominated.

        10/2003-Present: Deputy Assistant for Secretary Communications 
        and Information, Department of Commerce.

        8/1998-10/2003: Senior Associate, DLA Piper Rudnick (f.k.a. 
        Verner, Liipfert, Bernhard, McPherson, and Hand).

        6/1997-8/1998: Executive Director Government Affairs, 
        Industrial Telecommunications Association.

        6/1996-6/1997: Attorney Adviser, Federal Communications 
        Commission.

    9. List any advisory, consultative, honorary, or other part-time 
service or positions with Federal, State, or local governments, other 
than those listed above, within the last five years: None.
    10. List all positions held as an officer, director, trustee, 
partner, proprietor, agent, representative, or consultant of any 
corporation, company, firm, partnership, or other business, enterprise, 
educational or other institution within the last five years.

        Member of the Board of Directors, United States 
        Telecommunications Training Institute. The USTTI is a non-
        profit joint venture between leading U.S.-based communications 
        and IT corporations and leaders of the Federal government who 
        together provide tuition-free management, policy and technical 
        training for talented professionals from the developing world.

    11. Please list each membership you have had during the past ten 
years or currently hold with any civic, social, charitable, 
educational, political, professional, fraternal, benevolent, or 
religious organization, private club, or other membership organization. 
Include dates of membership and any positions you have held with any 
organization. Please note whether any such club or organization 
restricts membership on the basis of sex, race, color, religion, 
national origin. age, or handicap.

        Member, University Club of Washington, D.C.

        The above listed organization does not restrict membership on 
        the basis of sex, race, color, religion, national origin, age, 
        or handicap.

    12. Have you ever been a candidate for public office? If so, 
indicate whether any campaign has any outstanding debt, the amount, and 
whether you are personally liable for that debt: No.
    13. Itemize all political contributions to any individual, campaign 
organization, political party, political action committee, or similar 
entity of $500 or more for the past 10 years.

        Saxby Chamblis for Senate, $250, 7/31/03.
        Richard Burr for Senate, $500, 5/9/03; $250, 6/30/03.
        Harold Ford, Jr. for Tennessee, $250, 9/30/00.
        Billy Tauzin Congressional Committee, $250, 7/18/00.
        Bayou Leader PAC, $500, 9/02/99.
        Bruce C. Harris for Congress, $500, 7/28/99.
        Bush-Cheney 2004, $1,000, 6/30/03; $1,000, 3/19/04.
        National Republican Congressional Committee, $1,000, 10/18/
        2002.
        Dick Monteith for Congress, $250, 4/24/02.
        Texas Freedom Fund, $375, 7/05/03.

    14. List all scholarships, fellowships, honorary degrees, honorary 
society memberships, military medals, and any other special recognition 
for outstanding service or achievements: None.
    15. Please list each book, article, column, or publication you have 
authored, individually or with others, and any speeches that you have 
given on topics relevant to the position for which you have been 
nominated. Do not attach copies of these publications unless otherwise 
instructed.

                       Public Speaking Engagements
05/18/06                        Washington Space Business Roundtable
                                 (WSBR) (Speaking)
                                Satellite Broadband and Satellite
                                 Spectrum
                                ``Advising on Telecommunications
                                 Policy''
                                University Club, University Hall
                                Washington, DC
05/17/06                        Computer & Communications Industry
                                 Association (Speaking)
                                Washington Caucus, ``Telecom Reform''
                                Regis Hotel, Washington, DC
05/09/06                        Pike & Fischer's 2nd Annual Broadband
                                 Policy Summit 2006 (Speaking)
                                ``Charting the Road Ahead
                                Madison Hotel
                                Washington, DC
05/03/06                        Aspen Institute Roundtable on Spectrum
                                 Policy (Roundtable)
                                Clearing the Air: Convergence and the
                                 Safety Enterprise
                                Queenstown, MD
05/03/06                        The Federalist Society (Speaking)
                                Telecommunications & Electronic Media
                                 Practice Group
                                Cable Franchising: Is it Time for Reform
                                Washington, DC
04/18-19/06                     Telecom IQ--International Quality &
                                 Productivity Center (Speaking)
                                2nd Annual ENUM Summit
                                The U.S. Department of Commerce's View
                                 on ENUM
                                Boston, MA
04/10/06                        National Cable & Telecommunications
                                 Association (NCTA) (Roundtable)
                                Annual Convention and Exposition
                                Panelist: Public Policy
                                Atlanta, GA
04/04-05/06                     CTIA's Wireless 2006 Annual Conference
                                 (Roundtable)
                                Plenary Session `'Wireless Industry
                                 Regulatory Hot Topics''
                                Las Vegas, NV
03/28/06                        Catholic University of America's
                                 Columbus School of Law (Speaking)
                                ``Bringing America up to Speed:
                                 Delivering on Our
                                Broadband Future Without Sacrificing
                                 Local Identity''
                                Washington, DC
12/19/05                        European American Business Council
                                 (Panelist)
                                6th Annual Digital Economy Workshop
                                ``Enabling Wireless Markets &
                                 Technologies''
                                Regis Hotel, Washington, DC
11/29-12/1/05                   Government Advisory Committee (Speaker)
                                Represent the US delegation to the
                                 Government Advisory Committee
                                (GAC) of ICANN
                                Vancouver, Canada
11/15/05                        Int'l Institute of Communication (IIC)
                                 (Speaker)
                                Telecommunications Forum: ``Rethinking
                                 Telecommunications
                                Policy--What's So Different''
                                 Washington, DC
11/08/05                        Mississippi Technology Alliance
                                 (Speaker)
                                6th Annual Conference on High Technology
                                Jackson, Mississippi
10/31/05                        Defense Spectrum Summit (Panelist)
                                Advanced Ideas in Communications
                                DOD Spectrum Summit: ``Spectrum Reform
                                 Efforts: Nest Step Toward
                                Implementation''
                                Annapolis, MD
10/20/05                        MILCOM 2005 Conference (Panelist)
                                ``The Presidential Spectrum Initiative''
                                Atlantic City, NJ
09/27/05                        CTIA Wireless IT & Entertainment
                                 (Speaking)
                                ``Regulatory Panel--Facilitating
                                 Wireless Evolution--From
                                Voice to Broadband and Beyond''
                                San Francisco, CA
09/15/05                        Law Seminars International (Speaking)
                                Spectrum Management Conference
                                ``Evolving Public Policy: Key Government
                                 Players,
                                the Way They View Their Roles and Their
                                 Policy Priorities''
                                McLean, VA
07/25/05                        High Level Consultative Commission on
                                Telecommunications (Speaking)
                                United States--Mexico ``Seventh
                                 Meeting''
                                Mexico City, Mexico
06/20/05                        Software Designed Radio Forum (Speaking)
                                Regulatory Panel: ``Global Regulatory
                                 Summit on SDR & Cognitive Radio''
                                Fairmont Hotel, Washington, DC
06/16-17/05                     University of Texas (Speaking)
                                Workshop on Internet use in the Americas
                                ``Keynote overview of US policy in the
                                 area of
                                Broadband and Internet connection''
                                Washington, DC
06/06--7/05                     Multiparty Roundtable at SUPERCOMM 2005--
                                 (Roundtable)
                                Telecommunications Industry Assoc. (TIA)
                                 re: to discuss on mechanisms
                                to address the funding problems and
                                 technical areas in which Federal
                                funding should be directed.
                                Chicago, Illinois
05/02/05                        American Petroleum Institute
                                 Telecommunications Mtg (Speaking)
                                re: General Overview of the Agency
                                Washington, DC
04/19/05                        Land Mobile Communications Council
                                 (Speaking)
                                re: Direction of spectrum policy at NTIA
                                 & how it may impact the land
                                mobile community
                                Holiday Inn, Rosslyn-Key Bridge
                                Arlington, VA
03/14-16/05                     CTIA Wireless 2005 Annual Conference
                                Policy Outlook Track Panel 1
                                ``Facilitating Intermodal Competition''
                                Las Vegas, NV
01/05-8/05                      International Consumer Electronics
                                 Assoc. (CEA) Show, 2005
                                IPV6 Panel ``An Introduction to the New
                                 Internet: What is IPV6 and how
                                will it effect consumer electronics?''
10/28/04                        DoD Spectrum Summit (Roundtable)
                                ``Spectrum Transformation: How Military/
                                 Commercial
                                Spectrum Sharing Can Work
                                Annapolis, MD
10/26/04                        National Cable & Telecommunications
                                 Assoc. (NCTA) (Roundtable)
                                NARUC-NEC broadband summit
                                ``Broadband Deployment''
                                Arlington, VA
10/18-21/04                     Northern Ireland and Republic of
                                 Ireland) w/Under Sec. Of Technology
                                Meeting Dublin, Ireland
10/06/04                        Chamber of Commerce (Panelist)
                                ``The Telecommunications Landscape--
                                 Administration
                                and Congressional Perspectives''
                                Washington. DC
09/16/04                        Law Seminars International Spectrum
                                 Management Conference (Speaker)
                                NTIA: The President's spectrum
                                 initiative for the 21st century and the
                                Perspective of Federal Government
                                 spectrum users
08/15-18-04                     Aspen Institute Conference on
                                 Telecommunications Policy (Speaker)
                                ``Restructuring Telecommunications''
                                Aspen, Colorado
08/09/04                        Electronic Industry Alliance (EIA)
                                 (Panelist)
                                22nd EIA Annual Legislative & Regulatory
                                 Roundtable
                                Hot Springs, VA
07/22/04                        New Jersey Technology Council (NJTC)
                                 (Speech)
                                ``Domestic and international
                                 telecommunications and
                                information technology issues''
                                Voorhees. New Jersey
05/19/04                        United Telecom Council (Panelist)
                                Annual Conference and Exposition
                                ``The Hunt for Critical Infrastructure
                                 Spectrum''
                                Nashville, TN
05/13/04                        Heritage Foundation (Speaker)
                                Broadband by 2007: A Look at the
                                 President's Initiative
                                Washington, DC
03/08/04                        Consumer Electronics Association (CEA)
                                 (Panelist )
                                ``Public Forum on Spectrum Management''
                                Santa Clara, CA
02/23/04                        National Emergency Number Association
                                 (NENA) (Speech)
                                Second Annual 911 Goes to Washington
                                 Critical Issues Forum
                                Grand Hyatt, Washington, DC


    16. Please identify each instance in which you have testifies 
orally or in writing before Congress in a non-governmental capacity and 
specify the subject matter of each testimony: None.

                   B. POTENTIAL CONFLICTS OF INTEREST

    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients, or customers: None.
    2. Do you have any commitments or agreements, formal or informal, 
to maintain employment, affiliation, or practice with any business, 
association. or other organization during your appointment? No.
    3. Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated: None.
    4. Describe any business relationship, dealing, or financial 
transaction which you have had during the last 5 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated: None.
    5. Describe any activity during the past 5 years in which you have 
been engaged for the purpose of directly or indirectly influencing the 
passage, defeat, or modification of any legislation or affecting the 
administration and execution of law or public policy.

    During my employment at my former law firm. DLA Piper Rudnick 
(f.k.a. Verner, Liipfert, Bernhard, McPherson and Hand), I represented 
a number of clients with interests before the Congress. During the 
covered period my representation included supporting the initial 
application to transfer control of DIRECTV to EchoStar, and the 
eventual sale of DIRECTV to NewsCorp. This representation was on behalf 
of DIRECTV's former parent corporation, General Motors. I also 
represented a variety of transportation, defense, and financial 
services clients monitoring legislative activity. During the covered 
period this representation did not entail advocacy directly or 
indirectly related to specific legislation.

    During my tenure as Counselor to the Acting Assistant Secretary, 
and Deputy Assistant Secretary in the Department of Commerce, I have 
supported Administration initiatives before the Congress, most notably 
the passage of the Commercial Spectrum Enhancement Act (Pub. L. 108-
494).

    6. Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items.
    If appointed to the position of Assistant Secretary for 
Communications and Information, I will take the following actions to 
avoid a conflict of interest.
    As required by 18 U.S.C. Sec. 208, I will continue to disqualify 
myself from participating personally and substantially in any 
particular matter that has a direct and predictable effect on my 
financial interests or those of any other person whose interests are 
imputed to me, unless such participation is authorized or permitted by 
regulatory exemption or written waiver.
    In particular, I will not participate in a particular matter that 
will have a direct and predictable effect on my spouse's employment 
with the Pharmaceutical Manufacturers and Research Association, unless 
authorized pursuant to a written waiver. In addition, I will not 
participate in a particular matter involving specific parties in which 
the Pharmaceutical Manufacturers and Research Association is a party or 
represents a party, unless authorized or permitted pursuant to ethics 
regulations.
    Within 90 days of my confirmation, I will issue a statement 
memorializing these recusals.
    Also, within 90 days of my confirmation, I will divest my holdings 
in Omnicom.
    With respect to my financial interests (including Omnicom) from 
which disqualification is not presently required because of the 
applicability of a regulatory exemption, should a financial interest no 
longer qualify for an exemption, I will immediately disqualify myself 
from participating personally and substantially in any particular 
matter that has a direct and predictable effect on the interest, unless 
my participation is covered by another exemption, or unless I obtain a 
written waiver.

                            C. LEGAL MATTERS

    1. Have you ever been disciplined or cited for a breach of ethics 
by, or been the subject to any court, administrative agency, 
professional association, disciplinary committee, or other professional 
group? No.
    2. Have you ever been investigated, arrested, charged, or held by 
an Federal, State, or other law enforcement authority of any Federal, 
State, county, or municipal entity, other than for a minor traffic 
offense? No.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in an administrative agency proceeding or 
civil litigation? No.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere of any criminal violation other than a minor traffic 
offense? No.
    5. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be disclosed in 
connection with your nomination: None.
    6. Have you ever been accused, formally or informally, of sexual 
harassment or discrimination on the basis of sex, race, religion, or 
any other basis? No.

                     D. RELATIONSHIP WITH COMMITTEE

    1. Will you ensure that your department/agency complies with 
deadlines for information set by Congressional committees? Yes.
    2. Will you ensure that your department/agency does whatever it can 
to protect Congressional witnesses and whistle blowers from reprisal 
for their testimony and disclosures? Yes.
    3. Will you cooperate in providing the Committee with requested 
witnesses, including technical experts and career employees, with 
firsthand knowledge of matters of interest to the Committee? Yes.
    4. Are you willing to appear and testify before any duly 
constituted committee of the Congress on such occasions as you may be 
reasonably requested to do so? Yes.

    Senator Burns. Thank you.
    And, Mr. Sununu?
    Senator Sununu. Thank you, Mr. Chairman.
    Mr. Kneuer, I apologize for ignoring you. We've got--I hope 
I have more than a minute and 15 seconds, but I imagine it's 
about 5 minutes, and I do have a few questions I want to ask 
Chairman Martin, and I'll probably submit most of these for the 
written record so you can expand, you don't feel the need to 
make every single point in your oral testimony.
    First, a few questions about the Internet. Let me just ask 
a few. You can answer them all together.
    Do you think that the Internet should be regulated the same 
as we regulate--with the same regimes that we regulate other 
communication mediums? Do you support taxing Internet access? 
And should the FCC be allowed to regulate Google Video and 
YouTube?
    Mr. Martin. No, I don't think that the Internet should be 
regulated in the same manner as other telecommunications 
networks. And I actually have been opposed to any kind of taxes 
on Internet access. And, indeed, I've been opposed to any 
extension of our universal-service requirements to Internet 
access. I think that would only discourage people from 
subscribing to Internet access services, if we raise those 
prices on it. It's one of the reasons why I've been trying to 
focus on a telephone-number-based methodology. Telephone 
numbers are the key to using the public-switched telephone 
network, and I think that would be a more equitable means of 
contributing for those who are taking advantage of that public-
switched telephone network.
    So, no, I'm opposed to taxing the Internet access, and I 
don't think they should be regulated the same.
    Senator Sununu. And Google Video and YouTube video 
services, should the FCC have the power to regulate those?
    Mr. Martin. No, I don't think that's necessary, at this 
time.
    Senator Sununu. You mentioned universal service and your 
desire to make some changes with regard to both distribution 
and revenue collection, but the FCC keeps raising the 
contribution factor. We're over 10 percent now, 10 percent 
Universal Service fee on consumers' use of communications. Do 
you think that there is an upper limit to what you ought to be 
allowed to impose? Are you willing to go to 20 percent, to 30 
percent, under the current structure?
    Mr. Martin. No. And I think that there is an upper limit as 
to what we would be able to do, practically, before there was 
political pressure. But I would point out that, when I became 
chairman, actually, the assessment rate was over 11 percent. 
And the most recent assessment rate, that we released this 
quarter, is actually down to 9 percent. During my tenure as 
chairman, because of the actions we've taken on both trying to 
control both the distribution side and of beginning to broaden 
the base, we've actually been able to bring that down from 11 
to 9 percent since I became chairman.
    Senator Sununu. Explain to me what the logic is behind 
voicemail qualifying for E-Rate money. They qualify, but it's 
my understanding that IP voice service does not. Why would 
voicemail qualify?
    Mr. Martin. I think that what we've said in the past, as 
far as for E-Rate money, is that telecommunications services 
qualified for it, but that not all information services 
qualified for it. We were actually trying to be more 
restrictive in what we allow schools to be able to receive 
money for. And most of the focus on information services was 
actually on infrastructure for the schools to be able to try to 
connect to the Internet, rather than for the services and 
applications that would ride over it. We haven't paid--for 
example, for any of the software for schools, but we do pay for 
some of the hardware, which means that we pay for their 
Internet connections and for wiring of the schools.
    Senator Sununu. You also subsidize their service, though.
    Mr. Martin. We do, for their access. We subsidize their 
Internet access services and items that have been 
telecommunications services or regulated directly as 
telecommunication.
    Senator Sununu. I just want to make the point that it's not 
all hardware, it's not all----
    Mr. Martin. No.
    Senator Sununu.--infrastructure.
    Mr. Martin. It's not.
    Senator Sununu. And, in fact, the access portion is growing 
very, very rapidly----
    Mr. Martin. That's right.
    Senator Sununu.--and is provided to all parts of the 
country, suburban as well as rural and high-cost areas.
    Mr. Martin. That's right.
    Senator Sununu. And I would simply make a point I've made 
before, is that you suggest you want to be restrictive so that 
the objectives of this fund are directed--or the money in the 
funds are directed--toward the key objectives of high-cost 
areas and rural areas. There's a tremendous amount of money 
that remains in the hands of districts that don't necessarily 
fit that description.
    A final question about IP voice service. And I know there 
are a lot of technical factors that go into determining how you 
assess contribution requirements for Universal Service, but the 
contribution factor for IP voice providers is approximately 65 
percent, and the contribution factor for wireless providers is 
37 percent. I'll stipulate both of these are very arbitrary 
numbers, but it seems extremely disproportionate, and even 
punitive, to assign a contribution factor of 65 percent to one, 
and 37 percent to another, when I think it's fair to argue that 
the overall mix of the kinds of communications that are taking 
place are quite similar.
    Mr. Martin. There's some confusion; that's actually not 
correct. The contribution factor for both wireless and for IP 
services is the same.
    Senator Sununu. I'm talking about----
    Mr. Martin. It's 9 percent.
    Senator Sununu. I'm talking about the percentage of 
revenues.
    Mr. Martin. No, no----
    Senator Sununu. You assess----
    Mr. Martin. What----
    Senator Sununu.--65 percent of the revenues on IP 
providers, 37 percent of the revenues----
    Mr. Martin. We----
    Senator Sununu.--are the basis for the----
    Mr. Martin. We----
    Senator Sununu.--wireless providers.
    Mr. Martin. We assess a 9-percent surcharge on all of their 
interstate revenues. We did studies, and we had people submit 
studies to us that said what percentage of these services are 
interstate in nature versus local in nature. And in the 
wireless side, the best estimates we had were that it was 
around 37 percent. On the Voice over IP side, the only study 
that we had in the record said that in the last few years, it 
had been over 66 percent in each instance. So, we selected 65 
percent as a safe harbor. But, in both instances, both Voice 
over IP providers and wireless providers are allowed to come in 
and demonstrate that their revenues are significantly more 
local in nature, and then they don't have to pay that safe 
harbor.
    Senator Sununu. I respect the fact that you're trying to 
make a decision based on data, but it is spurious to make such 
an important and significant financial decision based on one 
datapoint. And I think it runs against common sense to assume 
that the percentage of interstate communication taking place 
under IP services is twice that taking place under wireless 
services. I will agree they might not be equal, but a factor of 
two to one, I think, really does defy common sense.
    I appreciate your responses, though; they're very direct.
    And I appreciate the indulgence of the Chairman.
    Senator Burns. Mr. Rockefeller?
    Senator Rockefeller. Thank you, Mr. Chairman.
    Chairman Martin and Mr. Kneuer, I don't have questions for 
you, and I apologize, but I'm going to vote for you.
    [Laughter.]
    Senator Rockefeller. The--first of all, I want to thank 
you. It's my understanding you're going to be issuing an order, 
before too long, with regard to a West Virginia company----
    Mr. Martin. Yes.
    Senator Rockefeller.--on a particular spectrum problem. And 
that's very important, and I thank you for that.
    As you know, we've talked about this before. We've been 
working--you've been working with OMB, we've been working 
together, to try and craft a letter on the Antideficiency Act--
and that's a very perilous Act--in which case the result of the 
Act is the opposite of what is intended in the case of the 
Universal Service Fund. I know you've been working to resolve 
that, very hard. But I think it has to be said that the OMB 
appears to be reasonably openly hostile to the Universal 
Service Fund, and, as is, unfortunate, to the E-Rate program. 
So, do you--what is your sense of how this is coming along? Can 
we resolve this?
    Mr. Martin. Well, I do think that we'll be able to provide 
you with some of the details of that soon, I hope. I think 
that, in general, as we've discussed, the Commission's 
conclusions are that the Antideficiency Act would otherwise 
apply to the Universal Service programs, that the high-cost 
program currently has enough in reserves that it would not be 
in violation of the ADA, and that if the ADA directly applied 
to the Schools and Libraries Program today, it would require us 
to raise the assessment rate slightly. So, that would be our 
best estimate today.
    Senator Rockefeller. And I thank you.
    As you know--and Senator Stevens has left--and he's been 
very helpful to us on this question of the appropriation's 1-
year exemption for the Universal Service Program from the 
Antideficiency Act. And my question to you is, would it be 
helpful to have another year's extension?
    Mr. Martin. Well, I think that whether or not Congress 
decides to extend it any further is really a decision for 
Congress. I will pledge that, no matter whether it's extended 
or not, we will make sure it doesn't have a programmatic impact 
on the program. We will make sure that we have sufficient funds 
raised and that we are able to continue to have letters go out 
to the schools and libraries without being delayed. One of the 
fortunate benefits of some of the steps we've taken to lower 
the assessment rate is that I do think we have a little bit 
more cushion if the result is that a slight increase is 
needed--I think it would be able to be absorbed, at this time, 
if needed.
    Senator Rockefeller. Good.
    I have been trying for, I don't know, 10, 12 years, through 
a crude mechanism called a tax credit--I, along with a whole 
lot of other people; in fact, I think 75 Members of the 
Senate--to get broadband deployment done through a tax credit. 
And I'm unhappy to report to you that it hasn't worked in any 
single one of those 10 or 12 years. We've gotten absolutely 
nowhere.
    So, do you think that the Universal Service Fund has, in 
its range, the possibility of support for broadband 
infrastructure? Do you have the authority to make it a 
supported service, or is that something that has to come from 
the Congress?
    Mr. Martin. I think we have the authority to take some 
additional steps on the universal service side, but I think 
that, practically, the fund wouldn't be large enough to absorb 
that. So, I do think we have the authority. Our authority is 
pretty broad in Section 254 of the Act, that says that the 
Universal Service Program needs to ensure that people that live 
in rural areas have have access to reasonably the same services 
at reasonably the same prices as those who live in urban areas. 
I think that language is broad enough that we could do 
something else, but I also think that the Universal Service 
mechanism today wouldn't be able to support that financially. 
So, I think that we wouldn't be able to do that, but I think we 
have the authority.
    Senator Rockefeller. Thank you.
    Thank you very much.
    Senator Burns. Mr. Dorgan?
    Senator Dorgan. Chairman, thank you very much.
    Is it Kneuer?
    Senator Burns. Kneuer.
    Senator Dorgan. Mr. Kneuer, thank you.
    Mr. Kneuer, I intend to support your nomination.
    Mr. Kneuer. Thank you.
    Senator Dorgan. I think you have substantial 
qualifications, and I'm pleased that you offer yourself for 
service.
    I do want to mention that, this morning, the trade numbers 
came out. Today's monthly trade deficit announcement was $68 
billion in a month, highest in history. We are engaged in a 
trade strategy that is fundamentally faulty and is going to be 
very damaging to this country. Most of the trade debt is owned 
by--a bulk of it's owned by the Chinese and the Japanese. And I 
know that being involved in the Commerce Department, you will 
hear people in the Commerce Department marching around and 
talking about how wonderful this trade strategy is. It's a 
disaster. It's been a disaster under Democrats and Republicans. 
It's grown much, much worse under this Administration, I might 
say. But I just wanted to make the point that we've had a 
pretty devastating announcement this morning about a $68-
billion monthly trade deficit. That--at some point, somebody 
needs to say, ``Whoa, this isn't working.''
    But, Chairman Martin, you were part of a troika in the FCC 
that said it was OK to create new ownership rules so that in 
one major city one company--one company--could own eight radio 
stations, three television stations, the newspaper, and the 
local cable company, and that would be just fine, no problem at 
all. The Federal courts found a problem with that. Do you still 
feel that way? I mean, you're now beginning a new ownership 
rulemaking process, but do you still feel comfortable 
suggesting that in one major American city it's fine for one 
company to own eight radio stations, three television stations, 
the cable company, the dominant newspaper? Does that give you 
pause?
    Mr. Martin. Yes, it gives me pause. I'm not so sure I would 
even concede that I was comfortable with the decision when we 
made the decision previously.
    Senator Dorgan. But you voted for it.
    Mr. Martin. I did. I did. Because I thought that the record 
indicated, in certain of the largest markets, you should be 
able to purchase more, under the record that we had in front of 
us. But were we all concerned about the impact of changes in 
media ownership requirements? Yes. Did it make me comfortable 
then? I wouldn't say so. And does it give me pause now? Sure. I 
think that the Commission is diligently trying to go back and 
reinitiate the media ownership process, to do so with an open 
mind regarding what we should end up doing. We start that 
process by not only receiving comments, but doing public 
hearings and listening to what the public has to say about 
where we should go on media ownership.
    Senator Dorgan. Chairman Martin, do you think there's been 
substantial increased concentration in virtually every area of 
the media?
    Mr. Martin. I think that it would depend. When you say 
``increased,'' I think it depends upon what you're measuring 
that against. In general, I would say that yes, there has been 
increase, but I think that there have been some areas where 
there obviously has been a decrease. The availability of news 
and information, for example, by the Internet, is significant, 
and wasn't available previously, depending upon the timeframe 
you're looking at. Obviously, in the television area, there's a 
significant number of sources of news and information because 
of cable that were not available prior to cable, when some of 
these rules were put in place. So, it depends upon the 
timeframe you're measuring, but, yes, there has been some, if 
you're looking at the most recent time.
    Senator Dorgan. Would you agree or disagree with this? 
Right now, the media conglomerates--about six of them, 
essentially: Viacom, Disney, Time Warner, News Corp, CBS, and 
NBC/General Electric--control the big-four networks, 70 percent 
of the prime-time television market share, most cable channels, 
as well as vast holdings in radio, publishing, movie studios, 
music, Internet, other sectors. And whenever somebody talks to 
me about the--all of the Internet opportunities and so on--I've 
talked before about many voices, one ventriloquist; you can 
cite many voices, one ventriloquist. Would you agree with me 
that we have seen very substantial concentration in almost 
every area of the media in recent years?
    Mr. Martin. In the recent years, we've seen more 
concentration. Since the 1996 Act passed, after which the 
Commission changed some of those rules, there's been 
significant increase since then.
    Senator Dorgan. Do you believe that increased 
concentration, in most cases, will likely be moving against the 
issue of localism, and that localism--with respect to 
broadcasting and the use of the airwaves that belong to all of 
the American people--localism is essential and central to the 
notion of what broadcasting is about?
    Mr. Martin. I think that localism and competition and 
diversity are the three central tenets of what broadcasting is 
about, but I think localism is certainly one of the most 
important.
    Senator Dorgan. And you have a localism proceeding 
underway. It's--in fact, Chairman Powell started it, and then 
just dropped it, it just sat there, and nothing happened. You 
have resurrected it. I believe you've resurrected it, or at 
least have talked about it. When do you expect it to be 
concluded?
    Mr. Martin. What we first need to do is compile the record 
that Chairman Powell started gathering, and put all of the 
information that we had gathered in that record into the media 
ownership proceeding to make sure that people have an idea of 
what information has been gathered. And we have one outstanding 
hearing on localism, separate from media ownership, that 
Chairman Powell had committed to do, that's outstanding, that 
we had never done, either.
    Senator Dorgan. It would make much more sense to complete 
the proceedings on owner--on localism, rather, before you 
decide on ownership, wouldn't it?
    Mr. Martin. We will make sure we complete the last hearing 
on----
    Senator Dorgan. And then--I know my time is expiring--one 
point. Since the Chairman started talking about net neutrality 
in his first question to you, I want to--when the FCC decided 
that broadband should be removed from Title II of the 
Telecommunications Act, and said it is no longer a telephone 
service, but an information service, that took from it, then, 
the attachment to nondiscrimination. Nondiscrimination rules 
applied, up until that point, to all that was described as a 
telephone service; nondiscrimination rules no longer applied 
once it was taken out of that definition. Is that correct?
    Mr. Martin. They did apply to all that was described as a 
telephone service.
    Senator Dorgan. Right.
    Mr. Martin. It wasn't necessarily all broadband. Cable 
modem services weren't described as a telephone service. So, it 
applied to some telephone companies offering it, but not to the 
cable companies.
    Senator Dorgan. And when the FCC made its decision, then 
the nondiscrimination rules that did attach at that point did 
not continue to attach.
    Mr. Martin. Those, and all the rules that applied to 
telephone services, do not attach.
    Senator Dorgan. And you've, instead, developed a set of 
principles. Do those principles include the principle of 
nondiscrimination?
    Mr. Martin. No, they don't include the principle of 
nondiscrimination.
    Senator Dorgan. They do not.
    Mr. Martin. No.
    Senator Dorgan. Any reason for that?
    Mr. Martin. In terms of access, there is discrimination 
that has to occur by necessity to deliver different kinds of 
services. Bits that are being used to deliver voice services or 
real-time video services are currently prioritized in order to 
allow those services to be delivered. I think that, when we 
talk about nondiscrimination among third parties, there has 
been discussion about whether the Commission should look at 
that issue. But just saying you can't discriminate among any 
bits actually isn't the way that current Internet access 
services are provided. That's what allows different services to 
be able to be provided.
    Senator Dorgan. But you understand the issue of 
nondiscrimination--or discrimination, I should say. Would you 
agree that the television advertisements that ran during our 
markup, this committee's markup, on the issue of net 
neutrality--the television commercials that ran, that indicated 
that the principles that you have established included 
nondiscrimination principles--that those television commercials 
were inaccurate?
    Mr. Martin. I'm not familiar with the ones that said that 
we included nondiscrimination in our four principles. But, if 
it did, nondiscrimination was not one of the four principles 
that we included.
    Senator Dorgan. Mr. Chairman, you've been generous with the 
time.
    Chairman Martin, you and the Commission will make some of 
the most important decisions that will be made, in terms of the 
development of information in this country. And this democracy 
thrives on information, the free flow of information. And it 
seems to me, further concentration in the media, having fewer 
and fewer people determine what we see, hear, and read in this 
country, is antithetical to everything we should believe in 
that fosters and nurtures democracy. And I hope as you and the 
other commissioners sift through these, you will keep that in 
mind. And I hope as you have six hearings around the country, 
the first of which will be in Los Angeles, you will hold one in 
a rural state, a rural area, as well, to allow us to weigh in 
on these things.
    And let me finish with at least one bone here, and that is, 
your predecessor held only one hearing and then moved ahead. I 
appreciate the fact that you're holding six hearings. Some of 
us will want to hold you up even more, to the extent we can, to 
slow you down and hope you reach the right conclusion. But 
thanks, again, for serving in public office. You'll hear, of 
course, much more from me as we proceed to work together on 
these issues.
    Mr. Kneuer, thank you, again, for offering yourself today 
to public service.
    Senator Burns. Mr. DeMint?
    Senator DeMint. Thank you, Senator Burns.
    Mr. Martin, your son has proved, once again, that Senators 
can put anyone to sleep.
    [Laughter.]
    Senator DeMint. I mentioned the WARN Act in my statement, 
the emergency alert system that we've been working on here in 
Congress, and obviously the FCC has an interest in that and has 
begun the rulemaking process. Our request is that you--as you 
stated in your statement, as you mentioned, the will of 
Congress should be expressed sometime in November. Apparently 
the bill is having hearings on the House side. We will pass it 
at 12 today. And, we believe, before the end of this year, we 
will have expressed the will of Congress. Are you willing to 
wait?
    Mr. Martin. Yes. The Commission, obviously, thinks it's 
important to make sure we have an emergency alert system that 
takes advantage of new technologies, but it's always preferable 
if Congress can tell us exactly how we should try to implement 
it.
    Senator DeMint. Yes. Thank you.
    Just a couple of questions about net neutrality. And I know 
we can't get into detail, but these are diagnostic questions.
    On the content side, do you believe a content provider, 
such as Google, should have the right to charge its customers 
more for prime placement on its pages than those who don't have 
prime placement?
    Mr. Martin. Yes. I'm not sure I see any reason why Google 
shouldn't be able to charge people however----
    Senator DeMint. But----
    Mr. Martin.--whatever it wants to charge.
    Senator DeMint. OK. Do you think a network provider, such 
as Verizon, should have the freedom to charge more for higher 
requirements, such as video, from its customers?
    Mr. Martin. I do. And I think the Commission has stated 
that in its principles, as well.
    Senator DeMint. OK. So, you think network providers, if 
they are offering higher-speed options and different types of 
products, that they can price those differently.
    Mr. Martin. I think so. And if we didn't allow them to, 
then they would not be willing to offer those different kinds 
of products.
    Senator DeMint. Exactly. And I think, as you know, what you 
just said is opposed to the concept of network neutrality. So, 
just wanted to make sure we were on the same page there.
    Just a quick question about multicast. And I was happy to 
see that you had pulled from the agenda the vote on additional 
must-carry privileges. As we move toward creating more cable 
competition, more video options in the marketplace, obviously 
we think it--at least a number of us do--think this is not the 
time to go in and mandate that our retailers of video services 
are required to carry different options by their customers, 
when we think that's going to happen naturally. But is it fair 
to say--do you intend to bring multicast must-carry up for a 
vote again at the Commission?
    Mr. Martin. Well, I don't have any current intentions to, 
because I don't think there's a majority of the commissioners 
who support that.
    Senator DeMint. Good. Thank you. That's all my questions.
    Thank you, Senator Burns.
    Senator Burns. Mrs. Boxer?
    Senator Boxer. Thank you, Mr. Burns.
    I want to follow up on the idea of localism that Senator 
Dorgan started, Mr. Martin. And, by the way, I have questions 
for both of you, so I'm going to stay a second round if my time 
runs out.
    When the FCC released its media ownership decision in 2003, 
Congress and the courts criticized the Commission for serious 
problems. In then-Chairman Powell's words, quote, ``In the 
months that followed, we heard the voice of public concern 
about the media loud and clear. Localism is at the core of 
these concerns, and we're going to tackle it head-on.''
    You said, Mr. Martin, ``What local broadcasters provide in 
terms of local news and information to the community is really 
important.'' And you were quoted in USA Today, in October 2005. 
So, I appreciated that, because I certainly agree with that.
    You still feel that way about the importance of localism?
    Mr. Martin. Yes. I do.
    Senator Boxer. OK. Now, in August 2003, the FCC established 
a Localism Task Force to study issues like the impact of media 
consolidation on local news programming. It is now 3 years 
later, and we haven't seen a release of any report or any 
policy recommendations from the staff. What has happened to 
that?
    Mr. Martin. When the Localism Task Force was started, under 
the previous chairman, they had committed to having a series of 
hearings. I think the final hearing was supposed to be in 
Maine. At the end of that hearing, they were to release a 
report that summarized all of the hearings that had occurred up 
until then. That process was never completed by Chairman 
Powell; when I took over as chairman, it was already supposed 
to have been completed. I think Chairman Powell had originally 
promised to do that by the end of 2004. But it wasn't 
completed. And so, at this point, we do need to do another 
localism hearing, which I've committed that the Commission will 
go do. And----
    Senator Boxer. I appreciate that.
    Mr. Martin.--and I've asked the--and I asked the staff to 
go back--they had not done the summary they had promised, and I 
asked them to go back and draft a summary of that, so we'll be 
able to make that publicly available.
    Senator Boxer. OK. Well, let me tell you why I have a 
problem with your answer. I mean, I'm very happy with what 
you're going to do, but I think there's work that's been done, 
and it's been stifled. And I don't know who stifled it. But I 
have a copy of a draft report, dated June 17, 2004, ``Do Local 
Owners Deliver More Localism? Some Evidence From Local 
Broadcast News.''
    And I ask that a copy of this be placed in the record. *
---------------------------------------------------------------------------
    * The information referred to has been retained in Committee files.
---------------------------------------------------------------------------
    Senator Burns. Without objection.
    Senator Boxer. Now, according to this report--have you seen 
this report?
    Mr. Martin. I haven't. And I wasn't chairman in June 2004.
    Senator Boxer. You haven't.
    Mr. Martin. No, I have not seen that.
    Senator Boxer. So, you don't think any of the commissioners 
saw this report.
    Mr. Martin. I think that the previous chairman may have, 
but I don't know if the other commissioners saw it.
    Senator Boxer. OK. Well, I'm going to ask you to please go 
back, after you look at it again--I'm going to ask the--all the 
other commissioners to tell me if they ever saw this report, 
because, according to it, ``Local ownership''--this is a 
quote--``adds almost 5 and one-half minutes of local news and 
over 3 minutes of local on-location news. That's over 5 minutes 
for each 30-minute local news broadcast. In the course of a 
year, this means locally owned stations provide over 33 more 
hours of regional news, news that's directly relevant and 
important to viewers.''
    Now, this isn't national security, for God's sakes. I mean, 
this is important information about issues that are key to the 
people--I would suspect, your own mom, who lives in rural 
America. So, I don't understand who deep-sixed this thing. I 
want to get to the bottom of it and find out if any 
commissioners saw this.
    And now, we're starting all over again. Well, bless your 
heart, and I'm glad you did it, but I don't have great 
confidence. You know, it seems to me--and maybe I'm just a 
cynic; I've been here a long time--that, you know, this comes 
out with a very clear response to the question of consolidation 
versus localism. And we have a pro-localism bit of information, 
nonbiased, compiled, clear, defended. And it never sees the 
light of day? Thank you, whoever sent this to me; I don't have 
a clue. But I'm sure glad somebody out there sent this to me, 
because I think this is news, that this kind of work has never 
seen the light of day.
    Do you have any clue who may have stopped the release 
here----
    Mr. Martin. As I----
    Senator Boxer.--of this report.
    Mr. Martin. As I said, if it was dated in June 2004, I 
became chairman in March 2005.
    Senator Boxer. Were you a commissioner then?
    Mr. Martin. I was a commissioner then.
    Senator Boxer. OK. And will you promise that you will read 
this report?
    Mr. Martin. I will. And I don't mean to imply that the 
staff hasn't pulled that back out in trying to resummarize 
where we were. I was just saying that the staff didn't have 
anything that was ongoing in finalizing the evidence that we 
had gathered. So, I'll make sure that that should be one of the 
things that they are----
    Senator Boxer. OK.
    Mr. Martin.--looking at trying to----
    Senator Boxer. Well----
    Mr. Martin.--summarize, and would be released. I will go 
back and make sure.
    Senator Boxer. Good. Because I have to tell you, this is--
this is a--this is a piece of work. This isn't some lightly 
pulled-together, you know, deal. They went out, and they did a 
real good study of this, and they found out that there's more 
local news. Despite all of the other talk from the big guys, 
there's more news. There's more local news. And that's what 
people want.
    Let me tell you, all you have to do is ask any of us. When 
we run for office, we have to take our advertising budget 
pretty seriously. We go to the local news. That's what the 
people want. That's what they watch. They want it. And this 
says you get more news when you have the luxury of having local 
news stations.
    And withhold my other questions until----
    Senator Burns. Mr. Pryor?
    Senator Boxer.--the next round.
    Senator Burns. Our team seems to be falling apart, so, you 
know, our batting order's going to pick up here a little bit.
    [Laughter.]

                 STATEMENT OF HON. MARK PRYOR, 
                   U.S. SENATOR FROM ARKANSAS

    Senator Pryor. Thank you, Mr. Chairman.
    Chairman Martin, thank you--thank both of you for being 
here. And Chairman Martin, thank you for your interest in 
always trying to reach out and work with me in various 
capacities. I appreciate that.
    Let me follow up on one of Senator Sununu's questions of a 
few moments ago on the Internet. He asked about whether the 
Internet should be regulated like, I guess, other media. Let me 
get to a more specific question about the Internet, and that's 
decency on the Internet.
    Does the FCC have any authority over the Internet right 
now?
    Mr. Martin. On the content and decency, no, we don't have 
any on the Internet.
    Senator Pryor. OK. Should it?
    Mr. Martin. You know, I think that, unlike the broadcast 
medium, or even some of the other mediums that are putting 
forth the same communications to everyone, the Internet is 
inherently a ``pull'' media, where you're going to a site and 
pulling it down. And so, I think that is different than having 
the same kind of standard that applies to broadcast that's 
``pushed out,'' so to speak, to everyone.
    Senator Pryor. OK. Do you think that we, as in the Congress 
or the FCC or the folks that are--the Internet industry, so to 
speak--do you think we should try to make the Internet a more 
decent place?
    Mr. Martin. Yes. I think that all the policymakers should 
be trying to make sure that the Internet is a more decent 
place.
    Senator Pryor. What's the best approach on trying to 
accomplish that?
    Mr. Martin. You know, I'm not sure. I think it's quite a 
challenge. We're facing current challenges in the media 
environment that we do have more direct authority over. So, I'm 
not sure.
    Senator Pryor. I know that there's--if I can change gears--
I know there's been a media campaign through the Ad Council, et 
cetera, about parental controls on televisions, and using cable 
and satellite, et cetera. And I know that you've been involved 
in watching that, trying to help structure that. What's your 
assessment of that public relations campaign and the 
effectiveness of it, as it stands today?
    Mr. Martin. I think that the public relations campaigns are 
always a good thing when you're making parents aware of the 
tools that they have, but I've consistently said that I don't 
think that's enough in the current environment. I think that we 
need to have more direct action to empower parents to take more 
control over the media that's coming into their homes. So, 
while I think it's helpful, I don't think parental controls are 
enough.
    Senator Pryor. Would you----
    Mr. Martin. I mean, I don't think the media campaign about 
parental controls is enough----
    Senator Pryor. OK, that's fair enough. Would you assess it 
as being effective or ineffective, or somewhere in between? 
What--how do you assess it right now?
    Mr. Martin. I think that the ads themselves may be 
effective, but I think it's important to remember that the 
parental control mechanisms that they are promoting are not 
available to a significant number of homes today. Those are 
only available if you're a digital cable subscriber, and 
digital cable subscribers are still, on average across the 
country, only 40 to 45 percent of the homes----
    Senator Pryor. Yes.
    Mr. Martin.--and that, even then, they are reliant upon 
accurate ratings, and many of the programs are not rated, or, 
if it's live or sports, something could still end up happening, 
like it did during the Super Bowl. So, I think the ads may be 
effective at their message, but I'm not sure I agree that that 
alone is enough.
    Senator Pryor. OK. Now, let me ask you about a state-
specific issue that's on another topic, and that is video 
franchising. The Committee's heard a lot of discussion about 
the Texas video franchising law, and I'd like to get--as a 
Federal regulator, I'd like to get your impressions of the 
Texas video franchising, about--has it increased consumer 
choice? Has it lowered the costs of programming? How's it 
working?
    Mr. Martin. It does seem that, in Texas, it has increased 
the consumer choice for video services. We went down and had a 
field hearing in Keller, Texas, where we were able to see 
Verizon offering their video service alternative, saw a 
demonstration of what AT&T plans to roll out in San Antonio 
this year after that franchise reform. So, it does seem to be 
increasing the ability of new entrants to be able to come in 
and offer a video alternative.
    Senator Pryor. Is it getting to middle-income and lower-
income households at the same rate it's getting to higher-
income households?
    Mr. Martin. You know, we haven't seen any evidence of that 
yet. I do think that many of the services were more high-end, 
they were more geared toward users who were purchasing a lot of 
media. But I haven't seen any evidence yet to see what's going 
on.
    Senator Pryor. One last question on net neutrality. 
Chairman Stevens, a few moments ago, mentioned that net 
neutrality has been a very sticky wicket for this Committee and 
for the telecommunications bill. There's really not a consensus 
on it. Actually, I was outvoted, in my position on it, in the 
Committee. And I think it's one of the major holdups on getting 
telecommunications done this year on the Senate floor.
    Personally, I like the FCC's approach, where you define two 
or three--I guess, three different items. And I'm willing to 
add a fourth, if that makes sense. Given your experience on the 
FCC in net neutrality, how has--from your perspective, how has 
the FCC approach worked, so far?
    Mr. Martin. I think, thus far, it has worked effectively. I 
mean, we identified the principles that we thought would guide 
us as we try to evaluate the issue. And we've acted where there 
were complaints that were raised in front of us. And we've been 
able to do that, thus far. And so, I think, so far, waiting to 
adopt widespread rules has been more prudent when we might not 
completely appreciate the implications of those rules. Absent a 
significant number of complaints that we've identified in the 
marketplace, or a significant number of problems, I think 
showing your strength through enforcement is the better method, 
at this point.
    Senator Pryor. Mr. Chairman, I'm out of time. Thank you.
    Senator Burns. Thank you, a lot, Mr. Pryor.
    I've got some questions. Mr. Kneuer, we know you're here.
    [Laughter.]
    Senator Burns. Even though you're not making any noise. And 
I've--I got to watch those babies go back and forth, and I 
said, ``Welcome to the Senate Daycare Center.''
    [Laughter.]
    Senator Burns. And--but I think it's very refreshing. I'm 
like Mr. Stevens; I think it's very--well, I'm just a new 
grandpa, though.
    I'm going to go to--Mrs. Boxer's got a couple of questions. 
I've got an important press conference--has to do with 
agriculture; and so, I take my agriculture pretty serious--and 
I'm going to submit my questions, but I want Mrs. Boxer to ask 
her--she's got a couple of more questions. Is that fair to say?
    Senator Boxer. Correct, Mr. Burns.
    Senator Burns. Well, if you could do that, and then I can--
I will close this thing up a little bit. But I want to give you 
an idea of what I'll be asking, and I want you to respond both 
to the Committee and to me. So, thank you.
    Senator Burns. You may proceed, Mrs. Boxer.
    Senator Boxer. Thank you, sir.
    Mr. Martin, I was very disappointed with your answer on net 
neutrality. You didn't even hesitate. You know, ``We're just 
going to allow these ISPs to set up their toll roads.'' Not 
your words; mine. But, you know, I have to say that your answer 
was so clear, I appreciate your honesty on the point, but it's 
only going to make a mess up here, because those of us who 
really believe in nondiscrimination, who believe that--the 
reason the Internet is so great is, we've stopped taxes, we've 
stopped toll roads, we've stopped fees. All of us. Or most of 
us. And, therefore, we've had this incredible growth. And now, 
all of a sudden we're going to have the ISPs setting up toll 
roads, charging different websites different rates. And your 
answer is, ``Well, if we interfere with it, they won't do--they 
won't make any progress.'' Well, that is not the history of the 
net. We've had, you know, nondiscrimination since the 
beginning, and there are many of us who are just going to fall 
on that sword.
    So, I'm just a little disappointed, because, as you know, 
the bill that passed out of here really gives you a lot of 
discretion. And I don't feel real comfortable with that, at 
this point, given what you have said.
    So, I hope you'll take a look again at the way you answered 
the question. Maybe I misheard it. But I've never heard someone 
just come straight out, ``Yup, we're going to let these folks 
do what they have to do,'' to the detriment, in my view, of the 
people of this country.
    I have a question on the NSA warrants, because I think it's 
an interesting situation here. You wrote a letter to 
Representative Markey that the Government had asserted--which 
is correct--the military- and state-secrets privilege in a 
Federal lawsuit; and, therefore, you said, you know, ``We can't 
get involved in this.'' Well, you probably know that the court, 
a U.S. District Court, refused to dismiss the case on state-
secret grounds, is allowing the plaintiffs to seek information, 
and discovery is going on. I mean, basically, what the court 
said, ``Hey, if there are some of--some of these records that 
were needed, please tell us, and we will absolutely go forward, 
but don't do a fishing expedition.''
    So, in light of this ruling, what plans does the FCC have 
to launch an investigation into the reported turning over of 
customer phone records to the NSA that had absolutely no 
involvement in any nefarious, or even suspected, acts?
    Mr. Martin. As I understand it, there are multiple cases in 
many different district courts. You're talking about the 
district court that allowed that case to proceed. There have 
been other district courts that have actually dismissed the 
cases because of the state-secret privilege that's been 
asserted. And I think that issue was on appeal before the 
appellate courts. And once there's a consistent ruling, the 
Commission will follow that consistent ruling. But I think that 
you have multiple courts coming out with different rulings, at 
this point.
    Senator Boxer. Well, we'll get back to you on that, because 
the decisions I know basically say that, you know, you could 
proceed. But I--you know, I'm disappointed in that, too.
    Mr. Martin. And could I respond to the earlier net-
neutrality question?
    Senator Boxer. Yes, but I want to make sure I get a 
question in to Mr. Kneuer. So, we may have to have that between 
us, which is just fine, if you don't mind. But I feel like Mr. 
Kneuer has been left out of this, and he has a very important 
job, because he will be establishing a $1-billion public-safety 
interoperability grant program, and a lot of us, in a 
bipartisan way, are concerned that our first responders can't 
talk to each other.
    So, how soon after October 1st will the NTIA be prepared to 
distribute grants to public-safety entities, Mr. Kneuer?
    Mr. Kneuer. Thank you, Senator.
    We've--since the day the legislation was passed, we've been 
working to be prepared to execute our responsibilities and 
authorities under the statute. As you mentioned, October 1 we 
have--borrowing authority becomes available. We have executed 
agreements with the Treasury Department to have access to those 
monies. We're working closely with our colleagues at the 
Department of Homeland Security. I've got strong support from 
the leadership inside the Department of Commerce to make sure 
that we have all the resources that we need.
    Senator Boxer. So, how soon--I hate to cut you off, but I'm 
running out of time--how soon can we see these grants being 
distributed to public-safety entities? Give me the date.
    Mr. Kneuer. I don't have a date on when grants would be 
made available. As I've said, we've been working to be prepared 
to have the monies available----
    Senator Boxer. OK. Well, let me just say----
    Mr. Kneuer.--working with DHS.
    Senator Boxer.--because I've got 8 seconds left, and I--I'm 
glad that you've planned it. But I have to say, we don't have 
time here. You know, everybody knows that we have to prepare--
that we have to prepare for an attack, that our law enforcement 
has to talk to each other. And you have the authority to start, 
October 1. And you can't tell me the date. So, will you please 
write to me within the next week or so and give me the 
projected date that you will be ready to hand out these grants?
    Mr. Kneuer. Absolutely.
    Senator Boxer. Because it's important. I thank you. And I 
will submit all my other questions for the record.
    I understand, Mr. Chairman, you're off to a press 
conference, so----
    Senator Burns. I have. And I thank the Senator from 
California.
    I--this is my question. Mr. Kneuer, I'm going to--I have a 
couple of questions for Chairman Martin, and it has to do with 
the VoIP 911 order and subsequent filings and this type thing. 
I want to know the status of those, and we will get those from 
you.
    Mr. Kneuer, on the Enhanced 911 Act. We still have--50 
percent of the counties of the United States still do not have 
a locator service, and some of them don't even have 911 and the 
PSAPs. And I think we've got to work on that, because we worked 
very hard to pass that, to make sure those monies, as a pass-
through to the--many states were using that money to balance 
their own budgets rather than passing it through to the 
countries or the entities that establish those call-in centers. 
So, my questions will go along with that.
    Also, can you bring me up to date, Mr. Kneuer, on ICANN and 
the--negotiating between them and VeriSign? I think that's very 
important right now for the Internet and also the routers and 
this type of thing. And most of my questions have been asked. 
You have--you responded to them, Mr.--Chairman Martin, and I 
appreciate that, and your candid responses to us. And--but 
those are the areas, I think, right now.
    911 is particularly important to me, because I think 
probably the passage of that legislation was the best public-
safety legislation that we've passed. In other words, locator 
service for a cell phone just makes good sense to me, 
especially in a time when we have more cell numbers now than we 
have wired numbers. And we need locator services when that 911 
call comes in to the nearest first responder.
    And so, my questions will be along that line, and if you 
could respond to me, and to the Committee, I would appreciate 
that very much. We're moving--and yet, we've still got some 
ground--very important ground to cover for both of you. I plan 
to support both of you for these positions and move ahead. But 
I would have--well, I would like to have responses to those 
questions. If you'd agree to that, why--I'm going to leave this 
record open for two weeks for other members to ask their 
questions and for you to get a response from this hearing.
    Without further ado, I'm going to recess this Committee.
    [Whereupon, at 11:25 a.m., the hearing was adjourned.]

                            A P P E N D I X

 Prepared Statement of Hon. Daniel K. Inouye, U.S. Senator from Hawaii

    I am pleased to welcome Chairman Martin and Mr. Kneuer before our 
Committee today.
    Chairman Martin has an impressive resume and an accomplished record 
as a public servant both as Commissioner and as Chairman of the Federal 
Communications Commission. I look forward to hearing his plans on how 
he will address the challenges in overseeing the ever-changing 
communications industry.
    I am especially interested in how he will ensure that consumers are 
protected and competition is promoted as technology changes and 
industries consolidate. I have a number of specific questions that I 
will ask the Chairman to address after we hear from the nominees.
    Thank you.
                                 ______
                                 
                      National Religious Broadcasters (NRB)
                                   Manassas, VA, September 11, 2006
Hon. Ted Stevens,
Chairman,
Senate Committee on Commerce, Science, and Transportation,
Washington, DC.

Dear Mr. Chairman:

    I write today to express the strong support of the National 
Religious Broadcasters (NRB) for the re-nomination and confirmation of 
the Honorable Kevin Martin as Commissioner and Chairman of the Federal 
Communications Commission.
    During my tenure as president of NRB, I have developed enormous 
respect for the intellect, character, integrity and clear-headed 
thinking of Chairman Martin, His understanding of the multi-faceted 
issues facing a rapidly-changing media world is impressive; his 
carefully reasoned and well-balanced approach to these complex matters 
is even more so.
    I have found Chairman Martin firm in his commitment to public 
policy values shared by the overwhelming majority of the American 
people. Unafraid to challenge media professionals to their highest and 
best, he is also firm in his readiness to seek correction when they 
stoop to their lowest and least.
    While NRB members have not seen every issue before the FCC go their 
way, we have always found an open door to make our thoughts and 
concerns known. This is due, in no small part, to Chairman Martin's 
leadership.
    I respectfully urge your quick and favorable action on the re-
nomination of Chairman Martin.
        Sincerely,
                                       Frank Wright, Ph.D.,
                                                      President/CEO
                                 ______
                                 
                      National Religious Broadcasters (NRB)
                                   Manassas, VA, September 11, 2006
Hon. Daniel K. Inouye,
Ranking Member,
Senate Committee on Commerce, Science, and Transportation,
Washington, DC.

Dear Senator Inouye:

    I write today to express the strong support of the National 
Religious Broadcasters (NRB) for the re-nomination and confirmation of 
the Honorable Kevin Martin as Commissioner and Chairman of the Federal 
Communications Commission.
    During my tenure as president of NRB, I have developed enormous 
respect for the intellect, character, integrity and clear-headed 
thinking of Chairman Martin. His understanding of the multi-faceted 
issues facing a rapidly-changing media world is impressive; his 
carefully reasoned and well-balanced approach to these complex matters 
is even more so.
    We have been particularly encouraged by Chairman Martin's active 
support for Multi-Cast Must-Carry. This important public policy 
question has, in our view, not received the full and fair consideration 
it deserves by the Congress. We commend Chairman Martin for his efforts 
to advance the Multi-Cast Must-Carry debate in the regulatory arena.
    While NRB members have not seen every issue before the FCC go their 
way, we have always found an open door to make our thoughts and 
concerns known. This is due, in no small part, to Chairman Martin's 
even-handed leadership.
    I respectfully urge your quick and favorable action on the re-
nomination of Chairman Martin.
        Sincerely,
                                       Frank Wright, Ph.D.,
                                                     President/CEO.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Ted Stevens to 
                            John M.R. Kneuer

    Question 1. Last December this Committee reported out a bill to 
provide $1.5 billion for the converter box program necessary for the 
DTV conversion, which will in turn make new spectrum available for 
first responders. Can you update us on your implementation of the 
program?
    Answer. Since the enactment of the Deficit Reduction Act of 2005, I 
have devoted significant time and effort to implement plans in 
accordance with the Act. The Department of Commerce and the Office of 
Management and Budget (OMB) have given this program high priority and 
have expedited clearance and procurement schedules to allow us to 
develop the program consistent with the schedule established in the 
Act.
    Because this program will affect every community, we have attempted 
to solicit a wide range of public comment on how to design and operate 
the program. Since enactment of the bill, NTIA has met with a full 
range of interested parties representing consumers, television 
stations, equipment manufacturers and retailers, potential vendors of 
coupon systems, and consumer education services. We have also 
collaborated with other Federal agencies including the Federal 
Communications Commission, the Government Accountability Office, and 
the Department's Office of the Inspector General, to insure the full 
range of government expertise is brought to bear on creating a program 
that is effective, efficient, and minimizes waste, fraud and abuse.
    On July 25, 2006, NTIA issued a Notice of Proposed Rule Making 
(NPRM) that seeks public comment on all aspects of the coupon program 
including eligibility, coupon distribution and redemption, retailer 
certification, and consumer education. The NPRM also addresses the 
technical specifications for converter boxes that may be purchased with 
the coupon. The deadline for public comment in the NPRM is September 
25, 2006. NTIA's intention is to publish final rules in early 2007.
    Because this is a one-time program and NTIA does not have coupon 
facilities, the agency intends to obtain services needed for the 
program through time-limited contracts. NTIA will retain oversight and 
approval of all work done under contract. Contemporaneously with the 
NPRM, NTIA has begun the government acquisition process to obtain the 
services necessary to educate consumers, certify retailers as well as 
distribute and redeem the coupons. The Request for Information (RFI) 
published on July 31, 2006, is the first step in the Federal 
procurement process. The information obtained in the RFI will be used 
to create cost estimates, performance requirements and other 
information required in the procurement process. Responses to the RFI 
were due on September 15, 2006. This information will allow NTIA to 
begin formal procurement as soon as the Rules are adopted. NTIA intends 
to award contracts by June 2007, so that vendors will have at least 6 
months to have coupon systems operational by January 2008.
    In both the NPRM and the RFI, NTIA has sought to design a coupon 
program that is efficient; minimizes the opportunity for waste, fraud 
and abuse; and, furthers the objective of a timely transition to 
digital television.

    Question 2. You are considering a proposal that would grant 
VeriSign the exclusive right to distribute dot.com addresses to 
registrars who in turn make names available to the public for a fee. We 
have heard complaints about the perpetual nature of that contract and 
the price increases it provides for dot.com names. Can you give us an 
update on where your review stands on that issue and your views on the 
contract terms?
    Answer. Under its Memorandum of Understanding with the Department, 
the Internet Corporation for Assigned Names and Numbers (ICANN) is 
required to obtain the Department's approval for any proposed new .com 
Registry Agreement before it can take effect. On March 3, 2006, ICANN 
submitted a proposed new agreement as part of a litigation settlement 
with VeriSign. Since that time, the Department has been reviewing the 
proposed new agreement in light of its longstanding goals of ensuring 
the continued stability and security of the Internet domain name system 
and of promoting the consumer benefits of a competitive marketplace. To 
that end, the Department has been in consultation with the Department 
of Justice's Antitrust Division regarding the competition issues raised 
by the proposed new agreement. In addition, Department officials have 
met with a number of interested stakeholders, including registrars, 
Internet service providers, and search engine companies, who have 
concerns about the agreement. The Department has also heard from a 
number of stakeholders advocating the benefits of the new agreement for 
the security and stability of the Internet domain name system. The 
Department of Commerce has heard from Members of Congress on both sides 
of the issue. The Department will consider all of these views and 
concerns as it concludes its review of the new .com registry agreement.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Conrad Burns to 
                            John M.R. Kneuer

    Question 1. At the end of the 108th Congress, we passed the ENHANCE 
911 Act. Among other things, that bill created a joint 911 Program 
Office between NTIA and NHTSA. Can you describe any progress your 
agency and NHTSA have made in setting up that office? What are the 
status and current plans and what is your overall commitment to 
ensuring that office has the internal resources necessary to be 
effective?
    Answer. I believe that enhanced 911 and wireless E-911 services are 
very important to the security and safety of the American people. NTIA 
and NHTSA will continue to work toward greater coordination and 
communications among Federal, State and local emergency communications 
systems and organizations involved in this effort. NHTSA and NTIA look 
forward to working with Congress to develop solutions for the 
deployment of both wireless and wireline E-911 nationwide.
    As of September 14, 2006, NHTSA and NTIA completed the following 
activities:

        Management Plan for the E-911 Joint Program. NHTSA and NTIA 
        completed and submitted to Congress on March 23, 2005, a 
        management plan for the 5-year duration of the joint program to 
        facilitate coordination and communication among Federal, state, 
        and local emergency communications systems, emergency 
        personnel, public safety organizations, telecommunications 
        carriers, and telecommunications equipment manufacturers and 
        vendors involved in the implementation of E-911 services.

        Memorandum of Understanding. On April 13, 2006, NHTSA and NTIA 
        completed a Memorandum of Understanding to formalize the joint 
        program mandated by the ENHANCE 911 Act of 2004 (the Act), Pub. 
        L. No. 108-494.

        National E-911 Implementation Coordination Office (ICO). NHTSA 
        and NTIA established basic office functions, including 
        telephone, mailing address, office email address, website, and 
        logo. The ICO is housed at NHTSA.

        Wireless E-911 Deployment Status. NHTSA, in conjunction with 
        the National Emergency Number Association (NENA), completed 
        tasks to expand the wireless deployment profile to include 
        Public Safety Answering Point (PSAP) FCC Phase II readiness 
        information.

        ICO Website. NTIA, in coordination with NHTSA, designed, 
        developed, registered and obtained a URL (http://www.e-
        911ico.gov/) for an ICO website to be fully operational in 
        early FY07. This website will primarily be used for 
        coordination and distribution of information on E-911 issues.

    Relative to the status and current plans, NHTSA and NTIA also 
initiated the following E-911 activities:

        Strategic Plan. NHTSA and NTIA developed the initial draft 
        version of a strategic plan for the activities for the ICO. 
        This plan will be completed in early FY07.

        Planned Meeting. The ICO is planning to convene a meeting early 
        in Fiscal Year 2007 (FY07) of all Federal agencies involved in 
        911 activities. During this meeting, the responsibilities of 
        the ICO will be discussed as well as methods for ongoing 
        coordination among involved Federal agencies.

        Stakeholder Listening Sessions. To elicit further input of 
        stakeholders on ICO activities and priorities, NHTSA and NTIA 
        are planning a series of formal listening sessions that will be 
        open to all interested parties.

        Next Generation 911 Initiative. NHTSA is continuing its Next 
        Generation 911 Initiative by issuing a Request for Proposals 
        (RFP) for a design team to complete a high-level system 
        architecture and a migration plan for the Next Generation of 
        the 911 system, enabling the use of technologies such as Voice-
        Over-Internet Protocol (VoIP) within the 911 network.

        Federal 911 Coordination. Under the Next Generation 911 
        Initiative, NHTSA will convene a meeting of all Federal 
        agencies involved in 911 activities. During this meeting, the 
        responsibilities of the ICO will be discussed as well as 
        methods for ongoing coordination among Federal agencies.

        Outreach. NTIA, in conjunction with NHTSA, initiated outreach 
        with stakeholders on the forefront of E-911 implementation 
        efforts, including state and local public safety experts, 
        experienced emergency personnel, leading equipment 
        manufacturers, PSAP operators, national public safety 
        organizations, and expert Federal agencies. Additionally, the 
        ICO already is working with the National Association of State 
        911 Administrators (NASNA) to provide leadership and management 
        to ensure that all areas of this country are E-911 enabled for 
        all technologies and moving toward the next generation of 
        technology. One of the main vehicles for doing this will be to 
        facilitate state planning efforts and distribute state's best 
        practices and lessons learned.

        Implementation Plan for the National Strategy for Pandemic 
        Influenza. The Department of Transportation, in cooperation 
        with Health and Human Services, the Department of Homeland 
        Security, and the Department of Commerce, is leading an effort 
        to develop model protocols for 911 Call Centers (Public Safety 
        Answering Points) that address the provision of information to 
        the public, facilitate caller screening, and assist with 
        priority dispatch of limited emergency medical services.

        Meeting of NHTSA Administrator and NTIA Acting Assistant 
        Secretary. NHTSA and NTIA are planning a meeting between the 
        NHTSA Administrator and the Acting Assistant Secretary, in 
        accordance with the Memorandum of Understanding signed by both 
        agencies.

    The ICO is housed at NHTSA. NTIA and NHTSA are continuing to 
support ICO activities in Fiscal Year 2007 from within existing staff 
resources. NTIA and NHTSA are fully committed to doing everything 
possible within the limitations of existing resources to ensure the ICO 
is effective in providing the necessary leadership to facilitate 
further deployment of E-911 capabilities where they are lacking today.

    Question 2. According to the National Emergency Number Association, 
today nearly 50 percent of counties in this country do not contain a 
Public Safety Answering Point (PSAP) that can accept Phase II wireless 
E-911 calls, meaning the call taker does not know the location of the 
call. Additionally, 25 percent of counties can not accept Phase I E-911 
calls, meaning they have no location or callback number if the call 
gets disconnected. There are still 300 counties that do not have E-911 
for wireline service, over 100 of which lack even basic 911. And of 
course the VoIP deployment is still ongoing. Progress is being made but 
these numbers are troubling. Beyond issuing mandates that directly 
affect communications providers, what do you see as the proper role for 
the FCC, NTIA and the Federal Government generally in providing 
leadership and management to ensure that all areas of this country are 
E-911 enabled for all technologies and moving toward the next 
generation of technology?
    Answer. I believe the proper role for NTIA, NHTSA, the FCC, and the 
Federal Government is providing leadership and management.
    One of the major functions of the new ICO and particularly the ICO 
website is to provide the industry with examples of ``Best Practices'' 
from around the country. NTIA, in particular, has formed a close 
working relationship with the E-911 Best Practices Working Group 
jointly led by the Association of Public Safety Communications 
Officials, International (APCO), the National Emergency Number 
Association (NENA), and National Association of State 911 
Administrators (NASNA). This group, established as an off-shoot of the 
Network Reliability and Interoperability Council (NRIC) in December 
2005, is made up of emergency communications experts from around the 
country. It will act as a clearinghouse for the collection and 
distribution of creative efforts to address E-911 financing, 
enhancement and deployment questions.
    Another function of the ICO is working with the National 
Association of State 911 Administrators (NASNA) to provide leadership 
and management to ensure that all areas of this country are E-911 
enabled for all technologies and moving toward the next generation of 
technology. One of the main vehicles for doing this will be to 
facilitate state planning efforts and distribute state's best practices 
and lessons learned.
                                 ______
                                 
     Response to Written Question Submitted by Hon. Jim DeMint to 
                            John M.R. Kneuer

    Question. In 2002 Congress enacted the ``Dot Kids Implementation 
and Efficiency Act.'' This requires the NTIA to ensure that any manager 
of the .US country code provides a safe set of sites for children. What 
do you intend to do to promote this virtual playground for children on 
the Internet?
    Answer. I will continue to work to promote the kids.us domain name 
space, as enacted as part of the Dot Kids Act, to protect children from 
inadvertently accessing inappropriate content or the threat of online 
predators while they are exploring the Internet.
    Currently, twenty-three organizations--including the Smithsonian, 
the Library of Congress, Disney, PBS, and Nickelodeon--provide 
educational and entertaining content on the kids.us website.
    If confirmed, I am committed to promoting the kids.us domain by 
encouraging providers of children's content to build kids.us websites. 
I will continue to promote the domain as an attractive addition to 
companies that currently host children's content on their existing 
websites.
    If confirmed, I would work with Congress on creative ideas to build 
the kids.us domain into a safe, robust and exciting place for children 
to play and learn online.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                            John M.R. Kneuer

    Question 1. Many critics of the ICANN-VeriSign settlement agreement 
argue that the presumptive renewal clause would allow VeriSign to hold 
on to the dot-com registry in perpetuity. How do you see ICANN holding 
the registry operator accountable without the strong leverage of being 
able to award the contract to a competing operator?
    Answer. Over the course of the past 6 months, I and other Commerce 
Department officials have met with a number of interested stakeholders 
including registrars, Internet service providers, and search engine 
companies with interests in or concerns about the agreement. The 
concerns have largely focused on the impact on competition of the 
proposed price increase for registrations permitted by the new 
agreement and the terms for future renewals of the revised new .com 
Registry Agreement. The Commerce Department has sought the advice of 
the Antitrust Division of the Justice Department on the competition 
concerns raised.
    On the other hand, other interested stakeholders have advocated 
that the renewal terms of the proposed agreement benefit the security 
and stability of the Internet domain name system. We have also 
consulted with those Federal agencies with expertise in the areas of 
security and stability on this matter.
    Based on the information that we have gathered, I am confident that 
any decision made by the Department will appropriately balance all of 
the interests to ensure the continued stability and security of the 
Internet domain name system and of promoting the consumer benefits of a 
competitive marketplace.

    Question 2. One of ICANN's primary missions is to promote 
competition. How does a presumptive renewal clause promote competition?
    Answer. As noted above, the Department is reviewing the proposed 
new agreement in its entirety to ensure both the continued stability 
and security of the Internet domain name system and of promoting the 
consumer benefits of a competitive marketplace.

    Question 3. Cyber security is a critical mission that all 
organizations struggle with. How can ICANN ensure that the registry 
operators are making the necessary security enhancements to guarantee 
the stability of the domain name system? How can ICANN hold a registry 
operator accountable?
    Answer. Cyber security standards are developed by the various 
industry organizations, such as the Internet Engineering Task Force 
(IETF), ISO, and IEEE, and adherence to the various standards is 
voluntary for the most part. While ICANN is not a standards 
organization, it promotes the adoption of industry standards through 
its agreements with registry operators to comply with these standards. 
Registry agreements address the technical obligations, including 
compliance with the various industry developed standards, security 
requirements and outage reporting that all registry operators must 
meet. In addition each registry agreement contains a Service Level 
Agreement which identifies the terms should the registry operator fall 
below the performance specifications.

    Question 4. Do you believe that a registry operator should be 
required to publicly justify any price increases? If no, why not and 
how is such an arrangement not anti-competitive? If yes, why is 
Verisign allowed to increase their prices four out of 6 years without 
justification?
    Answer. The domain name marketplace is not a regulated one. Prices 
are set based on negotiations between private sector parties. The price 
cap for .com registrations and price adjustments permitted under the 
proposed new .com Registry Agreement were negotiated by ICANN and 
VeriSign.
    Nevertheless, the Commerce Department is aware of the concerns 
raised primarily by the registrar community about the impact of a price 
increase on their industry. We have been in consultation with the 
Antitrust Division on this issue and will be guided by its advice in 
any final decision the Department makes.

    Question 5. Would greater competition in the registry space promote 
price competition and better service?
    Answer. I firmly believe that increased competition promotes lower 
prices and better services for consumers. Accordingly, one of the 
Department's core objectives during the transition to private sector 
management of the Internet domain name system has been the promotion of 
competition in this marketplace to bring the benefits to consumers of 
betters prices and services. The Department has strongly supported 
ICANN's efforts to introduce new top-level domains and to develop 
processes for the future introduction of more names.

    Question 6. Commerce asked the Department of Justice's Antitrust 
Division to review the settlement agreement. Please share with us the 
agency's concerns. How are these concerns being addressed? Were there 
recommendations or suggestions made that are not being implemented or 
considered?
    Answer. During its review of the proposed new .com Registry 
Agreement, the Commerce Department has sought the advice of the 
Antitrust Division of the Justice Department regarding the impact on 
competition of the proposed price increase for registrations permitted 
by the new agreement and the terms for future renewals of the revised 
new .com Registry Agreement. Like the Commerce Department, the 
Antitrust Division has been gathering information from the parties, 
interested stakeholders, and others on these issues, to provide its 
analysis and advice to the Department on any competition issues that 
may be raised by the proposed agreement. We expect to rely on this 
advice to evaluate the potential impact on competition of this 
agreement.

    Question 7. Are you open to bringing together the different 
stakeholders in order to arrive at a solution that will satisfy the 
different parties and still ensure the promotion of competition?
    Answer. In addition to its consultation with the Department of 
Justice's Antitrust Division regarding the competition issues raised by 
the proposed new .com registry agreement, I and other Commerce 
Department and Antitrust Division officials have met with a number of 
interested stakeholders, including registrars, Internet service 
providers, search engine companies, among others, with interests in or 
concerns about the agreement. The Commerce Department has also heard 
from a number of stakeholders advocating the benefits of the new 
agreement for the security and stability of the Internet domain name 
system. We have also heard from Members of Congress on both sides of 
the issue. Commerce Department and Antitrust Division officials have 
been gathering information from proponents and opponents of the 
agreement and I am confident that this information will be taken into 
consideration in any final decision that is made.

    Question 8. Can you comment on ICANN's transparency issues? How has 
this improved over the years and how can the organization continue to 
improve?
    Answer. The Department has long considered transparency to be a 
fundamental principle to ICANN's overall mission and function. The 
current Memorandum of Understanding (MOU) was structured to ensure that 
ICANN becomes a sufficiently stable, transparent, representative, and 
sustainable management organization capable of handling the important 
tasks associated with the technical management of the Internet domain 
name system into the future. This MOU also contains specific provisions 
intended to improve transparency, efficiency, and timeliness in the 
consideration and adoption of policies. While ICANN has made several 
improvements in its decision-making and policy development processes, 
as well as in internal reviews and evaluations of these processes, I 
believe ICANN is mindful of the need for continual improvement. The 
Department's recent public consultation process has revealed strong 
support from a majority of interested stakeholders for a more specific 
focus on transparency and accountability in ICANN's internal procedures 
and decision-making processes.

    Question 9. In recent years, the NTIA, working with the Census 
Bureau, has conducted a survey of Americans that explores their use of 
the Internet, computers, and other information tools. The last report, 
``A Nation Online'' (the 6th in a series that dates to the 1990s), was 
released in 2004 and interviewed approximately 57,000 households. This 
survey has been extremely useful to policymakers at all levels of 
government and the general public. It may be the only publicly 
available source of state-level data on the use of information 
technology and it is widely used by researchers in the academic, 
private, and public sectors. Does NTIA plan to field another survey in 
this series? If so, when?
    Additionally, this survey has sometimes (but not in 2004) asked 
respondents about their monthly bill for Internet service. As one of 
the sole public sources for this information, this consumer price data 
has been valuable to policymakers and researchers. Will NTIA include a 
question in the survey asking consumers what they pay, on a monthly 
basis, for Internet and other information services?
    Answer. Although ``A Nation Online'' has been useful to 
policymakers, the process of compilations renders it to be untimely in 
a rapidly changing marketplace. As market penetration stabilizes and is 
less subject to rapid change, we may consider future studies.

    Question 10. A ``next generation'' measurement question for 
policymakers is the quality of the Nation's communications 
infrastructure. Policy debate in the broadband arena will increasingly 
focus on network quality--the upload and download speeds available to 
home consumers, the reliability of service, and where advanced high-
speed infrastructure is deployed. Network speed is increasingly a 
benchmark used in international comparisons of broadband deployment, as 
well as part of regional economic development strategies in the United 
States. Network speed is also important to economists measuring the 
``information economy'' and for public understanding of the societal 
impacts of information and communications technology.
    However, traditional measurement tools, such as surveys of 
consumers or reporting requirements for companies, have limitations in 
addressing this issue. How does the NTIA plan to address this 
measurement challenge?
    Answer. I agree with your thoughts on the challenge of gathering 
systematic and up-to-date information on the availability and quality 
of broadband services. As noted in response to the previous question, 
the communications market is both rapidly expanding and rapidly 
changing. New service providers are entering the market every month, 
using a wide variety of different technologies. The services that those 
providers offer to customers in terms of price, speed, and quality are 
changing even more rapidly. Today we see various broadband platforms: 
fiber, cable, satellite, cellular, broadband over power line, and 
municipal Wi-Fi, just to name a few.
    In this competitive marketplace, consumers will demand and carriers 
will have an incentive to provide accurate information or speed, price 
and terms of service.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                            John M.R. Kneuer

    Question 1. NTIA will soon begin distributing one billion dollars 
in interoperability funds as mandated in legislation we passed last 
year on the transition to digital television. The conference report 
states that a portion of these funds should be distributed based on 
threat and risk of natural disasters and terrorism. Can you describe 
the factors NTIA will use to determine threat and risk, and how you 
plan to disburse this money? Will it all be risk-based? If not, what 
portion?
    Answer. We are working to begin this grant program as soon as 
possible so funds may be applied to the challenges of establishing 
interoperable communications among first responders across the country. 
NTIA and the Office of Grants and Training at the Department of 
Homeland Security (DHS) are working closely together on an agreement 
that will allow the use of DHS' existing grants infrastructure, 
technical assistance and outreach mechanisms. The agreement will speed 
program initiation, avoid duplication, and minimize the paperwork and 
administrative burden for public safety agencies applying for funds 
from multiple programs.
    Distribution of funds will be determined consistent with the 
guidance found in the legislative history accompanying the Act. 
Accordingly, NTIA intends:

        to distribute a limited portion of grant funds under this 
        section in a manner that gives priority to those public safety 
        agencies in areas designated as at high risk for natural 
        disasters and threats of terrorism to the agriculture, food, 
        banking, and chemical industries; the defense industrial base; 
        emergency services; energy; government facilities; postal, 
        shipping, public health, health care, information technology, 
        telecommunications, and transportation systems; water; dams; 
        commercial facilities; and national monuments and icons.

    Program priorities and allocation of funds have not been 
determined. We anticipate that the level of risk and need will vary 
from state to state. Funding decisions, therefore, are expected to be 
made based on current DHS and SAFECOM guidance as well as documentation 
provided by first responders in their state interoperable 
communications plans and information collected during the application 
process. We also expect the program to provide technical assistance to 
first responders in each state to assist them in identifying needs and 
how funds from this program might be best used to address 
interoperability gaps and weaknesses across the country.

    Question 2. We must make sure that we have a robust consumer 
education campaign so the American people know about the DTV transition 
and how to prepare for it. What is your plan to best use the $5 million 
available for this task? Given its local presence in communities and 
educational mission, will public broadcasting be utilized in this 
consumer education campaign?
    Answer. I agree with you about the importance of consumer education 
in the digital-to-analog converter box coupon program. NTIA's Notice of 
Proposed Rule Making (NPRM) emphasizes the importance of carefully 
leveraging the $5 million allocation by collaborating with and 
complementing the consumer education efforts of broadcasters, equipment 
manufacturers, consumer electronics retailers, and consumer groups as 
well as the ongoing efforts of the FCC. Based on our discussions with 
these stakeholders, we understand that they are planning to widely 
publicize the digital television transition with their customer groups. 
The NPRM seeks additional information on the role and future activities 
of the stakeholders in providing consumer information about the coupon 
program.
    Any public information campaign undertaken by NTIA will only be 
successful if other stakeholders in the digital transition and the 
digital-to-analog converter box coupon program contribute significant 
effort to the production and distribution of this information. NTIA 
fully expects that broadcasters--both public and commercial--will play 
primary roles in alerting their viewers to the availability of Federal 
assistance to purchase digital-to-analog converter boxes.
    In addition, NTIA's Request for Information (RFI), entitled 
``Market Research for Implementation of Digital to Analog Converter Box 
Coupon Program,'' seeks information about the capability of 
organizations to facilitate the participation of interested partners 
and to create a consistent and effective message about the coupon 
program. The RFI also will provide NTIA with information about 
organizations with the capability to assist in all aspects of the 
coupon program including consumer information.

    Question 3. The Department of Commerce has reportedly consulted 
with the Department of Justice on the proposed .com registry renewal 
agreement. Has DOJ provided your agency with any suggestions or 
comments?
    Answer. During its review of the proposed new .com Registry 
Agreement, the Commerce Department has sought the advice of the 
Antitrust Division of the Justice Department regarding the impact on 
competition of the proposed price increase for registrations permitted 
by the new agreement and the terms for future renewals of the revised 
new .com Registry Agreement. Like the Commerce Department, the 
Antitrust Division has been gathering information from the parties, 
interested stakeholders, and others on these issues, to provide its 
analysis and advice to the Department on any competition issues that 
may be raised by the proposed agreement. We expect to rely on this 
advice to evaluate the potential impact on competition of this 
agreement. While we have engaged in extensive discussions with the 
Antitrust Division throughout this review process, the Department has 
not yet received the Antitrust Division's formal advice.

    Question 4. The proposed .com registry renewal agreement would 
permit the registry operator to raise prices by 7 percent in four out 
of 6 years of the contract. Must these increases be justified annually? 
Can you compare and contrast this contract, and the aforementioned 
pricing, with the .net domain registry operation?
    Answer. The domain name marketplace is not a regulated one. Prices 
are set based on negotiations between private sector parties. The price 
cap for .com registrations and price adjustments permitted under the 
proposed new .com Registry Agreement, for example, were negotiated by 
ICANN and VeriSign, Inc.
    Nevertheless, the Commerce Department is aware of the concerns 
raised primarily by the registrar community about the impact of the 
potential price increase on their industry. We are also aware of the 
differences in the pricing provisions of the current .net Registry 
Agreement and the proposed new .com Registry Agreement. We have been in 
consultation with the Antitrust Division on this issue and understand 
that this has been taken into account in its competition analysis of 
the proposed new agreement. The Commerce Department will be guided by 
the Antitrust Divisions's analysis of this issue and its advice in any 
final decision the Department makes on whether to approve the proposed 
agreement.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Bill Nelson to 
                            John M.R. Kneuer

    Question 1. I share concerns with others that the NTIA and the FCC 
don't partner closely enough on setting Federal spectrum policy. What 
steps do you think you could take to more effectively coordinate 
spectrum policy with the FCC?
    Answer. The relationship between the FCC and NTIA is extremely 
important in setting Federal spectrum policy and over the past few 
years, our two agencies have worked closely together. In partnership 
with other government agencies, we've significantly increased the 
amount of radio spectrum available to commercial licensees, much of 
which has or will be used to provide broadband services, and we have 
facilitated the resolution of complicated problems that have enabled 
Federal users to better complete their missions.
    In accordance with President Bush's Spectrum Policy Initiative, 
NTIA will collaborate even more closely with the FCC in the coming 
years to craft policies that promote efficient use of radio spectrum by 
government and commercial users. We are already working together, and 
with other Federal executive agencies, to develop national strategic 
plans that address spectrum requirements and the impact of new 
technologies. In June, NTIA, in collaboration with the FCC, solicited 
public comment on a proposed spectrum sharing test bed that will enable 
Federal and non-Federal users of spectrum to test new ways to share the 
radio spectrum. NTIA and the FCC will also explore the use of advanced 
information technology capabilities to replace existing manual 
processes and procedures. Finally, NTIA and the FCC are committed to 
improving existing processes for assessing the impact of new 
technologies on incumbent licenses, thereby expediting the introduction 
of new spectrum uses.
    If confirmed, I am committed to work with my colleagues at the FCC 
and across government.

    Question 2. I have heard from a number of my Florida constituents 
about the proposed settlement between ICANN and Verisign that is under 
review at your agency. What assurances can you give me that the 
concerns of Internet users and small business owners are being 
considered at NTIA? How will you address their concerns?
    Answer. Under its Memorandum of Understanding with the Department, 
ICANN is required to obtain the Department's approval for the proposed 
new .com Registry Agreement before it can take effect. ICANN submitted 
the proposed new .com Registry Agreement to the Department of Commerce 
on March 3, 2006. The Department has been reviewing the proposed 
agreement in light of its longstanding goals of ensuring the continued 
stability and security of the Internet domain name system and of 
promoting the consumer benefits of a competitive marketplace.
    To that end, the Commerce Department has been in consultation with 
the Department of Justice's Antitrust Division regarding the 
competition issues raised by the proposed agreement. In addition, I and 
other Commerce Department officials have met with a number of 
interested stakeholders, including registrars, Internet service 
providers, search engine companies, representatives of small businesses 
and the user community, with concerns about the agreement. Based on the 
information that we have gathered, I am confident that any decision 
made by the Department will appropriately balance all of the interests 
to ensure the continued stability and security of the Internet domain 
name system and of promoting the consumer benefits of a competitive 
marketplace.

    Question 3. At the end of the 108th Congress, we passed the ENHANCE 
911 Act. Among other things, that bill created a joint 911 Program 
Office between NTIA and NHTSA. Can you describe any progress your 
agency and NHTSA have made in setting up that office? What are the 
status and current plans and what is your overall commitment to 
ensuring that office has the internal resources necessary to be 
effective?
    Answer. I believe that enhanced 911 and wireless E-911 services are 
very important to the security and safety of the American people. NTIA 
and NHTSA will continue to work toward greater coordination and 
communications among Federal, State and local emergency communications 
systems and organizations involved in this effort. NHTSA and NTIA look 
forward to working with Congress to develop solutions for the 
deployment of both wireless and wireline E-911 nationwide.
    As of September 14, 2006, NHTSA and NTIA completed the following 
activities:

        Management Plan for the E-911 Joint Program. NHTSA and NTIA 
        completed and submitted to Congress on March 23, 2005, a 
        management plan for the 5-year duration of the joint program to 
        facilitate coordination and communication among Federal, state, 
        and local emergency communications systems, emergency 
        personnel, public safety organizations, telecommunications 
        carriers, and telecommunications equipment manufacturers and 
        vendors involved in the implementation of E-911 services.

        Memorandum of Understanding. On April 13, 2006, NHTSA and NTIA 
        completed a Memorandum of Understanding to formalize the joint 
        program mandated by the ENHANCE 911 Act of 2004 (the Act), Pub. 
        L. No. 108-494.

        National E-911 Implementation Coordination Office (ICO). NHTSA 
        and NTIA established basic office functions, including 
        telephone, mailing address, office email address, website, and 
        logo. The ICO is housed at NHTSA.

        Wireless E-911 Deployment Status. NHTSA, in conjunction with 
        the National Emergency Number Association (NENA), completed 
        tasks to expand the wireless deployment profile to include 
        Public Safety Answering Point (PSAP) FCC Phase II readiness 
        information.

        ICO Website. NTIA, in coordination with NHTSA, designed, 
        developed, registered and obtained a URL (http://www.e-
        911ico.gov/) for an ICO website to be fully operational in 
        early FY07. This website will primarily be used for 
        coordination and distribution of information on E-911 issues.

    Relative to the status and current plans, NHTSA and NTIA also 
initiated the following E-911 activities:

        Strategic Plan. NHTSA and NTIA developed the initial draft 
        version of a strategic plan for the activities for the ICO. 
        This plan will be completed in early FY07.

        Planned Meeting. The ICO is planning to convene a meeting early 
        in Fiscal Year 2007 (FY07) of all Federal agencies involved in 
        911 activities. During this meeting, the responsibilities of 
        the ICO will be discussed as well as methods for ongoing 
        coordination among involved Federal agencies.

        Stakeholder Listening Sessions. To elicit further input of 
        stakeholders on ICO activities and priorities, NHTSA and NTIA 
        are planning a series of formal listening sessions that will be 
        open to all interested parties.

        Next Generation 911 Initiative. NHTSA is continuing its Next 
        Generation 911 Initiative by issuing a Request for Proposals 
        (RFP) for a design team to complete a high-level system 
        architecture and a migration plan for the Next Generation of 
        the 911 system, enabling the use of technologies such as Voice-
        Over-Internet Protocol (VoIP) within the 911 network.

        Federal 911 Coordination. Under the Next Generation 911 
        Initiative, NHTSA will convene a meeting of all Federal 
        agencies involved in 911 activities. During this meeting, the 
        responsibilities of the ICO will be discussed as well as 
        methods for ongoing coordination among Federal agencies.

        Outreach. NTIA, in conjunction with NHTSA, initiated outreach 
        with stakeholders on the forefront of E-911 implementation 
        efforts, including state and local public safety experts, 
        experienced emergency personnel, leading equipment 
        manufacturers, PSAP operators, national public safety 
        organizations, and expert Federal agencies. Additionally, the 
        ICO already is working with the National Association of State 
        911 Administrators (NASNA) to provide leadership and management 
        to ensure that all areas of this country are E-911 enabled for 
        all technologies and moving toward the next generation of 
        technology. One of the main vehicles for doing this will be to 
        facilitate state planning efforts and distribute state's best 
        practices and lessons learned.

        Implementation Plan for the National Strategy for Pandemic 
        Influenza. The Department of Transportation, in cooperation 
        with Health and Human Services, the Department of Homeland 
        Security, and the Department of Commerce, is leading an effort 
        to develop model protocols for 911 Call Centers (Public Safety 
        Answering Points) that address the provision of information to 
        the public, facilitate caller screening, and assist with 
        priority dispatch of limited emergency medical services.

        Meeting of NHTSA Administrator and NTIA Acting Assistant 
        Secretary. NHTSA and NTIA are planning a meeting between the 
        NHTSA Administrator and the Acting Assistant Secretary, in 
        accordance with the Memorandum of Understanding signed by both 
        agencies.

    The ICO is housed at NHTSA. NTIA and NHTSA are continuing to 
support ICO activities in Fiscal Year 2007 from within existing staff 
resources. NTIA and NHTSA are fully committed to doing everything 
possible within the limitations of existing resources to ensure the ICO 
is effective in providing the necessary leadership to facilitate 
further deployment of E-911 capabilities where they are lacking today.

    Question 4. According to the National Emergency Number Association, 
today nearly 50 percent of counties in this country do not contain a 
Public Safety Answering Point (PSAP) that can accept Phase II wireless 
E-911 calls, meaning the call taker does not know the location of the 
call. Additionally, 25 percent of counties can not accept Phase I E-911 
calls, meaning they have no location or callback number if the call 
gets disconnected. There are still 300 counties that do not have E-911 
for wireline service, over 100 of which lack even basic 911. And of 
course the VoIP deployment is still ongoing. Progress is being made but 
these numbers are troubling. Beyond issuing mandates that directly 
affect communications providers, what do you see as the proper role for 
the FCC, NTIA and the Federal Government generally in providing 
leadership and management to ensure that all areas of this country are 
E-911 enabled for all technologies and moving toward the next 
generation of technology?
    Answer. I believe the proper role for NTIA, NHTSA, the FCC, and the 
Federal Government is providing leadership and management.
    One of the major functions of the new ICO and particularly the ICO 
website is to provide the industry with examples of ``Best Practices'' 
from around the country. NTIA, in particular, has formed a close 
working relationship with the E-911 Best Practices Working Group 
jointly led by the Association of Public Safety Communications 
Officials, International (APCO), the National Emergency Number 
Association (NENA), and National Association of State 911 
Administrators (NASNA). This group, established as an off-shoot of the 
Network Reliability and Interoperability Council (NRIC) in December 
2005, is made up of emergency communications experts from around the 
country. It will act as a clearinghouse for the collection and 
distribution of creative efforts to address E-911 financing, 
enhancement and deployment questions.
    Another function of the ICO is working with the National 
Association of State 911 Administrators (NASNA) to provide leadership 
and management to ensure that all areas of this country are E-911 
enabled for all technologies and moving toward the next generation of 
technology. One of the main vehicles for doing this will be to 
facilitate state planning efforts and distribute state's best practices 
and lessons learned.

    Question 5. Related to the 2009 digital TV transition, Congress 
only authorized $5 million for a consumer education effort that many 
contend is the most important element of ensuring that Americans are 
prepared for the day that free, over-the-air television becomes an 
exclusively digital service. Is that sum sufficient or should Congress 
appropriate additional monies for this purpose? Given the success of 
public outreach campaigns that public television has successfully 
conducted in the past, if you are confirmed by the Senate, will the 
NTIA--under your leadership--consider giving public television a 
primary role in the comprehensive consumer education effort that will 
be necessary to ensure a successful DTV transition for all Americans?
    Answer. I agree with you about the importance of consumer education 
in the digital-to-analog converter box coupon program.
    NTIA's Notice of Proposed Rule Making (NPRM) emphasizes the 
importance of carefully leveraging the $5 million allocation by 
collaborating with and complementing the consumer education efforts of 
broadcasters, equipment manufacturers, consumer electronics retailers, 
consumer groups, as well as the ongoing efforts of the Federal 
Communications Commission. Based on our discussions with these 
stakeholders, we understand that they are planning to widely publicize 
the digital television transition with their customer groups. The NPRM 
seeks additional information on the role and future activities of the 
stakeholders in providing consumer information about the coupon 
program.
    Any public information campaign undertaken by NTIA will only be 
successful if other stakeholders in the digital transition and the 
digital-to-analog converter box coupon program contribute significant 
effort to the production and distribution of this information. NTIA 
fully expects that broadcasters--both public and commercial--will play 
primary roles in alerting their viewers to the availability of Federal 
assistance to purchase digital-to-analog converter boxes.
    In addition, NTIA's Request for Information, entitled ``Market 
Research for Implementation of Digital to Analog Converter Box Coupon 
Program,'' seeks additional information about the capability of 
organizations to facilitate the participation of interested partners 
and to create a consistent and effective message about the coupon 
program. The RFI also will provide NTIA with information about 
organizations with the capability to assist in all aspects of the 
coupon program including consumer information.
    Based on the public record developed through these proceedings, 
NTIA intends to design a coupon program within the budget allocation 
established by Congress. I greatly appreciate your concern about the 
sufficiency of funding for this program and fully intend to keep you 
apprised of activities, progress, budget, and all aspects of coupon 
program implementation and administration.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                            Kevin J. Martin

    Question 1. One of the conditions adopted by the FCC and agreed to 
by the parties in the AT&T-SBC/Verizon-MCI mergers was a requirement 
that the combined entities provide stand-alone ADSL service to `ADSL-
capable customers' within its territory. It is my understanding that 
under FCC precedent, this obligation to provide stand-alone ADSL 
applies to both retail and commercial customers. How does the FCC 
monitor compliance with this condition, and have there been any 
allegations to date that either party is failing to abide by this 
obligation to offer stand-alone service to residential consumers or 
commercial ISPs? Is the Commission aware of concerns regarding de facto 
noncompliance in situations where stand-alone service may be offered, 
but where the price for stand-alone ADSL service is set well in excess 
of the price for a bundled package of voice and ADSL service from the 
carrier? What tools are available to the Commission to address such 
concerns where a carrier's pricing of stand-alone service makes it 
economically unreasonable for a consumer to purchase it?
    Answer. In last year's merger review process, AT&T and SBC and 
Verizon and MCI made certain voluntary commitments, including the 
commitment to offer ADSL service without telephone service for a period 
of 2 years. Specifically, the condition states that ``[w]ithin twelve 
months of the Merger Closing Date,
    [the merging parties] will deploy and offer within its in-region 
territory ADSL service to ADSL-capable customers without requiring such 
customers to also purchase circuit switched voice grade telephone 
service.'' See, e.g., SBC/AT&T, Appendix F. The Commission, in 
approving the mergers made these commitments express conditions of the 
merger approvals. Accordingly, each company is required to file 
annually a declaration by an officer of the corporation attesting that 
the merged company has substantially complied with the terms of the 
conditions in all material respects. Although the deadline to file its 
annual declaration of compliance has not been reached, AT&T informed 
the Commission on June 30, 2006 that it fully implemented the condition 
offering ADSL service without telephone service under the terms of this 
condition in each of its states as of June 13, 2006.
    I am not aware of any allegations to date that either party is 
failing to abide by this obligation. Nevertheless, the Commission will 
vigilantly monitor all consumer-related problems concerning this 
service, including reviewing consumer complaints and other information. 
As noted in the merger, we expect that the terms and conditions of this 
service will reflect the underlying competitiveness of the market. The 
Commission retains its historical discretion to monitor the market and 
take corrective action if the public interest requires. Specifically, 
the Commission is prepared to use all of its enforcement tools to 
ensure compliance with this condition.

    Question 2. In response to concerns about indecent programming on 
cable television, many cable operators announced plans in recent months 
to create so-called ``tiers'' of family friendly programming. In your 
view, are these ``tiers'' working? If not, is any further action by the 
Commission contemplated to assist parents in choosing appropriate 
programming? If so, what are you considering? In your view, is the new, 
inter-industry initiative recently announced by former head of the 
Motion Picture Association of America, Jack Valenti, which is designed 
to promote greater awareness among parents of channel blocking 
technology, sufficient to help parents and protect children from 
objectionable material?
    Answer. The family tiers proposed by the cable industry are an 
important step, but it is too soon to know if consumers will view these 
tiers as a viable alternative. For example, several Members of Congress 
have expressed their concern that the family tiers as proposed would 
have no sports programming. Moreover, of those cable operators who have 
announced plans to introduce a family tier, only some have introduced 
them and, of those, many have not rolled them out in all of their 
service areas. We will have to see how these tiers evolve.
    The industry initiative to educate parents how to block channels 
should be helpful. Parents, of course, are the first line of defense, 
but industry also has a responsibility to empower parents by offering 
them more effective tools with which to supervise their children's TV 
watching. Consumer education efforts are always welcome but I do not 
believe it alone is sufficient to help parents and protect children 
from objectionable material. First, not all television viewers have 
access to blocking technologies. Only those consumers who own 
televisions that have a V-chip or subscribe to digital cable have this 
blocking capability. Second, blocking technologies are dependent upon 
programs being rated and being rated accurately. Sporting events like 
the Super Bowl, for instance, are not rated.

    Question 3. In November 2005, the FCC initiated a proceeding asking 
whether the existing franchising process unreasonably impedes the 
development of cable competition and broadband deployment in 
contravention of the directive in section 621 and, if so, how the FCC 
should address this issue. In your opinion, does the FCC have the 
authority under existing law to preempt or invalidate state or local 
redlining prohibitions and build-out requirements imposed on video 
service providers?
    Answer. In the Notice of Proposed Rulemaking that the Commission 
adopted in November 2005, we sought comment on our authority to preempt 
and our authority to address build-out requirements. The Commission has 
not yet made a final determination on this issue.
    In the Notice, we sought comment on the tentative conclusion that, 
``pursuant to the authority granted under Sections 621(a) and 636(c) of 
the Act, and under the Supremacy Clause, the Commission may deem to be 
preempted and superseded by any law or regulation of a state or LFA 
that causes an unreasonable refusal to award a competitive franchise in 
contravention of section 621(a).'' The Commission also sought comment 
on ``whether build-out requirements are creating unreasonable barriers 
to entry for facilities-based providers of telephone and/or broadband 
services'' and on the FCC's authority in this area. In so doing, the 
Commission took note of Section 621(a)(4)(A) of the Act. That provision 
provides that, ``[i]n awarding a franchise, the franchising authority 
shall allow the applicant's cable system a reasonable period of time to 
become capable of providing cable service to all households in the 
franchise area.''
    The Commission explicitly recognized the separate prohibition on 
redlining contained in the statute. The Commission explicitly stated: 
``For purposes of this discussion, we distinguish between (1) 
requirements that may function as barriers to competitive entry for 
providers of telephone and/or broadband services with existing 
facilities, and (2) prohibitions against discriminatory deployment of 
cable services based upon economic considerations.'' (See Section 
621(a)(3) which states: ``In awarding a franchise or franchises, a 
franchising authority shall assure that access to cable service is not 
denied to any group of potential residential cable subscribers because 
of the income of the residents of the local area in which such group 
resides.'') I would note that, in their comments, the U.S. Department 
of Justice stated: ``In light of the significant entry-deterring 
effects of mandated build-out requirements, the Department believes 
that LFAs should not be allowed to impose any such requirements except 
where necessary to prevent income discrimination, which the statute 
prohibits.''

    Question 4. In 2004, SBC (now AT&T) petitioned the FCC to rule that 
Internet Protocol (IP) platform services, including video services, do 
not fit any of the service-specific legacy regulatory regimes in the 
Communications Act, and thus the IP video service offerings that AT&T 
plans to offer would not be subject to the franchising regime of Title 
VI. In your opinion, is AT&T's proposed IP video service subject to the 
requirements of Title VI of the Communications Act? Please explain the 
legal justification for your answer.
    Answer. Section 621(b)(1) of the Communications Act provides that 
``a cable operator may not provide cable service without a franchise.'' 
The Communications Act defines a ``cable operator'' as ``any person or 
group of persons (A) who provides cable service over a cable system and 
directly or through one or more affiliates owns a significant interest 
in such cable system, or (B) who otherwise controls or is responsible 
for, through any arrangement, the management and operation of such a 
cable system.'' The Act excludes from the definition of a ``cable 
system'' ``a facility of a common carrier which is subject, in whole or 
in part, to the provisions of Title II of this Act, except that such 
facility shall be considered a cable system (other than for purposes of 
section 621(c)) to the extent such facility is used in the transmission 
of video programming directly to subscribers, unless the extent of such 
use is solely to provide interactive on-demand services.''
    AT&T is a common carrier which is subject, in whole or in part, to 
the provisions of Title II of the Communications Act. Thus, whether 
AT&T's video services are subject to the requirements of Title VI 
depends upon the characteristics of AT&T's video offering. To the 
extent that the offering involves solely ``interactive on-demand 
services,'' the franchising requirements of the Act would not apply. 
The Commission has not yet made a final determination on this issue.

    Question 5. To ensure that the media ownership rules are properly 
drawn, a full understanding of the public interest requirements of 
localism and diversity is necessary. Do you plan to complete the FCC's 
pending localism and diversity proceedings before moving forward with a 
decision in the media ownership proceeding?
    Answer. In June 2004, the Commission initiated a diversity 
proceeding, issuing a Public Notice seeking comment on 
``constitutionally permissible ways to further the mandates of section 
257 of the Telecommunications Act of 1996, 47 U.S.C. Sec. 257, which 
directs the FCC to identify and eliminate market entry barriers for 
small telecommunications businesses, and Section 309(j) of the 
Communications Act of 1934, 47 U.S.C. Sec. 309(j), which requires the 
FCC to further opportunities in the allocation of spectrum-based 
services for small businesses and businesses owned by women and 
minorities.''
    In July 2004, the Commission initiated a localism proceeding, 
issuing a Notice of Inquiry ``to receive direct input from the public 
on how broadcasters are serving the interests and needs of their 
communities; whether we need to adopt new policies, practices, or rules 
designed to promote localism in broadcast television and radio; and 
what those policies, practices, or rules should be.''
    We received numerous comments in both of these proceedings, which 
will help inform our decisions in the review of our media ownership 
rules we commenced this past summer. The Media Bureau is preparing a 
summary of the comments submitted in our localism proceeding that will 
be released to the public. The Media Bureau also is preparing a summary 
of the testimony taken at the localism hearings. All of this 
information will be fully incorporated into the media ownership 
proceeding. I also have proposed to consolidate the diversity 
proceeding with our review of the media ownership rules in order to 
ensure full consideration of the diversity issue with the media 
ownership proceeding. In addition, localism and diversity will be the 
focus of several independent studies and among the topics covered at 
our public hearings as we move forward with the media ownership 
proceeding.

    Question 6. In August 2005, the FCC initiated a rulemaking to 
consider what consumer protection requirements should be applied to all 
providers of broadband service. What is the status of this proceeding? 
In recent decisions, the D.C. Circuit has indicated that there are 
limits to the scope of the FCC's ancillary authority under Title I of 
the Communications Act. In your opinion, does the FCC have the 
authority to implement consumer protections on broadband service 
providers pursuant to Title I and how would the rationale differ from 
the failed efforts in the broadcast flag and video description 
decisions?
    Answer. As you note, the Commission initiated a rulemaking to 
consider what consumer protection requirements should be applied to all 
providers of broadband service in August of 2005. That proceeding is 
still pending. While the Commission is still considering what new 
rules--if any--are needed, the Commission has remained vigilant in 
protecting the consumer's interest. Moreover, even while the proceeding 
is pending, the Commission remains able to take appropriate enforcement 
actions where needed. For example, we recently opened an investigation 
and issued letters of inquiry to Verizon based on new charges it levied 
on broadband Internet access services. In response, Verizon abandoned 
the use of the charges.
    The Commission has authority to adopt broadband consumer protection 
requirements pursuant to Title I of the Communications Act. The Supreme 
Court reaffirmed last year that the Commission ``has jurisdiction to 
impose additional regulatory obligations under its Title I ancillary 
jurisdiction to regulate interstate and foreign communications.'' 
National Cable & Telecomm. Ass'n v. Brand X Internet Services, 125 S. 
Ct. 2688, 2696 (2005) (Brand X). Indeed, the Supreme Court specifically 
recognized the Commission's ancillary jurisdiction to impose regulatory 
obligations on broadband Internet access providers. Brand X, 125 S. Ct. 
at 2708 (``[T]he Commission remains free to impose special regulatory 
duties on facilities-based ISPs under its Title I ancillary 
jurisdiction. In fact, it has invited comment on whether it can and 
should do so.'').
    The Commission may exercise ancillary jurisdiction under Title I 
when: (1) Title I confers subject matter jurisdiction over the service 
to be regulated; and (2) the assertion of jurisdiction is reasonably 
ancillary to the effective performance of the Commission's 
responsibilities. United States v. Southwestern Cable Co., 392 U.S. 
157, 177-78 (1968). The Commission has found that both of these 
conditions are met for consumer protection requirements on broadband 
service. Wireless Broadband Internet Access Order, 20 FCC Rcd 14853, 
14914, para. 110 (2005). See also, id. At n. 342 (noting that the 
Commission was concurrently adopting ``a Notice of Proposed Rulemaking 
to determine what specific duties are necessary for broadband Internet 
access service providers, regardless of the technology they employ, to 
ensure the Commission's ability to fulfill its statutory obligations in 
the important area of consumer protection'').
    First, as the Commission stated, broadband services are ``wire 
communications'' or ``radio communications,'' as defined in sections 
3(52) and 3(33) of the Act, and section 2(a) of the Communications Act 
gives the Commission subject matter jurisdiction over ``all interstate 
and foreign communications by wire or radio.''
    Second, as the Commission has concluded, consumer protection 
regulations would be ``reasonably ancillary'' to effective performance 
of the Commission's responsibilities. Such rules would facilitate the 
Commission's responsibility to implement sections 222 (customer 
privacy), 255 (disability access), and 258 (slamming and truth-in-
billing), among other provisions, of the Act.
    In the broadcast flag decision, the court found that the Commission 
lacked subject matter jurisdiction over the electronic equipment it 
sought to regulate and thus failed to satisfy the basic prerequisite to 
the exercise of ancillary jurisdiction. See American Library Ass'n v. 
FCC, 406 F.3d 689 (D.C. Cir. 2005). In the video description case, the 
D.C. Circuit held that, because of First Amendment concerns, the 
Commission's ancillary jurisdiction did not extend to direct regulation 
of video program content. See Motion Picture Ass'n of America, Inc. v. 
FCC, 309 F.3d 796 (D.C. Cir. 2002). As discussed above, at issue here 
are broadband services that are ``wire communications'' or ``radio 
communications'' within the Commission's subject matter jurisdiction 
over ``all interstate and foreign communications by wire or radio.''

    Question 7. In August 2005, the FCC adopted a Policy Statement 
laying out four principles ``to encourage broadband deployment and 
preserve and promote the open and interconnected nature of the public 
Internet.'' While the Supreme Court indicated in dicta in the Brand X 
decision that the FCC could attempt to draft rules under its Title I 
ancillary authority, the D.C. Circuit has indicated that there are 
limits to the scope of the FCC's ancillary authority. In your opinion, 
does the FCC have authority to promulgate and enforce these principles 
under Title I, and if so, what limiting legal principles apply to the 
FCC's ancillary authority to address discrimination by broadband 
service providers? Please explain the legal justification for your 
answer.
    Answer. The Commission, under Title I of the Communications Act, 
has the ability to adopt and enforce the net neutrality principles it 
announced in the Internet Policy Statement. The Supreme Court 
reaffirmed last year that the Commission ``has jurisdiction to impose 
additional regulatory obligations under its Title I ancillary 
jurisdiction to regulate interstate and foreign communications.'' 
National Cable & Telecomm. Ass'n v. Brand X Internet Services, 125 S. 
Ct. 2688, 2696 (2005) (Brand X). Indeed, the Supreme Court specifically 
recognized the Commission's ancillary jurisdiction to impose regulatory 
obligations on broadband Internet access providers. Brand X, 125 S. Ct. 
at 2708 (``[T]he Commission remains free to impose special regulatory 
duties on facilities-based ISPs under its Title I ancillary 
jurisdiction. In fact, it has invited comment on whether it can and 
should do so.'').
    The Commission may exercise ancillary jurisdiction under Title I 
when: (1) Title I confers subject matter jurisdiction over the service 
to be regulated: and (2) the assertion of jurisdiction is reasonably 
ancillary to the effective performance of the Commission's 
responsibilities. United States v. Southwestern Cable Co., 392 U.S. 
157, 177-78 (1968). Both of these conditions are met with respect to 
the four principles of the Commission's 2005 Policy Statement. Indeed, 
the Commission found ``that both of the predicates for ancillary 
jurisdiction are likely satisfied for any consumer protection, network 
reliability, or national security obligation that we may subsequently 
decide to impose on wireline broadband Internet access service 
providers.'' Wireless Broadband Internet Access Order, 20 FCC Rcd 
14853, 14914, para. 109.
    First, as the Commission stated, broadband services are ``wire 
communications'' or ``radio communications,'' as defined in sections 
3(52) and 3(33) of the Act, and section 2(a) of the Communications Act 
gives the Commission subject matter jurisdiction over ``all interstate 
and foreign communications by wire or radio.''
    Second, section 1 of the Communications Act confers responsibility 
on the Commission ``to make available . . . a rapid, efficient, Nation-
wide, and world-wide wire and radio communication service with adequate 
facilities at reasonable charges.'' This responsibility is guided by 
the ``policy of the United States . . . (1) to promote the continued 
development of the Internet''; ``(2) to preserve the vibrant and 
competitive free market that presently exists for the Internet''; and 
``(3) to encourage the deployment of technologies which maximize user 
control over what information is received by . . . [users of] the 
Internet.'' 47 U.S.C. Sec. 230. See also 47 U.S.C. Sec. 157 nt 
(Advanced Telecommunications Incentives). The Commission's net 
neutrality principles facilitate these responsibilities.

    Question 8. Over the last year the FCC has taken action to 
eliminate contributions to the Universal Service Fund by DSL providers, 
increase contributions by wireless providers, and for the first time 
require VoIP providers to pay into the Fund. In your view, are these 
changes sufficient to ensure the longterm stability of the Fund or are 
they only a short-term fix? If they are not sufficient in the long 
term, what actions should the FCC take? Is Congressional action 
necessary to ensure the FCC has the authority it needs to ensure the 
long-term stability of the fund? If so, what is required?
    Answer. Preserving the stability of the Universal Service 
contribution system is one of the Commission's most important 
responsibilities. In June, the Commission took an interim step to 
ensure the stability of the fund by raising the wireless safe harbor 
and broadening the contribution base to include interconnected VoIP 
providers. We took these actions because we recognized the changes that 
were occurring in the telecommunications marketplace.
    Specifically, with respect to wireless, we found that the former 
safe harbor no longer accurately reflected the increasing extent to 
which wireless consumers utilize their wireless phones for interstate 
calls. Thus, it was necessary to update our Universal Service rules to 
account for this increased use by raising the safe harbor.
    The Commission also required interconnected VoIP providers--those 
providers that use the public switched telephone network (PSTN) to 
originate and terminate phone calls--to pay into the fund that supports 
the PSTN, the Universal Service Fund. We recognized that these services 
are increasingly being used as a substitute for traditional wireline 
telephone service and rely upon the PSTN to originate and terminate 
their calls. VoIP providers who do not utilize the PSTN are not 
required to contribute.
    When I became Chairman in March of 2005, the universal service 
contribution factor was 11.1 percent. Currently the contribute factor 
is 9.1 percent.
    Changes in technology and increases in the number of carriers who 
are receiving universal service support have placed significant 
pressure on the stability of the fund. The Commission is also actively 
considering other changes to the contribution system that may be 
necessary. We will be vigilant in taking any necessary steps, such as 
adopting a new contribution mechanism to ensure the stability of the 
fund.
    You also ask whether Congressional action is necessary. In the 
first instance, we intend to be vigilant in doing all we can to ensure 
the stability and sustainability of the Universal Service Fund. I note 
that several years ago the Federal and state members of the Universal 
Service Joint Board urged Congress to expand the Commission's authority 
to assess intrastate as well as interstate revenues. Specifically, they 
explained that ``[g]ranting the FCC explicit authority to assess 
contributions based on interstate and intrastate revenues would yield 
substantial benefits.'' (Letter to the Honorable Conrad Burns, May 19, 
2003.)

    Question 9. Despite the introduction and adoption of new 
technologies by many population segments, Native American households 
still lag woefully behind in access even to basic telephone service. 
This Committee recently considered legislation that would establish an 
Office of Indian Affairs within the FCC. Do you believe such an office 
would help spotlight the issues uniquely affecting Native Americans? 
What action is being taken by the FCC to fulfill its responsibility to 
Indian tribes.
    Answer. The Commission takes very seriously the issue of access to 
telecommunications by Native Americans. To this end, we are actively 
engaged in continuing our wide-ranging, comprehensive efforts to 
fulfill the mandate that all Americans, including those living in 
American Indian and Alaska Native communities, have access to 
affordable, quality telecom services.
    As part of this effort, the Commission has launched an ``Indian 
Telecommunications Initiative'' (ITI). The ITI is a comprehensive 
program that seeks to promote understanding and cooperation and trust 
among tribes and tribal organizations, the FCC and other governmental 
agencies, and the telecommunications industry. The ITI program seeks to 
build partnerships, identify potential solutions, and bring affordable, 
quality telecommunications services to Indian Country. The ITI 
program's goals--to increase the telephone penetration rate; facilitate 
the deployment of telecommunications infrastructure on tribal lands; 
and inform tribes about Federal Government programs, including 
Universal Service Fund programs--are undertaken in Indian Country by 
the FCC through targeted and effective tribal outreach, coordination 
and consultation. The Commission's Consumer and Governmental Affairs 
Bureau has a Tribal Liaison who is dedicated specifically to 
coordinating FCC work on issues uniquely affecting Native Americans, 
such as the ITI sponsored events and other outreach activities.
    Significantly, the ITI includes interactive regional workshops, 
staff participation at conferences sponsored by Tribal organizations, 
meetings with representatives of individual Tribal Nations regarding 
their unique telecom issues, and dissemination of educational materials 
to Tribal Nations and organizations. For example, in the past 18 
months, we have sponsored two major interactive regional workshops, and 
have announced a third such event that will take place next month:

   In July 2005 we held such a workshop in Albuquerque, NM, in 
        cooperation with the National Congress of American Indians 
        (NCAI).

   In July 2006, we hosted a Tribal Broadband Workshop and 
        Roundtable with the Southern California Tribal Chairman's 
        Association's Tribal Digital Village and the National Congress 
        of American Indians. The program, which was held in San Diego, 
        CA, featured multiple sessions on Broadband deployment in 
        Indian Country and site visits.

   On September 11th, we released a Public Notice announcing 
        that we will be hosting a Tribal Public Safety/Homeland 
        Security Workshop in Polson, MT on the Flathead Indian 
        reservation on October 24th and 25th. This event, the first to 
        focus on this particular subject matter, is designed as a 
        workshop and intergovernmental consultative meeting between FCC 
        senior staff and the tribal leaders and representatives who 
        have responsibility for homeland security, public safety, and 
        Information Technology security, and will focus on such topics 
        as emergency preparedness and critical infrastructure 
        protection in the communications sector and public safety 
        communications, interoperability and preparedness.

    If Congress decides to create an Office of Indian Affairs within 
the FCC, it could help further highlight the unique issues associated 
with access to telecommunications by Native Americans. To the extent, 
however, that just one office in the Commission is assigned these 
issues, it may reduce the effectiveness of existing tribal outreach 
activities that are currently integrated and supported by the 
Commission's multi-disciplinary outreach resources and functions.

    Question 10. In recent months new proposals have surfaced striving 
to help public safety attain robust and reliable interoperable 
communications systems. Specifically, in April, Cyren Call 
Communications filed its proposal to reallocate 30 MHz of the returned 
analog spectrum to create a nationwide broadband network for better 
public safety communications. Verizon Wireless also is now reportedly 
proposing a plan to build a nationwide broadband public-safety network 
in the 700 MHz band. Does the FCC plan to initiate a proceeding in a 
timely manner in order to establish a record to evaluate the merits of 
these proposals?
    Answer. The Commission has received a petition for rulemaking from 
Cyren Call Communications regarding its proposal. The Commission's 
Reference Information Center periodically releases a public notice 
listing such petitions recently received by the Commission, providing 
the public the opportunity to comment. Cyren Call's petition should 
appear on the next comment public notice, which will provide the public 
with an opportunity to establish a record on Cyren Call's petition. I 
would note, however, that Congress has directed the Commission to 
auction some of the spectrum at issue in the proposal. So--absent 
further Congressional action--the Commission may be unable to take any 
further action on the petition.
    Verizon Wireless has not filed a petition or other type of request 
with the Commission regarding a plan to build a nationwide broadband 
public-safety network in the 700 MHz band. We will review any request 
made by Verizon Wireless once it is filed and take appropriate action.
                                 ______
                                 
Response to Written Questions Submitted by Hon. John D. Rockefeller IV 
                           to Kevin J. Martin

    Question 1. Chairman Martin, I know that the FCC has two open 
proceedings where it seeks to understand what barriers the existing 
local franchising process impose on telephone companies who wish to 
enter the market.
    As you know, Senator Smith and I were the lead sponsors of 
legislation to streamline the video franchising process, but our bill 
was incorporated into the larger stalled telecommunications bill.
    Can you tell us what authority the FCC has to streamline this 
process? Do you anticipate the FCC issuing an Order on this issue 
before the end of the year?
    Answer. Section 621(a)(1) states that ``a franchising authority may 
not grant an exclusive franchise and may not unreasonably refuse to 
award an additional competitive franchise.'' Last November, the 
Commission opened a proceeding designed to solicit comment on 
implementation of Section 621(a)(1)'s directive that LFAs not 
unreasonably refuse to award competitive franchises, and whether the 
franchising process unreasonably impedes the achievement of the 
interrelated Federal goals of enhanced cable competition and 
accelerated broadband deployment and, if so, how the Commission should 
act to address the problem. Thus, Section 621 empowers the Commission 
to ensure that the local franchising process does not unreasonably 
interfere with the ability of any potential new entrant to provide 
video programming to consumers. If Congress does not act, we are 
working to move from this notice of proposed rulemaking to an order by 
the end of the year.

    Question 2. Mr. Chairman, I want to congratulate you for all of 
your hard work on emergency communications. I know that you are deeply 
committed to improving the emergency communications response 
infrastructure and capabilities of our Nation.
    I know that the FCC is considering requiring emergency alerts over 
our Nation's wireless telephones. I believe that this is good policy 
given the fact that so many people now rely on the wireless telephones 
for their primary communications needs.
    I know that the wireless industry is resisting your initiative 
arguing they do not have the resources or technical ability to be part 
of the Emergency Alert System. Can you comment on their objections?
    Answer. There is a great need to improve the Nation's emergency 
warning system. Our country needs a more robust warning system that 
takes advantage of advances in technology and recognizes how people 
receive communications today. For that reason, I believe wireless 
participation is critical. Most current wireless networks, however, are 
not designed to deliver messages to all devices in a specific 
geographic area. Based on this concern, the wireless industry has told 
the Commission that it ``would like to deliver a short-term SMS-based 
solution that will benefit Americans,'' and ``while that solution is 
operational, CTIA and the industry will work closely with the 
Commission and the other key government agencies to develop a longer 
term solution'' [CTIA ex parte, 08/11/06]. The Commission also 
recognizes that Congress is actively considering this issue. The 
Commission will continue to work with Congress, the wireless industry, 
and other government agencies to develop both short-term options and 
longer term solutions to develop a more robust and comprehensive 
warning system.

    Question 3. Chairman Martin, you recently sent an inquiry to 
Verizon and BellSouth over recently announced line items that they were 
adding to their DSL broadband offerings. In light of your public 
inquiry, they abandoned their plans for charging consumers these fees.
    As you know, wireless carriers are also charging consumers similar 
fees to the ones you were able to encourage Verizon and BellSouth from 
imposing.
    As you may know, the Commerce Committee adopted an amendment I 
offered that would prevent wireless companies from imposing these junk 
fees. Since it is unlikely that this legislation will be enacted this 
year, would you be willing to launch an FCC investigation into the 
wireless industry's imposition of these line items? I think you could 
get the industry to abandon these fees.
    Answer. The Commission agrees ``[i]t is critical for consumers to 
receive accurate billing information from their carriers to take full 
advantage of the benefits of a competitive marketplace'' [Second Report 
and Order on Truth in Billing, March 18, 2005]. For this reason, the 
Commission adopted truth in billing rules to ensure that consumers' 
bills are brief, clear, non-misleading, and in plain language. The 
Commission's truth in billing rules do not prohibit carriers from using 
line items. They do, however, prohibit the use of misleading line item 
charges. The Commission has indicated that it is ``misleading for 
carriers to include administrative and other costs as part of 
``regulatory fees or universal service charges'' or similar line item 
labels that imply government mandated charges'' [Second Report and 
Order on Truth in Billing, March 18, 2005]. The Commission concluded 
that this prohibition applies to all regulatory compliance charges, and 
that the ``burden rests upon the carrier to demonstrate that the charge 
imposed on the customer accurately reflects the specific governmental 
program fee it purports to recover'' [Second Report and Order on Truth 
in Billing, March 18, 2005]. In 2005, the Commission issued an order 
applying all of its truth in billing rules to wireless carriers and 
subjecting wireless carriers to the Commission's rules prohibiting 
misleading line items.

    Question 4. The 11th Circuit Court of Appeals recently overturned 
the FCC's most recent Truth-in-Billing order that preempted the states 
on wireless regulation.
    Does the FCC plan to appeal the 11th Circuit Court of Appeals' 
decision?
    Answer. The Commission has not appealed the 11th Circuit Court of 
Appeals decision to the Supreme Court. The Commission filed a petition 
for rehearing with the same panel of the Eleventh Circuit in this case 
on September 14, 2006.

    Question 5. Could you elaborate for me what your principles for any 
preemption of state telecommunications laws should entail? What is the 
proper role of state regulators vis-a-vis the FCC when it comes to 
regulating the Internet, the wireless industry, or new technologies 
like Voice Over Internet Protocol?
    Answer. In many areas, the FCC and state commissions work together 
in a Federal-state partnership to bring consumers more choice, better 
services, and lower prices. State commissions, however, have a special 
role because they are on the front lines dealing with consumers. 
Because states are closer to consumers than the FCC, they are 
particularly well-equipped to handle a variety of matters, such as 
consumer complaints. Indeed, the Federal-State Board on Universal 
Service acknowledged that ``states are in a better position than the 
Federal Government to target the needs of their own consumers.'' 
Recommended Decision, FCC 03J-02, para. 25 (re. Apr. 2, 2003). On the 
other hand, it is also critical that, in keeping with the Commission's 
charge under section 706 of the Act, there is a uniform national 
communications policy that fosters the development of new technologies.
    Last summer, the Commission initiated a notice of proposed 
rulemaking to examine how to develop a framework for consumer 
protection in the ``broadband age.'' This proceeding recognizes that we 
must work together with our state partners to ensure that consumer 
protection needs are met by all providers of new technologies. Notably, 
in the Commission's Vonage Order, which preempted Minnesota's entry 
regulation of Vonage's VoIP service, the Commission expressly noted 
that its order does not affect Minnesota's general laws governing 
entities that conduct business within the state, such as laws 
concerning taxation fraud, marketing, advertising, or general 
commercial dealings. Similarly, in the Commission's VoIP 911 
proceeding, we recognized the historic and important role of states and 
localities in public safety matters and sought comment on the role that 
states should play in implementing our VoIP 911 rules. We specifically 
asked how the Commission and the states can work together to ensure the 
public's safety.
    There are, of course, numerous areas in which we are already 
working closely with our state counterparts. For instance, we have 
delegated significant authority to them to administer phone numbers. 
Another area where we work closely with our state counterparts is in 
the area of slamming, where the Commission has concluded that the 
states have primary responsibility for administering the rules. 
Moreover, we recently created joint Federal/state task forces and 
working groups in the areas of Lifeline/Linkup and VoIP, and we are 
actively working with our state colleagues in these very important 
areas.

    Question 6. Many times in my office, we have talked about E-Rate 
and how much this program means for schools and libraries in West 
Virginia, and across the country. I want to publicly thank you for your 
efforts, and the work of your staff to provide outreach to the 
education community on this important issue. I know that you have 
issued new orders to allow schools and libraries to correct technical 
clerical errors to improve the application process--thank you.
    I hope to work with you on future improvements to streamline the 
applications, especially for basic telecommunication and Internet 
services. I know you and your staff have worked to crack down on real 
fraud with DOJ, and work to get repayments. This is important and it 
highlights that the program is working. What are your next steps in 
these initiatives?
    Answer. I fully support the universal service program and the 
critical function it serves to ensure access for consumers in rural and 
high-cost areas, and to promote access to advanced services for 
schools, libraries, and health care service providers in rural areas.
    As you note, the Commission adopted two orders earlier this year 
that start to improve the application process for the E-Rate program. 
More work remains to be done, and so the Commission is continuing to 
work with schools and libraries to further improve and streamline the 
application process for the E-Rate program. In addition, the 
Commission's Enforcement Bureau has suspended or debarred four bad 
actors from participating in the E-Rate program this year and we 
continue to assess fines and forfeitures on parties that try to take 
advantage of the program. We are also exploring what measures could be 
taken to prevent and detect potential waste, fraud, and abuse so that 
we can all be certain that E-Rate money is going to the schools and 
libraries that need it the most. These efforts are part of the 
Commission's comprehensive review of the entire Universal Service Fund 
started late in 2005, which is actively being worked on by staff.

    Question 7. The Department of Energy, the North American Electric 
Reliability Council, and others have acknowledged that the electric 
power system is an integral component of our Nation's critical 
infrastructure. Virtually all other networks, including 
telecommunications, depend on electric reliability to a considerable 
degree. Hurricane Katrina and other disasters have demonstrated this 
dependence vividly.
    Do you think telecommunications reliability is somehow more 
important than electric reliability, or do you agree that electric 
reliability is also essential? I ask these questions because I have 
some concerns about pole attachment policy. I think it's a good thing 
to encourage the deployment of broadband and other communications 
technologies, but I think we also need to make sure that the safety and 
reliability of our critical electric infrastructure is not jeopardized 
in the process. My understanding is that there has been a chronic 
problem of having literally tens of thousands of unauthorized cable TV 
and other communications attachments on utility poles in many places 
across the country, and many of these attachments do not always meet 
basic industry safety, reliability, and engineering standards. I am 
aware that current law addresses these issues in a very general way, 
but I think the process needs to be reformed to prevent harm to our 
critical infrastructure. Don't you think that the safety and 
reliability of critical electric infrastructure should be a paramount 
concern?
    Answer. I agree that the safety and reliability of critical 
electric infrastructure is a paramount concern. Issues of public safety 
and homeland security are one of the highest priorities at the 
Commission. Our work on telecommunications reliability should not come 
at the expense of other public safety systems. Your concern of 
unauthorized cable television and other attachments to utility poles 
across the country is an important one.

    Question 8. Do you think it is reasonable to require communications 
companies that attach their wires and equipment to utility poles ensure 
that their attachments comply with applicable safety, reliability, and 
engineering standards before making an attachment to critical electric 
infrastructure?
    Answer. Section 224(f)(2) of the Act expressly authorizes utilities 
to deny access to their poles on a nondiscriminatory basis for reasons 
of safety, reliability and generally applicable engineering purposes.

    Question 9. Under current law (Sec. 224 of the Communications Act) 
cable TV companies benefit from a regulated (i.e., subsidized) rate for 
pole attachments. I am not convinced that the cable industry needs to 
continue to receive a subsidized pole attachment rate at the expense of 
electric consumers. The subsidized rates were established in 1978 when 
the cable industry was considered a ``fledgling'' industry that needed 
help to compete. Today the cable industry is a multi-billion dollar 
industry. Do you think electric consumers--some of whom may have low 
incomes and not even subscribe to cable--should still be subsidizing 
multi-billion dollar cable companies?
    Answer. In general, I do not think electric companies should be 
subsidizing cable companies. Section 224 of the Communications Act 
directed the Commission to adopt regulations consistent with the Act to 
govern the charges for attaching to poles. The Act specifies the 
formula that the Commission should apply for attachments by cable 
companies and for attachments by telecommunications carriers. The 
Commission adopted those formulas in section 1.1409 of the Commission's 
rules (47 C.F.R. Sec. 1.1409).

    Question 10. My understanding is that FCC staff is actively 
considering a rulemaking petition submitted by the major incumbent 
telecommunications companies (i.e., ILECs) that would give them a 
subsidized pole attachment rates under the Pole Attachment Act for 
their attachments on electric utility poles. I find this odd because, 
if I remember correctly, the Pole Attachment Act (as it was amended by 
the 1996 Telecom Act) expressly excludes ILECs from FCC jurisdiction 
under that provision of the Act. Since this exclusion is a matter of 
statute, don't you think Congress should decide whether the exclusion 
should remain?
    Answer. The Commission has a petition before it asking for a 
declaratory ruling that pole attachment rates are just and reasonable 
for all attaching providers, including incumbent LECs. The scope of the 
statutory exclusion to which you refer, 47 U.S.C. Sec. 224(a)(5), is at 
the heart of the issue that the incumbent LECs raise. The Petitioner, 
the United States Telecom Association, contends that the statute's term 
``provider of telecommunications service,'' 47 U.S.C. Sec. 224(a)(4), 
includes incumbent LECs and indicates that Congress expressly decided 
not to exclude incumbent LECs from a right to just and reasonable rates 
for attachments, only from a right to nondiscriminatory access. This 
proceeding is pending before us, and staff is continuing to review the 
record and evaluate the arguments on both sides.

    Question 11. Congress and the FCC both are seeking to promote 
competition in telecommunications and video markets. However, under the 
Pole Attachment Act (Sec. 224 of the Communications Act) cable 
companies and some telecom providers have the advantage of only having 
to pay a regulated (i.e. subsidized) rate for attachments to utility 
poles. This subsidy is ultimately borne by utility customers in their 
electric rates. Do you agree that all users of critical electric 
infrastructure, regardless of the technology they use, including 
telecom and cable companies that attach their wires to electric utility 
poles, should be required to pay a similar pole attachment rate that 
reflects a fair share of the actual costs of building and maintaining 
critical electric infrastructure? Is it right for electric utilities 
and their customers to be required to pay a disproportionately greater 
share than the telecom and cable TV companies?
    Answer. In general, I agree that all users of critical electric 
infrastructure, regardless of the technology they use, including 
telecom and cable companies that attach their wires to electric utility 
poles, should be required to pay a similar pole attachment rate that 
reflects a fair share of the actual costs of building and maintaining 
critical electric infrastructure.
    Section 224 of the Communications Act directed the Commission to 
adopt regulations consistent with the Act to govern the charges for 
attaching to poles. The Act specifies the formula that the Commission 
should apply for attachments by cable companies and for attachments by 
telecommunications carriers. The Commission adopted those formulas in 
section 1.1409 of the Commission's rules (47 C.F.R. Sec. 1.1409).

    Question 12. Under the existing Pole Attachment Act (Sec. 224 of 
the Communications Act), an electric utility may deny a cable TV system 
or a telecommunications carrier access to its poles for reasons of 
safety, reliability and generally applicable engineering purposes. 
Despite this requirement, electric utilities tell me that thousands of 
attachments are being made to their infrastructure without any prior 
notice to the utility and, therefore, without giving the utility a 
reasonable opportunity to evaluate the safety and reliability impacts 
of the attachment. I'm worried about the potential impact of this fact 
on electric reliability. What is the FCC doing to ensure that cable and 
telecom companies provide notice to utilities before attaching new 
wires and equipment on utility poles and that these attachments meet 
all relevant electric industry safety and engineering standards?
    Answer. Our rules require that requests for access to a utility's 
poles by a telecommunications carrier or cable operator must be in 
writing. To the extent that companies are not complying with our rules, 
they are subject to enforcement action.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Bill Nelson to 
                            Kevin J. Martin

    Question 1. In 2003, the FCC formed the Federal Advisory Committee 
on Diversity in the Digital Age. In 2004, the Committee, led by Ms. 
Julia Johnson, presented the Commission with a series of 
recommendations designed to further enhance the ability of minorities 
and women to participate in the communications industries. But despite 
the efforts of this Diversity Committee, for 2 years the FCC has been 
silent on these efforts. What has happened to the Diversity Committee's 
recommendations?
    Answer. We have implemented several of these recommendations. For 
example, at the Diversity Committee's recommendation, the Commission 
has established band plans that include a mixture of license sizes and 
geographic areas in order to accommodate the needs of wireless 
providers of various sizes serving a range of different geographic 
areas. We are actively considering other recommendations. For example, 
the Commission is considering allowing additional time for construction 
of broadcast facilities licensed to certain designated entities, 
lengthening the terms for experimental licenses, and conducting a 
comprehensive channel search for new FM allotments.
    We are also putting particular emphasis on the issue of minority 
ownership in our media ownership proceeding. In the Further Notice of 
Proposed Rulemaking the Commission released in July, the Commission 
sought comment on the recommendations of the Diversity Committee. At 
the request of the Advisory Committee, the Commission has included 
their recommendations and filings in the media ownership docket and 
solicited public comment specifically on their recommendations. 
Minority ownership also will be the focus of independent studies and 
among the topics covered at the public hearings as we move forward with 
our review of the media ownership rules.
    Finally, several recommendations called for broader reform, beyond 
the Commission's authority. For instance, the Diversity Committee 
adopted a recommendation ``urg[ing] the adoption of a Federal program 
that would use the deferral of Federal capital gains tax liability as 
an incentive to make available to socially and economically 
disadvantaged persons and businesses the opportunity to acquire assets 
necessary to enter the broadcasting and telecommunications 
marketplace.''

    Question 2. While minorities now represent more than 30 percent of 
the population in this country, FCC data show that minority-owned media 
outlets account for only 3.41 percent of all broadcast entities. 
Despite improvements in other areas of the economy, little ground has 
been gained in ownership of these key media licenses. In 2000, an FCC-
commissioned study by the Ivy Group documented that minorities and 
women have always faced discrimination in this Nation's communications 
industries and these obstacles still persist. Also in 2000, the U.S. 
Commerce Department found that broadcast industry consolidation has 
exacerbated these barriers, including equitable access to capital, 
advertising, and employment opportunities. When does the FCC plan to 
study this problem and update the findings in these studies? And how 
does the FCC plan to address this issue before considering broader 
changes to its media ownership rules?
    Answer. In June 2004, the Commission issued a Public Notice seeking 
comment on ``constitutionally permissible ways to further the mandates 
of section 257 of the Telecommunications Act of 1996, 47 U.S.C. 
Sec. 257, which directs the FCC to identify and eliminate market entry 
barriers for small telecommunications businesses, and Section 309(j) of 
the Communications Act of 1934, 47 U.S.C. Sec. 309(j), which requires 
the FCC to further opportunities in the allocation of spectrum-based 
services for small businesses and businesses owned by women and 
minorities.'' The Commission also requested that commenters ``discuss 
and proffer specific recommendations for building on a series of market 
barrier entry studies,'' including the Ivy Planning Group study. I have 
proposed to consolidate these comments with our review of the media 
ownership rules. Moreover, we sought comment on the issue of minority 
ownership in the Further Notice of Proposed Rulemaking the Commission 
released in July. At the request of petitioners, I have also proposed 
that the Commission request further comment more specifically on 
minority ownership issues. In addition, minority ownership will be the 
focus of independent studies and among the topics covered at the public 
hearings as we move forward with our review of the media ownership 
rules.

    Question 2a. Please provide more specific details.
    Answer. We are studying and evaluating this problem now, and we are 
updating our findings now. We have just recently requested comment 
specifically on the recommendations of MMTC and the diversity FACA in 
the context of our media ownership proceeding.

    Question 2b. When does the FCC plan to study this problem and 
update the findings in these studies?
    Answer. To ensure that we are able to address this issue before 
considering broader changes to our media ownership rules, we are 
currently commissioning independent studies, some of which will focus 
expressly on minority ownership. One in particular will focus solely on 
minority ownership, studying the levels of minority ownership of media. 
The study also will investigate potential barriers to entry for 
minority owners. It also will consider possible reform measures to 
promote ownership diversity in the public airwaves. We also are 
planning to hold six hearings around the country to seek public comment 
on media ownership, and minority ownership will be a topic of 
discussion. At MMTC's request, we will soon circulate a FNPRM that 
discusses their recommendations in more detail and requests further 
comment.

    Question 2c. And how does the FCC plan to address this issue before 
considering broader changes to its media ownership rules?
    Answer. I cannot say right now how substantively we plan to address 
the issue, as we have not yet received public comment on the FNPRM or 
the results of our independent studies, and have not yet had any of our 
public hearings. I would be happy to keep you informed as we receive 
data and recommendations, and I welcome any suggestions you have. I 
have also proposed to consolidate these comments with our review of the 
media ownership rules to ensure that we are able to address this issue 
before considering broader changes to our media ownership rules.

    Question 3. Recently, a group known as the ``Diversity and 
Competition Supporters'' petitioned the FCC requesting that the agency 
withdraw its Notice of Proposed Rulemaking in the media ownership 
proceeding and correct a series of errors relating to minority 
ownership. Among other things, the petitioners noted that the Notice of 
Proposed Rulemaking fails to identify and address the minority 
ownership proposals remanded by the Third Circuit Court of Appeals in 
Prometheus Radio Project v. FCC. As you know, further remands from the 
Court will just enhance uncertainty. In light of this, are you planning 
on at least one comprehensive, independent study on minority ownership 
and possible reform measures to promote ownership diversity in the 
public airwaves?
    Answer. Yes, we are planning to have a comprehensive, independent 
study conducted on the levels of minority ownership of media. The study 
also will investigate potential barriers to entry for minority owners.

    Question 4. Minority and female ownership of broadcast licenses is 
extremely low when compared to the strides these groups have made in 
business ownership in other areas of the economy (e.g., health care and 
finance). Why do you think that is? Do you think that is problematic, 
given the objectives outlined in the Communications Act? What does the 
FCC plan to do about it?
    Answer. Diversity in broadcast and media is an important concern. 
The Commission has taken steps to further minority and female ownership 
of broadcast licensees such as the creation of a new entrant bidding 
credit. These credits are intended to facilitate the ability of 
minority-owned companies to enter the broadcast business. The 
Commission has used these credits in every broadcast auction conducted 
since 1999. Since 1999, we have held 11 broadcast auctions in which 
applicants successfully bid on 651 construction permits. A total of 197 
bidders eligible for a new entrant bidding credit in at least one 
market won 358, or 55 percent, of the construction permits.
    We are seeking to identify ways in which to further promote 
minority ownership. The Commission also is actively considering the 
proposals for advancing minority and disadvantaged businesses and for 
promoting diversity in broadcasting submitted by the Minority Media and 
Telecommunications Council and the recommendations on these issues 
developed by the Federal Advisory Committee on Diversity in the Digital 
Age.

    Question 4a. What are your personal views?
    Answer. I think that minority and female ownership is low because 
most broadcast licenses were given away decades ago, when minorities 
and women had even less access to capital and opportunities than they 
do today. As the Commission's Advisory Committee on Diversity for 
Communications in the Digital Age has stated: ``From the birth of 
broadcast radio in 1909 through 1978, minorities had almost no 
opportunities to acquire broadcast facilities. Thus, non-minorities 
enjoyed a 70-year head start.'' See FM Radio White Paper, available on 
the Diversity Committee's website at p://www.fcc.gov/DiversityFAC/docs/
FMRadioWhitePaper.doc.
    I do believe the fact that Minority and female ownership of 
broadcast licenses is extremely low is problematic. Diversity in 
broadcasting and the media generally is very important. That is why we 
are in the process of seeking comment on recommendations to improve the 
situation, are commissioning independent studies on the issue, and are 
making sure this issue is discussed at our public hearings around the 
country.
    Specifically, with respect to broadcasting, the Commission has 
taken steps to further minority and female ownership of broadcast 
licensees with the creation of a new entrant bidding credit. These 
credits are intended to facilitate the ability of minority-owned 
companies to enter the broadcast business. The Commission has used 
these credits in every broadcast auction conducted since 1999. Since 
1999, we have held 11 broadcast auctions in which applicants 
successfully bid on 651 construction permits. A total of 197 bidders 
eligible for a new entrant bidding credit in at least one market won 
358, or 55 percent, of the construction permits.
    In addition, in 2000, the Commission established the Low Power FM 
service in order to create a class of radio stations designed to serve 
very localized communities or underrepresented groups within 
communities. To date, the Commission has issued construction permits 
for well over 1000 LPFM stations. The Commission continues to work to 
ensure the success of the LPFM service.

    Question 5. How does the FCC use the data it collects in its Form 
323 to inform its policies regarding minority media ownership?
    Answer. The ownership reports filed on FCC Form 323 ask for only 
voluntary information on the gender, ethnicity, and race of parties 
holding an attributable interest in a station licensee.

    Question 6. Name one barrier to entry that you believe the FCC 
could eliminate to improve minority broadcast ownership?
    Answer. The Commission could allow additional time for construction 
of broadcast facilities licensed to certain designated entities.

    Question 6a. Why just ``certain'' designated entities?
    Answer. There is no need for the ``certain'' qualifier. 
``Designated Entity'' is a defined term. All DEs could be allowed 
additional time.

    Question 7. It is my understanding that currently the FCC does not 
give a ``pioneer preference'' when granting broadcast licenses. I am 
familiar with small radio broadcasters that have gone through the time 
and expense of locating unused broadcast radio spectrum and that 
petition the FCC for a license for such spectrum. Unfortunately, when 
the license is auctioned, the small radio broadcaster often cannot 
compete monetarily with larger broadcasters, who bid successfully on 
the licensed frequency. This acts as a disincentive for small and 
minority-owned broadcasters to enter the broadcasting market. Do you 
believe that awarding ``pioneer preferences'' (or some sort of 
appropriate bidding credit under these circumstances) could improve 
representation of small and minority-owned businesses in the broadcast 
arena?
    Answer. Between 1991 and 1997, the Commission did have a pioneer's 
preference program designed to give preferential treatment in the 
licensing process to parties that demonstrated their responsibility for 
developing new spectrum-using communications services and technologies. 
In the Balanced Budget Act of 1997, Congress terminated the 
Commission's authority to provide pioneer's preferences.
    The Commission has taken steps to further minority and female 
ownership of broadcast licensees such as the creation of a new entrant 
bidding credit. These credits are intended to facilitate the ability of 
minority-owned companies to enter the broadcast business. The 
Commission has used these credits in every broadcast auction conducted 
since 1999. Since 1999, we have held 11 broadcast auctions in which 
applicants successfully bid on 651 construction permits. A total of 197 
bidders eligible for a new entrant bidding credit in at least one 
market won 358, or 55 percent, of the construction permits.

    Question 8. Like you, I want to stimulate broadband deployment and 
competition. For the last several years, you have reported to us that 
the residential broadband market is increasingly competitive. We have 
heard from you that wireless, broadband-over-powerline, and satellite 
technologies were capturing a large customer base and bringing vigorous 
competition to American communities. Yet, by my reading, the FCC's own 
studies indicate that is not the case. Over the last few years, the 
market share of every technology aside from DSL and cable modem has 
declined. Cable modem and DSL now have a 98 percent market share. How 
do you explain this seeming inconsistency between what you have told us 
and the agency's own statistics? How has the FCC acted to encourage 
competition beyond DSL and cable modem?
    Answer. Encouraging the deployment of broadband infrastructure is 
one of my top priorities. High-speed connections to the Internet have 
grown over 400 percent since I became a Commissioner in July 2001. 
Specifically, in the first half of 2001, there were less than 10 
million high-speed connections to the Internet and, as of the end of 
2005, there were more than 50 million.
    The residential broadband market has become increasingly 
competitive. According to a Pew study, in March 2003, 67 percent of 
home broadband users logged onto the Internet using cable modems and 
only 28 percent used DSL. As of March 2006, DSL connections constitute 
half (50 percent) of all home broadband connections and cable modems 
have a 41 percent share.
    As you state, the FCC recently reported that 98 percent of 
residential broadband connections at the end of 2005 were ADSL or cable 
modem, and that 90 percent of all broadband connections reported to the 
FCC were ADSL or cable modem. Significantly, however, during 2005, the 
total number of satellite and terrestrial wireless connections 
increased by 3.3 million.
    With respect to how the Commission has sought to encourage 
competition by platforms other than DSL and cable modem, the Commission 
has taken a number of actions. For example, in the wireless arena, the 
Commission has increased the availability of spectrum that can be used 
in the provision of broadband services while allowing maximum technical 
and regulatory flexibility for entities seeking to provide wireless 
broadband Internet access service.
    In the satellite arena, the Commission has granted a number of 
applications that propose to provide satellite-delivered, high-speed 
Internet service offerings to consumers using frequencies in both the 
Ka-band and Ku-band. We have also initiated rulemakings to consider 
other alternatives that could increase the ability of satellite 
operators to provide competitive broadband Internet access services.
    The Commission also has adopted rules to facilitate deployment of 
broadband over power line (BPL) technology while protecting existing 
spectrum users from harmful interference. Indeed, last month, the 
Commission built upon its prior efforts to promote BPL deployment by 
finalizing its technical rules governing operation of BPL systems, 
including those providing Internet access services.

    Question 8a. What does the Chairman think about the combined 98 
percent market share between cable modem and DSL service providers?
    Answer. Competition has increased between cable and DSL in the 
broadband market and that is positive for consumers. As you state, 
however, the FCC recently reported that 98 percent of residential 
broadband connections at the end of 2005 were ADSL or cable modem, and 
that 90 percent of all broadband connections reported to the FCC were 
ADSL or cable modem. It would be better if there were more competitors 
in the broadband market and if those competitors had a greater share of 
the market. Cable modem and DSL currently have the greatest combined 
market share given their historical presence in the market. More 
specifically, cable companies were the first to aggressively enter the 
residential broadband market as they deployed and began to offer cable 
modem service, beginning in the late 1990s. Incumbent LECs soon 
followed by offering competing DSL service. Because these entrants had 
the advantage of already having networks with lines reaching the vast 
majority of households within their service territories, they had a 
head start in building a customer base and had more time to expand the 
geographic reach of their service offerings. Newer technologies, such 
as BPL and broadband wireless entered later and, accordingly, have not 
built out their networks as extensively as cable companies and 
incumbent LECs. Consequently, they can reach fewer households than the 
first two entrants, and their nationwide market share accordingly will 
be smaller relative to the earlier entrants. Nevertheless, these new 
technologies are currently expanding the geographic reach of their 
networks and are increasingly competing against cable modem and DSL 
providers. And, as these new technologies reach a greater proportion of 
total, nationwide households, we would expect that their nationwide 
percentage share of residential high-speed customers will also start 
increasing.

    Question 9. In May 2006, the Government Accountability Office (GAO) 
released a report that criticized the way that the FCC measures 
broadband penetration in the United States. The GAO wrote, ``For its 
zip-code level data, FCC collects data based on where subscribers are 
served, not where providers have deployed broadband infrastructure.'' 
The GAO study points out that FCC officials never intended the zip code 
reports to be treated as a measure of broadband penetration. The GAO 
noted that according to the FCC, the median number of providers of 
broadband enjoyed by American households is eight. However, the GAO 
found that the real number was two providers. That is a startling 
difference. How do you address the GAO's concerns, and what, if 
anything, has the FCC done to correct any problems?
    Answer. The Commission is committed to obtaining the best 
information possible about the availability and deployment of broadband 
services nationwide, particularly in rural and other hard-to-serve 
areas. GAO is correct that the zip code information alone (i.e., how 
many broadband providers serve at least some homes or businesses in a 
particular zip code) does not indicate how extensively those providers 
have deployed broadband infrastructure within any particular zip code.
    In order to gain an even better picture of the extent of broadband 
deployment, I have circulated a NPRM to the Commission that asks 
questions about how we can obtain more specific information about the 
availability of broadband in specific geographic areas and how we can 
combine our data with those collected at the state level or by other 
public sources. Significantly, as a result of a prior revision to our 
data collection form, just this year, we began reporting information 
regarding different speeds of broadband connections (e.g., about 
services offered at speeds in excess of 200 kps). I have also 
circulated our fifth inquiry under section 706 of the 
Telecommunications Act of 1996 into ``whether advanced 
telecommunications capability is being deployed to all Americans in a 
reasonable and timely fashion.'' In this Notice, we seek comment on all 
aspects of broadband availability, including price and bandwidth 
speeds. Between these two proceedings, it is my hope that the 
Commission will solicit the information necessary to better assess the 
competitive progress in the broadband market.

    Question 10. As you may be aware, I introduced an amendment (with 
Senator DeMint) that was unanimously adopted into the Senate Commerce 
Committee's telecommunications reform bill (H.R. 5252) a few months 
ago. This amendment would require the FCC to collect the kinds of data 
that are needed to adequately assess competitive progress in the 
broadband market. The Senate Commerce Committee would like to see 
information on a much more narrowly focused geographic area, including 
information on price and speed, so that we can assess not just 
availability, but quality of service. How would you carry out such a 
mandate?
    Answer. As I stated above, the Commission is committed to obtaining 
the best information possible about the availability and deployment of 
broadband services nationwide, particularly in rural and other hard-to-
serve areas. Accordingly, in order to gain an even better picture of 
the extent of broadband deployment, I have circulated a NPRM to the 
Commission that asks questions about how we can obtain more specific 
information about the availability of broadband in specific geographic 
areas and how we can combine our data with those collected at the state 
level or by other public sources. Significantly, as a result of a prior 
revision to our data collection form, just this year, we began 
reporting information regarding different speeds of broadband 
connections (e.g., about services offered at speeds in excess of 200 
kps). I have also circulated our fifth inquiry under section 706 of the 
Telecommunications Act of 1996 into ``whether advanced 
telecommunications capability is being deployed to all Americans in a 
reasonable and timely fashion.'' 47 U.S.C. Sec. 157 nt. In this Notice, 
we seek comment on all aspects of broadband availability, including 
price and bandwidth speeds. Between these two proceedings, it is my 
hope that the Commission will solicit the information necessary to 
better assess the competitive progress in the broadband market.

    Question 11. At what stage do you believe that the broadband 
communications market is ``competitive'' within a given geographic 
area? In other words, how many broadband competitors must offer retail 
services in a market area before you would deem that area to be 
``competitive,'' both for residential customers and for business 
customers?
    Answer. The Commission recognizes that increasing the number of 
competitors should benefit consumers, and, for this reason, the 
Commission has supported policies that encourage multiple broadband 
competitors, including the current AWS auction. Because telephone 
companies and cable companies are trying to acquire new customers, they 
are actively competing in the broadband market today. These providers 
are competing aggressively against each other to win customers by 
offering price promotions, improved customer service, and new services. 
The increase in broadband speeds is just one reflection of this intense 
competition. According to a recent Pew study, the price of broadband 
service has also dropped in the past 2 years.
    With respect to broadband services offered to business customers, 
the Commission observed in the recent SBC/AT&T and Verizon/MCI merger 
orders, that there are generally a greater number of providers 
competing to serve these customers. It further noted that many of these 
business customers are sophisticated, high-volume customers that can 
negotiate aggressively with providers.

    Question 11a. What is the Chairman's view on the appropriate number 
of competitors that are needed in a competitive market?
    Answer. There is no simple answer to the question of what is the 
minimum number of firms necessary for a market to be deemed 
competitive. In fact, economists have debated what it means for a 
market to be ``competitive'' or ``workably competitive'' or 
``effectively competitive.'' In addition, economists have recognized 
that the competitiveness of a market depends not only on the number of 
firms in the market, but also on a number of other factors or 
characteristics of the market, such as whether demand is stable or 
growing or whether products are differentiated.
    The answer to the question of what is the minimum number of firms 
necessary for a market to be deemed competitive, depends heavily on the 
characteristics of the market. These characteristics can include, but 
are not limited to, the degree of substitutability between products, 
cost of entry for new firms, and costs borne by consumers of switching 
from one product to another.
    The degree of substitutability between products offered by 
different firms is one of the most important market characteristics. 
The more consumers view products offered by different firms as 
identical, the fewer the number of firms are required to achieve 
competitive pricing. For example, if two firms are offering goods that 
consumers see as perfect substitutes for one another, then a perfectly 
competitive equilibrium can, under certain conditions, theoretically 
arise with only two firms in the market. Tirole (1988)
    Bork (1979) and DeHoog (1984) give theoretical examples where two 
competitors may be enough for ``adequate competition.'' Further, 
empirical studies looking at different industries suggest that 
competitive behavior can at times be achieved with entry of a second 
firm. For example, Bresnahan and Reiss (1991) show empirically that 
within the five retail and professional industries that they study, 
``In markets with five or fewer incumbents, almost all variation in 
competitive conduct occurs with the entry of the second or third 
firm.'' Further, ``. . . once the market has between three and five 
firms, the next entrant has little effect on competitive conduct.''
    Depending on the circumstances, even in markets with only two 
competitors, those competitors may compete aggressively against each 
other. For example, in the case of broadband access services offered to 
residential customers, a number of factors suggest that, even where 
only DSL and cable modem service are currently available, the DSL and 
cable modem service providers are behaving competitively against each 
other. Numerous DSL providers are offering reduced prices and steep 
promotional discounts. Cable modem service provider are responding with 
their own promotional discounts, particularly through the use of 
discounted bundles. Moreover, the ratio of price to maximum download 
speed has been dropping rapidly. In addition, both DSL and cable 
providers are competing in non-price terms. They are offering faster 
speeds, improved security and better customer service. At the same 
time, the Commission has made efforts to encourage the development and 
deployment of new broadband technologies, such as wireless and BPL 
technologies to facilitate multiple competitors in each market.

    Question 12. In March 2006, the FCC allowed a petition for 
forbearance to go into effect that resulted in a sweeping revision of 
the way the Communications Act applies to key services provided by a 
large incumbent carrier. By allowing this petition to take effect, the 
FCC erased decades of communications policy in a single stroke. 
Policies that may have been un-done have implications from homeland 
security to universal service contributions to the privacy protections 
guaranteed under Section 222 of the Act. By allowing this petition to 
take effect, the FCC's inaction also raises questions about continued 
carrier obligations to ensure disability access and interconnection in 
rural America. By dismissing all of these policies that were enacted by 
Congress, the FCC's inaction effectively rewrites existing laws. Do you 
believe such a large revision of the laws through agency inaction is a 
proper exercise of the FCC's duties?
    Answer. Section 10 of the Act sets forth a robust standard by which 
the Commission must evaluate petitions for forbearance. Section 10 also 
establishes a process by which petitions under this section ``shall be 
deemed granted if the Commission does not deny the petition'' within a 
maximum of 15 months. More than 3 weeks prior to the March 19th 
deadline, I shared with my fellow Commissioners a draft order 
addressing the merits of the Verizon Forbearance Petition, measured 
against the statutory criteria set forth in section 10 of the Act. The 
Commission was engaged on this issue and, by a recorded 2-2 vote, 
neither granted nor denied Verizon's Forbearance Petition. Without a 
majority of the Commission supporting either a grant or denial of 
Verizon's petition, the petition was ``deemed granted'' on March 19th. 
On March 20th, the Commission issued a news release memorializing the 
effect of its decision. At that time, all of the Commissioners took the 
opportunity to issue a statement explaining their reasoning. There is 
still no majority view on the appropriate outcome of Verizon's 
petition. And, the grant of Verizon's petition by operation of law is 
currently on appeal before the United States Court of Appeals for the 
District of Columbia Circuit, which will decide the legality of the 
grant.
    I believe that it would have been preferable for the Commission to 
have reached a majority view on Verizon's petition and issued a 
decision affirmatively granting or denying it. It is better for such 
official action to follow from a written decision issued by a majority 
of Commissioners. It is only because there was not (and is not today) a 
majority view here at the Commission that we were unable to take the 
preferred course of issuing an official written decision.

    Question 13. As you are aware, this Congress has been busy for some 
time on the issue of video choice. In Florida and nationally, new 
entrants are trying hard to enter the video market and provide 
consumers with another choice for cable services. We have heard 
considerable testimony in this Committee that such competition almost 
always leads to lower prices for consumers. We have also heard that one 
of the barriers to speeding such competition is the need to obtain 
agreements with each local franchise authority. This is not a criticism 
on the local franchising authorities, which have been doing a good job 
for many years in protecting consumers and making sure that local needs 
are met. At the same time, there are just so many local franchises in 
Florida and nationally that, even in the best of circumstances, that is 
a big order for new entrants. That is why I have been a staunch 
advocate of Congress taking action to streamline the local franchise 
process. Unfortunately, it appears that video choice may not become law 
during this Congress. If that's the case, what plans do you have for 
the FCC to act as a ``backstop''--to take actions, consistent with the 
Federal statute, to speed up competition in the video market?
    Answer. Section 621(a)(1) states that ``a franchising authority may 
not grant an exclusive franchise and may not unreasonably refuse to 
award an additional competitive franchise.'' Last November, the 
Commission opened a proceeding designed to solicit comment on 
implementation of Section 621(a)(1)'s directive that LFAs not 
unreasonably refuse to award competitive franchises, and whether the 
franchising process unreasonably impedes the achievement of the 
interrelated Federal goals of enhanced cable competition and 
accelerated broadband deployment and, if so, how the Commission should 
act to address the problem. Thus, Section 621 empowers the Commission 
to ensure that the local franchising process does not unreasonably 
interfere with the ability of any potential new entrant to provide 
video programming to consumers. If Congress does not act, we are 
working to move from this notice of proposed rulemaking to an order by 
the end of the year.

    Question 14. As part of the FCC's recent DSL Order, the regional 
Bell companies were relieved of their requirement to pay into the 
Universal Service Fund for revenues generated from their DSL service. 
However, smaller carriers were not relieved of this requirement under 
the FCC Order. Please explain why two telecommunications carriers 
offering identical DSL service are treated differently for the purposes 
of USF contributions?
    Answer. Last August, in the Wireline Broadband Internet Access 
Order, the Commission leveled the regulatory playing field between 
different broadband platform providers. Specifically, the Commission 
removed outdated tariffing regulations that applied to wireline 
providers of Internet access services but not to other broadband 
providers. The Commission found that facilities-based wireline 
broadband Internet access services, like cable modem services, were 
information services. At the same time, it permitted all wireline 
carriers, large and small incumbent LECs, to offer the underlying 
transmission input for these services on a common carrier or non-common 
carrier basis.
    We actually adopted this approach in response to the specific 
requests from some smaller incumbent LECs who stated that they wanted 
the option to continue providing the transmission portion of this 
service on a common carrier basis to preserve their ability to continue 
to receive the benefits of participating in the NECA pooling system. To 
the extent that any incumbent LEC voluntarily chooses to provide this 
underlying transmission component on a common carrier basis then it is 
providing a telecommunications service and is subject to the Title II 
obligations under the Communications Act, including the obligation in 
section 254(d) to pay into universal service on the interstate portion 
of their revenues derived from these services. If, on the other hand, 
an incumbent LEC chooses to provide the underlying transmission 
component on a non-common carrier basis, section 254(d) would not 
require contributions into the universal service fund.
    As the Commission stated in the order, ``neither the statute nor 
relevant precedent mandates that the broadband transmission be a 
telecommunications service when provided to an ISP, but the provider 
may choose to offer it as such.'' In the Matter of the Appropriate 
Framework for Broadband Internet Access to the Internet over Wireline 
Facilities, 20 FCC Rcd, 14853 at para. 103 (2005).

    Question 15. The issue of ``phantom traffic'' has been pending at 
the FCC for almost 1 year. Most stakeholders agree that any 
intercarrier compensation plan must have rules to ensure that all 
communications traffic is properly labeled so that all carriers can 
accurately identify network traffic. It is assumed that the 
comprehensive intercarrier compensation plan--referred to as the 
``Missoula Plan''--would take a considerable amount of time to approve 
and implement. Do you favor adopting an interim solution to address 
phantom traffic?
    Answer. The growing problem of ``phantom traffic''--that is, 
traffic containing insufficient data to permit proper identification 
and billing--is an important one. As you mention, the NARUC Task Force 
on Intercarrier Compensation has been working to find a comprehensive 
solution to intercarrier compensation issues. As part of their 
``Missoula Plan'' proposal, they suggest dealing with phantom traffic 
prior to adopting general reform. I understand that this group will be 
filing a specific proposal for handling phantom traffic later this 
month. This proposal will be given careful consideration as the 
Commission works toward resolution of these issues.

    Question 16. Since 2002, the FCC has been considering a proposal to 
change the contribution methodology for funding the Universal Service 
Fund (USF) and to impose a fee of $1.00 or more per month on each 
telephone number or connection. Apparently, under this proposal, a 
residential consumer who makes few, if any, long distance calls during 
the month would pay the same fee per line as a large business customer 
that may make thousands of dollars in interstate calls per month. Has 
the FCC considered the potential impact of the fee on low-volume and 
low-income consumers, and if so, what steps are being taken to ensure 
that these customers do not end up paying a disproportionate share of 
the USF funding burden?
    Answer. Preserving the stability of the universal service 
contribution system is one of the Commission's most important 
responsibilities. Changes in technology and increases in the number of 
carriers who are receiving universal service support have placed 
significant pressure on the stability of the fund. I have suggested a 
numbers-based approach as a possible solution because it is technology 
and competitively neutral. Specifically, such an approach would help 
maintain the stability of the fund by assessing all technologies used 
to make a phone call on a similar basis. Nevertheless, as the 
Commission reviews the various proposals to reform the current 
assessment system, it will carefully weigh the record and examine the 
potential impact of any course of action on all consumers, including 
low-volume and low-income consumers. The Commission recognizes the 
importance of ensuring that whatever contribution method is used does 
not disproportionately increase the costs of telecommunications 
services to low-volume and low-income users.

    Question 17. There has been a decline in the last few years in the 
percentage of households that have local landline telephone service. At 
the same time, USF spending has increased significantly. What are the 
FCC's plans to control USF spending and make sure that more Americans 
have access to affordable service?
    Answer. In the ongoing Rural Review Proceeding, the Federal-State 
Joint Board on Universal Service (Joint Board) is considering proposals 
to reduce excessive growth in the fund and distribute funds more 
efficiently, ensuring that more Americans have access to affordable 
service. For example, the Joint Board has sought comment on the 
methodology for calculating support for Eligible Telecommunications 
Carriers (ETCs) in competitive study areas. Specifically, it asked 
whether, if multiple carriers are supported, the competitive ETC should 
receive support based on its own costs, the incumbent's costs, the less 
of its own or the incumbent's costs, or some other estimate of costs. 
The Joint Board also sought comment on how costs should be determined 
to the extent that support is based on a competitive ETCs own costs.
    More recently, the Joint Board sought comment on the merits of 
using reverse auctions to distribute universal service support. Such an 
approach is designed to promote efficient investment by encouraging the 
carriers with the most cost effective networks to enter high-cost 
areas. Once the Joint Board makes a recommendation in that proceeding, 
the Commission will carefully consider the record and weigh any 
alternatives to the current methodology. In addition, the Commission 
will be mindful that any changes in universal service high-cost support 
should be implemented over time to minimize impact on consumers and 
carriers alike.

    Question 18. Almost 1 year ago, just days before Hurricane Katrina 
made landfall, several Senators sent you a letter asking you not to 
order that service be cutoff to VoIP subscribers (many of which already 
had E-911 service) because the subscriber had not acknowledged that a 
power failure or network failure could limit his communication in an 
emergency. I want to thank you for agreeing with us. It turns out that 
while network and power failures had widespread impacts on 
communications, nomadic VoIP turned out to be a life saver, connecting 
President Bush, FEMA, the Red Cross, and those relocated to relief 
centers. Now as hurricane season is once again upon us, many small 
businesses in Florida are subscribing to VoIP because they can maintain 
continuity of service in the event of a network failure--using the 
phone from any working broadband connection. But there are many 
locations in Florida where consumers and business cannot take advantage 
of these benefits because those areas may have 911 capabilities but 
still lack full E-911--much like wireless.
    What have you done since January 2006 to clear away the roadblocks 
and accelerate E-911 solutions for VoIP?
    Answer. Public safety obligations like 911 are critical to 
consumers and public safety alike. The 911 system is quite literally 
one of life or death. It is critical to our Nation's ability to respond 
to a host of crises and the Commission has been working hard to 
minimize the situations where users are unable to access it. The 
Commission is committed to making sure that, during an emergency, a 
person can always pick up the phone, dial 911, and access local 
emergency officials.
    Since January 2006, Commission staff have conducted numerous 
meetings and attended conferences with public safety officials, 
interconnected VoIP providers, carriers, and third-party vendors in 
order to answer questions, promote coordination and encourage 
cooperation. Although VoIP providers reported specific difficulties in 
accessing the 911 network of two incumbents LECs, the Commission 
contacted the parties and these two instances were resolved quickly. 
Currently, we are unaware of any other ongoing difficulties accessing 
the 911 network of an incumbent LEC, and no complaints have been filed.

    Question 19. Have you ordered that network owners give VoIP 
providers direct access to the 911 network.
    Answer. The VoIP 911 Order specifically states that incumbent LECs 
are required to provide access to their E-911 networks to any 
requesting telecommunications carrier, including trunks, selective 
routers and E-911 databases. Interconnected VoIP providers may try to 
negotiate interconnection directly with the incumbent LEC's E-911 
network or purchase guaranteed access to this network from competitive 
carriers and other third-party providers.
    When VoIP providers reported specific difficulties in accessing the 
911 network of two incumbents LECs, the Commission contacted the 
parties and these two instances were resolved quickly. Currently, we 
are unaware of any other ongoing difficulties assessing the 911 network 
of an incumbent LEC, and no complaints have been filed.

    Question 20. Have you provided equivalent liability relief for 
public safety answering points (PSAPs) and others?
    Answer. Congress, via the 911 Act, granted wireless carriers 
providing 911 service liability protection equal to that available to 
wireline carriers for 911 calls. To date, there is no equivalent 
Federal requirement for providers of interconnected VoIP service or for 
the PSAPs receiving 911 calls from them.

    Question 21. 38 PSAPs failed during Hurricane Katrina. Have you 
done anything to accelerate the transition to an IP-enabled emergency 
network for PSAPs to strengthen the 911 system and prevent this from 
happening again?
    Answer. In January 2006, the Commission established an Independent 
Panel Reviewing the Impact of Hurricane Katrina on Communications 
Networks (Independent Panel). The Independent Panel, composed of public 
safety and communications industry representatives, was tasked with 
making recommendations to the Commission regarding ways to improve 
disaster preparedness, network reliability, and communications among 
first responders. The Independent Panel's recommendations, released in 
June 2006, included recommendations intended to ensure a more robust 
911 and E-911 service. The Commission currently is seeking public 
comment on these recommendations via a June 2006 Notice of Proposed 
Rulemaking, and will take such action as is necessary to strengthen the 
911 system.

    Question 22. Have you provided necessary tools so VoIP services can 
reach all Americans--even in the most rural and remote regions of 
America?
    Answer. Spurring broadband deployment is perhaps the most important 
way to ensure that VoIP services can reach all Americans. I have made 
broadband deployment one of my highest priorities at the Commission. 
During my tenure as Chairman, the Commission has worked hard to create 
a regulatory environment that promotes broadband deployment in all 
areas of the United States. The Commission has removed legacy 
regulations, like tariffs and price controls, that discourage carriers 
from investing in their broadband networks, and has worked to create a 
regulatory level playing-field among broadband platforms. As a recent 
Pew study found, there is evidence of significant and widespread 
increases in broadband adoption across the nation.

    Question 22a. What else can be done to spur the spread of VoIP 
services?
    Answer. The other way to ensure that all consumers have their 
choice of competitive provider, including VoIP provider, is to make 
sure that new technologies, such as VoIP, are subject to a uniform 
national policy. To this end, I supported the Commission's two key 
orders promoting VoIP deployment. First, I supported the Commission's 
pulver.com Order, which declared that pulver.com's peer-to-peer VoIP 
service was an information service and could operate free from legacy 
telephone regulation by the states consistent with our longstanding 
policies for other information services. Second, I supported the Vonage 
Order, in which the Commission preempted a state's attempt to impose 
legacy telephone regulation on Vonage. The Vonage Order makes clear 
that the same preemption would apply to any state's attempt to impose 
similar regulations on providers of service comparable to Vonage's 
service, including VoIP services provided by cable operators. These two 
orders have kept VoIP providers largely free of unnecessary state 
economic regulation, including pricing regulation, and have thus 
accelerated their deployment dramatically.
    Moreover, the Commission has sufficient authority to take, and has 
taken, action against entities that attempt to discriminate against 
VoIP providers. Specifically, the Commission, through its Enforcement 
Bureau, entered into a consent decree with Madison River after it had 
attempted to block VoIP traffic.
    Finally, during my Chairmanship the Commission adopted an Internet 
Policy Statement, the principles of which all benefit VoIP providers. 
We stated that consumers are entitled to access the lawful Internet 
content of their choice; to run applications and use services of their 
choice, subject to the needs of law enforcement; to connect their 
choice of legal devices that do not harm the network; and to 
competition among network providers, application and service providers, 
and content providers. The Commission is committed to monitoring these 
issues and is prepared to step in as necessary to ensure that new 
technologies, such as VoIP, are capable of being deployed to all 
Americans.

    Question 23. Have you appointed a ``p-ANI'' administrator, as many 
stakeholders and Members of Congress have requested?
    Answer. Yes. Recently, I appointed a new Chairman of the NANC. Upon 
the appointment of the new chair, Neustar (a neutral third-party 
numbering administrator) was instructed to act as the Interim p-ANI 
administrator, as requested by the NANC. We have also asked the NANC to 
report back to the Commission, by October 10, 2006, with a timeline for 
resolving the p-ANI issue on a permanent basis.

    Question 24. There are currently numerous issues and open 
proceedings related to 911 at the FCC. These include: (1) the VoIP E-
911 Order and subsequent filings, petitions, and waiver requests; (2) 
major wireless carrier handset deadlines and waiver requests; and (3) 
requests from the deaf and hard of hearing community to complete open 
proceedings affecting their access to 911. Where do these issues stand 
at the FCC?
    Answer. When I became Chairman, I identified public safety and 
emergency preparedness as critical issues. We have been working hard to 
make sure that all consumers have access to 911 emergency services. 
Public safety obligations like 911 are critical to consumers and public 
safety alike. The 911 system is quite literally one of life or death. 
It is critical to our Nation's ability to respond to a host of crises 
and the Commission has been working hard to minimize the situations 
where users are unable to access it. The Commission is committed to 
making sure that, during an emergency, a person can always pick up the 
phone, dial 911, and access local emergency officials.
    With respect to VoIP, we are working with the VoIP community to 
implement our 911 rules. The Commission staff have conducted numerous 
meetings and attended conferences with public safety officials, 
interconnected VoIP providers, carriers, and third-party vendors in 
order to answer questions, promote coordination and encourage 
cooperation to accelerate 911 solutions.
    With respect to wireless, the Commission has been working to ensure 
that all major wireless carriers have reached 95 percent penetration 
among their subscribers for a handset-based 911 solution. The 
Commission has received several waiver requests and we expect that they 
will be resolved soon. And, the Commission has adopted 22 orders, 
pursuant to the ENHANCE 911 Act, addressing petitions for relief filed 
by 52 Tier III carriers of the 95 percent handset penetration 
requirement.
    Finally, with respect to Internet-based forms of Telecommunications 
Relay Services, such as Video Relay Service and Internet Protocol Relay 
Service, the Commission opened a proceeding late last year seeking 
comment on how it could reform its rules to ensure that the deaf and 
hard of hearing community has equivalent access to emergency services 
as all other consumers. As part of this proceeding, this November we 
will hold a Disabilities E-911 Summit where we intend to bring together 
leaders from the disabilities community, the E-911 community, partner 
agencies, and industry to identify the access that people with hearing 
or speech disabilities need; the technologies, services, and 
applications through which access should be offered; and the 
technological, policy, and commercial issues involved in providing the 
needed access to persons with hearing and speech disabilities.

    Question 24a. What is the current status of the VoIP waiver 
petitions?
    Answer. In regard to the pending VoIP waiver petitions 
specifically, thirty interconnected VoIP providers and one VoIP 911 
service provider (Telefinity Corporation--Dash 911) filed petitions for 
waiver of the Commission's VoIP 911 rules.
    Of the twenty eight currently pending petitions for waiver filed by 
interconnected VoIP providers, half of these are now moot in that the 
petitioners requested waivers for time periods that expired on or 
before September 16, 2006. Specifically, these petitions were filed by: 
ACN Digital Phone Service LLC; Constant Touch Communications, LLC; 
Cypress Communications, Inc.; deltathree, Inc.; Flint Telecom, Inc.; 
ICG Telecom Group, Inc.; Insight Midwest Holdings, LLC; Lingo, Inc.; 
Midwest Wireless Holdings L.L.C.; Primus Telecommunications; Shared 
Data Networks, LLC; Voiceglo Holdings, Inc.; Vonage America, Inc.; and 
Vox Communications Corporation. Similarly, the waiver filed by 
Telefinity Corporation--Dash 911, a provider of VoIP 911 services, is 
also moot in that it only sought a waiver through December 19, 2005. 
The remaining waivers are under consideration.

    Question 25. In March 2006, the FCC adopted a plan to establish a 
Public Safety and Homeland Security Bureau. Six months later, what is 
the status of that bureau and will that bureau be charged with 
addressing all or some of the ongoing 911 issues at the FCC, or will 
some 911 issues remain in existing bureaus?
    Answer. In March, the Commission adopted a plan to consolidate its 
public safety, homeland security, and disaster management activities 
into a single Public Safety and Homeland Security Bureau. Since then, 
we have been working with the Commission staff and the National 
Treasury Employees Union on the implementation plan. We also submitted 
to the Appropriations Committees of the U.S. Senate and U.S House of 
Representatives detailed financial information. We received final 
Congressional approval on September 11, 2006, and we plan to announce 
the opening of the Public Safety and Homeland Security Bureau on 
September 26, 2006.
    The Public Safety and Homeland Security Bureau will be charged with 
addressing all of the on-going 911 issues at the Commission. The Public 
Safety and Homeland Security Bureau will coordinate closely with the 
existing bureaus that have traditionally worked on 911 issues, 
including the Wireline Competition Bureau and the Wireless 
Telecommunications Bureau.

    Question 26. What is your view on the role that states should play 
in protecting consumers?
    Answer. In many areas, the FCC and state commissions work together 
in a Federal-state partnership to bring consumers more choice, better 
services, and lower prices. State commissions, however, have a special 
role because they are on the front lines dealing with consumers. 
Because states are closer to consumers than the FCC, they are 
particularly well-equipped to handle a variety of matters, such as 
consumer complaints. Indeed, the Federal-State Board on Universal 
Service acknowledged that ``states are in a better position than the 
Federal Government to target the needs of their own consumers.'' 
Recommended Decision, FCC 03J-02, para. 25 (re. Apr. 2, 2003). On the 
other hand, it is also critical that, in keeping with the Commission's 
charge under section 706 of the Act, there is a uniform national 
communications policy that fosters the development of new technologies.
    Last summer, the Commission initiated a notice of proposed 
rulemaking to examine how to develop a framework for consumer 
protection in the ``broadband age.'' This proceeding recognizes that we 
must work together with our state partners to ensure that consumer 
protection needs are met by all providers of new technologies. Notably, 
in the Commission's Vonage Order, which preempted Minnesota's entry 
regulation of Vonage's VoIP service, the Commission expressly noted 
that its order does not affect Minnesota's general laws governing 
entities that conduct business within the state, such as laws 
concerning taxation fraud, marketing, advertising, or general 
commercial dealings. Similarly, in the Commission's VoIP 911 
proceeding, we recognized the historic and important role of states and 
localities in public safety matters and sought comment on the role that 
states should play in implementing our VoIP 911 rules. We specifically 
asked how the Commission and the states can work together to ensure the 
public's safety.
    There are, of course, numerous areas in which we are already 
working closely with our state counterparts. For instance, we have 
delegated significant authority to them to administer phone numbers. 
Another area where we work closely with our state counterparts is in 
the area of slamming, where the Commission has concluded that the 
states have primary responsibility for administering the rules. 
Moreover, we recently created joint Federal/state task forces and 
working groups in the areas of Lifeline/Linkup and VoIP, and we are 
actively working with our state colleagues in these very important 
areas.

    Question 26a. Specifically, should the Commission write all the 
rules and the state commissions administer and enforce those rules?
    Answer. There are certain contexts where it is appropriate for the 
Commission to adopt the governing regulatory framework and for the 
state commissions to enforce the rules adopted in that framework. For 
example, in the numbering arena, the Commission has delegated authority 
to the state commissions to administer and enforce some aspects of our 
numbering rules. Still another example is in the slamming context where 
states have the primary responsibility for administering and enforcing 
our slamming rules.
    There are other contexts, however, where it is not appropriate for 
the Commission to delegate authority to the state commissions. One 
example of this is in the section 251 unbundling context. In this area, 
the United States Court of Appeals for the D.C. Circuit, vacated our 
rules delegating implementation of our unbundling rules to the states 
holding that we may not ``subdelegate to outside entities--private or 
sovereign--absent affirmative evidence of authority to do so.'' USTA 
vs. FCC, 359 F.3d 554, 566 (D.C. Cir. 2004).

    Question 27. What percentage of consumer complaints lodged with the 
FCC results in enforcement actions taken against communications 
companies? Does the FCC have the necessary resources to bring an 
appropriate number of enforcement actions, in order to fully protect 
consumers?
    Answer. The Commission takes its mission to protect consumers very 
seriously. The Commission has two bureaus whose core responsibilities 
include addressing complaints from consumers. Specifically, the 
Consumer and Governmental Affairs Bureau collects and responds to 
consumer inquiries and informal complaints. The Enforcement Bureau uses 
this consumer complaint information, as well as information it receives 
from communications companies, to vigilantly enforce the Act and the 
Commission's rules.
    In its enforcement actions, the Commission seeks to protect the 
public at large. Although all complaints are useful to the Commission 
in taking enforcement action, the number of complaints resolved by an 
investigation varies. Some investigations are triggered by a single 
complaint filed by a consumer, such as certain complaints against 
wireline carriers. Other investigations seek to address broader rule 
violations, such as in the indecency, junk fax or spamming contexts, 
and a single investigation will resolve significant numbers of 
complaints. For the past two fiscal years, for example, we have 
conducted over 800 investigations relating to issues raised by 
consumers, carriers, and on our own motion.
    Consumers can file informal complaints with the Commission in many 
ways, including by phone, postal mail, fax, electronic mail and through 
the Commission's website. The Commission receives approximately 120,000 
informal complaints per year, which all come through the Commission's 
Consumer Center. These informal complaints are each addressed in a 
variety of ways, including through mediation, referrals to other 
Federal or state agencies, or through coordination with other bureaus, 
including the Enforcement Bureau. In 2005, as a result of Commission 
involvement, $4.1 million was returned to consumers.
    With regard to necessary resources, the Commission is committed to 
making the best use of all resources that Congress has appropriated, or 
sees fit to appropriate in the future, for the bringing of enforcement 
actions to resolve consumer complaints.

    Question 27a. Could you provide more detail on the number of 
complaints that result in enforcement actions against communications 
companies?
    Answer. The Commission takes its mission to protect consumers very 
seriously. The Commission has two bureaus whose core responsibilities 
include addressing complaints from consumers. Specifically, the 
Consumer and Governmental Affairs Bureau (CGB) collects and responds to 
consumer inquiries and informal complaints. The Enforcement Bureau (EB) 
uses this consumer complaint information, as well as information it 
receives from communications companies, to vigilantly enforce the Act 
and the Commission's rules.
    Consumers can file informal complaints with the Commission by any 
reasonable means, including by phone, postal mail, fax, electronic mail 
and through the Commission's website. The Commission receives 
approximately 120,000 informal complaints per year, which all come 
through the CGB's Consumer Center. CGB addresses each of these 
complaints in a variety of ways depending on its subject matter and 
content. For example, complaints alleging wrongdoing by common carrier 
entities are routinely forwarded to the named carrier or carriers with 
instructions to the carrier(s) to satisfy or respond to the complaint 
within a time prescribed by the Commission, generally 30 days. The time 
for responding to a complaint may be shortened in certain instances, 
for example, if a public safety or health issue is indicated. In 2005, 
approximately $4.1 million dollars was returned to consumers by common 
carrier entities in response to informal complaints filed with the 
Commission.
    In all cases, informal complaints are processed with the goal of 
facilitating a satisfactory resolution or response for the consumer. 
For example, the Commission receives many complaints that are more 
properly filed with another state or Federal agency in the first 
instance. In these cases, CGB works cooperatively with the relevant 
state or Federal agency to ensure that the consumer has accurate 
information about where and how to file the complaint. In many 
instances, CGB will forward the complaint to the appropriate state or 
Federal agency on behalf of the consumer.
    CGB works in close coordination with EB to ensure that matters 
raised by consumers that warrant possible enforcement action receive 
the appropriate attention by the two Bureaus. For example, even in 
cases where the common carrier has issued a credit or refund to a 
consumer, the facts underlying the complaint may indicate an underlying 
compliance problem requiring additional scrutiny or enforcement action.
    EB largely handles major investigations aimed at protecting the 
public at large from prohibited practices or rule violations. The 
investigations often seek to address wide-spread practices that have 
the potential to impact thousands of consumers simultaneously, and may 
well go beyond the scope of consumer complaints filed with the 
Commission. Thus, for example, the Enforcement Bureau's investigation 
into whether carriers are adequately protecting their subscribers' 
personal phone records was triggered by a handful of consumer 
complaints, yet impacts virtually all consumers of telecommunications 
services.
    The Commission does not currently separately track enforcement 
actions taken solely against regulated communications companies versus 
non-communications companies. The parameters of an EB investigation as 
well as its ultimate targets are often defined by the aggregated 
complaints of consumers on a particular issue. As such, the enforcement 
actions taken by EB in a typical year will address untold thousands of 
complaints.
    For example, in 2005 an investigation begun in EB based on problems 
described in over 200 consumer complaints resulted in a $4,000,000 
consent decree with Sprint.
    In addition, since July of 2005, EB has issued 95 citations against 
entities involved in sending junk faxes as described in 6,336 consumer 
complaints.
    In yet another example, based on approximately 1,064 do-not-call 
complaints filed both at the Commission and the Federal Trade 
Commission, EB launched an investigation of T-Mobile's do-not-call 
policies resulting in a recent consent decree with T-Mobile.
    And, in the indecency context, over 500,000 complaints were 
resolved by the Commission's enforcement action against various 
television licensees concerning their broadcast of the Super Bowl 
XXXVIII Halftime Show.
    Finally, in the slamming context, in the first quarter of 2006, 
approximately 50 percent of consumer complaints related to slamming 
were resolved through orders issued by CGB. The remainder of these 
complaints were either re-categorized as a non-slamming complaint, 
closed pending further information from the complainant, or forwarded 
to the appropriate state agency which had ``opted-in'' to administer 
our slamming rules.
    Finally, with respect to public safety, interference, and field-
related cases, in Fiscal Year 2005, the Commission resolved all 3,866 
such public safety, interference and field-related complaints that it 
received.

    Question 28. In recent months, the media helped expose the 
pernicious practice of pretexting, whereby thieves pose as legitimate 
actors in order to obtain consumers' private telephone records. Several 
of my colleagues and I have introduced bills to make pretexting a 
criminal offense, and I expect that Congress will pass these bills very 
soon. I know that under your leadership, the FCC has taken actions to 
crack down on this pretexting. Can you please update me on what steps 
you have taken and plan to take to protect consumers from pretexting?
    Answer. The Commission is concerned about the disclosure and sale 
of consumers' personal telephone records and seeks to protect consumers 
against pretexting. We are investigating data brokers to determine how 
they are obtaining consumers' confidential calling records. The 
Commission's Enforcement Bureau (EB) has issued over 30 subpoenas to 
data brokers ordering the production of documents and evidence 
regarding these entities' sales of call records. We have also issued 
citations to those companies that failed to respond adequately, 
referred a case to the DOJ for enforcement, and issued a notice of 
apparent liability (NAL) for the maximum monetary forfeiture against a 
data broker--LocateCell.com--for its continued failure to respond to 
our subpoena.
    Further, in support of these investigations, we have made 
undercover purchases of phone records from various data brokers. This 
information has assisted us in targeting additional requests for 
information and in determining the exact method by which consumer phone 
record data is being disclosed. As a result of our investigations and 
those of other law enforcement agencies, most of the online operators 
that we originally identified no longer state that they can provide 
calling records.
    We are also investigating the telecommunications carriers to 
determine whether they have implemented appropriate safeguards to 
secure the privacy of consumers' confidential calling records. We must 
ensure that the telecommunications carriers are fully meeting their 
obligations under the Act and our rules to protect customer phone 
records. To this end, we have issued letters of inquiry to 
approximately 20 of the largest wireline and wireless carriers. These 
letters required the carriers to document their customer data security 
procedures and practices, identify security and disclosure problems, 
and address any changes they have made in response to the data broker 
issue.
    In addition, under the Commission's rules, a telecommunications 
carrier ``must have an officer, as an agent of the carrier, sign a 
compliance certificate on an annual basis stating that the officer has 
personal knowledge that the company has established operating 
procedures that are adequate to ensure compliance'' with the 
Commission's rules. In January, we issued a public notice requiring all 
telecommunications carriers to submit their most recent certification 
with us. As a result of our investigation into this issue, we issued 
three NAL to carriers for their failure to certify compliance with 
these very important rules. We have reached consent decrees, on this 
and other CPNI-related issues, with two of these carriers totaling 
$650,000.
    During the course of the Commission's investigations, several 
carriers have taken a number of steps to further protect the privacy of 
consumer account information. These steps include, among other things: 
using better security and authentication measures with respect to 
setting up online accounts; notifying customers of password or account 
changes (i.e., wireless carriers will send a text message); and greater 
monitoring of employee activities to detect breaches in internal 
corporate policies.
    Finally, in February, the Commission initiated a proceeding to 
determine what additional rules the Commission should adopt to further 
protect consumers' sensitive telephone record data from unauthorized 
disclosure. Specifically, in a Notice of Proposed Rulemaking (NPRM), 
the Commission sought comment on five specific proposals to address the 
unlawful and fraudulent release of CPNI: (1) consumer-set passwords; 
(2) audit trails; (3) encryption; (4) limiting data retention; and (5) 
notice procedures to the customer on release of CPNI data. In addition 
to these proposals, the NPRM also seeks comment on whether carriers 
should be required to report the release of CPNI. The NPRM tentatively 
concludes that the Commission should require all telecommunications 
carriers to certify on a date certain each year that they have 
established operating procedures adequate to ensure compliance with the 
Commission's rules and file these certifications with the Commission. 
The record closed in June and I have directed the staff to prepare an 
order for the Commission to consider this Fall.

    Question 29. In recent months, the media has helped expose the 
practice of ``caller ID spoofing,'' whereby a calling party alters the 
way that his telephone number appears on a recipient's caller 
identification system. Caller ID spoofing leads to identity theft, 
threats to public safety, and other undesirable outcomes. Senator Snowe 
and I introduced a bipartisan bill several months ago to help stamp out 
this fraudulent activity. Can you please update me on what steps you 
have taken and plan to take to protect consumers from caller ID 
spoofing?
    Answer. It is important that services like caller ID, which are so 
useful to consumers, not be used as tools to perpetuate fraud or 
deception to consumers. Specifically, the Commission's Enforcement 
Bureau has initiated several investigations against alleged spoofers by 
issuing letters of inquiry and/or subpoenas to entities apparently 
engaged in marketing and selling caller ID spoofing services to 
customers. These inquiries are aimed at learning how these companies 
operate and determining whether there are any violations of the 
Communications Act or the Commission's rules or orders. In addition, 
the Enforcement Bureau is coordinating with the Federal Trade 
Commission in addressing this important issue.
    Section 64.1601 of the Commission's rules establishes the delivery 
requirements for a calling party's caller ID information for two 
specific categories of users--common carriers and telemarketers. It 
requires common carriers to transmit the caller ID associated with an 
interstate call to all interconnecting carriers. It also requires 
telemarketers and any person or entity engaged in telemarketing to 
transmit accurate caller ID information.
    Although we are continuing to investigate these matters, this 
practice may present challenges to the Commission's enforcement 
authority. On April 5, 2006, I responded to a question from Speaker 
Hastert in which I indicated that the Commission may not have 
sufficient authority to fully address this issue. Thus, the passage of 
legislation that clarified the Commission's authority in this area 
would be helpful.

    Question 30. With the transition date for the digital TV transition 
rapidly approaching, what are the areas in which the FCC should play a 
major role (e.g., consumer education)?
    Answer. Our most important role is to finalize the rules that will 
govern broadcasters and cable operators in a digital-only age. This 
process includes finalizing the DTV Table of Allotments, completing the 
remaining technical and operation rules, and finalizing the technical 
carriage requirements. The Commission also will continue its work to 
educate consumers about DTV. The Commission has pursued several avenues 
for providing DTV information to consumers: publications, the Internet, 
participation at public exhibits and community and consumer-oriented 
events, and the media. We will work cooperatively with the National 
Telecommunications and Information Administration on consumer education 
efforts and to assist in implementation and administration of the 
coupon program for digital-to-analog converter boxes.

    Question 31. Recently published articles have cited sources that 
claim that the FCC's performance has suffered under your leadership. 
Among various criticisms, these sources have claimed that your office 
demands outcome-determinative results from FCC staff, instead of 
allowing objective facts to guide decision-making; that your office 
does not value the expert opinions of senior staff, which has caused 
large-scale senior staff turnover; that you have failed to fill several 
permanent positions, including bureau chief positions; and that staff 
morale is the worst that has been seen in years. I wanted to give you 
an opportunity to respond to these criticisms. How would you respond?
    Answer. I am proud of the fact that during my tenure as Chairman, 
the Commission had been able to achieve a balanced approach to policy--
eliminating economic regulations while protecting consumers and 
preserving broader social goals--in a bi-partisan, collegial manner.
    The Commission has successfully met significant management 
challenges including responding to Hurricane Katrina. The Commission 
stayed open late every day, 7 days a week, for 3 weeks following that 
storm in order to assist in the restoration of service for the 
residents in the affected areas. For example, we granted more than 90 
requests for Special Temporary Authority and more than 100 temporary 
frequency authorizations for emergency workers, organizations, and 
companies to provide wireless and broadcast services in the affected 
areas and shelters around the country. In most cases, these requests 
were granted within 4 hours, with all requests approved within 24 
hours.
    Additionally, the Commission will soon complete the first auction 
of Advanced Wireless Services (AWS). It is expected to be the biggest 
most successful auction in Commission history--licensing the largest 
amount of the spectrum capable of being used for wireless broadband 
services and raising nearly $14 billion for the U.S. Treasury. The AWS-
1 auction was the result of the hard work done by the Commission to 
improve our auctions processes so that spectrum, an invaluable public 
resource, is efficiently managed and distributed.
    Finally, I would note that numerous vacancies existed for Bureau 
and Office Chief positions when I took over as Chairman. In addition, 
several senior staff had already announced that they had planned to 
leave the Commission before I had become Chairman. In all there were at 
least six Bureau and Office Chief vacancies that I needed to fill in my 
first few weeks as Chairman. This shift in agency leadership is not 
uncommon when there is a change in administration. I placed long-time 
agency experts and veterans in many key positions. I am extremely proud 
of the individuals I have asked to become Bureau and Office Chiefs; 
these dedicated public servants have worked hard and are doing an 
excellent job in serving the Commission and the American public.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                            Kevin J. Martin

    Question 1. As you know, state and local public safety agencies, 
private, and commercial enterprises operating radio systems in the 800 
MHz band in the U.S. are in the process of re-banding. In June 2005, 
the re-banding process began in regions that do not have common borders 
with Canada and Mexico.
    Is the 36-month timetable to complete the re-banding in any danger 
of slippage?
    What delays in the implementation schedule or other missed 
milestones would raise concerns in your mind that there is a problem 
with the re-banding process that rises to the level requiring the 
Chairman's office to take a more hands-on role to ensure that the 
process is on track?
    Successfully completing the 800 MHz re-banding in Border States in 
a timely manner will require modification of existing band plans and 
spectrum sharing treaties with Canada and Mexico. Under the current re-
banding plan, Washington State-Canadian border issues affect the vast 
majority of my state's public safety 800 MHz radio communications 
systems. Currently, is the Commission working with National Public 
Safety Planning Advisory Committee (NPSPAC) Regional 43 (covering 
Washington State), the State Department, Sprint Nextel, and the 
Commission's Canadian counterparts, to address this critical public 
safety issue?
    Answer. In 2004, the Commission adopted technical and procedural 
measures designed to address the ongoing and growing problem of 
interference to public safety communications in the 800 MHz band. 
Specifically, the Commission adopted a new band plan for the 800 MHz 
band and established a transition mechanism for licensees in the band 
to relocate to their new spectrum assignments (i.e., rebanding).
    The first phase of the band reconfiguration process, which entails 
relocation of licensees on Channels 1-120 in the 800 MHz band, has 
generally proceeded in accordance with the timetable established by the 
800 MHz Transition Administrator (TA). In particular, the negotiation 
and mediation process established by the Commission and administered by 
the TA appears to have been largely successful in resolving disputes 
between Channel 1-120 licensees and Sprint Nextel. Hundreds of 
frequency relocation agreements have now been negotiated, and disputed 
issues have been referred to the Commission in only a handful of cases. 
In addition, 800 MHz stakeholders (including Sprint Nextel, the public 
safety community, other 800 MHz licensees, and equipment vendors) have 
worked with the TA and with one another to establish and refine 
procedures to expedite negotiations and the provision of relocation 
funding.
    While there has been good progress in rebanding to date, 
significant work still lies ahead over the next 22 months. The second 
phase of the timetable has now begun, which concerns relocation of 
licensees in the NPSPAC band from their current spectrum to the 
spectrum vacated by Channel 1-120 licensees. Timely completion of this 
phase will require diligence, commitment, and cooperation among all 
licensees, and will require sufficient resources to ensure that systems 
are successfully rebanded once negotiations are complete. We have 
directed the TA to take an active role in monitoring the progress of 
individual negotiations and establishing milestones for the rebanding 
process as a whole, and to report to us on a regular basis. In 
addition, the Commission has stated that it will not hesitate to take 
any additional steps that may prove necessary to prevent delays in 
negotiations or other aspects of the rebanding process.
    I am committed to ensuring that the Commission does everything 
possible to see that the process is completed as soon as possible. My 
staff and I are already involved. We have met and coordinated with the 
relevant stakeholders about the importance of meeting the schedule. 
Moreover, we have specifically asked all stakeholders for 
recommendations concerning any Commission actions that may be necessary 
to facilitate meeting this deadline.
    The Commission's orders require Sprint Nextel to meet an 18-month 
benchmark on December 27, 2006 by completing relocation of Channels 1-
120 licensees in the first 20 regions on the TA's schedule. In 
addition, the TA's phased negotiation timetable provides for the 
remaining waves of licensee negotiations to occur at specified 
intervals between October 2006 and July 2007. The Commission, and 
particularly my staff, will monitor the parties' progress against these 
milestones to determine whether additional Commission involvement in 
the rebanding process is needed.
    As you have noted, completing 800 MHz rebanding in the border areas 
in a timely manner will require amendments to existing agreements with 
Canada and Mexico. We have been working with all relevant parties to 
facilitate a timely and seamless transition along the Canadian border. 
To this end, in conjunction with the State Department, we have had 
discussions with Canada over the last 2 years to facilitate the 
transition.
    While Canada has not expressed any need to reconfigure its 800 MHz 
services, the channel allocations under our current agreements with 
Canada provide the United States with some flexibility to reband 
licensees on our side of the border without significant impact on 
Canadian allocations. However, a provision may be needed to facilitate 
cross-border mutual aid channels. FCC staff, along with the State 
Department, will continue to negotiate an arrangement with Canada to 
cover this critical public safety issue next month during bilateral 
discussions with Canada. We are optimistic that we can reach an 
arrangement with Canada that will allow the transition of stations 
along the Canadian border in a timely manner.

    Question 2. KMIH is a Class D station operated for over 35 years by 
the Mercer Island School District on Mercer Island, WA. It has a 
pending minor change application at the Commission to change its 
frequency of operation to the NCE band. During the summer, the 
Commission issued an Order to Show Cause (Reference 1800B3-RDH) 
regarding KMIH's application. Neither of the two affected stations 
objected to the proposed application, but requested the Commission 
place non-interference conditions on KMIH's application. If KMIH and 
KASB, a second station changing its frequency as an accommodation to 
KMIH, accepts these conditions, what steps remain prior to the 
Commission granting approval to KMIH's petition?
    KYRS is a low power FM (LPFM) station operating in Spokane, WA. Out 
of necessity, the station has filed a minor change application to 
change its frequency of operation to the NCE band. The application 
requires waiver of Commission rules regarding second adjacent channel 
and TV Channel 6 protections. The application includes letters from the 
affected parties (the NCE FM station and TV Channel 6), each stating 
that it does not object to KYRS's proposed change in frequency. The 
application has been accepted for filing on August 10th. In the 
intervening month, there is no record of any party filing an objection 
to the application. My staff has been informed by Commission staff, 
though, that the application violates statute. Which part of what 
statute does the KYRS application to change its frequency of operation 
to the NCE band violate?
    Answer. If KMIH and KASB accept those conditions, the Commission 
could issue a decision immediately.
    The KYRS application does not comply with the mandatory distance 
separation requirements for LPFM stations that Congress enacted in 
2000.

    Question 3. In speeches and in testimony before Congress, you have 
stated that fundamental priorities of the Commission include 
encouraging broadband deployment and enhancing spectral efficiency. One 
pending NPRM that has the potential of advancing these two priorities 
is the so-called ``white space'' NPRM (ET Docket No. 04-186). As you 
know, Title VI of the H.R. 5252 Senate substitute instructs the FCC to 
adopt technical and device rules to facilitate use of certified 
unlicensed devices within 270 days after enactment. If the Title VI 
provisions do not become law, there still remains a need for the 
Commission to complete the ``white space'' proceeding expeditiously.
    In your 2003 statement regarding the earlier related ET Docket No. 
02-380, you said, ``I strongly support making more spectrum available 
for unlicensed devices . . . I am concerned that opening this inquiry 
into the TV broadcast bands at this time may create additional 
uncertainty and potentially delay the digital transition''.
    Much has changed between the time when you made your initial 
statement and today. The Nation is already on a path to complete the 
transition to digital television. Congress has set the ``hard date'' 
for February 18, 2009. The vast majority of television broadcasters are 
transmitting digital over-the-air digital signals. The Commission has 
made considerable progress in finalizing the table of allotments for 
all broadcasters' digital channel selection. As a result of the 
Commission's digital tuner mandate, the U.S. installed base of digital 
televisions is going to increase rapidly. And advances have been made 
in cognitive radio and complementary technologies such as smart 
antennas.
    With these positive developments, have your views on the use of 
``white spaces'' evolved since your 2003 statement?
    When should Congress expect the Commission to complete ET Docket 
No. 04-186?
    Answer. I continue to support making more spectrum available for 
unlicensed devices and recognize that the DTV white spaces could 
provide an efficient and effective use of the TV spectrum. The 
Commission must also do all it can to speed the digital television 
transition while promoting innovative types of broadband products and 
services.
    In the past, I have expressed concern that allowing the use of 
these devices immediately could impede the progress of the DTV 
transition. The TV bands have been generally congested during the 
transition with TV stations operating on two channels each--an analog 
and a digital channel. Moreover, the final DTV channel election and 
assignment process was still ongoing, which made it difficult to assess 
the amount of white space that might ultimately be available.
    I agree that broadcasters' progress in transitioning to digital 
signals and the establishment of a hard date by Congress have been 
positive developments since I expressed my previous concerns. Given 
these developments, the Commission's Office of Engineering and 
Technology recently released a projected timeline for resolving the DTV 
white spaces proceeding. The projected schedule proposes that the 
Commission consider a report and order and further notice of proposed 
rulemaking in October 2006, report the results of testing by the 
Commission's laboratory in spring and summer of 2007, and consider 
final technical rules in October 2007. I believe this proposed schedule 
provides sufficient time to develop appropriate technical standards to 
prevent interference to TV broadcasting and other services, as well as 
sufficient lead time for industry to design, test, and produce new 
unlicensed products that would be available for sale to the public at 
the completion of the DTV transition.

    Question 4. As you are aware, a number of colleagues on the 
Commerce Committee and I are extremely interested in the Commission's 
Further Notice of Proposed Rule Making on media ownership and intend to 
follow its progress closely. I was pleased to learn the Commission 
intends to hold public hearings on media ownership around the country 
and I once again extend an invitation for the Commission to conduct a 
public hearing in Washington State.
    Do you intend for the Commission to conduct its quadrennial review 
of each of its media ownership rules sequentially and release 
individual rulemakings, or do you intend to review all of the 
Commission's existing rules in concert and release a single rulemaking?
    Will the Commission commit to issuing a Further Notice of Proposed 
Rulemaking that specifically describes to the public the proposed 
changes to its media ownership rules and allows them to comment on the 
proposed rules prior to the Commission voting to make any changes?
    The Commission has a long-standing policy to promote localism, 
diversity, and competition in its media ownership rules--in order to 
protect the public interest. The Telecom Act requires the Commission to 
conduct a quadrennial review of its media ownership rules, and allows 
repeal or modification of rules if the Commission determines they are 
no longer in the public interest. How does the Commission plan to 
consider changes to its media ownership rules without first completing 
its still-open proceeding on localism?
    I have serious concerns about lifting the Commission's existing ban 
on newspaper-broadcast cross-ownership in the same market. In 2003, you 
supported lifting this ban. At the time the new rules were released, 
you stated that ``. . . we recognize that newspaper/broadcast 
combinations may result in the significant increase in the production 
of local news and current affairs, as well as an improvement the 
quality of programming provided to their communities.'' What in the 
record collected by the Commission on media ownership prompted that 
statement? Do you still hold those views today?
    Answer. The Commission just started its review of the Commission's 
media ownership rules. We have not yet received comments, conducted the 
full series of public hearings or received the results of independent 
studies. We intend to consider all the rules in concert as we conduct 
hearings and independent studies. It is too early to determine whether 
the record will support one order or separate orders. It is also too 
soon to determine what actions--if any--we will take with respect to 
any particular rule. We are committed to ensuring that the public is 
fully informed and has the opportunity to comment and actively 
participate in this proceeding.
    The Commission is incorporating into its media ownership proceeding 
the comments submitted in our open localism proceeding. The Media 
Bureau is preparing a summary of the comments submitted in the localism 
proceeding that will be released to the public. The Media Bureau also 
is preparing a summary of the testimony taken at the localism hearings. 
All of this information will be fully incorporated into the media 
ownership proceeding. Localism will be the focus of independent studies 
and among the topics covered at public hearings as the Commission moves 
forward with its review of the media ownership rules.
    During the Commission's last review of its media ownership rules, 
the Commission conducted a number of studies, including one entitled 
``The Measurement of Local Television News and Public Affairs 
Programs.'' That study found that newspaper-owned affiliated stations 
provide almost 50 percent more news and public affairs programming than 
other network-affiliated stations. In addition, the study found that 
the average number of hours of local news and public affairs 
programming provided by the same-market cross-owned television-
newspaper combinations was 25.6 hours per week, compared to 16.3 hours 
per week for the sample of television stations owned by a newspaper 
that is not in the same market as the station.
    The Commission explicitly found that, ``[n]ot only do newspaper-
owned stations provide more news and public affairs programming, they 
also appear to provide higher-quality programming, on average, at least 
as measured by ratings and industry awards.'' The study also found that 
the ratings for newspaper-owned stations' 5:30 and 6 pm newscasts 
during the November 2000 sweeps period averaged 8 compared to an 
average rating of 6.2 for non-newspaper-affiliated stations. Further, 
newspaper-owned stations received 319 percent of the national average 
per station Radio and Television News Directors Association (RTNDA) 
awards, and 200 percent of the national average A.I. DuPont Awards in 
2000-2001. During that same period, non-newspaper-owned stations 
received RTNDA Awards at a rate of only 22 percent of the national 
average. They received DuPont Awards at a rate of 39 percent of the 
national average per station.
    The Commission also found that a second study, performed by the 
Project for Excellence in Journalism (PEJ), supported the findings of 
the study discussed above. In its study, PEJ analyzed 5 years of data 
on ownership and news quality. PEJ concluded that cross-owned stations 
in the same Nielsen Designated Market Area were more than twice as 
likely to receive an ``A'' grade as were other stations.
    Finally, I would note that even the Third Circuit concluded that 
reform of the newspaper/broadcast cross-ownership rule was needed. The 
Third Circuit agreed with the Commission, finding that ``[t]he 
Commission's decision not to retain a ban on newspaper/broadcast cross-
ownership [was] justified under Sec. 202(h) and [was] supported by 
record evidence.'' However, we are just beginning this process and the 
Commission will be looking to the record developed in our review of the 
media ownership rules to determine what action is now appropriate.

    Question 5. VoIP is an application that has the potential to drive 
consumer uptake of broadband and provide significant savings. While the 
percentage growth in VoIP use has been phenomenal over the past few 
years, the 4.2 million VoIP subscribers at the end of 2005 remains a 
small number when compared to the over 100 million landlines and over 
200 million wireless phones in use. VoIP has been a case where the 
technology is outpacing regulation. There remains uncertainty and 
inconsistency in the regulatory treatment of VoIP.
    Do you believe that interconnected VoIP service is 
telecommunications service or an information service?
    When should Congress, industry, and the public expect the 
Commission to determine the statutory classification of interconnected 
VoIP under the definition of the Telecom Act?
    Do you expect the deployment rate of interconnected VoIP to slow as 
a result of the recent Commission decision to establish the 64.9 
percent (safe harbor) universal service obligations (on an interim 
basis) for interconnected VoIP services? Why or why not?
    What regulatory obligations should one-way VoIP communications such 
as ``click-to-call'' have?
    Answer. The Commission has not yet classified interconnected VoIP 
services as ``telecommunications services'' or ``information services'' 
as those terms are defined in the Communications Act. While this issue 
is being considered, it is important to note that no economic or entry 
regulation has been imposed on VoIP services. For example, the 
Commission, in the Vonage Order, preempted Minnesota's entry regulation 
of Vonage's VoIP service. At the same time, however, the Commission has 
required interconnected VoIP providers to comply with various social 
and public safety obligations such as 911 emergency access, CALEA, and 
universal service. These apply irrespective of whether VoIP services 
are ultimately classified as information or telecommunications 
services.
    These issues are presently under consideration. In the meantime, 
the Commission has removed economic regulation and clarified what 
social and public safety obligations apply to interconnected VoIP 
services.
    When the Commission made interim modifications to the assessment 
methodology for contributions to the Federal Universal Service Fund, it 
recognized that VoIP service was increasingly being used as a 
substitute for traditional telephone service--in particular, as a 
substitute for traditional long-distance calling. While stand-alone 
interstate long-distance revenues have been declining, interconnected 
VoIP revenues, which typically include bundled long distance service, 
have been growing dramatically. Although the Commission established a 
safe harbor for interconnected VoIP services, it also pointed out that 
``to the extent that this safe harbor is higher than some providers' 
actual interstate use, providers may instead contribute to the fund 
based on actual revenue allocations or by conducting a traffic study.'' 
In the Matter of Universal Service Contribution Methodology, at para. 
54. Moreover, under the Commission's rules, a provider of interstate 
and international telecommunications whose annual universal service 
contribution is expected to be less than $10,000 is not required to 
contribute to the Universal Service Fund. Interconnected VoIP providers 
that satisfy this de minimis exemption need not contribute to the Fund, 
thus limiting the contribution obligation to those interconnected VoIP 
service providers that should be able to afford to make such 
contributions.
    The number of VoIP subscribers has grown dramatically from 
approximately 150,000 subscribers in 2003 to 1.2 million subscribers in 
2004, and to 4.2 million subscribers at the end of 2005. The Commission 
has stated that it expects this trend to continue.
    To date, the Commission has only imposed obligations on providers 
of ``interconnected VoIP'' services. Our rules define these services as 
those that ``(1) enable[s] real-time, two-way voice communications; (2) 
require[s] a broadband connection from the user's location; (3) 
require[s] Internet protocol-compatible customer premises equipment 
(CPE); and (4) permit[s] users generally to receive calls that 
originate on the public switched telephone network and to terminate 
calls to the public switched telephone network.'' 47 C.F.R. Sec. 9.3. 
Thus, one-way VoIP communications are not covered under this 
definition.
    The Commission has a pending rulemaking proceeding in which it is 
considering the extent to which certain regulatory obligations should 
apply to VoIP services that could be characterized as ``one-way VoIP 
communications.'' In that proceeding, the Commission tentatively 
concluded that ``a provider of a VoIP service offering that permits 
users generally to receive calls that originate on the PSTN and 
separately makes available a different offering that permits users 
generally to terminate calls to the PSTN should be subject to the rules 
we adopt in today's Order if a user can combine those separate 
offerings or can use them simultaneously or in immediate succession.'' 
In the Matter of IP-Enabled Services, at para. 58.

    Question 6. Last year, to ensure that broadband networks are widely 
deployed, open, affordable, and accessible to all consumers, the 
Commission adopted four, so-called ``net neutrality'' principles. Are 
these net neutrality principles broadly enforceable by the Commission? 
If so, under what authority will the Commission enforce these 
principles?
    As you know, in 2005, the Commission approved the transfer of 
control of MCI to Verizon Communications Inc. and that of AT&T to SBC 
with certain conditions. As conditions of both mergers, effective on 
the merger closing date and continuing for 2 years thereafter, the 
merged companies will ``conduct business in a manner that comports with 
the principles set forth in the FCC's Policy Statement, issued 
September 23, 2005 (FCC 05-151),'' which describes the Commission's net 
neutrality principles. Do these companies have any legal obligation to 
abide by the Commission's net neutrality principles beyond 2 years 
after their respective merger closing dates?
    Do you believe that Internet end-users should be entitled to 
receive service from each broadband access provider in a manner that 
does not discriminate in the carriage and treatment of Internet traffic 
based on the source, destination, or ownership of such traffic?
    Answer. The Commission, under Title I of the Communications Act, 
has the ability to adopt and enforce the net neutrality principles it 
announced in the Internet Policy Statement. The Supreme Court 
reaffirmed last year that the Commission ``has jurisdiction to impose 
additional regulatory obligations under its Title I ancillary 
jurisdiction to regulate interstate and foreign communications.'' 
National Cable & Telecomm. Ass'n v. Brand X Internet Services, 125 S. 
Ct. 2688, 2696 (2005) (Brand X). Indeed, the Supreme Court specifically 
recognized the Commission's ancillary jurisdiction to impose regulatory 
obligations on broadband Internet access providers. Brand X, 125 S. Ct. 
at 2708 (``[T]he Commission remains free to impose special regulatory 
duties on facilities-based ISPs under its Title I ancillary 
jurisdiction. In fact, it has invited comment on whether it can and 
should do so.'').
    The Commission may exercise ancillary jurisdiction under Title I 
when: (1) Title I confers subject matter jurisdiction over the service 
to be regulated: and (2) the assertion of jurisdiction is reasonably 
ancillary to the effective performance of the Commission's 
responsibilities. United States v. Southwestern Cable Co., 392 U.S. 
157, 177-78 (1968). Both of these conditions are met with respect to 
the four principles of the Commission's 2005 Policy Statement. Indeed, 
the Commision found ``that both of the predicates for ancillary 
jurisdiction are likely satisfied for any consumer protection, network 
reliability, or national security obligation that we may subsequently 
decide to impose on wireline broadband Internet access service 
providers.'' Wireless Broadband Internet Access Order, 20 FCC Rcd 
14853, 14914, para. 109.
    First, as the Commission stated, broadband services are ``wire 
communications'' or ``radio communications,'' as defined in sections 
3(52) and 3(33) of the Act, and section 2(a) of the Communications Act 
gives the Commission subject matter jurisdiction over ``all interstate 
and foreign communications by wire or radio.''
    Second, section 1 of the Communications Act confers responsibility 
on the Commission ``to make available . . . a rapid, efficient, Nation-
wide, and world-wide wire and radio communication service with adequate 
facilities at reasonable charges.'' This responsibility is guided by 
the ``policy of the United States . . . (1) to promote the continued 
development of the Internet''; ``(2) to preserve the vibrant and 
competitive free market that presently exists for the Internet''; and 
``(3) to encourage the deployment of technologies which maximize user 
control over what information is received by . . . [users of] the 
Internet.'' 47 U.S.C. Sec. 230. See also 47 U.S.C. Sec. 157 nt 
(Advanced Telecommunications Incentives). The Commission's net 
neutrality principles facilitate these responsibilities.
    The merger conditions adopted by the Commission only apply for 2 
years. Specifically, they read, ``[e]ffective on the Merger Closing 
Date, and continuing for 2 years thereafter, [the merged entities] will 
conduct business in a manner that comports with the principles set 
forth in the FCC's Policy Statement, issued September 23, 2005 (FCC 05-
151).'' See, e.g., SBC/AT&T Merger Order, Appendix F.
    Although the Commission did not adopt net neutrality rules, the 
Commission has the ability to take appropriate steps where needed. For 
example, when we learned that a particular phone company was blocking 
access to a competing VoIP provider, we opened an investigation and 
negotiated a consent decree that made the company cease discriminating 
and pay a fine.
    As I have said in the past, network providers should have the 
ability to offer consumers different speeds of service and plans with 
different quality of service guarantees. Some consumers are willing to 
pay more for a faster speed or higher quality of service. I should also 
note that traffic prioritization already occurs today. For example, 
voice is prioritized over data traffic, and video is prioritized over 
other data traffic.

    Question 7. During the 1990s, an unintended consequence of the 
introduction and adoption of new technologies (wireless phones pagers, 
fax lines, dial up Internet, etc.) was a dramatic increase in the 
number of area codes splits and overlays. In the past, you have spoken 
of the importance of number conservation and how some of your 
predecessors and colleagues may have initially underestimated the 
impact that area code changes have on local businesses and consumers. 
The projected growth in VoIP subscribers, who can select area codes 
different than that of where they reside, will likely present a new 
challenge to state regulators. In order to prevent the premature 
depletion of numbering resources, what steps should the Commission take 
specifically with respect to VoIP service providers?
    In the event that Part 52 rules were to not apply to VoIP carriers, 
would it be appropriate for such carriers to continue to go through 
CLECs for numbers so that numbering request, utilization and forecast 
data and other important information would continue to be filed with 
regulators?
    Answer. The Commission's rules require that carriers provide, as 
part of their applications for initial numbering resources, evidence 
that they are licensed and/or certified to provide service in the area 
in which they seek numbering resources as well as evidence that their 
facilities are in place or will be in place to provide service within 
60 days of the numbering resources activation date. These requirements 
apply equally to carriers requesting an initial NXX code and those 
requesting an initial thousands-block pursuant to the pooling 
requirements the Commission has established. The Commission works 
closely with the numbering administrators to enforce these 
requirements. In addition, we have granted authority for several states 
to implement mandatory thousands-block number pooling as a conservation 
measure in certain area codes and are examining extending that 
authority to more states.
    Under the Commission's rules, only telecommunications carriers may 
access telephone numbers. Accordingly, our current Part 52 rules apply 
only to telecommunications carriers. Today, VoIP providers secure 
numbering resources via partnering relationships with CLECs. The 
Commission receives numbering request, utilization, and forecast data 
through the CLECs.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                            Kevin J. Martin

    Question 1. New Jersey has just one commercial VHF station--WWOR 
Channel 9. The FCC has stated in the past that this New Jersey licensee 
has special obligations to serve New Jersey. To me, this means a 
majority of resources, staff, and coverage for New Jersey news and 
events. However, the FCC needs to clarify WWOR's obligation. Will the 
FCC further clarify WWOR's special obligations to New Jersey as part of 
the station's 2007 license renewal?
    Answer. The Commission is aware of the unique circumstances 
relating to the provision of broadcast television service to residents 
of New Jersey. As you may know, in 1976, the Commission imposed a 
special service requirement on commercial VHF television stations 
licensed to New York and Philadelphia, including WOR which is now WWOR. 
Pursuant to this requirement, VHF stations licensed to New York and 
Philadelphia were required to establish and maintain a physical 
presence in New Jersey in order to facilitate the coverage of issues of 
interest to the residents of New Jersey. To assist the Commission's 
review of their performance for New Jersey, the stations also were 
required to supplement their license renewal applications with reports 
concerning the service provided to New Jersey.
    In 1982, Congress amended the Communications Act to require the 
Commission to issue a license to any existing VHF commercial television 
station licensee that volunteered to move to an unserved state. 
Pursuant to this legislative direction and at the request of WWOR's 
licensee, the Commission reallocated Channel 9 from New York City to 
Secaucus, New Jersey and issued a license to WWOR reflecting that 
change. At that time, the Commission informed the station's licensee 
that its service to Northern New Jersey, which the Commission viewed as 
broader than the community of Secaucus, would be reviewed during 
proceedings to renew WWOR's license.
    WWOR and other New Jersey television stations must file their 
renewal applications with the Commission by February 1, 2007. As we 
review WWOR's renewal application, we will review its service 
obligations to Northern New Jersey.

    Question 2. Both WWOR Channel 9, a commercial station and WNET 
Channel 13, a public station, are licensed in New Jersey cities. Yet 
they advertise and market themselves as New York stations. I think this 
is deceptive and not true to their licenses. Are licensees permitted to 
advertise and market their stations with no mention of the city or even 
the state of license?
    Answer. Pursuant to the Commission's rules, commercial and 
noncommercial educational radio and television stations are required to 
identify themselves at the start and finish of each broadcast day and 
hourly throughout the day. That identification must include broadcast 
of their call signs, followed by the station's community of license. No 
Commission rule regulates how stations advertise and market themselves 
with respect to mentioning the city or even the state of license.

    Question 3. Must a licensee maintain facilities in the state in 
which it is licensed?
    Answer. The Commission is aware of the unique circumstances 
relating to the provision of broadcast television service to residents 
of New Jersey. As you may know, in 1976, the Commission imposed a 
special service requirement on commercial VHF television stations 
licensed to New York and Philadelphia, including WOR which is now WWOR. 
Pursuant to this requirement, VHF stations licensed to New York and 
Philadelphia were required to establish and maintain a physical 
presence in New Jersey in order to facilitate the coverage of issues of 
interest to the residents of New Jersey. To assist the Commission's 
review of their performance for New Jersey, the stations also were 
required to supplement their license renewal applications with reports 
concerning the service provided to New Jersey.
    Commission rules do not explicitly require that either a station's 
technical facilities or its main studio be located in the same state as 
the station's community of license. However, facility location is 
limited by the requirement that a station put a principal community 
contour over the community of license. In certain special circumstances 
such as with respect to WWOR-TV, the Commission expected the station to 
move its former New York City studios and offices to an unserved state, 
in this case New Jersey.

    Question 4. In January 2005, FCC Chairman Powell announced that the 
FCC was investigating the Armstrong Williams scandal. More than a year 
and a half has gone by, yet I'm only told that the matter is 
``pending'' with no known timeline and no assurance that the FCC will 
even issue a final report. What is the status of this investigation, 
and does this kind of journalism-for-hire concern you as much as it 
concerns me?
    Answer. These issues do concern me and the entire Commission. Last 
year, less than 1 month after I became Chairman, the Commission issued 
a public notice reminding broadcasters of their obligations under 
sections 317 and 507 of the Communications Act of 1934, and sections 
73.1212 and 76.1615 of the Commission's rules. These provisions 
generally require that, when payment has been received or promised to a 
broadcast licensee or cable operator for the airing of program 
material, at the time of the airing, the station or cable system must 
disclose that fact and identify who paid or promised to provide the 
consideration. The Commission also sought comment on video news 
releases and their use by broadcast licensees and cable operators. We 
have several investigations that are ongoing that relate to potential 
violations of these rules.
    In addition, subsequent to our release of this public notice, the 
Commission received a complaint from Free Press and the Center for 
Media and Democracy, which alleged that a number of broadcasters had 
violated the Commission's sponsorship identification rules. We sent 
letters of inquiry to all of the stations identified in that complaint, 
asking them to respond to allegations that they have violated the 
sponsorship identification rules.
    The sponsorship identification rules serve an important purpose. 
They ensure that the listening public knows when someone is seeking to 
influence them.

    Question 5. New Jersey has passed a statewide video franchise law 
to allow phone companies to offer television through one contract as 
opposed to going town by town. But it also has ``buildout'' 
requirements so a new entrant will serve the 60 most densely populated 
towns within 3 years. Is it good policy for Federal legislation to take 
away those buildout requirements already agreed to in states?
    Answer. It is important to have both policies that encourage new 
entry and competition in the video marketplace and policies that ensure 
everyone receives the benefits of such competition and that prohibit 
discrimination. In achieving such a balanced approach, it is important 
that such requirements not create such a high threshold that they deter 
competitive entry.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Conrad Burns to 
                            Kevin J. Martin

    Question 1. There are currently numerous issues and open 
proceedings related to 9-1-1 at the Commission. The VoIP E-911 Order 
and subsequent filings, petitions and waiver requests; major wireless 
carrier handset deadlines and waiver requests; and requests from the 
deaf and hard of hearing community to complete open proceedings 
affecting their access to 9-1-1; to name a few. Where do these issues 
stand at the FCC?
    Answer. When I became Chairman, I identified public safety and 
emergency preparedness as critical issues. We have been working hard to 
make sure that all consumers have access to 911 emergency services. 
Public safety obligations like 911 are critical to consumers and public 
safety alike. The 911 system is quite literally one of life or death. 
It is critical to our Nation's ability to respond to a host of crises 
and the Commission has been working hard to minimize the situations 
where users are unable to access it. The Commission is committed to 
making sure that, during an emergency, a person can always pick up the 
phone, dial 911, and access local emergency officials.
    With respect to VoIP, we are working with the VoIP community to 
implement our 911 rules. The Commission staff have conducted numerous 
meetings and attended conferences with public safety officials, 
interconnected VoIP providers, carriers, and third-party vendors in 
order to answer questions, promote coordination and encourage 
cooperation to accelerate 911 solutions.
    With respect to wireless, the Commission has been working to ensure 
that all major wireless carriers have reached 95 percent penetration 
among their subscribers for a handset-based 911 solution. The 
Commission has received several waiver requests and we expect that they 
will be resolved soon. The Commission has also adopted 22 orders, 
pursuant to the ENHANCE 911 Act, addressing petitions for relief filed 
by 52 Tier III carriers of the 95 percent handset penetration 
requirement.
    Finally, with respect to Internet-based forms of Telecommunications 
Relay Services, such as Video Relay Service and Internet Protocol Relay 
Service, the Commission opened a proceeding late last year seeking 
comment on how it could reform its rules to ensure that the deaf and 
hard-of-hearing community has equivalent access to emergency services 
as all other consumers. As part of this proceeding, this November we 
will hold a Disabilities E-911 Summit where we intend to bring together 
leaders from the disabilities community, the E-911 community, partner 
agencies, and industry to identify the access that people with hearing 
or speech disabilities need; the technologies, services, and 
applications through which access should be offered; and the 
technological, policy, and commercial issues involved in providing the 
needed access to persons with hearing and speech disabilities.

    Question 2. In March of this year the FCC adopted a plan to 
establish a Public Safety and Homeland Security Bureau. Six months 
later, what is the status of that bureau and will that bureau be 
charged with addressing all or some of the ongoing 9-1-1 issues at the 
Commission or will some 9-1-1 issues remain in existing bureaus?
    Answer. In March, the Commission adopted a plan to consolidate its 
public safety, homeland security, and disaster management activities 
into a single Public Safety and Homeland Security Bureau. Since then, 
we have been working with the Commission staff and the National 
Treasury Employees Union on the implementation plan. We also submitted 
to the Appropriations Committees of the U.S. Senate and U.S. House of 
Representatives detailed financial information. We received final 
Congressional approval on September 11, 2006, and we plan to announce 
the opening of the Public Safety and Homeland Security Bureau on 
September 26, 2006.
    The Public Safety and Homeland Security Bureau will be charged with 
addressing all of the on-going 911 issues at the Commission. The Public 
Safety and Homeland Security Bureau will coordinate closely with the 
existing bureaus that have traditionally worked on 911 issues, 
including the Wireline Competition Bureau and the Wireless 
Telecommunications Bureau.

    Question 3. In the FCC's proceeding examining local franchising 
requests by would-be competitive cable service providers, the 
Commission solicited public comment on whether build-out requirements 
create unreasonable barriers to entry.
    The U.S. Department of Justice responded, stating:

        ``In light of the significant entry-deterring effects of 
        mandated build-out requirements, the Department believes that 
        LFAs should not be allowed to impose any such requirements 
        except where necessary to prevent income discrimination, which 
        the statute prohibits.''

    The Department supported this conclusion by pointing out that:

        ``Build-out requirements that impose on an entrant the 
        obligation to serve a geographic area that the entrant had 
        concluded would be uneconomical to reach can lead to the 
        entrant abandoning its plans for the entire area or, if the 
        entrant agrees to the condition, result in competition being 
        less vibrant or efficient. When the entrant agrees to such a 
        build-out requirement, prices may be higher than they would be 
        otherwise, due in part to the entrant's increased construction 
        costs or inability to make optimal technology choices, or 
        because the area actually cannot economically support another 
        competitor.''

    In other words, buildout mandates stifle competition. When faced 
with a build-out requirement as a condition for receiving a franchise, 
a competitor may not enter the market. Or, if the new entrant agrees to 
the build-out requirement, it may have to charge higher rates.
    Chairman Martin, do you find the Department's comments about the 
counter-productive impacts of a new entrant build-out requirement 
credible?
    Answer. I agree that unreasonable build-out requirements and 
timeframes could discourage new entrants and stifle competition. The 
points that the Department of Justice makes are echoed in the comments 
of a wide range of commenters, including new entrants to the video 
marketplace like incumbent local exchange carriers and broadband 
service providers, equipment manufacturers, and advocacy groups. Some 
provided specific examples of this. For instance, one telephone company 
indicated that it has withdrawn more than 25 percent of the requests it 
has made for cable franchises due to build-out requirements. In each 
case, the company withdrew its request after determining that 
compliance with the build out requirement would not be economically 
feasible.

    Question 4. Further, isn't it true that competitive local exchange 
carriers (CLECs), who in some places are cable companies, have been 
allowed to enter local telephone markets without the economic burden of 
a build-out requirement?
    Answer. Yes, CLECs, including cable companies, do not have to 
comply with any build-out requirements when they seek to provide local 
telephone service.

    Question 5. According to the National Emergency Number Association, 
today nearly 50 percent of counties in this country do not contain a 
Public Safety Answering Point (PSAP) that can accept Phase II wireless 
E-911 calls, meaning the call taker does not know the location of the 
call. Additionally, 25 percent of counties can not accept Phase I E-911 
calls, meaning they have no location or callback number if the call 
gets disconnected. There are still 300 counties that do not have E-911 
for wireline service, over 100 of which lack even basic 9-1-1. And of 
course the VoIP deployment is still ongoing. Progress is being made but 
these numbers are troubling. Beyond issuing mandates that directly 
affect communications providers, what do you see as the proper role for 
the FCC, NTIA and the Federal Government generally in providing 
leadership and management to ensure that all areas of this country are 
E-911 enabled for all technologies and moving toward the next 
generation of technology?
    Answer. Although the FCC plays a significant role in establishing 
911 rules for telecommunications providers, the funding of PSAPs has 
traditionally fallen under state or local jurisdiction. The Federal 
Government does, however, play a role in encouraging and supporting 
state efforts to upgrade their PSAPs. The ENHANCE 911 Act of 2004 
required NTIA/DOT to establish a joint program to facilitate 
coordination and communication between Federal, state, and local 
emergency communications systems, emergency personnel, public safety 
organizations, telecommunications carriers, and telecommunications 
equipment manufacturers and vendors involved in the implementation of 
E-911 services and create an E-911 Implementation Coordination Office. 
Aside from ensuring that telecommunications providers within its 
jurisdiction are E-911 capable, the FCC's primary role has been to 
serve as a resource for PSAPs in their efforts to become E-911 enabled. 
In this capacity, the Commission has provided technical assistance and 
objective evaluation concerning available E-911 technologies, and 
information on the regulatory requirements imposed on service 
providers. The Commission has also engaged in outreach efforts with all 
stakeholders, including individual PSAPs, state PSAP coordinators, 
related public safety organizations (such as NENA), consumers, and 
technology vendors to increase awareness of the resources available at 
the FCC and facilitate to the maximum extent possible further E-911 
deployment. For example, in November, we will hold a Disabilities E-911 
Summit where we intend to bring together leaders from the disabilities 
community, the E-911 community, partner agencies, and industry to 
identify the access that people with hearing or speech disabilities 
need; the technologies, services, and applications through which access 
should be offered; and the technological, policy, and commercial issues 
involved in providing the needed access to persons with hearing and 
speech disabilities.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Jim DeMint to 
                            Kevin J. Martin

    Question. Chairman Martin, Spectrum is a valuable, scarce public 
resource and spectrum auctions benefit American taxpayers. Over the 
past 13 years, auctions have deposited $20 billion into the U.S. 
Treasury. In fact, we have an auction occurring over at the FCC where 
the current gross is $13.8 billion and companies are still bidding. 
Fiscally responsible programs like auctions are critical to ensure the 
best possible management of taxpayer resources.
    Auctions are the fastest way to bring technology to market. 
According to the FCC, the period of time from application to license 
grant is now less than 1 year. Assurance that spectrum will be 
available quickly increases bidder certainty and presents the licensee 
with a strong incentive to deploy innovative systems to consumers as 
quickly as possible. Faster deployment means keeping the U.S. 
competitive with other countries and benefiting consumers who want 
access to more technology at lower prices.
    Chairman Martin, the FCC is successfully utilizing a market 
allocation model right now in the Advanced Wireless Service spectrum 
and later when it auctions the DTV spectrum in 2009. Can you give a 
compelling reason that the ``beachfront'' spectrum--the TV broadcast 
spectrum ``white space''--should be allocated any differently?
    Answer. I agree that auctions and the licensed market allocation 
model have been extraordinarily successful in most instances. In 
general, the auctioning of licensed spectrum efficiently distributes a 
scarce resource to those who will put it to its highest and best use. 
The Commission has tried to strike a balance between the licensed model 
and the unlicensed model, determining which model to use based on all 
of the relevant circumstances. The licensed model is more efficient in 
many cases, and tends to work best when spectrum rights are (1) clearly 
defined, (2) exclusive, (3) flexible, and (4) transferable. When 
spectrum rights lack these attributes, potential licensees face 
uncertainty and may lack incentive to invest in a license or offer 
service. In those circumstances, the unlicensed model may better 
optimize spectrum access and utilization.
    The Advanced Wireless Service spectrum currently being auctioned 
and the recovered analog television broadcast spectrum both fit well 
within the licensed model. Licensees of this spectrum will have clearly 
defined, flexible rights to use the spectrum on an exclusive basis, and 
will be able to transfer those rights to third parties. Both bands 
allow licensees to operate wide-area, wideband systems at relatively 
high power and will protect licensees from interference from other 
spectrum users. And these services allow for flexible use--a licensee 
will be able to provide fixed or commercial mobile radio services. 
Spectrum with this combination of rights is relatively scarce, which 
tends to make it particularly valuable.
    The Commission has not determined whether spectrum in the digital 
television white spaces is better suited for use on a licensed or 
unlicensed basis. Any user, whether licensed or unlicensed, would need 
to protect the rights of incumbent licensees and therefore would not be 
allowed to cause harmful radiofrequency interference to existing 
licensees. As a result, white space users will have secondary rights 
only and likely will be limited in the power levels at which their 
devices are able to operate. Some have argued that such encumbered 
spectrum would be made available most efficiently on an unlicensed 
basis. However, the limitations that would need to be placed on this 
spectrum could be written into the licenses and therefore would not 
prevent the spectrum being made available on a licensed basis. 
Licensing the spectrum has the benefit of enabling policymakers and 
those in the affected industry to determine the source of any harmful 
interference.
                                 ______
                                 
   Response to Written Question Submitted by Hon. John E. Sununu to 
                            Kevin J. Martin

    Question. A long-term problem facing law enforcement agencies, fire 
departments, and other members of the first responder community in the 
northern parts of New Hampshire--those above Line A--is the ability to 
obtain new radio frequencies and channels. The current approval process 
averages one to 3 years, and many applications are simply rejected due 
to objections by the Canadian government. The affected agencies make a 
compelling case that this is unintentionally putting personnel and 
American citizens in harms way.
    Please outline the current process for considering and approving 
applications for public safety licenses for use above Line A. 
Historically, has the Canadian government raised objections been within 
the bounds of reasonable spectrum management? When was the last time 
this process was reviewed or revised? What steps can the FCC take to 
revise the application and appeals process for new radio frequencies 
for those communities above Line A, and how soon could these steps be 
implemented?
    Answer. I agree that it is critical that first responders above 
Line A have the ability to obtain new radio frequencies and channels 
when needed.
    The United States' relationship with Canada on public safety radio 
systems is currently governed by a series of binding bilateral legal 
agreements and protocols that were negotiated by the Department of 
State. The existing agreements specify the process for coordination of 
public safety license applications for use above Line A. Pursuant to 
these agreements, the U.S. sends Canada public safety license 
applications for review. Canada approves those applications that, based 
on their interference analysis, will not cause harmful radiofrequency 
interference to their existing facilities and denies those that will 
cause interference. If Canada denies an application, the U.S. may 
submit its own supplemental interference analysis or the U.S. licensee 
may amend its application to change its frequency, move its location, 
or lower its power so as to avoid interference to Canadian operations. 
The same process takes place in reverse--with Canada submitting its 
public safety license applications to the United States for review, and 
the United States having an opportunity to reject Canadian 
applications.
    When Canada rejects an application, the Commission works with the 
applicant and Canada to find an alternative frequency or uses other 
mechanisms for resolving the interference concern. This process has not 
been revised in several years. I share your concern that these 
applications be processed on a more timely basis, and will work with 
the Department of State and our Canadian counterparts to examine 
whether there are possible improvements that could be made to the 
existing bilateral agreements.

                                  
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