[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
   FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS FOR 2011

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                             SECOND SESSION
                                ________
       SUBCOMMITTEE ON FINANCIAL SERVICES AND GENERAL GOVERNMENT 
                             APPROPRIATIONS
                   JOSE E. SERRANO, New York, Chairman
 DEBBIE WASSERMAN SCHULTZ, Florida  JO ANN EMERSON, Missouri
 ROSA L. DeLAURO, Connecticut       JOHN ABNEY CULBERSON, Texas
 CHAKA FATTAH, Pennsylvania         MARK STEVEN KIRK, Illinois
 BARBARA LEE, California            ANDER CRENSHAW, Florida    
 ADAM SCHIFF, California            
 STEVE ISRAEL, New York             
 TIM RYAN, Ohio                     

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
           Lee Price, Bob Bonner, Angela Ohm, and Ariana Sarar
                           Subcommittee Staff

                                ________

                                 PART 7
                                                                   Page
 Consumer Product Safety Commission...............................    1
 Election Assistance Commission...................................  121
 Federal Communications Commission................................  195

                                   S

                                ________

         Printed for the use of the Committee on Appropriations

 PART 7--FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS FOR 
                                  2011
                                                                      ?

   FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS FOR 2011

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                             SECOND SESSION

                                ________

       SUBCOMMITTEE ON FINANCIAL SERVICES AND GENERAL GOVERNMENT 
                             APPROPRIATIONS
                   JOSE E. SERRANO, New York, Chairman
 DEBBIE WASSERMAN SCHULTZ, Florida  JO ANN EMERSON, Missouri
 ROSA L. DeLAURO, Connecticut       JOHN ABNEY CULBERSON, Texas
 CHAKA FATTAH, Pennsylvania         MARK STEVEN KIRK, Illinois
 BARBARA LEE, California            ANDER CRENSHAW, Florida    
 ADAM SCHIFF, California            
 STEVE ISRAEL, New York             
 TIM RYAN, Ohio                     

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
           Lee Price, Bob Bonner, Angela Ohm, and Ariana Sarar
                           Subcommittee Staff

                                ________

                                 PART 7
                                                                   Page
 Consumer Product Safety Commission...............................    1
 Election Assistance Commission...................................  121
 Federal Communications Commission................................  195

                                   S

                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 62-205                     WASHINGTON : 2010

                                  COMMITTEE ON APPROPRIATIONS

                   DAVID R. OBEY, Wisconsin, Chairman
 
 NORMAN D. DICKS, Washington        JERRY LEWIS, California
 ALAN B. MOLLOHAN, West Virginia    C. W. BILL YOUNG, Florida
 MARCY KAPTUR, Ohio                 HAROLD ROGERS, Kentucky
 PETER J. VISCLOSKY, Indiana        FRANK R. WOLF, Virginia
 NITA M. LOWEY, New York            JACK KINGSTON, Georgia
 JOSE E. SERRANO, New York          RODNEY P. FRELINGHUYSEN, New 
 ROSA L. DeLAURO, Connecticut       Jersey
 JAMES P. MORAN, Virginia           TODD TIAHRT, Kansas
 JOHN W. OLVER, Massachusetts       ZACH WAMP, Tennessee
 ED PASTOR, Arizona                 TOM LATHAM, Iowa
 DAVID E. PRICE, North Carolina     ROBERT B. ADERHOLT, Alabama
 CHET EDWARDS, Texas                JO ANN EMERSON, Missouri
 PATRICK J. KENNEDY, Rhode Island   KAY GRANGER, Texas
 MAURICE D. HINCHEY, New York       MICHAEL K. SIMPSON, Idaho
 LUCILLE ROYBAL-ALLARD, California  JOHN ABNEY CULBERSON, Texas
 SAM FARR, California               MARK STEVEN KIRK, Illinois
 JESSE L. JACKSON, Jr., Illinois    ANDER CRENSHAW, Florida
 CAROLYN C. KILPATRICK, Michigan    DENNIS R. REHBERG, Montana
 ALLEN BOYD, Florida                JOHN R. CARTER, Texas
 CHAKA FATTAH, Pennsylvania         RODNEY ALEXANDER, Louisiana
 STEVEN R. ROTHMAN, New Jersey      KEN CALVERT, California
 SANFORD D. BISHOP, Jr., Georgia    JO BONNER, Alabama
 MARION BERRY, Arkansas             STEVEN C. LaTOURETTE, Ohio
 BARBARA LEE, California            TOM COLE, Oklahoma           
 ADAM SCHIFF, California            
 MICHAEL HONDA, California          
 BETTY McCOLLUM, Minnesota          
 STEVE ISRAEL, New York             
 TIM RYAN, Ohio                     
 C.A. ``DUTCH'' RUPPERSBERGER,      
Maryland                            
 BEN CHANDLER, Kentucky             
 DEBBIE WASSERMAN SCHULTZ, Florida  
 CIRO RODRIGUEZ, Texas              
 LINCOLN DAVIS, Tennessee           
 JOHN T. SALAZAR, Colorado          
 PATRICK J. MURPHY, Pennsylvania    
                                    
                 Beverly Pheto, Clerk and Staff Director

                                  (ii)


   FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS FOR 2011

                              ----------                              

                                           Thursday, March 4, 2010.

   FISCAL YEAR 2011 BUDGET FOR THE CONSUMER PRODUCT SAFETY COMMISSION

                               WITNESSES

INEZ TENENBAUM, CHAIRMAN, U.S. CONSUMER PRODUCT SAFETY COMMISSION
NANCY NORD, COMMISSIONER, U.S. CONSUMER PRODUCT SAFETY COMMISSION

              Introduction of Witnesses--Chairman Serrano

    Mr. Serrano. The committee will come to order. We welcome 
you to this very cozy room.
    Today the subcommittee meets to discuss the fiscal year 
2011 budget request of the Consumer Product Safety Commission. 
Joining us today are the Chairman of the CPSC, Inez Tenenbaum, 
as well as CPSC Commissioner, Nancy Nord. We thank you both for 
joining us today.

                  Chairman Serrano's Opening Statement

    For fiscal year 2011, the budget request for the Consumer 
Product Safety Commission is $118.6 million. The agency has 
seen its responsibilities grow enormously for the last few 
years. In response to a large number of product hazards and 
product recalls, Congress enacted the Consumer Product Safety 
Improvement Act of 2008. This law, together with other recent 
legislation addressing pool and spa safety and the protection 
of children from gasoline burns, provides for important 
consumer protections but has also essentially doubled the 
workload of the CPSC. It is important to determine whether the 
agency staffing levels are adequate to fulfill these 
responsibilities.
    In 2007, when I became Chairman of this subcommittee, the 
agency had fewer than 400 full-time employees. Funding 
increases provided by this subcommittee have enabled the CPSC 
to grow to 530 full-time employees in fiscal year 2010, a more 
than 30 percent increase in staffing in 3 years. However, this 
is still far less than the agency staffing 30 years ago when it 
had 978 employees.
    A strong CPSC is more important than ever. This is 
particularly evident in the area of imported products. The 
volume of imported products has doubled in the last 15 years, 
and while imports account for 20 percent of all consumer 
product purchases, they account for more than 80 percent of 
recent product recalls. GAO reported last August that the 
CPSC's ability to monitor imported products is limited by 
staffing shortfalls. The Fiscal Year 2010 Appropriations Act 
included funding to help address this problem, and I am pleased 
that the fiscal year 2011 budget requests additional resources 
for the agency and for the import safety initiative. It is 
important for this subcommittee to determine whether these 
resources are truly adequate to ensure the safety of imported 
products.
    The Commission has worked hard to implement the many 
provisions of a Consumer Product Safety Improvement Act. At the 
same time, we have heard about confusion among manufacturers, 
distributors and retailers about particular requirements. I am 
interested in knowing how implementation is going right now, 
whether industry is complying, and whether the CPSC is devoting 
adequate resources to enforcing the new laws, and many 
important consumer protections.
    In addition to implementing these consumer protections, the 
new law directed CPSC to establish a public Internet-accessible 
database on the safety of consumer products. The agency is also 
preparing to move into a modernized laboratory facility 
designed to enhance its research on product hazards. 
Furthermore, the agency has begun an effort to work more 
closely with manufacturers and regulators in China by opening 
an office in Beijing. I am interested in hearing about the 
status of all of these efforts and how budget requests will 
enhance them going forward.
    Chairman Tenenbaum joined the Commission in June 2009. She 
has a long history of public service, including 8 years as 
South Carolina's State superintendent of education.
    Commissioner Nord is no stranger to this subcommittee. This 
is her third appearance before us. She has served on the CPSC 
since 2005 and served as Acting Chairman from 2006 to 2009.
    We thank you both for your testimony. We look forward to a 
very informative discussion. And I also look forward to a great 
baseball season where the Cardinals will do almost as good as 
my Yankees.
    Mrs. Emerson. Hey now, we have really, really done a great 
job on recruitment this year, so I am not certain of that, Mr. 
Chairman, I must add. But Debbie and I are actually the 
cochairs of the congressional softball team, and we start our 
practice next week. You will be happy to know that since we are 
playing the women of the press, that we actually think we will 
prevail this year since at least there is not such an age 
differential where we set ourselves up for failure last time 
and Debbie broke her leg. But other than that, we are getting 
all ready, we are getting all ready for a wonderful, wonderful 
baseball season. And I truly am excited. I don't know anything 
about this new Brad Penny, this new pitcher we have gotten, but 
he has been around a while. Do you know anything about him?
    Mr. Serrano. Yes. He is good, unfortunately.
    Mrs. Emerson. Thank you. Thanks, Mr. Chairman.
    Mr. Serrano. Jo Ann Emerson, ladies and gentlemen.
    Mrs. Emerson. I have the app on my phone so I can get all 
the Cardinals news, like Google alerts, Cardinals alerts.
    Mr. Serrano. Who says Members of Congress are not regular 
people?

                    Mrs. Emerson's Opening Statement

    Mrs. Emerson. I do love my Cardinals, I must tell you.
    Anyway, thanks for holding this very important hearing. 
Thank you all very much for being here today. We do welcome you 
for your first appearance, Madam Chair.
    And, Commissioner Nord, thank you for being back for the 
third time? Third time.
    Anyway, as the Chairman said, you all have received large 
funding increases since 2007 compared to other agencies, and I 
really am anxious to hear how you all are spending those funds 
and hiring the necessary people to do the important work that 
we keep laying upon you all.
    I also want to say that I did vote for the Consumer Product 
Safety Improvement Act. And I, like most members of the 
committee, believe that protecting consumers should be our top 
concern of the business community and the regulatory community. 
And facilitating those goals should be one of our most 
important, if not the most important, responsibility we have.
    But we are also charged here in Congress with addressing 
the unintended consequences of its actions. And with respect to 
the CPSIA, this means realizing that in addition to the 
benefits of the statute, there has been some avoidable damages 
to small businesses, domestic manufacturers, thrift stores and 
charities. And I think we can all agree upon that. However, our 
economy isn't as resilient today as it has been in the past, so 
it is really very, very important that we not ignore those jobs 
lost or those that could be lost due to unnecessary aspects of 
this statute.
    The 2010 appropriations bill directed the Commission to 
provide recommendations to the Congress on changes needed to 
CPSIA, and for whatever reason that I cannot understand, I 
don't know why these recommendations have become politicized in 
this body, but it appears, as usual, that logic and sensible 
actions are not immune from partisanship in Washington.
    Let me close by stating that regulation is a balancing act 
so that consumers, especially children, are protected, but 
businesses are able to operate without unnecessarily burdensome 
requirements. And I want to say this because as we try our best 
to jump-start the economy, I have met with hundreds of small 
business people over the last month, all of whom tell me that 
you can give me a tax credit, you can take away my--the need 
for me to pay payroll taxes, but at the end of the day, it is 
the uncertainty in the economy and the burdensome regulations 
that are thrust upon my business each and every day that no 
other country or competitor faces that are causing me not to 
hire people. This is what they have said across the board. So 
that is worrisome, and that is why I am hopeful that we will 
all be able to work together to maximize the benefits and 
minimize the detriment of this statute and the work that you 
all are doing.
    So thanks, and I look forward to hearing your testimony.
    Mr. Serrano. Thank you.
    Mr. Serrano. Now we will take your testimony. Please keep 
in mind that we would like you to keep your testimony to 5 
minutes. And then, of course, your full text will be included 
in the record.

              Chairman Inez Tenenbaum's Opening Statement

    Ms. Tenenbaum. Thank you. Good morning, Mr. Chairman, 
Ranking Member Emerson and Members of the Subcommittee on 
Financial Services and General Government. I am so pleased to 
be here to discuss the U.S. Consumer Product Safety 
Commission's fiscal year 2011 budget request.
    During the past 8 months, as Chairman of the CPSC, I have 
had the great opportunity to see firsthand the great work that 
the Commission undertakes every single day, from new 
regulations to ensure the safety of cribs to enforcement 
actions against children's jewelry with harmful levels of lead, 
cadmium and other toxic metals, the CPSC is once again an 
agency that means business when it comes to protecting the 
safety of the American consumer.
    Much of this progress would not have been possible without 
the reauthorization of the Commission through the Consumer 
Product Safety Improvement Act of 2008 and the additional 
funding received by the agency in 2009 and 2010. I greatly 
appreciate the increased resources that members of the 
subcommittee have supported all through the past 2 years and 
can assure all of you that those resources have been put to 
good use through increased staffing, improved import 
surveillance, and rapid and robust responses to new and 
emerging hazards.
    The results of this new commitment to the CPSC are really 
very encouraging. One concrete example of this is the increased 
staffing and resources at the agency. During 2008, the number 
of CPSC full-time employees had dropped to only 385. This was 
the lowest level in the agency's history and down from a high 
of 978 in 1980. Section 202 of the CPSIA required the agency to 
increase its FTEs to at least 500 by the end of 2013, and I am 
pleased to report to you that we have already reached that 
milestone and currently have approximately 501 FTE positions 
filled at the CPSC as of March 1, 2010. In addition, we are 
currently interviewing another 16 FTE positions, and have open 
announcements for another 9 FTE positions. Taken as a whole, 
this puts us well on track to meeting our approved FTE ceiling 
of 530 in 2010.
    But employee numbers are only one indicator of change. 
Another key metric is results. One concrete example is that of 
our ability to stop dangerous products before they enter the 
stream of commerce. In fiscal year 2007, the CPSC collected 
approximately 750 samples of suspect products entering our 
country. In fiscal year 2009, that number rose to almost 1,600. 
At the same time, we started to see a commensurate decrease in 
the number of voluntary recalls, from 563 in 2008 to 466 in 
2009.
    The Commission's proposed 2011 budget request of $118 
million, $600 thousand is designed to accelerate this forward 
momentum by continuing internal modernization and rebuilding 
efforts. It is noted in my written statement the proposed 
fiscal year 2011 is only $400,000 over our 2010 level, but it 
will allow the Commission to support the key above areas of 
emphasis by reallocating $13.9 million in funds used for 2010 
nonrecurring activities.
    Specifically, the proposed budget will allow the Commission 
to pursue new and enhanced initiatives in four key areas. The 
first is the Commission's compliance initiative. Since passage 
of the CPSIA, Commission staff have worked diligently to 
promulgate and implement the numerous rules required by that 
law. In 2011, the CPSC's work will shift from developing rules 
mandated by the CPSIA to enforcing those rules, both within our 
borders and at ports of entry. To further facilitate those 
efforts, the CPSC's 2011 budget requests $4.6 million and the 
addition of 41 full-time employees to support additional 
responsibilities associated with three key elements of the 
compliance program, and that is regulatory enforcement, import 
surveillance and defect investigation.
    The second area is information technology modernization and 
the Commission implementation of a searchable public database 
of consumer product safety information. Section 212(b) of the 
CPSIA requires the Commission to upgrade its information 
technology systems and develop a database that allows consumers 
to submit incident reports that can subsequently be reviewed by 
all members of the general public. In response to this mandate, 
CPSC is developing a single integrated Web-based environment, 
the Consumer Product Safety Risk Management System, the RMS, 
which will change the way the Commission receives and analyzes 
data.
    The Commission has already allocated approximately $20 
million to fund many of the initial planning and design costs 
of the RMS and deeply appreciates this subcommittee's past 
support of this program. In fiscal year 2011, funding 
requirements will largely shift from design and build costs to 
maintenance costs. Therefore, the 2011 budget requests $1.8 
million for staffing combinations of eight FTEs and other 
contract positions to maintain the system and comply with the 
OMB's requirement for information technology governance, 
cybersecurity and privacy.
    Now, the third area of focus is consumer outreach and 
education. Providing consumers with recall and product hazard 
information that helps make families and communities safer is 
one of my top priorities. This year and in fiscal year 2011, 
the Commission plans to accelerate efforts to conduct 
grassroots education and advocacy in hard-to-reach and 
vulnerable populations. In August 2009, the GAO released a 
report recommending that the CPSC increase its focus on 
reaching minority populations. Mr. Chairman, I know that this 
is a key priority for you. Since becoming the Chairman of the 
CPSC, I have directed the Commission staff to explore 
additional outreach efforts to underserved populations, and 
this will remain a key priority going forward.
    We also continue to focus on public education and outreach 
efforts to prevent drownings and entrapments involving children 
in residential and public pools. Congresswoman Wasserman 
Schultz has been a tireless advocate of increased safety 
measures and outreach in this area. And I am pleased to note 
that the 2011 budget contains $1 million specifically to 
continue the pool and spa safety education. This funding will 
build on the previous funding of $8.1 million in fiscal year 
2009 and 2010 to continue to help the agency drive down the 300 
child drownings each year.
    And fourth, the 2011 budget proposes an additional $200 
million for CPSC to support the National Nanotechnology 
Initiative. In the last few years, there has been increasing 
public concern over the potential health impacts associated 
with the technology. Although nanomaterials may have the same 
chemical composition as non-nanomaterials, at the nanoscale 
they may demonstrate different physical and chemical properties 
and behave differently in the environment and in the human 
body. The $2 million proposal will allow the Commission to 
conduct exposure and risk assessment of nanomaterials, allow 
database updates to properly flag reports of nanotechnology 
incident reports in consumer products, and conduct consumer 
outreach efforts such as public meetings.
    Mr. Chairman, Ranking Member Emerson, thank you again for 
the opportunity to testify on the proposed 2011 budget for the 
U.S. Consumer Product Safety Commission. And I look forward to 
working with you and other members of this subcommittee on the 
budget request. And I will be happy to entertain your questions 
after Commissioner Nord makes her statement.
    Mr. Serrano. Thank you so much.
    [The prepared statement of Chairman Inez Tenenbaum 
follows:]

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                 Commissioner Nord's Opening Statement

    Mr. Serrano. Thank you, Commissioner Nord. Welcome back.
    Ms. Nord. Thank you so very much. I am delighted to be here 
with my friend and colleague Chairman Tenenbaum to fully 
support the agency's 2011 budget request. And I also want to 
thank this subcommittee for all of the support that you have 
given us to help us push forward our ongoing safety 
initiatives.
    Chairman Tenenbaum has mentioned the initiatives that we 
plan to undertake in the next fiscal year, and these 
initiatives build on the growth and the progress that we have 
made over the last 2 years, and that is a direct result of the 
support that this subcommittee has given us.
    Since Inez has given you a good overview of our request, I 
want to spend my time with you talking about a related issue, 
and that is the agency's implementation of the Consumer Product 
Safety Improvements Act. The CPSIA is landmark legislation. It 
gave the agency important new tools, tools which we requested, 
are grateful for, and which we are using. But as we implement 
the CPSIA, we have seen where more flexibility in the law would 
help us respond more appropriately to real-world situations in 
order to avoid consequences that we don't believe that Congress 
really intended.
    You asked us for a report on ways in which to improve the 
CPSIA to help the agency better carry out its mission, and we 
sent that report in January. So let me suggest a couple of key 
issues on which we could all focus.
    First, I think we need to focus on products that present 
real risks of injury. I know you want us to be using public 
resources in the most efficient way, to address the most 
pressing safety issues, and the CPSIA identifies lead poisoning 
as one of those. And to be very clear, all of us believe that 
lead should be removed from children's environments. That is 
not open to debate, as far as I am concerned. But under the 
law, we are spending immense amounts of staff time and 
resources to examine and regulate things that really do not 
present a lead risk to children.
    Just to give you a couple of examples, we spent hours 
debating whether we needed to prohibit 12-year-olds from using 
ballpoint pens. The little tip that holds the ball in place has 
more lead than the law allows. So that was a real question that 
the agency had to deal with.
    A question is presented whether your preteen daughter can 
have rhinestones and lead crystals on her ballet costume. Under 
the law right now, the answer is no. Any glitz is going to have 
to be plastic.
    The question of children's bicycles. The little Schrader 
valve, the little air pressure tire valve, the tip of it has 
brass in it. It needs to be there for the threads. But brass 
has lead in it above the statutory limits, so it violates the 
statute right now. And speaking of brass, we have ruled that it 
has to be removed from children's products, even though our 
scientists have found that it does not pose a risk, and that 
they would have no qualms letting their children use the 
products that we are banning.
    And finally, I think all of you have probably heard from 
your libraries. Older books may have lead in the ink that 
violates the statute. So this presents a real question for 
libraries and what they are going to do loaning out older 
books.
    We do not see a risk, real risk, with these products, but 
as currently written, things like pens, books, bikes are being 
pulled into this regulatory net.
    Secondly, I think we need to focus on effective testing, 
trying to minimize needless burdens. Some facts here. I think 
all of us agree that a very rigorous testing program should be 
required to ensure the safety of children's products, but the 
law requires that all children's products be tested by a third-
party independent testing laboratory. And in some cases, that 
probably isn't necessary. We certainly know it adds expense to 
the process, and it increases costs to consumers. And some 
flexibility, I think, needs to be given to the agency.
    Representative Emerson referred to small businesses that I 
know all of you have heard from. We have, too. A small company 
just reported that they spent $50,000 having their inventory of 
educational products tested even though they knew there was no 
lead in them. I just talked last week to a U.S. furniture 
manufacturer who has decided not to go into children's 
furniture line, which he had been planning to do, because of 
CPSIA. We heard from a very small business with eight employees 
that adapts products, toys, for use for special needs children. 
They told us they probably can't survive because of this law. 
The agency needs some flexibility to deal with these situations 
while still giving safety in appropriate ways.
    Finally, I think we need to be focusing prospectively 
rather than retroactively in how we regulate products. When I 
say retroactivity, what I mean is we are dealing with 
products--we are banning products that are already in the 
stream of commerce rather than looking at their manufacturing 
date. But that phenomenon really hits retailers, especially 
resellers, much more dramatically than others. The president of 
Goodwill Industries has written to us about his concerns, and 
to quote his letter, he says that the CPSIA unnecessarily puts 
local communities at risk. That is what he told us. The 
Kentucky Goodwill has advised our colleague Commissioner 
Northup that they have seen a very large drop in the number of 
child items through their stores across the State of Kentucky. 
The Honolulu Salvation Army has closed its entire children's 
section because of liability fears.
    Surely Congress did not intend this, but the agency really 
needs the assistance of Congress to make this right. Our 
concern is that we are now regulating products that do not 
present a real risk, and it really does raise the question of 
best use of scarce public resources. Whether we have two 
Commissioners, three Commissioners or five Commissioners, all 
of us are committed to making this law work, but we have also 
united in our request for greater flexibility. We need your 
assistance, and we stand ready to do everything we can to, as 
you indicated, have this law maximize benefits and minimize 
burdens. That is what we all want.
    Thank you so much.
    Mr. Serrano. Thank you.
    [The prepared statement of Commissioner Nancy Nord 
follows:]

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                          CPSIA IMPLEMENTATION

    Mr. Serrano. And thank you both for your testimony.
    Let me put aside for a second the questions I had prepared, 
because you bring up an interesting point and one I think that 
merits both dealing with the points you bring up, Commissioner 
Nord, and also with a little bit of history. And my question 
then would be how do we create a fair and just balance? Perhaps 
Congress legislated in a way that it has created some issues 
that we have to address. That is possible. It happens all the 
time. But why did Congress legislate? Because of the lack of 
oversight in the past and the ability to give everybody 
flexibility created an unsafe environment for children and for 
all Americans. So every so often in this country, we do this. 
We do this with everything, not just legislating. We do it with 
all kinds of issues in the House where there is a crisis, and 
we react to it, and then we go perhaps beyond what we were 
supposed to. I am not suggesting that is what we did. That is 
what you are suggesting.
    So my question is how do we now make sure that we don't 
have to legislate a few years from now or a generation from now 
to deal with the fact that we had such a problem before us? 
Yes, there are Salvation Armies and Goodwill and other people 
who are saying you did too much. But we had to because we had a 
mess on our hands, and we had a very unsafe environment for our 
children and for our citizens.
    So my question is how do we adjust that that we have to 
adjust if it is true we have to adjust, if there is a need, 
without going back to the days where no one cared what came 
into the country and what happened? This was not done because 
one day Members of Congress got up and said, oh, what do we do 
today? Okay, let us pass a new consumer law. No. It was because 
we were being hit hard and people were demanding action from 
us. I remember the time. People were saying, you have got to do 
something. We are trying to do something. How do we balance it?
    Ms. Tenenbaum. First of all, we have been working very hard 
to implement the CPSIA, and we very much are mindful of the 
strains on small businesses and low-volume manufacturers. We 
responded to your request to come up with the report. We all 
worked on this report. It was a bipartisan, unanimous report 
that we sent to Congress asking for flexibility.
    But in the interim we at the Consumer Product Safety 
Commission have tried to provide flexibility as well. We have 
issued 41 Federal Register notices, and we will have 12 more 
additional rules in the next 8 weeks, because industry has told 
me, ``We want to have predictability. Hurry up with these rules 
so we know how to respond.''
    Second of all, you had inaccessibility, and you had lead in 
electronic products as an exemption to the lead requirements. 
So what we also came up with were lead determinations for 
textiles, for other materials that we said you don't have to 
test. If you make a shirt we know it won't have lead in it. 
Now, if you buy buttons from a button maker who can say they 
are lead-free, then you don't have to test the shirt at all.
    So we have tried to use common sense in the implementation. 
We put out a guide for small businesses and reseller stores 
like the Goodwills. I have been on many nonprofits, and so has 
my husband, that have sponsored these resale stores. We try to 
educate these resellers on what they can look for in products 
to pull them from the shelves. We have done this kind of 
education with resellers.
    We also have come up with an enforcement policy which would 
allow for component part testing so that if you buy a component 
part, and it is lead free--like, if you are making blue jeans, 
and you buy lead-free zippers, which YKK is making now, the 
button manufacturers are making lead-free buttons, then you 
don't have to test if you buy it and you have a reasonable 
assurance that it does not contain lead.
    So we are working to do all of this, but at the same time 
we, in that report to Congress, realized that we needed 
flexibility. And we all agree that the ``any lead standard'' 
was something that was a little too tough. It was tough for 
bicycles and ATVs, and we gave a stay of enforcement so we 
would not be enforcing this law against them. It was too tough 
for books in terms of those published prior to 1985. The books 
that are now published don't really have a lead problem because 
the process does not contain lead. If you have a book with a 
spiral binding, you might have a different problem because it 
might contain lead. But the publishers now know what to do, and 
they don't have to go test every book because they are lead-
free.
    But we have asked to have this flexibility, and now it is 
in the Commerce Committee. We are working with them to try to 
see what is the best way to approach the flexibility. We 
propose that if you could show us that the lead was needed 
because it was impractical to remove, or it really did not pose 
any measurable adverse health effect to the consumers, then 
that was the functional purpose.
    Now, we understand that there are some people in the ATV 
industry that have supported that amendment to the CPSIA. The 
bicycle industry supported that. So now it is the issue of 
whether we have functional purpose or whether we have a risk-
based approach. Any way you approach it, it is going to be more 
work for the CPSC.
    What you [Congress] did was establish a bright-line test. 
You said no more than 300 parts per million, which is where we 
are now, in the content of lead in a product, or 90 parts per 
million in terms of lead paint. So that is what we enforce. But 
what we have all agreed on is that the ATVs and bicycles do not 
pose the risk to the consumer, and the ATV industry has also 
assured us that they can manufacture an ATV where the rider 
does not come in contact with lead. So this would work for us.

                   FLEXIBILITY IN CPSC IMPLEMENTATION

    Mr. Serrano. Let me ask you, Commissioner, you were very 
clear in supporting the report that says, give us flexibility. 
But in the meantime are you satisfied with some of the steps 
that have been taken to give some flexibility outside Congress 
giving you that?
    Ms. Nord. Well, the agency is doing what it can within the 
confines of the law. But on the Commission level, on the staff 
level, we are very clear that our hands are tied in a number of 
different ways. As the Chairman said, we are looking at 
component testing, but that is out in the future. Hopefully 
that will help small businesses. We don't know yet. We are 
doing some other things. But we don't have the ability to 
address the underlying systemic problems that we have seen come 
up.
    Your question is important. When the crisis with imports 
hit, obviously the Congress was very concerned, the agency was 
very concerned, and we were all working together at that time 
to get our arms around this, also working with an admittedly 
and incredibly constrained budget.
    Perhaps the most effective thing to address this issue is 
the fact that you all gave us resources to set up an import 
surveillance division so that we would have people at the 
ports. And our strategy has been to push safety as far back up 
the manufacturing chain as we possibly can and then have an 
ability at the ports to look more broadly at the products that 
are coming in, and that is because of our agency is working 
with this subcommittee and your Senate counterpart to make that 
happen, and that has been really effective.
    Now, obviously we understand that Congress was concerned 
about this and wanted to address it, but the provisions in the 
CPSIA do tie our hands in a number of different ways. And it 
really ends up making us focus on all products with lead 
whether the child is exposed to the lead or not. And that is 
the concern we have, and that is what we would like to address.
    Mr. Serrano. I can speak for myself, but I tell you, I 
think Congress would be open to revisit, but I don't think 
Congress on either side of the aisle is interested in going 
back to the days when the situation got so out of hand, it 
created the situation where we had to react.
    Mrs. Emerson.

                          LEAD STANDARD CHANGE

    Mrs. Emerson. I am not disagreeing with you, Mr. Chairman, 
that we need to keep the bill, but here is just a list for you 
of all the companies that have either been hurt or closed as a 
result of this act, all of which are small businesses, I might 
add.
    Chairman, you mentioned 300 parts per million of lead, and 
that is due to be reduced to 100 parts per million by August.
    Ms. Tenenbaum. If technologically feasible.

                        LEAD CHANGE FEASIBILITY

    Mrs. Emerson. If technologically feasible. But it is pretty 
darn hard for a lot of companies to meet even the 300 parts per 
million. In other words, companies are having to decide to use 
different types of materials to make things, and, of course, 
they break, and it costs the companies money. There is just a 
chain reaction, if you will. So how do you determine if it is 
going to be technologically feasible, number one? And number 
two, what is going to happen if companies cannot, cannot find 
the products that they need within that 100 parts per million 
to make whatever item it is they are making?
    Ms. Tenenbaum. Well, we are grappling with that now at the 
CPSC on what will companies have to show us to prove that 
reducing it to 100 parts per million is not technologically 
feasible. Our scientists and engineers will review the criteria 
that companies present us to determine if the lead is needed in 
the product to make it stronger. If you need the lead, then we 
will allow you to continue the 300 parts per million.
    And so the other thing is that in the report to Congress in 
January that we filed, we asked that that 100 parts per million 
be applied prospectively and not retroactively, because there 
are companies now who are meeting the 300 parts per million 
standard. They will be applying to keep that standard if they 
feel like it is not technologically feasible to go down to 100. 
While we are reviewing their application and making these 
findings, we don't want stores to be in limbo or the companies 
to be in limbo on what the limit will be. So we are asking that 
to be applied only prospectively.
    Mrs. Emerson. I would hope so, given the fact that we have 
all these companies.
    But let me hear from Commissioner Nord on this question.
    Ms. Nord. One of the concerns that I have about migrating 
down to 100 parts per million is in order to hit the 
technologically feasible standard, companies are going to have 
to individually come in and make that case to us. So it could 
potentially be an incredible drain on resources for the agency, 
because, for example, as I indicated, brass has got lead in it, 
but we can't give an across-the-board exemption. We will have 
to be looking at these things on a case-by-case basis.
    We also get into the situation where perhaps it is 
technologically feasible. I mean, it is technologically 
feasible. Recycled metal has lead in it. You can have virgin 
metal. It is technologically feasible. It is very expensive. 
But you can meet the 100 parts per million requirement, but to 
do it is requiring these companies to spend resources 
reengineering their products in a way that hits the statute, 
but doesn't necessarily address safety or advance safety.
    Again, my concern is that the agency really needs to be 
focusing on products that are unsafe and that harm children. 
That is our mission, not dealing with ballpoint pens and 
bicycle tire valves where nobody gets lead poisoning from 
riding a bicycle. So we would like to get off that and back 
onto our core mission.

                           JOB LOSS AND CPSIA

    Mrs. Emerson. Okay. So then I will pose the question to 
you, which is obviously not part of your core mission, but the 
question is begged nonetheless, and that is has the Consumer 
Product Safety Commission or any other agency in the Federal 
Government or executive branch, I should say, estimated the 
number of jobs that will be lost as a result of this new law?
    Ms. Nord. The agency has not done an economic analysis of 
the impact of this law. I think it would be something that 
would be very, very helpful.
    Mrs. Emerson. What do you think, Chairman?
    Ms. Tenenbaum. No, we do not have the ability to do that, 
but I have not seen any other agency in federal government who 
has done it as well.
    But going back to what the Chairman mentioned, this law was 
passed because of a number of egregious cases where there were 
high levels of lead in paint, and in toys. Congress spent hours 
listening to testimony on how lead affects the developmental 
and brain development of children. It was mentioned many times 
that there are no safe levels of lead.
    Now, Commissioner Nord talks about that the staff does not 
think that there are risks. What the staff at one point, before 
you passed the CPSIA, had to rely on was the Federal Hazardous 
Substance Act, and at that point, they had established that 1 
microgram per deciliter, a blood lead level increase was the 
standard. That was the standard until Congress set this bright 
line of 300 parts per million, and 100 parts per million if 
technologically feasible, and 90 parts per million for lead in 
paint. So it has helped the industry to know where the bright 
line is. We are struggling with the same thing now on cadmium, 
cadmium and other heavy metals, that we found in high levels in 
jewelry.

                      CADMIUM REPLACEMENT FOR LEAD

    Mrs. Emerson. Is cadmium now being used to replace lead?
    Ms. Tenenbaum. I have sent a strong warning in my speech to 
the APEC, the Asian Pacific Economic Council, in my speech to 
APEC in January. I said, do not use cadmium and other metals in 
place of lead. The AQSIQ, which is our counterpart in China, 
has made that same stern warning just in the last few days to 
manufacturers,``Do not use cadmium and antimony, barium and 
other heavy metals in place of lead.''
    So we have warned them, but we also are looking now at 
establishing what the limits are on cadmium in children's 
jewelry that we find safe and unsafe. And that is what we had 
to do on lead repeatedly, item by item.

                        ECONOMIC IMPACT ANALYSIS

    Mrs. Emerson. I understand. In my district, 97 percent of 
all the lead that is mined in the United States comes from my 
district, and I am very sensitive about having lead in soil and 
harming children, and that is why I was very supportive of this 
particular bill. But I do think that sometimes things get out 
of hand, as you all well know.
    May I ask if both of you, even though you don't do it 
today, would you support having an economic impact analysis 
done on the effects of this law on jobs in the United States?
    Ms. Tenenbaum. I would have no problems at all having 
someone do an economic analysis.
    Ms. Nord. I think that would be incredibly helpful. How can 
you regulate if you don't know the impact of your regulations? 
I think it is something we desperately need.
    Ms. Tenenbaum. But we also want to make sure that we 
maintain a very high level of safety for children, and that 
economic impact does not override the concern for safety. And 
we really agree that we need flexibility. All five 
Commissioners think we need flexibility on lead. How we get 
there is how we disagree. There were some who want to set a de 
minimis level, and there are three of us that would rather have 
a level where you have to show that you really need this lead 
in the product, and it is impracticable for you to remove it, 
and that you can show that there are no reasonable or 
demonstrable or measurable health risks to children.
    So we agree on this but not on how we get there. And 
Congress will have to determine what is the most common sense 
way to get there.
    Ms. Nord. There is a great deal of agreement. I guess my 
response would be that once you have shown that there is no 
risk, then isn't that the end of the analysis? I mean, that is 
really what we are trying to focus on is deal with risky 
product, harmful product. If the product has no risk, then I 
think we don't have any business regulating it.
    Mrs. Emerson. Okay. There are so many questions, and it is 
complex, but maybe we should let Debbie go.
    Mr. Serrano. Before we turn to Debbie, again, this is an 
issue, in my opinion, of balance, because at the expense of 
making the business community angry, which I tend to do at 
times, if Congress said, let the business community write all 
consumer protection laws in this country, the end result might 
be zero consumer protection laws in the country. It was never 
the intent, nor should it ever be the intent, to legislate on 
behalf of the consumer and the American public by getting rid 
of jobs. But also we can't take an economic crisis and assume 
that everything we legislate here is going to cost jobs, so we 
can't do health care because it will cost jobs, we can't get 
out of Afghanistan because it will cost defense jobs, we can't 
do Consumer Product Safety Commission stuff because it will 
cost jobs. I am not sure that that is--really at the end of the 
road what happens.
    So we have to continue to be protective of the people we 
represent, while being sensitive to the fact that you are 
right, if something is found not to be harmful, then maybe we 
will move away and do something else. But I can tell you that 
as I turn to her, when Debbie Wasserman Schultz spoke about 
pools and spas, I was asked by reporters, why are you dealing 
with that? In fact, one had the nerve to say there are not too 
many pools in the South Bronx. I say that is not the point, 
right? Well, no one questioned that what she did was very 
important. What a build-up.
    Ms. Wasserman Schultz. Thank you.
    Mr. Serrano. And we do have a couple of pools in the South 
Bronx.

                           CPSIA FLEXIBILITY

    Ms. Wasserman Schultz. Thank you very much, Mr. Chairman.
    I can appreciate the need for flexibility. Flexibility is 
fine, but I think that, Commissioner Nord, you are starting 
from an unfounded premise that somehow the size of the business 
and what it manufactures makes it more likely to manufacture a 
safe product versus a large business. So it is popular now to 
carp about the need to protect small businesses and to save 
jobs and make sure that we cannot lose jobs. I agree with all 
of that. But I come to this debate as the only person around 
this table with young children.
    Mrs. Emerson. I have grandchildren.
    Ms. Wasserman Schultz. I mean, I am the mother of twin 10-
year-olds and a 6-year-old. And I will just give you my own 
anecdotal example. While it might not seem like a ballpoint pen 
with lead in it at the tip is a dangerous product or poses a 
potential risk to any child--the other day when I came home 
from Washington, I saw a scratch up my son's arm from about 
midforearm to midbicep, and I asked him how he got it. And he 
said, Mom, I accidentally scratched myself with a pencil.
    Now, I mean, it was a scabbed scratch. Now, my son is not 
self-mutilating. This was just an accident. But it happens. And 
if there is an unsafe level of lead, a pencil, pen, it could 
have easily have happened with a ballpoint pen. Fortunately he 
is in elementary school, and they are still requiring the use 
of pencils and not pens, but that could cause him harm.
    And during the whole debate on the CPSIA, I found that I 
had one of those products in my home--this was at the time my 
youngest daughter was 4--that had those little pieces that were 
not meant to be placed in any child's mouth, but that children 
were placing in their mouth, and they were lead balls 
basically. Here is another example of a product that was 
manufactured by a small business. You just recalled baby 
bracelets and pacifier clips last month because of high levels 
of lead, and that was manufactured by a small business.

                          CPSC RESOURCE NEEDS

    Commissioner Nord, with all due respect, in 2007 I had an 
exchange with you prior to the passage of this law, and you 
argued that the Commission didn't need more resources and 
didn't need more staff. So today you are praising the fact that 
you have more resources and more staff. So your position is 
inconsistent, with all due respect.
    Ms. Nord. Thanks for the question because it gives me an 
opportunity to clarify what my position was. I have never--and 
I think we can go back to the record, and I would love to do 
that with you--argued that we should not have more staff. What 
I did, Commissioner Moore and I presented a budget that allowed 
us to do certain things with the budget in front of us, but 
when asked, I have always welcomed more resources.
    Ms. Wasserman Schultz. The exchange was with me, 
Commissioner, and I asked you specifically. My recollection is 
clear. You said specifically that you didn't ask for more 
resources, you didn't think it was necessary, you just thought 
the size of the staff was adequate to do the job that you 
needed to do. That was our exchange.
    Ms. Nord. With all due respect, I would disagree. My 
recollection is different.
    But nevertheless, getting to the core question, no one is 
arguing that small businesses by definition will never produce 
an unsafe product. What we are arguing is that we need to be 
focusing in on the products that cause harm, not regulating 
things across the board in the kind of rote way that we are 
doing it now. And that is what the CPSIA does not allow us to 
do.
    With respect to minimizing regulatory burdens on small 
businesses when we don't think there is going to be a risk, 
that is what we don't have----

                              LEAD IN TOYS

    Ms. Wasserman Schultz. Let me ask you, since you are making 
that argument. From the perspective of what parents think, we 
think--and I think I can speak for lots of parents--that it is 
really not understandable why a product has to have lead in it. 
There are some products that I agree, the lead, but why is it 
that there are certain toys that have more lead than necessary? 
Why can't they just reduce the amount of lead below the limit?
    Ms. Nord. If the toy has lead in it that is going to expose 
the child to the lead in any kind of measurable amount----
    Mr. Wasserman Schultz. I just gave you an example from this 
week.
    Ms. Nord. I am sorry to hear about your child, but the 
scratch on his arm is not going to give him lead poisoning. 
Lead poisoning is a chronic hazard. And the question should be 
should we remove ballpoint pens from children's environments.
    Ms. Wasserman Schultz. Why not just reduce the lead in the 
tip of the ballpoint pen?
    Ms. Nord. The problem is that the lead is there for a 
purpose. And, yes, we could do that, and your child would not 
be using ballpoint pens because they would be unaffordable. As 
I said, brass is the example I used.
    Ms. Wasserman Schultz. I am sorry. That is a blanket 
statement that you have no qualification to back up.
    Ms. Nord. I am more than happy to provide you with that.
    Ms. Wasserman Schultz. Ballpoint pens would be unaffordable 
unless we have lead in the tip of them?
    Ms. Nord. The lead serves a purpose there. It would meet 
the functional purpose.
    Ms. Wasserman Schultz. So if we don't have lead in the tip 
of ballpoint pens, they would be unaffordable?
    Ms. Nord. You would replace it with something more 
expensive.
    Ms. Wasserman Schultz. Unless you can show me a 
documentation and economic analysis of that, I have a hard time 
understanding that.
    Ms. Nord. I would be delighted to give you what we have. 
But again, if the agency had done more economic analysis of 
these issues, we would be in a better place to regulate, and 
that is something I think we do need to be doing.
    Ms. Wasserman Schultz. I support flexibility. I do not 
support making sure that children are exposed to lead 
unnecessarily.
    Ms. Nord. Then we agree.
    Ms. Wasserman Schultz. But we don't agree with the 
difference between the majority of the Commission and the 
minority in one which you serve where you allow a de minimis 
level of lead versus ensuring that it is inappropriate for--or 
not possible for a company to follow the law. The law was 
debated and discussed and supported for a reason, because there 
was an absence of regulation. There was no one minding the 
store. And parents became scared and tired of it. And I will 
tell you as a mother of young girls who wear the jewelry around 
their necks, and I see them playing with it in their mouths all 
the time, even though that is silly and they shouldn't do that, 
if unbeknownst to them and to me it has an inappropriate level 
of lead in it, then they could get lead poisoning.
    Ms. Nord. We all agree on that point, And I think there is 
no debate. And we want to work with you to make that happen.

                     POOL AND SPA SAFETY ACT GRANTS

    Ms. Wasserman Schultz. There appears to be some debate.
    Turning, Mr. Chairman, if I can, just to two other 
subjects, one being my appreciation for you for providing the 
resources, and also to the Commission for your excellent 
enforcement of the Virginia Graham Baker Pool and Spa Safety 
Act, both under your chairmanships. I am a little bit 
frustrated that the grant program, the State grant program, 
even though it has been fully funded the last two fiscal years, 
has taken an extraordinarily long time for the Commission to 
get off the ground. So can you, Madam Chair, describe your 
progress? I mean, there is $2 million that is potentially going 
to expire in September, and I don't want to see that happen.
    Ms. Tenenbaum. Well, first of all, we fully support the 
Virginia Graham Baker Act and appreciate your advocacy in 
getting this bill passed.
    We have been working hard with the Centers for Disease 
Control and Prevention to establish the State grant program 
that the act calls for. We finalized the details of the plan 
just this week. The CDC in conjunction with the Commission will 
be releasing a funding opportunity announcement the beginning 
of April. And my understanding is the grant applications will 
be due in June, and the grant qualifying to States will be made 
in August.

                   POOL AND SPA GRANT QUALIFICATIONS

    Now, it is important, however, that the states currently 
meet the statutory requirements. In fact, the states must pass 
legislation in order to qualify for this act. We have looked--
--
    Ms. Wasserman Schultz. We are in the middle of the 
legislative session season right now.
    Ms. Tenenbaum. And we are following some States, Florida, 
Texas, to see if they will pass this legislation. We will be 
showing states what model legislation looks like and we have 
relayed the model legislation. In the event that it does not 
pass, it [the funding] stays at the Commission. What we want to 
assure you, that in the event states do not pass this 
legislation, we can take that money, and we would use it in the 
spirit of the Virginia Graham Baker Act to do more contracting 
with people to do education advocacy, if we are allowed to.
    Now, the other thing is we have also asked Congress to 
consider whether it should be states or a municipality. For 
example, the city of Miami, could they apply for the grant? 
Could they pass an ordinance? It might be that the pool safety 
is closer to local government than state government. Should 
Fort Lauderdale, or--Jacksonville, any of your large cities 
pass an ordinance----
    Ms. Wasserman Schultz. Phoenix has a very strong one.
    Ms. Tenenbaum [continuing]. That complied with this, they 
could then get the grant. And we were asking you to make 
amendments to the CPSIA so that we could--
    Ms. Wasserman Schultz. I would be glad to work with you on 
that, because whether we do it state by state or major city by 
major city, the idea is to make it more likely that we have 
tighter restrictions around pools.
    Mrs. Emerson. Can I add something? Those state grants 
really would be helpful, because I have small community pools 
that truly cannot afford the 10- or $15,000 that it is going to 
cost them to comply with the law. And I hate for the kids in 
these towns where there is no other place to have recreation to 
not have that ability to seek assistance here.
    Ms. Tenenbaum. Well, in Columbia, South Carolina, the 
headlines in last summer's paper was the main community pool 
could not open because it had not met the requirements. So they 
scrambled around and got the equipment and met the 
requirements. But you are right, if we could provide some 
flexibility.

                         POOL AND SPA EDUCATION

    If you wanted to know about the education outreach program, 
we have that information, too. We have given our grant to 
Widmeyer Communications and Omni Digital Studio to create the 
largest public education campaign the agency has ever done: 
$3.6 million will go to Widmeyer for a Website, for all kinds 
of educational materials for us to use in pool and spa safety; 
$200,000 for Omni Digital Studios; and then we have $4 million 
in which we will contract with third-party organizations to 
train and target education this week. So that would be 
something that a community organization or regional and State 
organizations could apply for those awards, and we would give 
them those awards to do education advocacy of pool and spa 
safety.
    So we are working very hard. The initial launch in April 
for the rollout of the program will be at the National Drowning 
Prevention Association's conference in Pittsburgh, I think you 
have spoken to that conference several times. We will have a 
broader launch on Memorial Day, and I hope this is a press 
conference we can do it in Florida together. I know that you 
joined Commissioner Nord, Senator Klobuchar and the Taylor 
family for last year's kickoff. So we want to work with you 
again on that.
    Ms. Wasserman Schultz. Absolutely. I look forward to it.
    Mr. Chairman, are you planning on having us come back?
    Mr. Serrano. We are in the process of having three votes, 
but as you can see from the yeas, it is going to be a while 
before it gets to a significant number there. So we will keep 
going here.

                             IMPORT SAFETY

    On the issue of product recalls, we know that 80 percent of 
recent U.S. product recalls were imported items. The CPSC 
budget request would devote approximately 57 staff to the 
import safety initiative comprised of personnel stationed at 
ports, field support and other support staff. However, as GAO 
pointed out last August, the import staff of the Commission are 
significantly smaller than that of other agencies like the FDA, 
which has 700 people.
    Does CPSC have a long-term plan for ensuring adequate 
oversight of imported products?
    Secondly, has the Commission improved its information 
sharing with customs to ensure that the Commission has access 
to ship manifest data before products arrive at U.S. ports?
    Ms. Tenenbaum. Well, thank you. Just to give a comparison, 
in 2009, we had 12 people in the Import Surveillance Division, 
10 people actually at the ports, and for this year we had 18 in 
the whole division and 14 at the ports. We are trying to 
increase that to 23 in the division and 19 at the ports. But we 
also, if you add to that the field staff which we have in many 
of our states, also hazard identification and reduction, and 
also support from our attorneys and general counsel, the whole 
number is now 43 total for import surveillance program, and 
next year will be 57. However it is still woefully under what 
other agencies have in port surveillance.
    We are trying to do is work through technology in 
cooperation with Customs and Border Protection so that we get 
this information from the manifest. We are asking for just 
$250,000 to implement the analysis and planning phases to 
develop an automated interface with ITDS operated by Customs 
and Border Protection. This will allow our system to talk to 
their systems and do data mining. This is only the planning 
stages.
    We also had additional contract funds left over. We are 
looking at using $2 million to do a risk management system so 
that we can have the technology to look in those manifest 
systems and determine what is there that really we should be 
paying attention to.
    So technology will help considerably, but once we phase it 
in this year, it is not inconceivable that next year if we do 
the risk assessment, we will come back to you and let you know 
where our gaps are.
    We also have a contract with Booz Allen Hamilton. It has 
been since 2003 that we had a strategic plan, and we need a new 
operating plan as well. We need to look at all the requirements 
under CPSIA, what kind of information we are going to get on 
the public database in terms of the referrals and consumers 
letting us know about deaths and injuries and how we are going 
to respond to that. It will be more information than we have 
really handled before. So we, through that planning and 
strategic process with Booz Allen, will look at the service 
gaps and be able to tell you when we come back next year what 
the big needs are for this agency to function appropriately and 
have stronger surveillance in the ports.
    Now, we consider ports not just to be ports on the coast, 
but ports of entry. So we have 300 ports of entries, and we 
have as you--19 people stationed at the ports. However, we do 
use the State field staff. So if we know that there are 
fireworks that were put on a train on a California coast, and 
they go to an inland city, and that is where they are unloaded, 
we can send field staff there to check on what the status of 
those--whether they are in compliance in terms of fireworks. We 
will be able to give you a better idea of need.

                             LEAD IN BOOKS

    Mrs. Emerson. Can I just ask you for a clarification real 
quick? This is quick. We started to talk about lead, and I want 
to talk about the whole functional issue when we get back. You 
said books are lead-free. Are not the books that were pre-1985, 
don't those contain lead in the ink?
    Ms. Tenenbaum. They do. Pre-1985 had lead in the ink. If 
you use the four-color process and modern printing now, the 
books that are printed in today don't have lead.
    Mrs. Emerson. But what happens to libraries and that sort 
of thing who----
    Ms. Tenenbaum. That is why we needed some relief so that 
the libraries don't have to test. They are not selling books, 
but they are lending in the stream of commerce. But it is the 
pre-1985 books, that if we could just warn parents--maybe a 
warning would be adequate. If you look inside some of these 
1985 books, it is the illustrations in the older books that 
have lead in the illustrations. So we want to advise parents 
not to let children mouth the books. And the books for little 
children aren't lasting since 1985. But if you go into schools, 
particularly in rural areas, and you go into libraries, you are 
going to see pre-1985 books.
    Mrs. Emerson. I still have all my Golden Books when I was a 
kid that I gave to my kids, who hopefully will give them to 
their kids.
    Ms. Tenenbaum. Well, if you want to bring them to 
Washington, we will test them for you.

                  LEAD IN DOLLS AND COMPONENT TESTING

    Mrs. Emerson. I might do that.
    And also then just very quickly, you said something about 
lead-free buttons on dolls. But do you not have to test every 
single part of dolls, including the rouge on the checks? You do 
not have to test every part of the doll?
    Ms. Tenenbaum. We have implemented an enforcement policy on 
component part testing. In fact, I was just at the toy fair. We 
went in to see Legos. They thanked us for having the component 
part testing where they can buy the lead-free paint, and they 
don't have to take the whole Lego apart and chip off the paint.
    Mrs. Emerson. We are talking about dolls here.
    Ms. Tenenbaum. Dolls. If you manufacture new dolls, and you 
use lead-free products, then you keep that certification, and 
you have a reasonably check up, just to make sure it is lead-
free, then you wouldn't have to test the doll. You would not 
have to destroy a doll to find the lead. You would say, I 
bought lead-free paint, I bought lead-free buttons, here is my 
certificate. It is like Commissioner Nord said, the component 
part testing market has not developed, but it is a huge market 
for someone who wants to develop a hobby store with all lead-
free component parts. It is a huge market for people.
    Mr. Serrano. Yes. We have three votes, so we will ask you 
for your help here in waiting for us.
    Before I leave, one thing. So you mean those spiral 
notebooks that our great friends in the media use could be 
hurting them?
    Ms. Tenenbaum. It is not a children's product for them.
    Ms. Nord. It would explain a lot, wouldn't it?
    [Recess.]
    Mr. Serrano. Okay. We will do the best we can. She is 
reading something there, which means something will come up 
soon.

                          CHANGING CPSC FOCUS

    Some of the agencies under our subcommittee's jurisdiction, 
such as the Federal Communications Commission and the 
Securities and Exchange Commission, have had to change their 
regulatory approach in response to changing products in the 
marketplace. Chairman Tenenbaum, what are some ways you plan on 
changing the focus of the CPSC going forward in response to 
changes in the marketplace for consumer products?
    Ms. Tenenbaum. Thank you, Mr. Chairman.
    As incoming Chairman, my first obligation was to finish the 
rulemaking required under the CPSIA. That has been a top 
priority for me so that we would have the rules developed, and 
industry would know how to comply. We could go beyond just 
rulemaking and start enforcing the requirements of the CPSIA.
    But even broader than that, we are not just a lead and 
phthalate agency. We also need to look at fires, carbon 
monoxide and other issues that cause injury and death. The 
database that Congress required us to develop will give us more 
information than ever before. Now we collect data from 
emergency rooms, death certificates and newspaper articles, as 
well as from our hotline and as many other sources as we can 
get, but sometimes we don't get the information until years 
after it has happened. The public database will allow consumers 
to give us information, and then we will have to respond as 
quickly as possible. If we know of a death, we can't let a 
death just stay in the database for months and not investigate. 
So we are going through this management and operations planning 
with Booz Allen Hamilton, the company we have hired to help us 
with our strategic planning, and we will look at the service 
gaps and gaps within our organization that would prohibit us 
from responding quickly.
    But we are always looking at developing trends; 
nanotechnology, for example. We have asked for $2 million so 
that we can participate in the whole nanotechnology research 
project that is under way with all of the other Federal 
agencies. With this $2 million, we will be able to contract 
with them to ask them to review our products that we oversee to 
determine what problems they see in terms of nanotechnology 
that we need to be aware of.
    So I think you always have to be looking at the 
marketplace, getting the best data possible, having 
relationships with the research agencies of the Federal 
Government, working with your state officials. Some states do 
research. The attorneys general also; we are working with them 
closely so that they turn over products that they find. We need 
to be open to getting information from all sorts of avenues.

                            COLLECTING DATA

    Mr. Serrano. And in the past, you say it was difficult to 
get this information, or you got it late. Any resistance to 
getting it now?
    Ms. Tenenbaum. Well, we have ways of collecting data. One 
is the NEISS system, and through that system we pay emergency 
rooms to fill out forms on injury and deaths related to 
products, and they give us that on a regular basis. We also get 
death certificates from states, and we look at that. We have 
five different silos of information at the Department, and we 
haven't had the ability to data mine. With the money that 
Congress has given us for IT modernization, we can now have a 
technology that allows CPSC to go through all of these systems 
and mine data so that we will have death and injury information 
on products quicker than ever before.
    So with IT modernization, the public database, this risk 
management program that we want to do with Customs and Border 
Patrol, we will be able to get more data sooner and respond to 
it more effectively.

                    COMMUNICATING SAFETY INFORMATION

    Mr. Serrano. Now, in both of your testimonies, you spoke 
about communicating important safety information in minority 
communities. What has the Commission done, and what is it 
currently doing, to ensure that important product safety 
information, including information on recalls, is being 
disseminated in these communities, including communities where 
languages other than English is spoken, and particularly for 
families who do not have a computer at home?
    Ms. Tenenbaum. We are well aware, and I come from a state 
where we have so many rural areas where there is a great 
digital divide where people don't have computers. So what we 
try to do is when we announce a recall is work with the media. 
For example, on crib recalls we had almost 200 million people 
get information. We go on all the national morning news 
programs. We use social media such as Twitter, and we will be 
using Facebook. We use as much of the free media as possible to 
get our word out.
    But we also provide hard copies of the product recall. We 
can mail those to States, and we provide hard copies to child 
care providers and consumers who don't have access. We work 
with the Neighborhood Safety Network, which has 5,600 members, 
and through that Neighborhood Safety Network, which is very 
much in touch with minority communities, we get those safety 
messages out.
    But we do have a dedicated Spanish-speaking spokeswoman, 
Arlene Fletcha, whom you met at the 2008 press event that you 
had with Nancy Nord at the Bronx library. And Arlene translates 
dozens of announcements for the Hispanic community and conducts 
interviews with Telemundo and Univision that reach millions of 
viewers.
    We still plan to launch our special minority outreach 
campaign that will increase the use of the Neighborhood Safety 
Network, which is 5,600 community leaders. We are going to five 
cities this year for minority community outreach.
    Mr. Serrano. Which city; do you know?
    Ms. Tenenbaum. I don't have that, but Scott Wolfson might 
know. We will get back to you. We are in the planning stages, 
working on that. But it will be the Hispanic, African American, 
Asian American populations.
    We also translate our information on the Web in Chinese, 
too. We are very aware that we can't just have English only on 
our Web site.
    Mr. Serrano. What a phrase.
    Mrs. Emerson.
    Mrs. Emerson. Sorry. You caught me chitchatting. I 
apologize.

                           FUNCTIONAL PURPOSE

    Let us talk about functional purpose, which is kind of 
arcane to talk about. You have suggested, Madam Chair, that a 
way to fix the unintended consequences of the CPSIA is to add 
an exclusion for function purpose, which basically--I 
understand that would allow the Commission to exclude 
components with higher levels of lead if the lead was found to 
be essential for the function of whatever the item is. So can 
you elaborate for me how such an exclusion might work at the 
Commission, please?
    Ms. Tenenbaum. Well, the term came from the Federal 
Hazardous Substance Act, and that term was a part of that act. 
So if someone came to you and said, we have chemistry sets, and 
we need this banned hazardous substance to be part of the 
chemistry set to teach chemistry, we were allowed to give a 
pass on substances that were ordinarily banned because the 
petitioner would say, we need it for a functional purpose. So 
it was a legal term that we have always used under the Federal 
Hazardous Substance Act for products that you had to have the 
ingredients because it was a functional purpose of the product.
    Now, I want to clarify that I support the bright line, the 
lead limits under the CPSIA. I thought that was a step forward 
because you have 300 parts per million for the lead content and 
90 parts per million for lead paint. I support that, and 
several other Commissions do as well. We are not talking about 
reducing those, but what we are talking about is for a person 
who has a product that cannot meet those levels to be able to 
say we need it for the functional purpose of this product. The 
amendment is being discussed in the Commerce Committee and it 
depends on what the components of that are. I don't really have 
the components at this time because it is under discussion.
    So we support the bright-line test, and that was in the 
report to Congress. But when we wrote to Congress, we didn't 
recommend functional purpose or de minimis. Commissioner 
Northup and Commissioner Nord have said--Commissioner Northup 
has been very strong, and I think she put in her statement that 
she wanted a de minimis standard. But it would put the agency 
back in having to test every product for what is de minimis for 
product. Lead can bind, depending on the alloy it is attached 
to, we would have to go through and look at every product and 
to see how it would increase the blood lead level. And that is 
where we were before you passed the CPSIA. To give exclusions 
will require agency resources and staff; however, it depends on 
how the exclusion is written by the Commerce Committee on how 
extensive those resources will be.
    Mrs. Emerson. Commissioner Nord, how do you feel about the 
concept of functional purpose?
    Ms. Nord. I have got concerns about it, as does my 
colleague, Commissioner Northup. Our concern is that it could 
be very, very subjective.
    Mrs. Emerson. Who makes the decision?
    Ms. Nord. The agency would make the decision.
    Mrs. Emerson. So you would ask your scientists as opposed 
to you as Commissioners?
    Ms. Nord. Does the lead in this particular product meet a 
functional purpose with respect to this product. And that is--
at least in the legislative constructs we have seen today--is 
defined as highly impracticable to remove that lead. That term 
``highly impracticable'' is well litigated. It has a meaning in 
the law which takes a bit of the functionality away from the 
functional purpose provision.
    And we are also very concerned it is going to be very, very 
resource-intensive for the agency, and it is going to turn the 
agency into a product-approval-type agency.
    With respect to the bright-line aspect of the law, I mean, 
because the law is a bright-line law, you end up with these 
anomalies that we have been talking about. Instead, what I 
would like to see is an amendment so that the law recognizes 
the expertise of the agency to define the risk and then 
regulate based on the child's interaction with the product. If 
it results in any kind of measurable increase in the blood lead 
level, whether it is a functional purpose or not, then I think 
we need to regulate it and take that product out of the 
marketplace.
    Mrs. Emerson. So taking it back to the book analogy, if you 
will, then if, in fact, the lead in the ink of the pre-1985 
books doesn't have a functional purpose, but--so we still know 
that that poses no real threat to the kids. So how then, if 
that is the case, and you all have determined that the book 
industry is exempt, then does that mean you have to use that 
same--you would have to use the same criteria for any other 
perfectly safe products, too? Correct or not?
    Ms. Nord. Right now under the functional purpose test as we 
understand it, the book industry would not be exempt. They 
would not be able to meet that. That is why we have had to ask 
for a separate exclusion for them. And the book example makes 
the point. It does not meet the functional purpose. However, we 
are not aware of any risk of lead poisoning to children using a 
1985 book. It just doesn't happen. So that would be an example 
of where a negligible risk-type concept would accommodate all 
of these things.

                         IMPACT ON CPSC BUDGET

    Mrs. Emerson. I have to believe that going through, looking 
at all of the exclusions, that has got to have a huge impact on 
your budget.
    Ms. Tenenbaum. So will the de minimis test. If we do away 
with the bright-line test, and everyone comes forward and says, 
you know, we are not going to raise the blood lead level, we 
will be back in the same position we were before the law was 
passed. We will have to test every product. And that is why we 
all agreed that we would tell Congress we needed flexibility, 
and you would listen and make the best determination.

                           FUNCTIONAL PURPOSE

    But on functional purpose, the idea is to have 300 parts 
per million or 100 if technologically feasible and 90 parts for 
paint, because all the research in terms of scientific research 
has demonstrated that there is no safe level of lead. And it is 
to incent people to take lead out.
    For example, Commissioner Nord was talking about the little 
toy, the John Deere tractor, that had the lead in the tire. The 
company has already taken the lead out. They are manufacturing 
that without a lead ring. A lot of the button manufacturers 
have visited us and said, we are taking the lead out. They are 
going all the way up the supply chain, and using the raw 
materials that do not have lead. YKK visited us to report that 
they are making lead-free zippers. It provides incentives. It 
is 2 years out since the passage of the CPSIA, and 
manufacturers have complied. One company came to see me and 
said, ``We read the law, and we didn't stop at 300 parts per 
million, we stopped at 100 parts per million.'' This major toy 
manufacturer has already gone to 100 parts per million because 
it could do that, and it didn't stop at 300.
    So I see a lot of positive changes. I see also people 
struggling to enact this law. But we have tried to take a 
common sense approach and give guidance with component part 
testing, and determinations that whole lines of products don't 
even have to be tested in textiles. We are working through 
this. So we want flexibility, but we are trying to do it 
without making lead prevalent in the marketplace as it was 
before in children's products.
    Mrs. Emerson. Commissioner Nord, do you have anything to 
add?
    Ms. Nord. Well, again, our objective is the same. We want 
to have a safe marketplace for children's products.

                         IMPACT ON CPSC BUDGET

    With respect to agency resource issues, I am very concerned 
that the functional purpose test, if it is put into place, is 
indeed going to be very resource-intensive as opposed to some 
sort of negligible risk kind of standard, because we will have 
to be looking at each product and the functional purpose of the 
lead in that product. We won't be able to look across product 
lines at commodities, for example. We wouldn't be able to look 
at brass, for example, as it is used in all children's products 
under the functional purpose test, and that is of concern to 
me.
    With respect to trying to work to get the lead out, again, 
we all agree that that is what the agency should be doing. But 
you do end up with the strange results where you have got a 
product that meets the standard in the legislation that could 
expose a child to more lead than a product that exceeds the 
lead levels. And it is those kinds of anomalies that are 
bothersome to us and we would like the flexibility to be able 
to address. That is what we are asking for.
    Mrs. Emerson. I just hope that, depending which way you all 
determine to go, or whether our legislation--our refinement 
legislation, that you will have the resources to do what you 
need to do, which if you go to--I mean, this sounds rather 
complicated, this whole functional purpose--and complex, I 
should say, that requires a lot of people touching it.
    Okay. I better stop there. Thanks, Chairman.
    Mr. Serrano. I am just thinking. I really hope you both 
walk away from here today understanding that we understand that 
this is not easy what has to be done, and we respect both of 
your views. My only problem is that I keep remembering back to 
where the SEC sat in front of me and told me, no, we are fine, 
we don't need any more money, and we are doing what we are 
supposed to do, and then we saw what happened. And so we had 
all of that happen because in the past the Commission was 
allowed to look at what it needed to look at and not what it 
was told to look at every so often. So we had major recourse.
    But anyway, the gentlewoman from Florida.
    Ms. Wasserman Schultz. Thank you, Mr. Chairman.
    In fact, the CPSIA was in response to a significant 
problem.
    Mr. Serrano. Right. And it ended up passing--the behavior 
was always, let us do our thing, don't overburden us.
    Ms. Wasserman Schultz. And look where it got us.

                            CHINESE DRYWALL

    I want to just change the subject for a moment and focus on 
Chinese drywall. I know that the CPSC, Madam Chair, HUD and CDC 
have been tasked with coordinating the investigation. I 
appreciate your meetings with the task force on the drywall, 
Chinese drywall crisis. My understanding is that the CPSC 
received the first reports of the problem over a year and a 
half ago, and since that point we have some homeowners that 
have lost their homes, many homeowners that have moved out or 
abandoned their homes.
    My district is dotted with Chinese drywall. They are not 
able to live in their homes. Their homes are making them sick, 
and they are faced with not only not being able to live in 
them, but they can't sell them. Their insurance isn't covering 
them, so they have an asset that is only a burden to them, and 
how are they supposed to go pay for other housing? It is just 
really a huge, huge problem, particularly problematic in that 
insurance companies are denying coverage to homeowners, and 
that the foreign manufacturers are refusing to accept 
responsibility.

                    CHINESE DRYWALL REMEDIATION PLAN

    So I know you have conducted studies, and you are 
cooperating with other agencies. Has the CPSC begun formulating 
a remediation protocol that can be accepted by the homeowners 
with confidence that it will fix the problem, and when can we 
expect to see that remediation plan?
    Ms. Tenenbaum. We have been working with HUD on the 
remediation plan, and it should be available to the public by 
the end of April. We have a new study, the Lawrence Berkeley 
National Laboratory study, that has data that showed some 
Chinese drywall samples had significantly higher emission rates 
for hydrogen sulfide and other reduced sulfur gases compared to 
domestic samples and other imported samples. This has been 
consistent with the chemical analysis that we did in October 
2009. It is also consistent with the November 23, 2009, 51 
homes study, which found a strong association with the problem 
of drywall and hydrogen sulfide.
    So last week, February 25th and 26th, brought together all 
of the experts from our contractors and our Federal partners. 
We had a 2-day discussion on what we learned about Chinese 
drywall. The studies we have done have been used in the 
multidistrict litigation in Louisiana. So they have used our 
studies in terms of the plaintiffs' cases down in Louisiana, 
which has parties from all of the states.
    We have spent $3.5 million on the investigation. It is the 
largest investigation we have ever done in the history of the 
CPSC.
    I visited personally drywall homes in Florida and in 
Virginia. I feel deeply for the homeowners. They have had to 
move out. It really is tragic because so many of the young 
families with whom we have spoken and visited in their homes, 
this is all their equity. Everything is tied up in this home. 
They have moved in with relatives. We carry a heavy burden at 
the Department to get this finished in terms of our studies, 
and to get the remediation guidelines announced with HUD in 
April.
    We also work with HUD, and we did a joint announcement with 
them that states could use the community block grant money, if 
it was not already designated, to help families remediate their 
homes. We also wrote a letter to the IRS regarding drywall 
asking them to do a casualty loss reduction. So we are looking 
at creative ways that we could allow the homeowner to have a 
write-off or deduction to help them financially.
    Ms. Wasserman Schultz. Now, they are getting a property tax 
break?
    Ms. Tenenbaum. Right. They are getting a property tax 
break. But in Florida we have 1,723 reports. Overall, we have 
received 2,941. Florida has the highest with 1,723. But when we 
talked to the mayors and the Governors in all the other states, 
we think it could go as high as 5,000. We have investigated 
every death that we have read in newspapers where there were 
people that said there were deaths. We have investigated every 
one of those and have not determined that drywall was the cause 
of it.

                        CHINESE DRYWALL ILLNESS

    Mrs. Emerson. I actually have a constituent who is a 
drywall installer who is, we think, permanently disabled now 
because of just getting sick from all of the exposure.
    Ms. Tenenbaum. Hydrogen sulfide. In Florida you have a home 
builder, Lennar. Lennar is going into the homes it built and 
stripping it down to the studs and taking out the drywall and 
then rewiring. There is another major homebuilder in Virginia 
that is also doing the same thing. And this remediation program 
will spell out what we think needs to happen for full relief.

                    CHINESE DRYWALL FINANCIAL IMPACT

    Ms. Wasserman Schultz. Do you know what the financial 
impact is?
    Ms. Tenenbaum. Well, it just depends on the size of the 
house and the amount of drywall.
    Ms. Wasserman Schultz. I mean, the total financial cost for 
the remediation.
    Ms. Tenenbaum. No. I had heard numbers of $75,000 per home 
to take out all the drywall, but that just depends--I think 
Lennar told me, or Dragus up in Virginia told me that. But it 
is the size of the home and the amount of drywall. In some 
cases the drywall was upstairs, from China, but it wasn't 
downstairs, so you didn't have to take it all out.

                     CHINESE DRYWALL HEALTH EFFECTS

    Ms. Wasserman Schultz. Do you have a timetable for a report 
on the health side effects of the impact of the drywall?
    Ms. Tenenbaum. Well, we had looked at the health effects, 
and we think this latest study from Lawrence Berkeley 
Laboratories will address that. But the original studies we 
did, the 51 home studies, was reviewed also by the CDC, and 
they found that the amount of hydrogen sulfide that was emitted 
did not contribute to a chronic or acute health problem.
    But we have thought that all of the synergistics--if you 
get into a home that is tightly built, and in Florida you build 
a home and you often don't open the windows because you have 
the air conditioner on all year, we have found that all of that 
together can be an irritant.

                CHINESE DRYWALL MANUFACTURER COOPERATION

    Ms. Wasserman Schultz. Are we getting any cooperation from 
the Chinese drywall manufacturers?
    Ms. Tenenbaum. Well, we have not to date. In the 
multidistrict litigation, there is one Chinese manufacturer who 
has defaulted on the complaint. They are having a hearing, and 
they are going to assess damages in absentia for this drywall. 
Knauf is a German company that has manufacturing in China, and 
it has been working with the court. It has also been sued in 
the multidistrict litigation, and it has cooperated.

                              CRIB SAFETY

    Ms. Wasserman Schultz. And lastly, Mr. Chairman, I wanted 
to commend your leadership, Madam Chair, on the issue of crib 
safety. I passed legislation in Florida that actually was 
ultimately vetoed by Governor Jeb Bush despite overwhelming 
support for it, including from the industries it impacted, that 
would have made sure that cribs sold in Florida were safer and 
didn't have a lot of the problems that you have found that they 
still have. But they are still in hotels and places where cribs 
are repeatedly used over a long period of time. And we don't 
really know where they have been or where they--and they are 
beyond the reach of recall notices. So can you talk a little 
bit about your efforts in this area?
    Ms. Tenenbaum. Well, thank you. And this is something that 
Commissioner Nord has supported with me, and really the whole 
Commission has stood up to the crib issue.
    First of all, we will have a new crib rule in 2010, and 
that rule will outlaw or ban drop-side cribs. Once we write 
that rule, it can be applied retroactively to cribs in public 
places like child care facilities and hotels.
    We still have concerns with cribs in homes, and so I have 
asked my colleagues and staff at the CPSC to continue 
monitoring the effectiveness of recalls and how many people are 
actually getting these repair kits, because the repair kits 
make the side immobile so that the drop-side is not going up 
and down. You don't have that pull-out where the children fall 
into the crack and suffocate.
    But we also work with the ASTM. We brought the Committee in 
and said this has gone on long enough, and we want you to work 
with us. They worked with us for 2 days, coming up with a new 
standard in which the ASTM, through their voluntary standards, 
banned the drop-side crib. It is now out for vote. In March we 
will have the results of the ASTM vote. We realize that this 
has really started something within the crib industry that all 
of them need to come out with a repair kit, if they have drop-
side cribs, to make the side immobile.
    The registration cards, which are part of the CPSIA, are 
for required people to fill out the information when they 
purchase a new crib. When you have a recall, all the people who 
have sent the registration card in will be able to be 
contacted. On crib recalls we go on all the national morning 
shows. We do as much media as possible. We also get coverage on 
national nightly news.
    Ms. Wasserman Schultz. Are these mandatory or voluntary 
standards?
    Ms. Tenenbaum. These will be mandatory new crib standards.

                        MANDATORY CRIB STANDARD

    Ms. Wasserman Schultz. Because right now the crib standards 
are voluntary, aren't they?
    Ms. Tenenbaum. Well, they are, and the CPSIA outlined a 
list of 12 durable nursery products that had to have mandatory 
standards. And cribs were scheduled for 2012 at the Commission, 
and I moved it up to 2010 so we would have a mandatory 
standard.
    We also started this Safe Sleep initiative in January where 
we have a team of attorneys, compliance officers, engineers, 
public affairs specialists, who meet regularly weekly on all of 
the information we have on cribs and expedite the recalls of 
cribs that have been in the pipeline for several years.
    So we are trying to do everything we can to get the old 
cribs off the market, or either to get repair kits, and to have 
a brand new standard which is state-of-the-art.

                      FOREIGN MANUFACTURE OF CRIBS

    Mrs. Emerson. Is foreign manufacturing any part of the 
problem?
    Ms. Tenenbaum. A large number are from China. A large 
number are from China and from other countries. But probably 
the major manufacturers are from outside the country.
    Mr. Serrano. We are going to try to have one more round and 
then try to wrap it up because we have yet another series of 
votes coming.

                              CHINA OFFICE

    You know, again going back to my other subject, this is why 
it is such a delicate balance, because we have the drywall 
issue that I am sure if we had started on voluntarily testing 
on Chinese drywall, you would have had a lot of people saying, 
why are you doing that, leave that alone, do something that is 
important, and yet now we have a problem. So there is a 
balance. I don't envy the work you have to do, and I don't envy 
what we have to do in the future to assist your doing it.
    I have one last question, and then I am going to submit the 
other questions for the record. You are setting up an office in 
China, and China is a big issue. So tell us what kind of 
cooperation you are getting in China to set up this office.
    I would be remiss if I did not put in the usual Emerson-
Serrano comment on--isn't it amazing that we can have an office 
of our government in China, but we can't even be allowed to 
visit Cuba? But anyway, that is another issue for another day.
    I am all for it, but think of it. I am just wondering out 
loud. I think it is great. But if you had told--well, no. I was 
going to say Richard Nixon. He is the reason why we have 
relations with China. If you would have told somebody else that 
we were sending an office of our government to China, they 
would say, what are you talking about?
    Ms. Wasserman Schultz. Mr. Chairman, the track record of 
China really rings strongly towards expanding our outreach to 
Cuba. The results have been so incredibly good, haven't they?
    Mr. Serrano. It is good for the CPSC.
    Mrs. Emerson. They have got more staff.
    Mr. Serrano. They have got more staff.
    So tell us what that office is like very quickly and what 
issues you have had. And what kind of support are you getting 
from the Chinese Government? And lastly and most importantly, 
what are we beginning to see in terms of cooperation for better 
products, safer products?
    Ms. Tenenbaum. Well, thank you.
    Because China is the largest single source of imported 
consumer products, it will and has been the focal point of 
CPSC's external efforts. First of all, we are seeing great 
cooperation from the American Embassy in China. Ambassador Jon 
Huntsman has been very helpful. In fact, our office will be in 
the American Embassy in China, and we have hired one person, 
Jenny Wang, who is at the CPSC for the next month receiving 
training. She is Chinese. She is a delightful person and will 
be helping Chinese manufacturers as well as U.S. manufacturers 
ensure that product safety is paramount with the manufacturers.
    We also will be hiring an American employee, and we are 
working with the Chinese Government to try to get approval for 
that diplomatic post. Ambassador Huntsman is working closely 
with us to try to get that approved as well, and we expect we 
will have the American employee in place in the next few 
months.
    Mr. Serrano. One employee?
    Ms. Tenenbaum. We will have two, a Chinese and an American, 
for right now to see how it works and see how it is utilized by 
the Chinese. They will be doing training.
    Mr. Serrano. Where is this office physically?
    Ms. Tenenbaum. It is in Beijing in the American Embassy. So 
that is very good. We didn't have to go out and get our own 
space. They gave us space because the embassy is very helpful 
to us in all efforts in China. But training and outreach to 
China is a priority.

                           WORKING WITH CHINA

    This year we had our biennial summit in China where we took 
our employees and also stakeholders, American businessmen and 
women, with us to China, and we focused on writing a new--not a 
memorandum of agreement, but a working document going forward. 
We are asking the Chinese government to emphasize best 
practices in manufacturing. Also, we have stressed that they 
had the responsibility to ensure that their manufacturers are 
meeting our standards.
    We have had a successful Webinar in January with Chinese 
manufacturers, that was very highly attended. We also did 
training at the Hong Kong toy show in January. We had 120 
manufacturers view a Webinar that we did over the Internet in 
December.
    We will continue to work with the Chinese in a very 
agreeable fashion. It is not perfect. But they also assure us 
that they understand it is their responsibility to make sure 
manufacturers meet best practices and comply with the 
standards.
    Now, this fall, we will go back to Shanghai, China and have 
a meeting with China, the European Union and the United States 
on safety standards. We have our Office of International 
Programs who regularly translates requirements and regulations 
on the Internet in Chinese so that the Chinese have access to 
this.
    So we feel that our relationships with China are strong and 
very amicable, and we keep pushing forward to make sure they 
understand what are the best practices in manufacturing.
    Do you want to add to that?
    Ms. Nord. One of the themes ever since 2007 has been to 
push safety back to the source, and that means going to China. 
And I think the agency has been consistent over the last 3 or 4 
years that that is very important.
    One of the first things I did after the passage of CPSIA 
was to go to China to explain to the Chinese Government and to 
the Chinese manufacturers the changes that were in store for 
them. And what was interesting, Mr. Chairman, was that right 
then is when the melamine in the milk crisis in China hit, and 
that was killing Chinese children. And I have to tell you that 
the change in attitude was striking.
    So I think the Chinese are starting to get that product 
safety is important. It is not only important for their export 
markets, it is important for their population.
    Mr. Serrano. Because they sell it to themselves, too, 
right?
    Ms. Nord. Exactly. And that was such an instructional 
experience to be on the ground and see that happen. That trip 
was our first venture over to China with our counterpart from 
the European Union, and I have to say it was a very, very 
powerful message for the world's two biggest markets to be 
standing there and saying to the Chinese that product safety is 
a core value, and we expect it from those who export to 
America.
    Ms. Tenenbaum. I might say that one of the things we 
continue to see in China, though, is counterfeiting and that 
looks like the real product. So it is very important that 
third-party testing be required for importers bringing 
children's products into the United States from China, because 
that is allowing us to stop at the port those goods that are 
not meeting the requirements of the CPSIA.

                      INTELLECTUAL PROPERTY THEFT

    Mr. Serrano. Which I had a question. Just your presence 
there in China. We know what your mission is, but does it have 
a side effect on the issue of intellectual property theft and 
so on? I mean, I know that is not your mission, but your 
presence there is important and historic in so many ways. What 
about that other conversation?
    Ms. Tenenbaum. Well, we have not entered into that 
conversation. We have entered in trade conversations. When we 
were at the summit, one of the members of the delegation from 
China made some claims that the requirements, the safety 
requirements in the CPSIA were hurting trade. We were able to 
show them the trajectory, that the number of imported products 
from China continues to go up and be increased every year, and 
that the safety requirements was not inhibiting trade or 
dampening trade.
    But the intellectual property needs to be addressed in 
China because they counterfeit products. The manufacturer is 
going out of its way to buy lead-free zippers and lead-free 
components to put on their products, so when they counterfeit, 
they are buying from another source that has not tested the 
product, and it is a serious safety problem.
    Mr. Serrano. Well, Ms. Wasserman Schultz left before Mrs. 
Emerson and I had told her if we ever do establish relations 
with Cuba, you won't be asked to test rum, cigars, music or 
baseball players, because they are known to be of world-class 
quality. Thank you so much.
    Mrs. Emerson. I love it. I love it.

                     CHECKING CHINESE MANUFACTURERS

    Do you all actually get into the--get into the lab? Do you 
actually expect to do spot checking of manufacturing facilities 
in China? I mean, how are you going to determine with two 
people whether or not things are either copies or they are 
original, or is that going to be the third--go ahead.
    Ms. Tenenbaum. When you have third-party testing, the 
children's products have to go to a private laboratory or 
either a laboratory that is operated by the company and 
firewalled to assure that they meet the lead limits. That is 
how we ensure that they have a certificate of third-party 
testing, and that they meet the lead and the phthalate limits 
required under the CPSIA.
    Mrs. Emerson. Have you found any fake certificates?
    Ms. Tenenbaum. Well, we are certainly aware that that 
counterfeiting of certificates and this is something that we 
have to watch for constantly.
    Mrs. Emerson. Yeah, because actually even with a whole 
different issue--I have a company in my district who is in 
competition with a Chinese company, and technically--and there 
is some anti dumping--there is an anti dumping situation going 
on. But nonetheless, there is all sorts of fake certificates of 
things that get routed through South Korea, for example. So I 
was just curious if you were--
    Ms. Tenenbaum. But we are aware that is an issue on which 
we have to have surveillance. And we have also told the Chinese 
that this is their responsibility from their ports to make sure 
that the certificates aren't counterfeit.
    Mrs. Emerson. And you feel good that they get it?
    Ms. Tenenbaum. Well, anytime you are in a regulatory 
position and you are a regulator, you have to have a program 
whereby you provide oversight to make sure the quality is there 
and call them out if you find one. We certainly can't turn our 
back on any company. We have to continue to insist that they 
take responsibility for products coming out of their country, 
and that they have a certificate. The Chinese government 
requires companies to certify that it meets the requirements.
    Mrs. Emerson. Do you have anything to add?
    Ms. Nord. I think you have identified a key problem that we 
are going to see more and more going forward, and that is fake 
certificates. I think it is probably going to be a growth 
market that we will probably have to watch closely.
    Mrs. Emerson. We probably shouldn't discuss this here 
today.

                           TESTING LABORATORY

    Let me ask you about your testing laboratory, and then I am 
going to submit the rest of my questions, Mr. Chairman, because 
there--I have several more.
    Your budget justification for 11 mentions that you carried 
over $6 million in previously appropriated funds for 
modernization of--I have the worst time saying modernization 
for some reason. Now, does this signify----
    Mr. Serrano. Try it as English as a second language.
    Mrs. Emerson. How do you say it in Spanish?
    Mr. Serrano. I cannot say it in Spanish.
    Mrs. Emerson. Does this signify a delay in your move to the 
new laboratory? Or maybe you should fill us in on the current 
schedule.
    Ms. Tenenbaum. We will move into the laboratory by the end 
of the year. That is our goal. Now, the cost of the facility is 
16.1 million in Federal funds, plus 3 million that the landlord 
is putting in, for a total of 19.1 million. So the funds are 
carried over to renovate the lab, to provide the kinds of 
testing spaces that we need.
    But we are very excited, and I will give Nancy Nord credit 
for really starting this process under her leadership. The new 
laboratory will be in Rockville. The space was built as a 
laboratory, so it was not a building that we had to go in and 
put in all of the cabinets and all of the labs. So it will not 
only be a state-of-the-art lab, it will also be office space, 
as well as storage space.
    And there are a number of new features that it will allow 
in that it will have a dedicated testing area for children's 
electrical, combustion, and sports and recreational products 
that we don't have now. It will enhance the fire-testing spaces 
with modern safety and environmental features, and the 
provisions for more accurate observation of fire developments 
in products. We think that it will reduce facility operations 
because now we have a series of little buildings, and this will 
be under one roof.
    Mrs. Emerson. So it will obviously be more efficient?
    Ms. Tenenbaum. It is a total cost of $16.1 million, and we 
have an annual recurring rent of $2.2 million. The rent is 
really $2.8 million, but we will use the $600,000 that we pay 
rent on now. It will be a state-of-the-art facility that we 
have needed for a very long time. And you might want to say 
something, since it was under your leadership that you kicked 
this off.
    Ms. Nord. Well, we have been working towards this goal for 
sometime. It became very apparent when I became Acting Chairman 
that we needed this, and we went out and did what we needed to 
do to get it, again with funds that you all provided and which 
we are so thankful for.

                            TESTING CHOICES

    Mrs. Emerson. So describe what current testing is conducted 
at the--at your testing laboratory now. And I am just curious, 
how do you determine what is going to go out to a third-party 
lab, for example? I am just curious.
    Ms. Tenenbaum. Well, third-party labs are used by importers 
and domestic manufacturers to test their products, the 
children's products, to ascertain the level of lead and 
phthalates. So that is where you use the third party.
    Our lab will be where we do our own testing. For example, 
with cadmium, we had ``The Princess and the Frog'' jewelry. It 
had the Disney logo, and we went out and bought that jewelry. 
We were successful in getting Walmart to do a recall, because 
we tested the jewelry and found that it was well over what the 
Federal Hazardous Substance Act allowed.
    So we do those kinds of tests. We do a number of tests, 
engineering, toys, cigarette lighters, mattresses, flammability 
in children's products. But if you allow me to give you a full 
description of what we do for the record, I would appreciate 
it.
    Mrs. Emerson. That would be great.
    [Summary of CPSC Lab Testing follows:]

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    Ms. Tenenbaum. Because that is where we could give you a 
full picture of how hard our people work in such limited 
conditions.
    Mrs. Emerson. I think that would be a fun field trip for us 
to make, Chairman.
    Ms. Tenenbaum. We would love for you to come to the new 
lab.
    Mr. Serrano. We can test the lack of bipartisanship in the 
House.
    Mrs. Emerson. They can test how much lead.
    Mr. Serrano. These four people here should be an example, 
right?
    Ms. Tenenbaum. We would like for you to come out. You can 
either visit now or toward the end of the year. Our goal is to 
get into it by the end of the year, and we would like to take 
you out and visit there. That would be excellent. If anytime 
you ever want to go to a port, too, we have now a full-time 
staff member at CTAC, which is looking at all of the 
information that is coming in to Customs. But we can take you 
to a port and show you how the containers come through and how 
we test and look at the certificates and seize products.
    Mrs. Emerson. That would be interesting. And I appreciate 
you allowing that. Maybe if we plan a date to go see the lab 
that way, you will be forced to get it finished on time.
    Ms. Tenenbaum. That is right. And I would invite you to 
Charleston, South Carolina, where you could visit that port. 
That would be a nice trip. That is a wonderful port.
    Mrs. Emerson. Thank you.
    Thanks, Mr. Chairman. I am done for now.
    Mr. Serrano. Okay. Thank you so much for your testimony, 
both of you. Thank you for the work you do. We will continue to 
try to be helpful in making your job easier, making your 
challenge less challenging. And don't ever lose sight of the 
fact you may not be the most famous agency in the government, 
but you certainly have the safety of people, especially 
children, in your hands. So it is something to be proud of, and 
we are proud of the work you do. Thank you so much.

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                                           Tuesday, April 27, 2010.

FISCAL YEAR 2011 BUDGET REQUEST FOR THE ELECTION ASSISTANCE COMMISSION 

                                WITNESS 

HON. DONETTA DAVIDSON, CHAIR, U.S. ELECTION ASSISTANCE COMMISSION
    Mr. Serrano. The subcommittee will come to order.
    Mrs. Emerson will be joining us in a second, but she has 
given us the okay to proceed since that side is in great hands.
    Mr. Culberson. We are in good hands, yes.
    Mr. Serrano. Today, we will hear from the Election 
Assistance Commission on its budget request of fiscal year 
2011. We welcome back Election Assistance Chair Donetta 
Davidson, who is making her third appearance before the 
subcommittee. I think that is a record.
    As it is an election year, it is of particular interest for 
the subcommittee to hear how the EAC has prepared for the 
upcoming midterm elections, lessons learned from past 
elections, the main challenges the EAC must address in the 
lead-up to November, and what additional resources the 
Commission will need to successfully perform its mission.
    As I have said many times, the EAC is a small agency with a 
significant responsibility. The Commission plays a critical 
role in giving guidance and information to election officials, 
providing regulatory authority over the National Voter 
Registration Act, and directing Federal resources to support 
the conduct of open, fair, and accessible elections.
    More than $3 billion in Federal money has been appropriated 
over the past 7 years, including $93 million in fiscal year 
2010, to help improve election administration and voting 
systems. Even with this commitment of resources, election 
officials continue to have critical unmet needs relating to the 
smooth conduct of elections.
    For fiscal year 2011, the President's budget proposes $16.8 
million for operating expenses, a decrease of $1.2 million from 
fiscal year 2010. The President's request does not provide any 
funding for State election reform agendas, representing a $75 
million decrease from fiscal year 2010. I am particularly 
interested to hear about how this cut in requirement payments 
will impact States.
    The 2008 election had the highest voter turnout in recent 
years. More than 132 million Americans voted. While perhaps not 
everything went perfectly, we did not see the same level of 
controversy that plagued other recent elections, such as the 
2000 Presidential election. We hope that this is a sign that 
the EAC, together with State and local officials, are learning 
from experience and are moving in the right direction.
    Finally, I strongly believe that the often intense debate 
over election issues is due to the passion we share when it 
comes to protecting our democratic process in guaranteeing the 
right of every individual to cast a ballot in a fair, open, and 
honest election. Our goals should be to ensure that we count 
every vote and make every vote count. I hope this hearing will 
help us to understand better what the EAC needs to help the 
Nation meet that goal.
    Testifying before us today is the chair of the Election 
Assistance Commission, Donetta Davidson. Ms. Davidson has 
served as the commissioner at the EAC since 2005 and is now 
chair of the Commission for the second time. Prior to her 
service at the EAC, she was Colorado's Secretary of State; and 
she also has significant experience administering elections in 
two Colorado counties.
    We are pleased to have her here again today, and the timing 
is so wonderfully well set in place because--and here is Mrs. 
Emerson.
    Mrs. Emerson. Thank you. I am so sorry.
    Mr. Serrano. No, no. It is okay. And I just finished my 
statement.
    Mrs. Emerson. Thank you very much for being here today. We 
are very grateful and look forward to your testimony.
    Ms. Davidson. Thank you.
    Mrs. Emerson. May I say something else?
    Mr. Serrano. It is your statement.
    Mrs. Emerson. I want to apologize to you for not being 
available to meet with you when you were in the office. I had 
something unexpected come up that I had to deal with. So my 
apologies.
    Ms. Davidson. Not a problem. Not a problem.
    Mr. Serrano. You know how it goes.
    We ask you to limit your statement to 5 minutes. The rest 
of your statement will go in the record, and that will give us 
hours upon hours to grill you, although Mr. Culberson has 
agreed to stay within the 5-minute time limit, which is a major 
accomplishment for this committee. Please proceed.
    Ms. Davidson. I will try. Good morning, Chair Serrano and 
Ranking Member Emerson and committee members and the 
appropriation committee for inviting me today. I want to thank 
you for your support.
    My name is Donetta Davidson, and I am a lifelong election 
official. I became chair of the Election Assistance Commission, 
or the EAC from now on in my testimony, in January this year. I 
serve alongside my commissioners, Gracia Hillman and Gineen 
Bresso Beach, who I thank for their hard work and dedication to 
the success of the EAC.
    The EAC is a small Federal agency with a big mission to 
improve administration of Federal elections. Today, I will 
discuss our fiscal year 2011 budget and how it will be executed 
to achieve our mission. The EAC's budget request is 16.8, which 
will include 3.25 million to the National Institute of 
Standards and Technology.
    As EAC chair, I will focus on the following initiatives: 
improved service for military and overseas voters, the National 
Voter Registration Act, and collecting and ensuring creative 
solutions in elections like contingency planning in the States 
and counties and polling place work recruitment.
    Let me describe a few budget items that are of great 
interest to the committee and the public, beginning with our 
grants and our requirements payments section. Our fiscal year 
2011 budget request includes 750,000 of college poll worker 
grants. Last year, 71 organizations requested 5 times more 
funding than was available. This program has been very popular 
because we continue to have a shortage of poll workers 
throughout the Nation.
    Regarding how States are spending their requirement 
payments, since 2003, I cheated and I brought some charts with 
me today. The chart on my right is showing section 251 
expenditures by year. As you can see, we saw a big spike in the 
spending in 2006. Then, on my left, the chart shows a 
comparison of when the funds were received by States versus 
when the funds were used. The majority of the funds were 
received in 2004 and 2005, as the orange and yellow show.
    Again, we see most of the funds were spent, as you can see 
by the blue indication, in 2006. A small amount of the funds 
were spent in 2004, 2005, primarily due to the provisional 
voting implementation and polling place information for voters. 
A few States had already purchased new equipment and were 
eligible for reimbursement of HAVA funds.
    With these charts, it shows that it takes about 18 months 
of time before a State when the appropriation is passed and 
that the State receives them and spends the money. It takes 
about 18 months. There is two reasons for this. It is the 
State's ability to appropriate the 5 percent match and the 
State procurement process.
    In 2007 through 2009, HAVA distribution and expenditure 
rates slowed down. Most likely, these rates will continue to 
follow the typical 18-month cycle that we saw in previous years 
as we know that some States were unable to appropriate the 5 
percent match in 2008 and 2009 due to budget constraints.
    So let us review some of the basic facts regarding the 
payments. Appropriated has been 2 billion six; through March of 
2010, over 2.4 billion has been distributed. States have 
reported spending about 80 percent of the funds through 
September 30, 2009. Twenty-one of our States have certified 
that they have met the compliance of Title III.
    Of course, managing and distributing HAVA funds is not the 
only main responsibility we have at EAC. We have certified four 
voting systems, and we are in the last stage of our next 
iteration of voluntary voting system guidelines. And, as a part 
of our responsibility under the MOVE Act, we just delivered 
yesterday a roadmap to Congress which included a draft remote 
electronic voting system pilot program that we devised.
    I also want to make sure that you are aware that EAC has 
translated the national voter registration form and also other 
material into five Asian languages, along with the Spanish that 
is available.
    There is not enough time to tell you about all of the work 
EAC is doing on behalf of the voters and the election 
officials, but it is always available at www.eac.gov, including 
the translation of voters registration forms and other material 
in the six languages.
    Before I conclude, I want to thank the EAC staff for their 
hard work. They are creative, industrious, and dedicated. I 
also want to thank you for your leadership to the EAC and to 
the American voters.
    I will be happy to answer any of your questions.

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    Mr. Serrano. Thank you so much. Thank you for your 
testimony.
    Two quick things come to mind that I didn't have prepared 
to ask. Refresh my memory. The five languages, the six 
languages, is that by law or is that--that is by law, right?
    Ms. Davidson. That is correct. The National Voter 
Registration Act requires that the languages be available in 
certain areas within the United States underneath Title--I want 
to say Title V requirements, but I am not sure that is right, 
and then there is that section of the National Voter 
Registration Act.
    Mr. Serrano. Okay. And, secondly, just on a personal level, 
when we say you were a local election official, you did it all 
at the local level, right?
    Ms. Davidson. I was a local election official in a very 
small county, very rural county. And then also I was the 
election official--elected county clerk in both of them--in a 
very large county. So I had the rural and the metro experience, 
and they are very different.
    Mr. Serrano. I just think that every so often we should 
mention people in this society who don't get much credit. 
Having been in elected office for 36 years now, some of the 
folks that work at the local level never get any credit; and I 
am not talking just about the officials but the folks that get 
up at 4:30 in the morning, for instance, in New York to be at 
the poll site by 5:00 to have those machines ready by 6:00, and 
then they are there until 9:00, and then they have to count. 
And years like last year, the count went on, just the lines of 
people outside and the whole thing; and they do it for very 
little money and with no fanfare. And so every so often in 
public we should give them a special thanks because, without 
them, it doesn't happen.
    Ms. Davidson. Absolutely. You are absolutely correct. They 
are really the vital source of our Election Day process. 
Without them, we couldn't conduct the elections.
    Mr. Serrano. Right. Congress provided $115 million in 
fiscal year 2008 and $100 million in 2009 and $75 million for 
fiscal year 2011 for grants to States for the purpose of 
helping them meet the requirements of the Help America Vote 
Act. What percentage of this funding has been distributed to 
States? What are the reasons for funding not yet being 
disbursed or used by the States? And, lastly, how fast are 
States spending HAVA funds relative to the rate at which this 
subcommittee has provided funds to them?
    Ms. Davidson. The States in some areas--it is State by 
State. Every State is different. I need to make that statement, 
first of all.
    But we have appropriated all the funds except about $200 
million of the funds, and that has been the later funds that 
have been given for us to appropriate to the county and--to the 
States, I should say, to the States--And the reason why they 
haven't been able to meet that 5 percent. We have been trying 
to work with the States to give them the flexibility. If they 
can meet part of that, we will give them the money that they--a 
portion of that 5 percent that they have met to give them that 
capability at drawing down some of their funds. But we do have 
some States that are really under dire stress.
    Mr. Serrano. And this stress is caused by what, their own 
inability to absorb the funds, their inaction, resistance? Is 
there any resistance?
    Ms. Davidson. Mr. Chairman, there is no resistance. If the 
States had the 5 percent match, they have to go through their 
own legislative process to get the 5 percent and their budget 
or their budget process, and it usually is legislative. Some 
States, as you notice, it took them 2 years to be able to get 
their money. Some of our States only--their legislators only 
meet every 2 years. So that is one of the things that holds up 
them getting them money.
    And then the other thing is we have found that there is 
just as much problem out there with the States currently--the 
ability of meeting the financial needs, they just haven't been 
able to get the 5 percent. States have asked us for special 
ability--like Florida asked us if they could use their interest 
money to meet that 5 percent. We don't have that authority, 
obviously. So right now, no, we can't do that.
    Mr. Serrano. This was the interest money on----
    Ms. Davidson. That they had made on HAVA and haven't spent 
today.
    Mr. Serrano. I see.
    Now, on a personal note, I know that my State of New York 
had some problems catching up to date, I would say. From your 
point of view, are we ready to go in New York? I know what they 
tell me, but are they ready to go?
    Ms. Davidson. New York, we are aware, has been spending 
money and buying equipment this last year. I think New York 
City was one of the last counties that actually purchased--or 
the city and county that actually purchased the equipment. So 
it is probably being manufactured and delivered as we are 
speaking, and it should be utilized in this next election.
    Mr. Serrano. Okay. That makes me a little nervous with 
September primaries and November elections. Not that I have a 
special interest, but----
    Ms. Davidson. Well, I can tell you, Mr. Chair, that we 
found--as you stated in your opening statement, it takes time 
for election officials to write new manuals when they get new 
voting systems, train their poll workers, train, obviously, 
their office staff and even training the voters to vote on new 
systems. So we had more problems. When we put all of the 
systems in at one time nearly throughout the United States, 
there were more problems. And, as you have said, the problems 
seem to have ceased this last election, be a lot less. We are 
always going to be training new election officials, but 
definitely we hope--and I know that they are working very hard 
at training everybody to make sure it is a smooth election for 
everyone.
    Mr. Serrano. Thank you.
    Now, as you know, there are proposed budget cuts, a 
decrease of $75 million. We also know there are States that 
have the leftover dollars. So will all States be eventually 
impacted by the proposed budget cut in the elections reform 
program in 2011? How will States continue to be compliant in 
the future? In other words, what do States need in the mid to 
long term to keep up with the HAVA requirements?
    Ms. Davidson. You know, as I said in my opening portion, 
every State is different. I really think that you need to talk 
to the individual States. Some States have spent all of their 
money. Others have spent a percentage of it. But, really, it is 
up to the State, every State. How they have run their elections 
and how they run them, because of their State laws, is much 
different throughout the Nation. So it is by an individual 
State-to-State need.
    Mr. Serrano. Thank you. I can't believe that the chairman 
stuck to the 5-minute rule.
    Mrs. Emerson.
    Mrs. Emerson. Wow, I guess I better be--don't start the 
clock yet. How did the Yanks do last night?
    Mr. Serrano. The Yankees were at the White House yesterday.
    Mrs. Emerson. Did you have fun?
    Mr. Serrano. It was fabulous. I yelled out, 28, Joe. Not 
meaning his number, but 28th World Series, the next one. 
Arrogant on my part.
    Mrs. Emerson. Did you have your picture made with 
everybody?
    Mr. Serrano. No, they wouldn't let us near them. It was 
terrible.
    Mrs. Emerson. When the Cardinals came from having won the 
World Series we got our pictures.
    Mr. Serrano. And I am a Cardinal, right?
    The greatest time was when the President complained that 
the White Sox would probably never win a World Series again; 
and Joe Girardi, the manager, says, Mr. President, hold onto 
the Yankee trophy. He said, you better hold onto it because it 
will be the last time you touch a World Series trophy.
    Mrs. Emerson. Sorry. We have this little baseball 
competition going here. My Cardinals won last night, too.
    Okay. Ms. Davidson, you said that the States are not 
allowed to use the interest money that they earn on the monies 
that they have received for purposes of their 5 percent match, 
correct? So what do they do with this interest money? What can 
they use it on?
    Ms. Davidson. That is correct. If a State has not met the 
requirements of Title III, they can purchase more voting 
equipment. They can use it on a voting registration system or 
improving it. A lot of States are having to improve their voter 
registration because of the MOVE Act. They can also use it on 
the procedures on doing the--let me stop and think. There are 
four reasons: provisional ballots, and then educating voters, 
and putting the information up in the polling place, also.
    Mrs. Emerson. Well, it seems to me, though, just looking at 
these numbers--for example, Missouri, which is my home State, 
received $44,914,650. They have spent 88.9 percent of their 
funds, which is--excuse me, no, that is plus interest--95.7 
percent of their funds. So that is good. They are still sitting 
on $3,878,000 plus. And it seems to me that it is somewhat 
advantageous for the States to just be sitting on this money 
and not spending it because they are earning all this interest. 
So it multiples and they have got more money to spend, correct?
    Ms. Davidson. Of course, they make a lot less on the 
interest now than what they used to.
    Mrs. Emerson. But New York is sitting on $22 million 
interest. Missouri is on almost $3.9 million. They make less on 
interest, but it is still sitting there, and it is growing a 
little bit.
    Ms. Davidson. You are correct. That report is as of 
September 30, 2009, So there could be more expenditures made 
since that time.
    Mrs. Emerson. Since that time. Okay.
    Now, given the fact that for every other government program 
known to mankind, practically, the State or the local match is 
25 percent, 30 percent, even up to 40 percent, so 5 percent 
just doesn't seem a lot to me, given--and I am very sympathetic 
and understanding of the financial positions States find 
themselves in, but I am still looking at this list of how much 
money all the States are sitting on and I am wondering why we 
are sending the States--they are sitting on nearly a billion 
dollars worth of unspent HAVA grant money; and, given that our 
deficit is projected to be $1.6 trillion this year, why would 
we be giving these States more money? Please tell me why.
    Ms. Davidson. Well, what I can tell you is every State is 
different. Some of States have spent all of their money, 
including their interest money. There have been a few of those 
that have spent 110 percent. So that includes their interest 
money. Other States have spent an average of probably 80 
percent. Some States are still holding on to probably about 50 
percent of their money, and I imagine New York is in that 
category is shown there because they have just started spending 
the money this last year. So with the report being due in 
September of 2009, there is quite a bit of money to spend in 
that area since that time. But every State is so different. So 
it is hard for me to tell you why.
    I can tell you from history that States know this money is 
not going to continue, and they are afraid they are not going 
to be able to continue meeting the needs of the contracting, 
supporting their voting systems. They know that voting systems 
only last about 8 to 10 years, and they know they are going to 
be up for a new allocation of money that has to be spent, and 
they are afraid where they are going to get that because they 
know the Federal money has not been appropriated for anything 
like that.
    Mrs. Emerson. We keep giving them money, though, so it 
seems to me--I don't know. Do you think it would be better for 
us to take back the money that we have got and wait for them to 
apply for grants and you all just hold it in D.C., as opposed 
to leaving it there for them since they are not applying for 
the grants in the first place?
    Ms. Davidson. I really don't have an opinion on that. The 
States being able to have it in their funds and spend it at the 
time--I do know that when we have money that has been allocated 
to give to the States it takes them a great deal of time to 
first meet the HAVA requirements, have a State plan, how they 
are going to spend it and have that put in the Federal register 
and then also do any type of expenditures they have to go 
through their appropriation that is required by State law. So 
it does take them about 18 months to be able to, from the time 
it has been appropriated, to be able to receive it and spend it 
is what we are finding.
    Mrs. Emerson. Could you provide us with some updated 
figures? Do you have any beyond September 30, 2009?
    Ms. Davidson. I don't--the laws require them to report on 
that time. Now----
    Mrs. Emerson. Do you mean like quarterly?
    Ms. Davidson. The reports are due September. So that is----
    Mrs. Emerson. Each year?
    Ms. Davidson. Each year. So I am trying to think if I could 
ask them to give us an additional report right away without 
going through the Paperwork Reduction Act. We do have to do 
that; and, as you know, that takes 3 to 4 months to get it 
through.
    Mrs. Emerson. Could you just send them an e-mail maybe?
    Ms. Davidson. I am sorry to say if I ask more than nine 
people, I fall underneath that. Even with an e-mail. But I will 
see if we have anything. I will report back to you.
    Mrs. Emerson. That would be awesome. Thank you so much.
    Ms. Davidson. I definitely will do that.
    Mrs. Emerson. Thank you.
    Mr. Serrano. Just as an aside, I am told that part of what 
is happening in the States is that the States are unsure what 
commitment the Federal Government will make to them as they 
move along. For instance, all the ones who are already on board 
now in 10 years will have to replace the machines. In the 
meantime, machines break down and so on.
    Then there is the other point, I am told, where funds 
sitting there may have already been obligated in some way. So 
it is not that they are not spent.
    Mrs. Emerson. That is why I asked if we could get a midterm 
report by e-mail so we could keep the paper at a low level.
    Mr. Serrano. I am for paper, but--yes.
    Ms. Davidson. There is one thing that comes to light that 
has happened this last year, the MOVE Act. The MOVE Act has 
required several elements for the States to meet that will be 
additional funding that they will be spending of their HAVA 
dollars. And one of those is to make their system where they 
can send out electronically to the overseas and the military 
any blank ballots and election material. They also have to be 
able to track that ballot, the absentee ballot when it goes out 
and when it comes in and put that up on a Web site to make it 
available to the individuals.
    So their systems will need work; and every time that we 
even ask for a change of our report, that costs the States 
money. So I can tell you that much. When laws are changed, 
obviously, that costs money for them; and they can utilize the 
HAVA dollars in meeting those needs.
    Mr. Serrano. Since I am lobbying my Republican colleagues 
for a bill that is on the floor on Thursday----
    Mrs. Emerson. He is being nice to us.
    Mr. Serrano. Mrs. Emerson is one of the greatest ranking 
members in history; and now I yield to one of the greatest 
members in the history of the world, Mr. Culberson, under the 
5-minute rule.
    Mr. Culberson. Thank you very much, Mr. Chairman.
    We really do appreciate your service, Ms. Davidson. Thank 
you very much.
    When a State election voting system is certified as 
accredited, you are looking not only at the actual machinery 
and mechanism the State uses for people to vote but their 
entire voting system, correct? You are looking at the way they 
conduct the election, the way that the State ensures it that 
people with disabilities or other language barriers have access 
to vote, that sort of thing. You are looking at the whole 
comprehensive system or just the machine?
    Ms. Davidson. I am sorry to tell you that I cannot meet 
your dream. It is just the equipment that we look at. We test 
it by the standards that have been set by the TGDC, NIST, and 
the EAC. So it is tested just to those standards.
    Mr. Culberson. As I recall--and I know all of us were here 
after the--I think this law was initially passed in 2003, 
2002--2002--in response to the problem with the Florida 
election and hanging chads and the punch card system. We are 
trying to find a way in Federal elections to make sure the 
votes are counted accurately and honestly, and I know that the 
money that the States are given as a part of the funding is to 
help them replace their old punch card system, correct? And we 
ideally want States to be able to move to an electronic system 
that has been certified as accurate by the Election Assistance 
Commission, correct?
    Ms. Davidson. That is correct.
    Mr. Culberson. You also, I notice in your report, have as a 
part of your responsibility, in addition to making--there is a 
national voter registration form, some standards that if it is 
a Federal election--obviously, if it is a State election that 
is there, we, as the Federal Government, can't necessarily 
dictate to the States what sort of standards they are going to 
set in a State election. But if it is a Federal election, this 
national voter registration form, just a standard that was 
adopted apparently in 1993, that is also a part of your charge, 
is to make sure that States are registering and allowing people 
to vote that are qualified, correct?
    Ms. Davidson. That form is utilized by anybody throughout 
the Nation, along with the State form. They are not required to 
only accept that form. I mean, they have to accept that form, 
but they also can utilize their own State form. They also 
utilize the Federal form that FVAP hands out. That is the 
overseas and military form. So they utilize all those forms, 
but it is not mandated that is the only form they can use.
    Mr. Culberson. What I am driving at is--and, also, I 
noticed you also help States with this funding they can also 
use to help keep their voter registration lists purged from 
people who pass away or are disqualified because of a felony 
conviction, et cetera; is that correct?
    Ms. Davidson. That is correct.
    Mr. Culberson. What I am driving at is, how do we help 
ensure that States are registering people who are qualified, 
that are able to vote, and that we are not voting people that 
are either felons or otherwise disqualified because they are 
not a citizen, for example?
    Ms. Davidson. Everything that the Election Assistance 
Commission does is voluntary except provide the form and the 
rules that we have to go through to develop that form.
    Mr. Culberson. But the States, by accepting the money, they 
are locked in to comply with the requirements of the Act.
    Ms. Davidson. Remember, we are an assistance commission. We 
can give them all kinds of assistance. They are not required to 
accept that. Even our testing that we do on equipment, that is 
a voluntary process. The States can utilize equipment that has 
been tested and certified by the EAC or they can go out and buy 
equipment on their own and it does not meet our qualifications.
    Mr. Culberson. But once the State accepts the funding, they 
are not required to comply with any of the----
    Ms. Davidson. It is still an assistance commission.
    Mr. Culberson. Have any of the States rejected the funding?
    Ms. Davidson. No, no States have rejected the funding. 
There was a couple of States that rejected the initial up-front 
funding to replace the--I believe that is the 102 money. The 
102 money, they rejected that; and I think it was only one or 
two States that rejected it, wanted to keep their same system 
that they had.
    Mr. Culberson. Who was that? What States?
    Ms. Davidson. Through the 102 money was to buy one piece of 
equipment for every precinct that met the needs of the 
disability community to be able to vote openly and fairly and 
confidentially. That it had to meet those standards, also.
    Mr. Culberson. What, if anything, does the Commission do to 
ensure that the voter registration rolls are purged of people 
that have passed away, become convicted of a felony, or that 
the voter registration rolls do not contain the names of people 
who are not eligible to vote because they are not citizens?
    Ms. Davidson. We do not have any authority. We are not a 
regulatory agency at all in that area. The only ones that 
really review that is the Justice Department.
    Mr. Culberson. Or the Secretary of the individual States--
    Ms. Davidson. The Secretaries of States and also the 
Attorneys General within their own States, obviously. Yes. But 
I meant at the Federal level.
    Mr. Culberson. Thank you.
    Thank you very much, Mr. Chairman.
    Mr. Serrano. Just an editorial comment. If there is 
something I know about undocumented folks is that they really 
don't want to be found out. The idea of going to a register to 
vote is like in your face, here I am, and it is just the 
opposite.
    Ms. Lee, before you came in, I made a comment that I was 
being extra nice to all colleagues because I need your votes on 
Thursday. But you have been with me for a few years on that. I 
am still going to introduce you as the greatest Member of 
Congress in the history of the world.
    Ms. Lee. Thank you very much, Mr. Chairman. And that vote 
on Thursday, I think it is extremely important in terms of 
democracy building.
    Let me thank you for being here. I apologize for being 
late. I hope my questions are not redundant.
    Let me just say, Ms. Davidson, I, of course, come--my 
congressional district is in Oakland, California, northern 
California. But I was born in El Paso, Texas. So I come from a 
State where there was a poll tax and I went through the civil 
rights struggles and finally got the right to vote, my family 
and friends. And so the protection of the rights of voters in 
the election process is very, very dear to not only myself but 
members of the Congressional Black Caucus, to all of us.
    After the Bush versus Gore decision, I once again became 
very concerned about the protection of the rights of our voters 
and the election process, from ballot issues in Florida to 
voting machine dysfunctions. There were real issues that needed 
to be resolved.
    And since the right to vote is really at the core of our 
Constitution and at heart of the civil rights movement, I guess 
I am very concerned about how the Help America Vote Act of 2002 
is being implemented, especially as it relates to, one, the 
commissioners.
    Now, you can correct me if I am wrong. It is my 
understanding right now there are three commissioners and there 
is one Democrat on the Commission and the vacancy. I want to 
know how that affects the deliberations and the operations of 
the Commission in terms of the real imbalance in terms of 
political party affiliation and the important work that needs 
to be done. So that is my first question.
    Secondly, of course, you know, the lack of diversity among 
the 37-member Board of Advisors and the 110-member Standards 
Board and the hundreds of election officers around the country, 
do you have a breakdown on the demographics of the Board of 
Advisors and the Standards Board?
    Of course, we have 50 percent women in our country, 65 
percent white, 15 percent Hispanic or Latino, 12 percent 
African American, 4.5 percent Asian American, 1 percent 
American Indian, point 2 percent native Hawaiian and other 
Pacific islanders, and 1.7 percent persons who claim two or 
more races. So I think it is very important to get it right 
because of the history of what we have been through in our 
country to make sure that diversity is there in a very clear 
way. So I would like to find out if you have that information. 
If not, could you submit to the committee?
    Ms. Davidson. The first question on the three members of 
the EAC commissioners, we are a nonpartisan board. We act as a 
nonpartisan board. There have been times when it has been one 
Republican and two Democrats with vacancy, is how it seems to 
work. But I have not seen that be a problem in any way, shape, 
or form.
    The other question, the Standards Board is two members from 
each State; and one is appointed by the Secretary of State for 
the State and then the local individual is appointed by the 
locality. I do not have a breakdown of that board at all, and I 
am not sure I would be accurate in trying to guess the 
diversity of the nationality of individuals.
    And, second, the Advisory Board is appointed by other 
people than the EAC, so we have never, ever had a breakdown 
there, either. I can tell you that the Standards Board is half 
and half Democrat and Republican. That is the only thing that 
the law made sure, that there wasn't a lopsidedness on that 
Board.
    Ms. Lee. Well, I guess, Mr. Chairman, I don't know if we 
could ask the Commission for the breakdown in terms of gender 
and race on these boards. Because, again, it may be fine. It 
may reflect the diversity of our Nation, and it may not. And I 
think it is important that we know the background and the race, 
ethnicity, and gender of people on the 37-member Board and the 
110-member Standard Board. Because if they didn't take 
diversity into consideration, then we may not have a Board that 
is diverse. Or if they did, we are fine.
    Ms. Davidson. I will be more than happy to try to collect 
that information, but, again, I will have to go through the 
Paperwork Reduction Act to be able to collect that information 
for you.
    Ms. Lee. That is fine. Whatever it takes.
    Ms. Davidson. It may take a while. But I would be happy to 
put that issue into action and be able to work on it.
    Ms. Lee. I really appreciate it and just let us know what 
you think in terms of time frame, however long it takes. But we 
need to know sort of the time frame it would take to get this.
    Ms. Davidson. I will try my best in as short of time as 
possible.
    Ms. Lee. Thank you.
    Ms. Lee. Finally, let me ask you about the needs of 
Americans with disabilities and access to voting machines, 
written ballot, and other ways to verify that the vote that 
they believe they are casting is actually the one cast. How are 
we moving in terms of Americans with disabilities? My sister 
has a disability, and I am very in tune with the needs of the 
disabled in terms of the voting machine issues and all the 
barriers that have been there for the disabled community.
    Ms. Davidson. You are absolutely right. And with the Help 
America Vote, that was one of the main issues that was in that 
main legislation.
    We have done several things. The equipment that is out 
there, we have pushed very hard to make sure that we are 
meeting more and more disabilities. You have got to remember 
somebody could have more than one disability as they go to the 
polling place, and it is very important by law they be able to 
vote independently and privately. And so we are working very 
hard on that.
    We also received an $8 million grant to move forward on a 
study for the disability community on equipment, and that grant 
is getting ready to go out. Part of that grant we are doing 
with the injured military voters, that we have about a $500,000 
grant that will go for a tally vote either later today or 
tomorrow, for the commissioners to vote on. And that is to 
study what the needs are of our individuals returning back from 
the military with some type of--being injured and meeting that 
need. So that is part of that $8 million grant.
    The rest of it will go out very shortly for study of 
disability issues and needs that we can improve upon in the 
future. So we are hoping that that grant is very popular and we 
get a lot of information.
    Ms. Lee. Great. That is very important. But it is hard to 
believe that we are just going to begin to study it. Don't we 
have the data already that show what the needs of the disabled 
are and how to effectively ensure that they vote--have access 
to voting?
    Ms. Davidson. We did a roundtable in the last of 2009 with 
the community that was really all the community from the 
diverse community of disability. And what we found was that 
education was one of the things that we need to be doing more 
on as well as the equipment. The equipment that we have, the 
DREs, met more the needs of the disability, but that was the 
equipment that came up where the public felt--or some of the 
public felt that it was not as secure as it should be.
    Ms. Lee. What happened to Diebold, parenthetically?
    Ms. Davidson. Diebold has been purchased by ES`S, and that 
is being reviewed by the Department of Justice, whether they 
can purchase that. It is an issue that is being--it is clearly 
not a complete decision that has been made on that, whether 
that purchase may go forward.
    Ms. Lee. Good. I am glad of that.
    Ms. Davidson. But the direct record machines, there are 
still several States and localities that have that. They have 
in a lot of areas put paper with it to make it where the public 
feels it is more secure.
    Ms. Lee. Thank you.
    Mr. Serrano. Thank you.
    Chair Davidson, what are the top priorities that need to be 
accomplished before the 2010 midterm elections to ensure that 
the election is fair, open, and accurate? I said in my 
statement that you are not seen as a big agency, but you have a 
major responsibility. And these elections don't get boring in 
this country. They get more exciting all the time. And I expect 
these midterm elections are going to be heated, and you are 
going to see reports on TV saying that people are registered 
who shouldn't have registered and machines are not ready and 
States are not ready. So what needs to be in place, in your 
opinion, to make sure that the right election is conducted in 
terms of having every vote counted properly and what steps are 
the States taking to prepare for the midterm elections? What 
role are you playing with the States?
    Ms. Davidson. First of all, the role we play is to try to 
provide as much as we can throughout the Nation of educating 
our election officials. When you stop to think about it, three-
fourths of our election community, whether they are county or 
municipalities that are running the elections, are small. They 
are small to medium size. We only have a few large. So being 
able to get the information out to them, even if it is on the 
Web site, we find not always do our municipalities and counties 
get this information and utilize it.
    Being able to share our information that we have developed 
is one of the biggest things I think that we need to try to 
improve upon. We send it out, but it seems like it doesn't get 
into the hands of the people that really need it.
    It is on the Web site. We go to conferences. We will go to 
any State conference and talk about the information that is out 
there.
    I will say that I think that is being spread far more than 
what it had been in the past. I was just at an election 
conference that was held in Seattle, and part of the 
presentations were even on our work that we do at the EAC, the 
type of information that we have to go out to those localities. 
And even in the audience they were talking about other portions 
of our program that we have done, whether it is laying out your 
ballot properly to make sure that it is not confusing to the 
voters, as well as information at the polling locations, hiring 
poll workers, recruiting, maintaining the poll workers.
    We have got to distribute about 22 different documents that 
have been placed upon our Website quick starts that will be 
really easy for the counties and localities to read and to be 
able to improve upon their elections. Security, testing 
equipment before an election and also doing audits after 
elections, information there, how valuable that is for them to 
know the process and to do it right. So getting the information 
out is very important to the Election Assistance Commission 
because that is information that would help every locality.
    The other thing is States are very dedicated, as you said, 
in your opening remarks. States and localities, they are very 
proud of their election officials and maintaining and running 
that election fair; and making sure that all of their citizens 
are able to register and to vote and to have their vote counted 
is very important to all of our election officials. And they 
are learning more and more about pre-testing, L`A testing, and 
testing after the election to make sure the election was run 
accurately and without any problems.
    Mr. Serrano. So, with that in mind, how reliable would you 
say were the voting systems that were used in the 2008 
election?
    And, also, I understand that the Election Commission always 
conducts a survey after an election, but since 2004 this survey 
has not collected information on voting system performance or 
malfunctions. So in the absence of a formal survey in 2008, did 
you receive reports of voting machines not working or possibly 
recording a vote inaccurately and what, if anything, how 
extensive was this and what role have you played? How do you 
feel about the equipment that will be used this November? And, 
secondly, what kind of reports have you been getting about the 
past?
    Ms. Davidson. First of all, I feel good about the equipment 
that is out there. 2008, the equipment ran very well.
    I will tell you we do have one open-ended question on our 
survey, because we thought they would fill that out and we 
would get more information on any type of anomalies they found 
within their election during the process. We never received any 
answers whether we had questions on there before or not. But we 
are finding States are reporting to us when they do any type of 
testing themselves, reports that they have conducted within 
their States. Those are up on our Web site. They have presented 
those, and they are up on the Web site.
    Now that we have certified equipment, it is also part of 
our procedures and our manual; and a manufacturer has to do 
this just to keep his manufacturing capability, is he has to 
report if he has been certified by EAC any anomaly that takes 
place in the election process to the EAC immediately. So, in 
the future, that is how we will get it; and it will be more 
accurate and up to date than if we wait until a report after 
the election. We will get that immediately so we can notify our 
localities of any issue that they need to be aware of before 
Election Day, possibly, rather than after the election and not 
notifying them.
    Mr. Serrano. Did you get many reports in 2008 or were 
things much smoother than--I was going to say in 2000, but that 
is unfair. Everything is smoother than in 2000. Well, it was--
--
    Mrs. Emerson. That is true.
    Mr. Serrano. I think we all agree, right? They are still 
counting votes in some places.
    Mrs. Emerson. They counted them twice in my place.
    Ms. Davidson. We did not get any anomaly reports from the 
States.
    Mr. Serrano. You what?
    Ms. Davidson. We did not get any reports from the States 
that there were problems in the 2008----
    Mr. Serrano. Okay. One of the areas that I am very excited 
about--and it is a small area--is mock elections. I really 
believe that education and civic engagement begins in a 
person's youth. The Mock Election Program is a grant program 
under the EAC that allows students to participate in simulated 
elections with actual voting equipment, ballots, and poll 
workers. And I tell you, I wish there was one in every 
community in the Nation, because I think it is a great idea.
    Can you give us an example of one or two programs that have 
been implemented under the Mock Election Program and what kind 
of impact are you seeing, how are the grant recipients engaging 
the students?
    Ms. Davidson. I can. In 2008 and in 2009, we gave out each 
year $300,000 worth of grants. That was each year. Excuse me. 
Two of those that were so successful, one was in Miami which 
they are even this year having two schools a day teaching the 
students about election process and even allowing them to vote 
on voting equipment, and this will last for 3 months. So this 
should include educating students on election----
    Mr. Serrano. Is that the whole city of Miami, the school 
district, or what?
    Ms. Davidson. Miami-Dade County I believe is what it is 
called, a county.
    Mr. Serrano. It is two schools a day?
    Ms. Davidson. For 3 months. So that will contact many 
students. I cannot tell you exactly how many it will. They have 
to report that after they get through with that grant, so we 
will have a report on that when it is finished.
    Mr. Serrano. We would like to see that.
    Do you know offhand what the actual work with the students 
consists of? I mean, I remember about 25 years ago I set up a 
program in my district where I had the local--I found out that 
the local middle school, one of the many local middle schools 
in my district--at that time, my State assembly district was 
having a student election. I said, why don't I provide a couple 
of voting machines and you will have inspectors and have a 
table and you will have to register ahead of time and register 
with a party and then you can vote for any candidate. And we 
took them through the whole thing.
    And we found out a few years later, according to the 
principal, that that graduating class eventually in high school 
had a very high participation rate in the local election 
because we had used those machines.
    So do you know what it entails, what it actually entails?
    Ms. Davidson. I do. I do have that in front of me.
    The election department will run a Mock Election Program to 
introduce to the high school students a new optical scan voting 
system. The mock election will be conducted as if the school 
were an actual precinct. The school students will serve as poll 
workers and as judges. And that is what they do on each one of 
them.
    We think this will be utilized by over a thousand students, 
and we are also going to do a video of this so that we can put 
this up on the Web site to educate other people that come into 
our EAC Web site to learn from that.
    Mr. Serrano. I commend you for that, and I would hope that 
continues to grow. I think that is very, very, very key. And at 
these mock elections, Mr. Culberson, maybe you allow everyone 
to vote, just in case they become citizens later.
    Mr. Culberson. Don't ask, don't tell.
    Mr. Serrano. Mrs. Emerson.
    Mrs. Emerson. At least we have fun, right? That is a good 
thing. And I thank you.
    I actually chaired my college mock election probably back 
in--I didn't run for anything. I didn't want to run for 
anything. I am an accidental Member of Congress. It was a 
wonderful experience, particularly for those of my fellow 
students who were not at all politically involved; and they 
learned a lot. And one of my daughters did the same thing when 
she was in college, too. So I commend you all for that. I think 
it is great.
    Let me ask you a little bit about staffing, if I might, 
please. You all are authorized for 50 full-time employees, and 
your budget is $17 million. How many staff people do you have 
on board right now?
    Ms. Davidson. I would say it is possibly 40, is what I am 
guessing. Forty-two is what I was just told.
    Mrs. Emerson. Can you give me a sense or give all of us a 
sense of what percentage of your staff are involved directly in 
such activities such as grant management, election studies, 
writing guidance, and what percentage play a strictly 
administrative role?
    Ms. Davidson. The administrative role is 21 out of the 42.
    Mrs. Emerson. So then the other 21 are involved in the 
other sections. I am curious, because you are a small agency; 
and I know you have a big mission. But with 50 full-time 
employees, or the ability to have 50, and a $17 million budget, 
I think I am confused as to why you have an executive director, 
a chief operating officer, a chief financial officer, and an 
acting director. I mean, do you really need all of those people 
at the top end of the administrative, as opposed to actually 
working in a liaison function with the State, et cetera? That 
is a tiny agency to be so top-heavy in management.
    Ms. Davidson. You know, when I came to the agency, I 
believed the same way you did. But we went through our first 
audit over a year ago and failed it miserably.
    Mrs. Emerson. That was because?
    Ms. Davidson. That was because we were even told in our 
audit that we needed to hire these positions, get people that 
had expertise in there to be able to handle the job. We hired 
not only the CIO, but we hired the auditor. We came out this 
last year with a clean audit. In one year, we changed the way 
we were working. We had relied on other agencies,
    In our audit, also, it showed that we had not met anywhere 
near the needs of the requirement of developing procedures and 
guidelines to meet the Federal requirements. We walked in there 
and started doing what HAVA told us to do; and, being a new 
agency, we didn't think about that we had to meet all of the 
requirements and all of the rules and regulations that the 
Federal Government had set out. There wasn't a handbook on how 
to form an agency, and we weren't doing a very good job of it.
    Mrs. Emerson. Who all gave you an audit, the GAO or who it 
was?
    Ms. Davidson. No. We had to be audited because of the 
amount of money that we get in. We had to be audited by our 
Inspector General, and he had to go out to a special--it was a 
special audit because of the amount of money. So it was a 
higher audit.
    Mrs. Emerson. Was it an outside contracted audit?
    Ms. Davidson. Yes, it was an outside contract that our IG 
went through to audit our agency. And the first one we did 
fail. But the second one we worked very hard at meeting all of 
the requirements of the Federal Government, and we passed that 
audit this last time, and we were very proud that we passed it.
    What we found and what I have found to be personally--you 
know, to open up really with you, is, yes, we are a small 
agency, but we have to meet every requirement that the Federal 
Government sets out, no matter what size the agency is. There 
is no different requirements for us than there are for others.
    Mrs. Emerson. I understand. No, I understand that. It just 
seems to me, when there are only 50 people, to be top heavy 
that way, I mean, you wouldn't run a business that way. But you 
know that as well as I do, if you, in fact asked the same 
question.
    Now that you have gotten a clean audit and everything is 
squared away--I know that, over a year ago, the Commission 
interviewed and made an offer to an individual to backfill the 
general counsel position and then subsequently withdrew the 
offer; and I know that that person then took the issue to the 
Office of Special Counsel and claimed he was denied the 
position due to his political leanings. The Office of Special 
Counsel ruled in favor of this individual's claims that you all 
had wrongly denied him the position, and I am told that you all 
have now reposted the position. So have you identified anyone 
to backfill the general counsel's position and what will you do 
to make sure that the next candidate is handled in a fair and 
unbiased manner?
    Ms. Davidson. EAC takes this situation very seriously, and 
we are working now to make changes to improve our hiring 
process, and we are committed to a fair and rigorous process in 
doing so.
    Currently, the applications process has been closed. They 
are being reviewed to make sure that every candidate meets the 
minimum requirements.
    Mrs. Emerson. So do you know when you might be hiring this 
person?
    Ms. Davidson. Hopefully very shortly. We are all excited, 
and we are ready to hire. We have been without a counsel too 
long.
    Mrs. Emerson. So then you are going to have an executive 
director, a CFO, a COO, an acting director, and a general 
counsel. You couldn't combine those position, huh? I am having 
issues with this many for a 50-person--and I understand, but I 
am not satisfied with the answer: That is the way the 
government tells me to do it. It is not personal towards you. 
It is just stupid, in my opinion. But I appreciate your 
commitment to trying to make this Commission work properly.
    Ms. Davidson. And if I haven't answered it properly and the 
staff didn't feel like I have, we will make sure that you get 
additional information.
    Mrs. Emerson. Thanks. Thank you.
    Mr. Serrano. My dear, dear friend, Mr. Culberson.
    Mrs. Emerson. You didn't say my dear, dear friend, Mrs. 
Emerson.
    Mr. Serrano. I said the greatest ranking member----
    Mrs. Emerson. You then called her the greatest. You called 
Barbara the greatest.
    Mr. Serrano. She has been with me on that bill for 6 years 
now.
    Mrs. Emerson. I see. If we go with you on the bill, that 
means we rise up in your esteem?
    Mr. Serrano. You would be like the greatest of all time.
    Mr. Culberson. Thank you. Thank you, Mr. Chairman.
    It does look like the Attorney General--I was going back 
through the statute trying to refresh my memory, and the 
uniform and nondiscriminatory election requirements in the Act, 
do you enforce those at all or is that entirely up to the 
Attorney General?
    Ms. Davidson. Would you repeat your question?
    Mr. Culberson. This is your enabling Act, Title 42 of the 
U.S. Code, looks like it is section 15.401 in the following 
sections. Title III looks like the requirements for uniform and 
nondiscriminatory election technology, that the States have to 
have an accurate voting list, et cetera. The question I was 
asking you earlier, a State does have to certify it looks like 
to the Commission that they are in compliance with the 
requirements of the Help America Vote Act and they file that 
certification with you, correct?
    Ms. Davidson. That is correct. And we have 21 States that 
have filed that and met those requirements. And it is not only 
that they have to meet it. They have to continue to meet that 
yearly. That is even their precinct, whether they are 
accessible to the disability. It falls down to that level, as 
well as equipment and the voter registration. But it is a self-
certification.
    Mr. Culberson. Right. You don't confirm the accuracy of the 
certification?
    Ms. Davidson. No, we don't. That is for the Department of 
Justice. We have no authority underneath the law to do so.
    Mr. Culberson. You have no authority to confirm the 
accuracy of the certification given to you by the States?
    Ms. Davidson. What really happens is----
    Mr. Culberson. That is implicit. I would think.
    Ms. Davidson. If there is any indication that something is 
not right, we can ask our Inspector General to go out and audit 
the State and to see, and then his audit--he will review that 
audit to see if they are meeting what he feels. That is the 
only thing we can do, is really turn it over when we feel that 
somebody hasn't quite met it or we ask for more information 
when they send in their certification. It is a pretty simple 
process for them to say they have certified, that they are 
compliant.
    Mr. Culberson. I notice there is also a section in the 
enabling act that allows State election officials in Texas, the 
Secretary of State, to enter into an agreement with the Social 
Security Administration to cross-check the voter registration 
rolls, for example, in Texas against the Social Security list 
and to try to ensure the accuracy of the voting list. Do you 
have that information about which States have entered into an 
agreement with the Social Security Administration to cross-
check their voter accuracy, the voter registration list? Could 
you provide that to me?
    Ms. Davidson. I don't think I have that.
    Mr. Culberson. That has to be a part of your jurisdiction. 
It is in your enabling act.
    Ms. Davidson. Well, one of the things that they do is some 
States have an agreement with the Motor Vehicle Department 
because they collect it, and they check it every time with 
them. So they get it through the Motor Vehicle--they don't get 
it just directly through the Social Security. We have got----
    Mr. Culberson. From the Federal Government, who makes sure 
that those--other than if you get a complaint, for example, and 
you perform an audit and in this case with the Social Security 
Administration cross-checking the accuracy, a list with the 
States, wouldn't that be within your jurisdiction, if there is 
such an agreement, that it is being carried out in a way that 
is accurate and fair and keeps the Social Security records 
confidential?
    Ms. Davidson. I will double-check. But we don't have any 
authority, I don't believe, at all in that area. But I will 
double-check and get back with you. Because if I am wrong, I 
don't want to give the wrong information.
    Mr. Culberson. I would like to know which States have that 
agreement and particularly in Texas. Do we have it in Texas?
    The problem is, in some jurisdictions, there has been a 
recurring problem with people who are deceased or felons or not 
eligible voting. Now the computer technology has gotten so good 
it is possible to cross-check those lists, and the statute does 
authorize the State to enter into an agreement with the Social 
Security Administration to cross-check those lists. That is a 
really important way to confirm the accuracy of the voter 
registration rolls, and I would be grateful if you could tell 
me which States are doing so.
    Mr. Culberson. All of Title III then, what authority do you 
have to ensure that States are in compliance with the 
requirements of the Title III, the uniform and 
nondiscriminatory election administration requirements?
    Ms. Davidson. We don't have any authority.
    Mr. Culberson. Any authority at all?
    Ms. Davidson. No. We are just an assistance commission, and 
we don't have any authority. It is only the Department of 
Justice that has the authority to go out. If we see clips, we 
turn those clips over sometimes to our IG to go out----
    Mr. Culberson. Clips?
    Ms. Davidson. Newspaper clips that there is a problem in 
some States how they are spending their money that possibly we 
don't think meets the requirements of HAVA. So we turn that 
over to our Inspector General.
    Mr. Culberson. Do they take it to the Department of 
Justice?
    Ms. Davidson. And then if there is something in our report 
that we feel that States are not giving us, our full report 
goes to the Department of Justice, and they review it.
    Mr. Culberson. Do you do anything or could you provide me 
with information on what enforcement actions the Department of 
Justice is taking?
    I notice at the end of Title III it does say that the 
Attorney General--excuse me--in Title IV, Section 401 of the 
Act, the Attorney General may bring a civil action against any 
State or jurisdiction for declaratory or injunctive relief, a 
restraining order or a permanent injunction to enforce the 
provisions of the Act. Is that something you monitor or work 
with them? And could you provide us with a list of what civil 
action the Attorney General has taken, where and when?
    I am still trying to figure out--I have to tell you, I tend 
to agree with Mrs. Emerson's comments about overloaded 
bureaucracy. You all have a lot of noble purposes, but it 
really just seems to me from first blush you generate a lot of 
paperwork, a lot of reports, a lot of paperwork and a lot of 
busywork. And it just doesn't seem like there is a whole lot of 
beef here, a whole lot of substance to what you do because you 
say you don't have any enforcement authority.
    What can you tell me about what the Attorney General has 
done under Title IV? Could you provide my with information on 
what civil actions the Attorney General has taken to enforce 
the Act?
    Ms. Davidson. I can ask the Attorney General to give us a 
report.
    Mr. Culberson. You don't monitor that?
    Ms. Davidson. They do not give us information. They don't 
keep us up to date when they are going out to even look into a 
State or a county. They don't keep us in their--we have asked 
to be acknowledged and know more information.
    Mr. Culberson. The chairman has been very generous with his 
time. And you all have a noble purpose. Mr. Chairman, there is 
clearly a need for Federal funds for some States to update the 
voting machines to go from the punch cards. I don't know what 
purpose this agency has got. This might be a good place to look 
to save some money.
    Thank you very much. I appreciate it.
    Mr. Serrano. It is interesting that you are bringing up the 
issue of possible voter fraud. I recall we had an issue here a 
few years ago where the agency had hired a contractor to look 
at the issue of voter fraud and some very serious newspapers 
reported that indeed the issue was not that there was voter--
that voter fraud was not a problem, but voter intimidation was, 
and that some folks allegedly at the Justice Department got 
involved in what the final report should look like, and the 
final report said voter fraud was the problem when the initial 
draft report said voter intimidation was the problem, not voter 
fraud.
    Mr. Culberson. If I may recall, also, the Black Panther 
suit that was dropped by this Justice Department was a real 
concern because there was videos of these big thugs running 
people off from the polls. And the previous Justice Department 
pursued those guys, and then this Justice Department dropped 
them. That is a problem on both sides.
    And if I may share with you a story. It illustrates the 
problem with elections. My grandfather was actually a Federal 
election poll watcher in South Texas in Duval County, the 
famous Box 13 in Lyndon Johnson's election. This in the 1940s. 
And my grandfather noticed that a lot of the migrant voters 
were coming in that had a piece of string with knots in it. And 
they would come in to--this is why I am so interested in this. 
My grandfather--I grew up with this, the problem in South Texas 
and particularly----
    You will love this story, Mr. Chairman. It is relevant to 
the Commission.
    But my grandfather noticed that these people would come in 
to vote, and they had a string with knots tied in it. And they 
would lay the string down next to the ballot; and wherever 
there was a knot, they would check off the ballot. And then 
they would take the string, and they would hand it to the next 
guy, and he would come in and lay it down.
    My grandfather as the Federal election watcher studied that 
for a minute, and he finally instructed the poll workers to 
hand them the ballot upside down. And because these poor folks 
were illiterate and they were using the string, they would lay 
it down there and it screwed up their whole system. This is 
Duval County, Box 13.
    Mr. Serrano. And you thought this was bad? From strings--
that is before it became a palm card. Now you have got a palm 
card outside the polling site telling you put a check next to 
Serrano, put a check next to Serrano, put a check next to--and 
don't vote--yeah, but----
    Mr. Culberson. These guys can't enforce it. That is what 
worries us. We want you to be able to----
    Mr. Serrano. I am just telling you that that might have 
been just the way to tell people how to vote. That happens all 
the time. They are called ads, too.
    But, anyway, I am not making light of it. I understand what 
you are saying.
    Let us move on for a second to Military and Overseas Voting 
Empowerment, MOVE. What is the status of States implementing 
MOVE and can States use HAVA dollars currently distributed to 
address the new requirements of the MOVE Act?
    Ms. Davidson. The States have been asked by our department 
to send us a letter if they are not able to get a plan in to 
how they are going to spend it under the MOVE Act. And we are 
supposed to be receiving those by May of this year.
    I would tell you probably we will receive every different 
way that you can think of meeting the MOVE Act because our 
States are all different. Can they use HAVA money? If they are 
Title III compliant, they can spend HAVA money as much as they 
need to. If they are not Title III compliant, it depends on how 
they are going to spend the money. If it is a voter 
registration system, improving that, they probably could spend 
it under Title III and not be compliant. But there is about 
$350,000 that each State can spend on it without being 
compliant. So they can spend some, but they may not be able to 
meet all their needs.
    Mr. Serrano. I am just concerned that as we get closer to 
these elections and then to the 2012 elections, or any other, 
actually, for that matter, that we are not where we need to be 
with the military and the overseas voters. And that is key. I 
mean, we spend a lot of time in this country making great 
comments, as we should, about our troops. And then not to give 
them all the help they need in making sure that they get to 
vote is just a shame. So I would hope that we continue to stay 
on top of that and make it possible.
    Ms. Davidson. We also have a pilot program that the EAC has 
been working on for several months. Even before MOVE, we 
started working with NIST and the Federal Voting Assistance 
Program to develop a pilot program that would be put into an 
area outside of the country that voters could vote on. It would 
be a kiosk-type system and would have a backup of a paper. But 
it allows people to vote right there at their locality.
    Plus, the MOVE Act has added more time to the ballots to be 
out. Hopefully, that will help our overseas voters.
    We are continually trying to get information and putting 
information out to the States on how they can help their 
overseas and military voters. Many of the States have moved 
forward, putting a lot of the information up on their Web site 
and providing blank ballots to voters so they can vote early 
and get those ballots back in time. It cuts away that time of 
mailing a ballot out and getting it back in so they can get the 
ballot to the voter.
    Mr. Serrano. Well, I hope we really stay on top of that. 
That is of interest to all of us. I know Mrs. Emerson and I 
share the same thoughts on this.
    The impact of the census and redistricting. As a result of 
the census, 2012 elections will be the first year the States 
will face redistricting since the passage of HAVA. How will the 
2010 census impact State spending of HAVA funds?
    Ms. Davidson. For the States, the census could affect them 
in several ways. If there is a locality that has growth in the 
community, they will have to have more precincts, more 
equipment. If they are bilingual, they will have to create 
their ballots and their voting information in the languages 
that are required. We have a lot of that information that we 
have already done, but if there is also more languages added, 
obviously we will have to start working on that and getting it 
provided for them. There are also more judges that could be 
utilized and things like that. So it depends on how the census 
creates or breaks up a county or a municipality in their 
voting. It could make more precincts. Definitely, the census is 
something that the States are considering and knowing that they 
have got to work through.
    Mr. Serrano. Now, I suspect that the census will show that 
we have become yet even more a diverse Nation, which will 
require special needs. Will States be able to use HAVA funds to 
address an increase in alternative language communities for 
ballots, polling, and place signage?
    Ms. Davidson. Yes, Mr. Chair, they will. They will be able 
to use HAVA funds to make sure that the signages are in all 
languages and the ballots and everything like that so they can 
use HAVA funds.
    Mr. Serrano. Thank you.
    Mrs. Emerson, my dear, dear, dear friend, Mrs. Emerson.
    Mrs. Emerson. Thank you, Mr. Chairman.
    Ms. Davidson, you may remember that Congressman Lungren and 
I recently raised concerns about some of the Commission's 
contracting practices; and we specifically raised questions 
concerning EAC's practice of awarding contracts 
noncompetitively or in instances where you all only received 
one bid. We additionally asked to what degree you contract out 
positions at EAC that include inherently governmental roles. So 
I have a few little questions about that.
    First of all, can you explain what you all are doing to 
make sure that this practice of awarding contracts on a 
noncompetitive basis remains limited?
    Ms. Davidson. When EAC was formed, there was a lot more 
contracts. Because we didn't have the employees to do the jobs, 
a lot of contractors were hired. Since that time, the contracts 
have come down. We are bringing the contracts down constantly 
in our agency, and that is one of the reasons why people were 
hired to do some of the work.
    Mrs. Emerson. So how many contracts do you all have 
outstanding right now?
    Ms. Davidson. I am sorry. I don't have that right in front 
of me, but I will get it for you. I remember the letter that I 
sent and listed all the contracts, but they went back for 3 
years. So I cannot tell you----
    Mrs. Emerson. If you can just get that information to me 
some time--you probably have it readily available. Someone in 
the staff does.
    Ms. Davidson. I think that we do. So I can get that to you 
right away.
    Mrs. Emerson. Right. Normally, I am not a big fan of 
contracting out inherently governmental functions. However, in 
some cases, if there is something temporary to be done, it 
makes less sense to hire someone permanently than it does to 
make the contract. So it is concerning. And if you could get 
that information from obviously how many contracts you all 
started, where you are today and whether or not some of these 
are inherently governmental roles and some are not.
    Let me ask you a little bit about grants. Your budget 
request shows an amount of $740,000 for grant funding in 2011. 
This is a reduction of $300,000 from 2010. What is the amount 
requested for each grant program for 2011 and what changes were 
made for each program from 2010?
    Ms. Davidson. What we have in that section is just the poll 
worker grant, over $700,000. The mock election, because we made 
those a 3-year grant in 2008 and a 2-year grant in 2009 knowing 
that money was tight, those are ongoing grants right now. We 
didn't ask for the $300,000 until the mock election.
    Mrs. Emerson. I see. Can you tell me how much of your grant 
money went to ACORN or any of its affiliates?
    Ms. Davidson. We had two contracts underneath, that we had 
Project Vote that got money--I think it was 2007, maybe 2008. I 
am unsure of that. But there were two grants in 2006, it looks 
like. So it amounted to around $16,000 each. There were two of 
them, and they were given to Project Vote. We have asked our 
Inspector General to investigate that and to get a full report 
on if it was allocated to ACORN and how it was spent. So we 
have asked for an investigation.
    Mrs. Emerson. Do you have measures in place now to assure 
that no grant moneys will go to ACORN or any of its affiliates? 
I realize that a lot of ACORN has closed down, but they have 
also renamed themselves. So----
    Ms. Davidson. If we know the affiliates and we know--that 
would be something we would look at when grants come in.
    Mrs. Emerson. But you don't have any specific measures in 
place right now with regard to that; is that correct?
    Ms. Davidson. Well, we ask for affiliates; and so that will 
help us in that way. But I don't know what kind of measures you 
are talking about.
    Mrs. Emerson. Just a policy that says no money is going to 
go. We put it in law, but----
    Ms. Davidson. We are following the law. So that is where we 
are at.
    Mrs. Emerson. Just because knowing or doing the research 
necessary to be able to recognize some of the new names of this 
organization, I mean, that hopefully is ongoing among your 
staff.
    Let me ask you----
    Mr. Serrano. Excuse me a second. I am just confused, and I 
am not trying to be difficult. Didn't the court just rule that 
we couldn't have done that to ACORN?
    Mrs. Emerson. I don't know the answer.
    Mr. Culberson. A district court did. It is on appeal. The 
statute still stands until----
    Mr. Serrano. Okay. All right.
    Mrs. Emerson. Let me ask you, have you all ever considered 
conducting a study to determine the unique requirements of 
meeting the needs of voters in both urban and rural settings? I 
have a very, very, very rural, very rural district with 28 
counties. I just want to make sure that all of my voters have 
the ability to vote, and I just am curious if you all have ever 
considered doing something. And then there are equal challenges 
in urban settings. One of my big issues would be transportation 
to get to a poll, if you will. And you might not have that in 
the city where there is public transportation, but we don't 
have that. I am just curious if you all have ever thought about 
it.
    Ms. Davidson. We are doing a study currently. We are just 
getting ready to start it. We are selecting people from 
localities that would be willing to serve on that. So if you 
have somebody in mind that is from your district, we would be 
more than happy to put them on that.
    You are absolutely right. It is very different for an urban 
county. And with money being tight, they close precincts. So it 
means further for them to drive. That also means, then, there 
needs to be consideration for those voters, how can they vote. 
Maybe early voting where they could go to the poll when they go 
shop for groceries before the Election Day. Or absentee ballots 
given to individuals that live so far away from a polling 
place. It is a real problem.
    I understand where you are coming from and we do at the 
agency. The cities have their issues and how they are meeting 
them. They can meet it in some ways with technology, but that 
doesn't work for a small county. So we are very aware that 
there are some real needs for a study there, and that is 
beginning to start. So I welcome if you would like to have 
somebody put on that committee.
    Mrs. Emerson. That would be wonderful. I appreciate that 
offer, and we will definitely get back to you sooner rather 
than later. I am thrilled you are doing that study because--I 
mean, people who live in cities can't imagine the issues that 
folks out in the rural area have and vice versa. So I am 
grateful that you all are doing that. Thank you.
    Ms. Davidson. Not a problem. I understand that well, 
because I have served different sizes of counties, and my job 
was completely different.
    Mrs. Emerson. Thanks.
    Mr. Culberson. Thank you, Mr. Chairman.
    Mr. Serrano. I am going to introduce to everyone the 
immigrant's greatest friend, Mr. John Culberson.
    Mr. Culberson. The legal immigrant's greatest friend.
    Mr. Serrano. Try to ask a set of questions without 
immigrants in it.
    Mr. Culberson. Actually, this is about military personnel 
and following up on----
    Mr. Serrano. You don't have to be a citizen to serve in war 
in the military, right?
    Mr. Culberson. In fact, it entitles you to go to the front 
of the line to become a citizen, God bless them, if they serve 
in the military, which is really a wonderful provision of the 
law.
    I wanted to ask about military people, service members 
voting. I know in Texas, for example, if you mail in a ballot 
to vote, as long as the postmark is on or before Election Day, 
the clerk will count it. That is pretty standard, I think, 
nationwide, right?
    Ms. Davidson. That is----
    Mr. Culberson. In your experience in Colorado as well, if 
you received a ballot from someone voting by mail, if the 
postmark was on or before Election Day, you counted it?
    Ms. Davidson. And the laws are changing throughout the 
Nation. A lot of the States have said that if the ballot was 
received up to 10 days after the election, it would be counted, 
if that was postmarked on Election Day.
    Mr. Culberson. Sure. A reasonable period after the 
election, right. But as long as the postmark is on or before 
Election Day.
    Ms. Davidson. That is correct.
    Mr. Culberson. What surprises me actually in here, Mr. 
Chairman, this is something we really ought to look at because 
this I think will disenfranchise a lot of military people. I 
didn't realize this was in the Act. But in Title VII of the 
statute in voting assistance programs for overseas voting 
materials, the Secretary of Defense has to ensure that the 
measures implemented, da, da, da, do not result in the delivery 
of absentee ballots by service members to the financial 
destination after the date on which the election for Federal 
office is held.
    So that Federal law is inconsistent with, really, the 
standard rule across the country. I am sure it is true in New 
York and Missouri, that if you vote by mail and again the 
postmark is on or before the date of the election, it is 
counted if it is received within 10 days.
    We probably ought to fix that, because I bet that results 
in disenfranchising a lot of military people that are serving 
overseas. I didn't realize that was in there. Would you agree?
    Ms. Davidson. I didn't realize it was in there, either. I 
would agree. Because I will tell you right now that----
    Mr. Culberson. It says, if the ballot is not received--the 
Secretary of Defense has to ensure that the ballots are 
received by the clerk--for example, you were a clerk in a 
county in Colorado, in Bent County, that the Bent County 
election clerk has to receive the ballots on or before Election 
Day or they are not counted.
    Mr. Serrano. Right. Well, that is true for everybody else.
    Mr. Culberson. No, no. Actually, the rule for everybody 
else is, if the ballot is received up to 10 days after the 
election, as long as the postmark is marked before--but he 
can't--even if he is delivering ballots postmarked on or before 
the Election Day, they are no good.
    Voice. Delivered to the soldier to cast the ballot by 
election.
    Mr. Culberson. No. The statute says, the Secretary shall 
ensure that the measures implemented--his measures implemented 
under the statute result in the delivery of absentee ballots to 
the final destination of such ballots. The final destination is 
the clerk.
    So we have really got to fix that, Mr. Chairman and Mrs. 
Emerson, because we are disenfranchising a lot of military 
people.
    Now, the 10-day rule is reasonable. Obviously, if the guy's 
ballot comes in 6 months later, you don't want to count that. 
But 10 days, don't you think we probably ought to fix that? 
Because I guarantee that is probably disenfranchising----
    Mr. Serrano. If that is the way it reads, I would agree 
with that. If that is the way they are implementing.
    Mr. Culberson. Yeah. The way the statute reads on its face 
and as the commissioner says, the chairman says, it is--and it 
is your opinion as well as an election clerk, that would 
disenfranchise members of the military whose ballots were 
received 10 days or less after the election as long as the 
mail-in ballot were postmarked on before the election date, 
correct? That is an accurate statement?
    Ms. Davidson. Yeah. Congressman, you are absolutely right. 
If that is the way the law reads--I mean, I think that 
everybody has been reading it to say that a ballot that is 
unvoted should not be sent to a voter after the election.
    Mr. Culberson. Sure. But that says the final destination, 
And the final destination has to be the county clerk.
    Ms. Davidson. If that is the way it is, that definitely 
needs to be fixed, because we don't want to disenfranchise any 
more of our military members.
    Mr. Culberson. Right. That is a bad problem.
    You also, I understand from reading the statute, have the 
authority, as Mrs. Emerson said, to issue grants to nonprofit 
entities that are engaged in helping to organize voters or 
register voters, correct? Do you only issue grants to 
government entities or can you also issue grants to nonprofits 
or nongovernment entities?
    Ms. Davidson. We can issue to nongovernment entities, but 
we cannot issue a grant on voter registration.
    Mr. Culberson. I understand. Therefore, the question----
    Ms. Davidson. It was through the mock election that this 
happened, so that you are aware, a college poll worker.
    Mr. Culberson. If I could just follow up with some 
precision to get a really clear answer on Mrs. Emerson's 
question about ACORN. Because we did pass in an appropriations 
bill last year I think, after all this monkey business came out 
about ACORN, flat prohibition against any Federal money going 
to ACORN or to any of their affiliates. It is the law. It has 
not been overturned by a final judgment of an appellate court. 
So, therefore, it is the law of the land. What are you doing to 
ensure the enforcement of that law?
    Ms. Davidson. We are making sure----
    Mr. Culberson. That you are not issuing grants to ACORN. It 
is prohibited.
    Ms. Davidson. To ACORN or anybody that affiliates with 
ACORN.
    Mr. Culberson. It is prohibited?
    Ms. Davidson. Yes.
    Mr. Culberson. Have you issued any grants to ACORN or any 
of their affiliates?
    Ms. Davidson. Not since the law was passed. That was in 
2006 that we did that.
    Mr. Culberson. You are sure of that? Because your answer to 
Mrs. Emerson was a little foggy.
    Ms. Davidson. I am sure of it.
    Mr. Culberson. Okay. And we really do appreciate your 
service, and I thank you for your answer to our questions, and 
I appreciate the chairman's indulgence for the time. Thank you.
    Mr. Serrano. We have your papers over here. We are looking 
at it. We are as concerned as you are, and we will look at it 
and make recommendations.
    I have one last question, and then we will let you go. How 
is that?
    I have heard that the job of--well, I know the job of an 
elected official is often challenging, ensuring that elections 
are fair, accurate, and carried out officially with small 
staffs and limited resources. So in a tough budget year, I can 
imagine the job of an election official is particularly 
challenging.
    I understand that you have personal experience, as we said, 
working as an election official when you were county clerk and 
later as Colorado's Secretary of State. Can you relate some of 
your experiences to the challenges that election officials will 
face this coming year throughout the Nation? Every State has 
less money than they had before. How will this affect the 
running of these elections? And how can we assure that local 
and State election officials have the resources they need to 
successfully oversee the elections?
    Think back to those days when you were sitting there 
wondering if you would ever get to testify in front of Mr. 
Culberson.
    Ms. Davidson. I think probably my knees would have been 
shaking a little bit more than today.
    Mr. Serrano. My knees are shaking right now.
    Ms. Davidson. Oh, good. I am in good company then.
    Elections are difficult. They are not the same throughout 
the United States, as I have said before. Every State has their 
own issues. Every county has their issues. Polling place 
workers are a tremendous--a scarceness. And our college poll 
worker program has been a big success because it brings in 
individuals with the experience of technology, the energy to be 
able to carry those 8 hours--not 8 hours but almost 18 hours 
sometimes of Election Day, but making sure that they have the 
resources that they need.
    I would tell you in a county budget, as I was a county 
clerk, I found that I was the last one on the list of receiving 
money. It was always the potholes that needed to be filled, the 
police department that needed the money. We weren't thought 
about.
    But I will say since HAVA came on the forefront and the 
heightened public interest in elections, it has been good 
because it has brought a lot of good ideas and a lot of things 
forward. And with the passage of HAVA and the Federal funds, it 
has helped the States to become more up to date, the voter 
registration lists and being able to have that throughout the 
States, to be able to control people being registered more than 
once. It is also hooked up with the deceased files and the 
motor vehicle files. It has improved the election process. So 
the money that has been spent definitely has improved that 
process of Election Day.
    Also, the disability people being able to vote for the 
first time independently and privately has been an asset to all 
of those people. It is very hard to answer your question, how 
can we make sure that they have everything that they need, 
because we hear from the States when we go to their meetings 
that there are issues that they have that we haven't even begun 
to think about. So it seems like it is constant that there is 
always a new issue that they need to be considering.
    Our contingency planning is one of my pet ones, because 
when we think about what can go wrong on Election Day--somebody 
said, why is the election so hard? It is not rocket science. 
You know what? It is worse. Because we can't say 3 minutes or 2 
seconds before it is supposed to go up in the air that the 
rocket--that we are going to stop the process. We have to have 
Election Day.
    So training our election officials to be ready for that 
pre-certification and everything that goes on is very 
important. Every State has their own issues and their own 
needs.
    So for me to answer that, I am really not able to answer I 
know to what you really want. And I am sorry about that. 
Because it changes it seems daily even within the States and 
the counties. So I am not doing a good job for you, and I 
apologize.
    Mr. Serrano. That is okay. I know it can become difficult 
at times. Always feel free after this hearing to supply us with 
any further information on any of the questions that were 
asked.
    Mrs. Emerson and I have some questions for the record.
    I want to thank you for your testimony today. We want to 
thank you for your service. We want to remind you again that, 
regardless of differences you may see within the two parties on 
many issues, there is one issue where we don't disagree on and 
that is having fair and accurate elections. There will 
different interpretations as to what that means to some people 
in some areas, but certainly we understand on this subcommittee 
the importance to our democracy and to our system to have fair 
elections with full or as close to full participation as 
possible.
    I am always amazed at how much you hear people say how much 
they love this country and how much they love our system and to 
the point--and this is only my comment--where sometimes we try 
to force our system down other country's throats, where they 
should be like us. And yet when it comes to election, we are 
not outraged when only half of the people vote or we are not 
outraged in the past when we elected the President from both 
sides with 43 percent of the people voting.
    So anything we can do to make elections better, to have 
more people participate, and to make sure that when that person 
voted for a certain candidate that that is pretty much--or 
should be actually the actual result of that vote with no 
hanging anything in the future. So that is what we ask you to 
continue to look at; and, in the meantime, you will continue to 
have our support.
    I am sure if people were to do an analysis of this 
subcommittee they would find out that Mrs. Emerson and I treat 
everybody who comes here with respect. That is because we 
understand that everybody who sits before us has a major role 
to carry out, and we want you to be successful. Our patience is 
running thin on the Security Exchange Commission. Other than 
that, we want to be supportive.
    Other people say his subcommittee meetings are like a love 
fest. Well, because we want to be supportive, especially you. 
You have a major, major role to play; and your agency has a 
major task to accomplish. So thank you for your work. Thank you 
for what will be your work, and keep us informed on anything 
that is going on that we should know.
    Ms. Davidson. I would be more than happy to. Thank you.
    Mrs. Emerson. Thank you.
    Mr. Serrano. The meeting is adjourned.

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                                           Wednesday, June 9, 2010.

        FEDERAL COMMUNICATIONS COMMISSION FY 2011 BUDGET REQUEST


                               WITNESSES

JULIUS GENACHOWSKI, CHAIRMAN, FEDERAL COMMUNICATIONS COMMISSION
    Mr. Serrano. The subcommittee will come to order. Before we 
begin are there any numbers from the FCC as to the ratings last 
night for the Nationals game?
    Mr. Genachowski. I did some firsthand research, Mr. 
Chairman, and took my son to the game, and I can give a full 
report at a later time.
    Mr. Serrano. Great. That is wonderful. The ratings must 
have gone through the roof.
    We are pleased to have Chairman Genachowski before us today 
to discuss the FCC's proposed budget for next year--and the 
Nationals game from last night--on the Commission's Broadband 
Plan also.
    Rapid changes in communications technologies are giving 
consumers more options, even as it gives some providers more 
leverage for high prices. The FCC must run faster and faster to 
keep pace with these changes. We count on the FCC to regulate 
communications so as to protect consumers without stifling 
innovation.
    Last March, the FCC issued its Broadband Plan that lays out 
the current Commission's perspectives on the future of 
communications. As the Broadband Plan made clear, Americans 
increasingly rely on broadband Internet connections for 
delivery of fast, rich and reliable transmission of voice, 
text, Internet browsing, medical images, entertainment or 
almost any other form of communication.
    Now, as you know, this hearing is on-line live as we speak, 
and I sent out a Twitter message, I put it on two Facebook 
pages and an e-mail. So we should get at least 10 people to 
watch.
    Mrs. Emerson. Do you have your BlackBerry out so you can 
answer or Twitter as we are going along.
    Mr. Serrano. Yes. And we are being recorded.
    Mrs. Emerson. Good.
    Mr. Serrano. Just to make the point that we are up to date 
on some of the technology, although it is all very confusing to 
us still.
    As the Broadband Plan explains, wireless spectrum is 
becoming increasingly in demand as more communications go 
wireless and require more bandwidth. We face a crisis if we do 
not act soon to free up more spectrum for broadband. I applaud 
the FCC's efforts to identify under-used spectrum for possible 
conversion to broadband applications.
    I am also pleased that the Plan recognizes the benefit to 
our society when almost everyone has access to broadband. More 
and more, access to broadband opens opportunities in education, 
job hunting, becoming an informed voter, and so forth, and lack 
of access to broadband closes opportunities. We must work to 
close the digital divide in access to broadband.
    Not long after the ink dried on the FCC's Broadband Plan, a 
ruling by the Court of Appeals for the District of Columbia 
Circuit raised questions about the FCC's authority to regulate 
Internet service providers. As a recent New York Times 
editorial pointed out, it is essential for the FCC to have 
authority over the Internet, the dominant 21st century mode of 
communications. We are looking forward to better understanding 
your decision to launch proceedings to bring ISPs under Title 
II.
    This subcommittee has also been concerned that almost 9 
years after 9/11 and 6 years after the 9/11 Commission report 
our first responders still lack the robust interoperable 
communication system needed in the case of major emergencies. 
Your plan recommends one approach that has been endorsed by 
both co-chairs and two members of the 9/11 Commission, but that 
approach has been opposed by some organizations representing 
first responders. We look forward to learning how you propose 
to resolve this situation so that we can move ahead.
    PEG channels that provide public, educational, and 
governmental information to cable TV viewers make a vital 
contribution to our civic society. As technology has evolved 
some of those PEG channels have become more difficult to 
access. Despite many petitions and comments for the record, the 
FCC has failed to fix this problem. I was disappointed that 
your 360-page Broadband Plan made no mention of the future of 
PEG, much less proposed a solution.
    Finally, as you know, I have been concerned that Americans 
living in the Territories often lack communication services 
comparable to those available in the States. Your report on 
communication services available in the Territories shows 
dismal rates of Internet use in the Territories. I was pleased 
to see that your Commission recently gave the go-ahead for XM-
Sirius to make the investments necessary to operate effectively 
in Puerto Rico. I remain concerned about the availability of 
universal service funds there.
    I want you to be assured, Mr. Chairman, that it is in the 
best interest of this committee and this Congress for you folks 
to succeed, but to succeed on behalf of the consumer, to 
succeed on behalf of strong technology for our future, to 
succeed on behalf of bringing us to where we should be as a 
nation, but never at the expense of leaving behind any 
community, including those folks who live in the Territories.
    And with that I turn to my colleague, my sister and the 
ranking member, Mrs. Emerson. 
    Mrs. Emerson. Thank you, Mr. Chairman. Chairman 
Genachowski, welcome and thanks so much for being here today.
    The FCC has an important regulatory role in the county's 
communications, television, radio, Internet and cable 
industries, and we all know these services touch nearly every 
American citizen and business daily. Ultimately you all have to 
find a balance between enabling technological progress and 
providing enough regulation and oversight to ensure that the 
American people have available communication services. It is a 
very challenging job, with many business technology and 
consumer groups watching your every move.
    I want to congratulate you on the development of the 
national Broadband Plan. Developing a strategic plan to provide 
every American with affordable access to broadband services is 
a worthy goal. And I am very pleased because it has the 
potential to assist those Americans without Internet access to 
improve health care, education, public safety, access to 
government and the economy. I am still a little confused why we 
used--we were going to deploy rural Internet opportunities, or 
at least broadband opportunities, after which you were then 
going to do a new map, if you will. So perhaps the cart got 
before the horse, in spite of the fact that I do think that 
that is a good use of stimulus funds is the deployment of 
broadband, particularly since I have a hugely rural district. 
So it will end up helping my constituents a good deal.
    I will say, though, that I, like many others, have some 
concerns with your plan. As the chairman said, many in the 
first responder community are concerned with your strategy to 
implement a nationwide wireless first responder network, or at 
least the means by which you want to do it. And I am also 
concerned with your announced plan to reclassify broadband as a 
phone service instead of as an information service. Many have 
questioned whether this reclassification will stand the 
scrutiny of the courts.
    In addition, my constituents, my very small providers, 
really believe this action will reduce private sector 
investment and broadband expansion, which will obviously then 
hinder your goal of expanding affordable broadband access.
    Thanks for being here. I look forward to your testimony, 
and we will have lots of questions, I presume. Thanks, Mr. 
Chairman.
    Mr. Serrano. Thank you. You know the drill, Mr. Chairman. 
You give us 5 minutes, we will put your whole statement in the 
record, and then we will drill you to the point of exhaustion 
on our part, I am sure.
    Please proceed.
    Mr. Genachowski. Thank you. Good morning, Chairman Serrano, 
Ranking Member Emerson, Congressman Crenshaw. Thank you for 
being here. I am pleased to be making my first appearance, so I 
am learning the drill. But I welcome this subcommittee's 
oversight and input and look forward to working with you to 
ensure that the Commission is able to perform its mission and 
that we get good input into all of the issues in front of us.
    I also want to take a minute to thank your staff, Lee Price 
and John Martens, who have taken considerable time and effort, 
a very healthy working relationship at the staff level, and I 
appreciate their work.
    The FCC's mission is to promote opportunity and prosperity 
for all Americans through communications, technologies, and 
networks. To advance this mission we are focused on these 
goals: Promoting universal broadband that is robust and 
affordable for all Americans regardless of where they live; 
pursuing policies that promote job creation, investment, 
competition, and innovation; protecting and empowering 
consumers and families; helping deliver interoperable public 
safety communications networks with the best technology to 
serve our firefighters, police officers, and other first 
responders, and ultimately to save lives; advancing a vibrant 
media landscape that serves the public interest in the 21st 
century; and seizing the opportunity for the United States to 
lead the world in mobile.
    The budget we have submitted will considerably enhance the 
FCC's ability to achieve these goals. It will help ensure that 
we have the staff we need with the technical skills we need to 
support our work to promote investment, competition, job 
creation, public safety, our global competitiveness in this 
complex communications landscape.
    The budget request also includes investments in technology 
that will enhance agency operations, particularly in the area 
of public safety. My written statement contains more details on 
this. I ask that it be included in the record.
    Let me briefly touch upon some key items before the 
Commission, and I am sure we will have an opportunity for a 
good exchange on these.
    First, as I am glad both of you mentioned, Congress 
directed the FCC to produce a national Broadband Plan, and we 
have now done so and submitted it to Congress and the 
President. It includes key recommendations to transform the 
Universal Service Fund from supporting yesterday's technologies 
to tomorrow's, recovering and unleashing licensed and 
unlicensed spectrum so that we can lead the world in mobile. It 
proposes ways to promote investment by cutting red tape, 
lowering the cost of deployment and accelerating broad 
deployment everywhere of wired and wireless networks. It 
proposes initiatives to foster vibrant competition and empower 
consumers who are often confused about this landscape. It 
includes a roadmap to tackle vital inclusion challenges so that 
everyone everywhere, individuals and small businesses, can 
enjoy the benefits and opportunities of broadband, and it 
proposes concrete ways in which broadband can be deployed to 
help solve many of our Nation's major challenges, including 
education, health care, energy, and public safety.
    In April, the Commission released a detailed, extensive 
timetable for taking action on the Plan's recommendations. The 
Commission has since unanimously approved eight action items 
already, including a notice kicking off broad-based universal 
reform. In May we continued driving on this agenda by approving 
three more items from the Plan's recommendations, a notice to 
cut red tape in the E-Rate program and increase flexibility for 
schools to better serve their communities with the funds and 
the technology, and order a notice to foster competition in 
broadband deployment by improving access to pole attachments, 
part of the blood and guts of this area where if we get it 
right we can seek faster deployment of infrastructure, and an 
order enabling the use of 25 megahertz more spectrum for mobile 
broadband.
    Although many of the action items from the national 
Broadband Plan can be further reviewed and acted upon by the 
Commission, a few major recommendations require review and 
action by both Congress and the Commission, one of the most 
urgent being the creation of a nationwide interoperable public 
safety broadband wireless network. For far too long, as you 
said, Mr. Chairman, our Nation's first responders have lacked 
such a network. As part of the national Broadband Plan I tasked 
our FCC team, led by a brilliant retired admiral with great 
experience in this area, with starting anew and developing a 
comprehensive plan for an interoperable broadband public safety 
network. The Commission staff has proposed a multi-part plan 
that will support the greatest benefits for public safety's 
day-to-day needs and provide essential redundancy and 
resiliency during the worst emergencies. The Plan confirms that 
the current 24 megahertz of spectrum identified by Congress and 
allocated to public safety is sufficient for public safety 
needs for the foreseeable future, and that if necessary in dire 
emergencies public safety will be able to access and roam on 
adjacent commercial networks in the 700-megahertz band, 
including the D-block, which Congress has required the FCC to 
auction.
    It includes specific recommendations to get our mobile 
broadband public safety network built during a window that is 
closing of the rollout of commercial 4G networks. If we can get 
this done now, taking advantage of efficiencies that can happen 
by building out at the same time, we can both get it done and 
save a tremendous amount of money than if we wait.
    Second, with respect to our goal of ensuring that the U.S. 
leads the world in mobile, there is little debate that our 
Nation's spectrum needs are rapidly increasing, with demand for 
spectrum very significantly exceeding the supply. If the U.S. 
is to lead the world in mobile services and technologies, we 
must address this looming spectrum crunch. I understand and 
share the concern that in pursuing this objective that we take 
full account of viewers of free over-the-air TV as we pursue 
what we strongly believe is a win-win-win plan to benefit free 
over-the-air viewers, the broadcast industry, our broadband 
future and American consumers.
    I look forward to working closely with this committee and 
Congress on a mechanism for a win-win-win auction to address 
our mobile spectrum needs and make sure that we take full 
accounts of existing services like free over-the-air TV.
    Finally, I remain focused on the importance of broadband to 
our Nation's economic growth, competitiveness, investment and 
innovation, huge opportunities here for the country. But as we 
heard, we face legal uncertainty now as a result of a recent 
court decision in the Comcast case.
    Comcast, although we argued to sustain the framework that 
had existed, the court disagreed and that decision cast real 
doubt on whether the legal framework the Commission chose for 
broadband Internet services nearly a decade ago is adequate to 
achieve core broadband policies such as universal service, 
public safety, and promoting investment and innovation related 
to broadband and extending it to all Americans.
    In addressing this issue, I reject both extremes, the 
extreme of overregulation and the extreme of doing nothing. I 
believe that a light touch approach continues to be the correct 
one, and look forward to ongoing dialogue with Congress as the 
Commission seeks public comment on how best to ensure that our 
broadband policies rest on a solid legal foundation and that we 
foster a climate for robust private investment in 
communications that benefits all Americans.
    As you may know, the chairman of our authorizing full and 
subcommittees have announced they will start a process to 
develop proposals for updating the Communications Act. I 
welcome their process and the opportunity to serve as a 
resource to them and Congress in their work, and of course I 
look forward to working with the members of this subcommittee 
on these issues and all issues the FCC faces.
    Thank you again for this opportunity to discuss the FCC's 
2011 budget request and our work under the Historic Recovery 
Act. I respectfully request that the subcommittee consider 
granting the FCC's fiscal 2011 funding request, and I would be 
happy to hear comments and of course take any questions.
    Mr. Serrano. Thank you so much. Thank you. Around here we 
always use the phrase ``win-win.'' You say ``win-win-win.'' 
Does that extra ``win'' mean you know something is going to 
happen?
    Mrs. Emerson. It means the Cardinals and the Yankees and 
the Nationals are all going to get a win.
    Mr. Serrano. It used to be a situation where everyone asked 
how long before Serrano brings in Cuba and Puerto Rico into any 
kind of a hearing and now it is how soon the Yankees and the 
Cardinals come into it. So we will see you in September.
    The court decision, the D.C. Decision, now, first of all, 
when you come before this committee or any committee in 
Congress, and I am sure some of my colleagues are going to be 
upset with this, not in this committee, don't ever assume that 
Members of Congress know this issue through and through, 
because this is one of the more complicated issues that we deal 
with, and I am sure it is for you folks too. Now, the court 
decision kind of threw everybody for a loop. And the issue was, 
as we saw it, do you have the authority, existing authority, to 
move in the direction that many of us want you to move in. So 
what's your sense?
    Now, just as a little aside, if one looks at your 
biography, you have done enough in the past to have dealt with 
many issues on many levels, from the Supreme Court to Congress 
to the administration to the FCC. So you certainly have an 
understanding of how these things move. Did that court decision 
cripple you? Does it allow leeway? Does it give you leeway to 
do what you need to do? Where are we at now? How can you 
explain that to us?
    Mr. Genachowski. There is no question that the decision 
raised serious questions, created a problem that we have to 
solve. There had been a consensus that the FCC could adopt 
sensible rules around broadband for universal service, for 
public safety, for consumers, under a particular Title I 
approach. We defended that in court, we thought it was fine. We 
want to focus on what the American people want us to focus on, 
which is extending broadband to all Americans, leading the 
world in innovation, driving tremendous investment, having this 
be a platform for job creation, and extending the wonders of 
broadband and health care and education to all.
    Unfortunately, we didn't win the case. And in its opinion 
the court raised real questions about the consensus framework 
that had been used. We now have to solve that problem. As I 
looked at it, we had two extremes in the debate. We had an 
extreme of oh, well, this is fine, the FCC doesn't need to do 
anything here at all, and we had what I believe is an extreme 
of oh, this is an opportunity for massive regulation of this 
infrastructure. And I reject both those extremes. And I 
directed our staff to identify a strategy that would restore 
the status quo, that would restore the light touch framework 
that would allow the Commission to do what is necessary to 
promote investment, to promote public safety, to extend 
broadband, not to do more than what is necessary. And the staff 
developed what we have called the third way approach that is 
modeled on the existing approach for how mobile voice is 
regulated and that we will continue to take public comment on 
and discussion on, with our central goal being the litigation. 
The court decision created a problem, let's solve it so that we 
can tackle our country's broadband needs.
    Mr. Serrano. And how do other members, I mean they are not 
here, but is there support on the Commission for that approach?
    Mr. Genachowski. Well, I wouldn't want to speak for other 
members. I think we have healthy debate at the Commission, 
which is a good thing. I think each of the members of the 
Commission has expressed their initial views. This is an issue 
of sufficient importance that we should have public comment, 
public discussion, and encourage everyone involved to roll up 
their sleeves with the Commission with an approach of problem 
solving. I don't think anyone disputes that there is a problem. 
And I am going to do everything I can to work with all 
stakeholders, my colleagues at the Commission, the great staff 
at the Commission, to tackle this and solve it so that we can 
focus on the core goals that I think are widely shared of 
promoting broadband for our economy and for solving major 
national challenges.
    Mr. Serrano. And if I was to put you on the spot and say 
looking forward, at what point date wise can you say we have 
put this part aside and we are moving on now? I mean, I know 
you are moving on different fronts at the same time, but we 
have put this issue behind us, this has been resolved, what do 
you see?
    Mr. Genachowski. Well, the first step is to start the 
proceeding, which we haven't done yet. It takes time to get it 
going. We will start the proceeding, we will encourage broad 
public comment and input, and we will do everything we can to 
solve this problem while we continue to move forward 
simultaneously on key elements of the Broadband Plan. We can't 
slow down, it is too important for extending opportunity to all 
Americans. And we have continued to move forward in the ways 
that I mentioned, we will keep on moving forward, and we need 
to tackle this issue for many reasons, including the fact that 
the rest of the world is not standing still.
    Mr. Serrano. Let me, I am going to be asking members after 
Mrs. Emerson speaks to stick to the 5-minute rule, so I will 
abuse it now and say the following. On your last comment, I 
don't know how briefly you can do this, but what happened to 
us, why did we fall behind, why are we in so many ways the 
greatest country on Earth and in this particular one we are 
trying to catch up, what happened to us?
    Mr. Genachowski. It is obviously a very good question. A 
lot of people disagree on why we are where we are, but I think 
there is broad agreement that we are behind where we should be. 
Perhaps one of the drawbacks to having the infrastructure that 
we do is that we have to deal in this country with legacy 
infrastructure that in some cases slows us down. We have to 
reform the Universal Service Fund so that it applies to 
broadband, not just all telephone service. But I think what we 
focused on in the Broadband Plan was assessing what the current 
obstacles are and what we need to do to tackle them.
    Mr. Serrano. Mrs. Emerson.
    Mrs. Emerson. Thanks, Chairman. So Commissioners McDowell 
and Baker have stated that no evidence exists of systemic 
failure in the broadband market that would justify a new 
onerous regulatory regime. So perhaps you can tell us, because 
we are the Financial Services Subcommittee and generally we 
deal mostly with something dealing with financial services, and 
I will admit to not having a lot of expertise in this issue, 
but other than the Comcast case, which I actually kind of 
understand, what problem would be solved by increasing Internet 
regulation and is there evidence that Internet service 
providers are discriminating against certain customers?
    Mr. Genachowski. A couple of points if I may. One is I 
don't support a new onerous regulatory regime. I oppose it. I 
support the restoration of the light touch regulatory regime 
that we have. There are a couple of different issues that get 
talked about together here. With respect to the basic authority 
issue, there is a broad list of problems we have to solve and 
they are detailed in the national Broadband Plan; broadband for 
all of America, tackling public safety, tackling privacy, 
promoting investment. All of these require the FCC to have 
basic authority with respect to broadband access.
    Another issue that gets discussed in this is the issue of 
preserving a free and open Internet. I do believe that we have 
something very special in this country: An Internet built on an 
open architecture that allows free speech, that allows 
innovators to reach a broad audience. It has led to the 
development and growth of small businesses across the country, 
huge benefits in terms of investment. My view on this is that 
we need to preserve what we have and make sure that this 
platform remain open as we drive more and more investment in it 
so that the infrastructure can lead the world.
    Mrs. Emerson. Well, are you concerned that a majority of 
Members of Congress in both parties oppose your plan? I think 
there were 171 Republicans and 74 Democrats who wrote you a 
letter basically saying not to move forward with your plan, 
quite frankly because it is our responsibility to give you 
direction as opposed to you giving us direction. But you know 
we all are trying to work together to help the American people. 
But does that bother you that the majority of Members aren't, 
on the House side anyway, aren't in favor of your plan?
    Mr. Genachowski. Well, the concerns that Congress have of 
course I take very seriously. And I share many, if not all, of 
the concerns that are in the letters. We need to find a way to 
make sure that we restore the status quo that exists, protect 
consumers, promote competition, promote investment, promote 
universal broadband to all Americans in a way that is a healthy 
framework that is consistent with the framework that we had. So 
I am looking forward to ongoing discussions with Members of 
Congress to developing broader understanding of the options, of 
the approach that I have suggested, and I believe that this is 
an area where I hope and I think we should be able to achieve 
better understanding and enable us to move forward in a way 
that allows us to have a solid legal foundation that promotes 
investment so that we have a basis for making sure we can take 
care of universal service, take care of public safety, take 
care of small businesses and broadband, and I look forward to 
this process and I think our proceeding will help be a resource 
as we move forward.
    Mrs. Emerson. Well, since your Broadband Plan assumes 
significant contributions or investments by the private sector, 
and if, I mean you just mentioned investment, but if investors 
are fearful of government's involvement in regulating the 
Internet, and you may not call it regulation but others do so, 
it is all a question of semantics, so how is that going to 
impact the expansion of broadband to all Americans if in fact 
you have investors who say, well, wait a minute here, this is 
overreach-overreach. And I realize that you say it is not, but 
some others would think it is.
    Have you studied the question and the impact that that 
might have on how we do achieve at least the large goals in 
your plan.
    Mr. Genachowski. I am committed to making sure that we have 
a framework that promotes investment. As Congressman Serrano 
mentioned, I spent many years in the private sector, including 
work as an investor. This is essential. In this country private 
investment will fuel our broadband networks, and we have to 
make sure that we achieve that. We are just at the beginning of 
tackling this issue. I would note just one thing, which is that 
the third way approach replicates the framework for mobile, 
which has been very consistent with investment, it has been 
widely praised. And I look forward to discussing this with you 
and other members to make sure that we have a framework to 
achieve our common goals with respect to broadband.
    Mrs. Emerson. Are you having trouble with the authorizing 
committee? This is something that everybody believes will 
somehow solve a problem that exists out here, at least, you 
know, according to you. Have you not talked to the authorizing 
committees to determine whether or not a narrow bill could 
simply be written and that would preclude you from having to do 
it by regulation? People are very nervous about any regulatory 
body doing things by regulation in place of us legislating it 
because it is a little heavy, at least the perception is it is 
very heavy handed.
    Mr. Genachowski. The chairmen of the authorizing committee 
on the House side and the Senate side have announced that they 
are looking at proposals to update the Communications Act and 
we will of course be a resource to that. So they are looking.
    Mrs. Emerson. So in other words, you would not hold back 
and perhaps let Congress do what it is supposed to do as 
opposed to you all doing it instead?
    Mr. Genachowski. I am looking for a solution that allows us 
to work together to promote our common broadband goals. And I 
put on the table a solution that I believe rejects both 
extremes that is modeled on regulatory frameworks that work, 
but I am focused on a solution and if Congress were to provide 
a solution that would be welcome.
    Mrs. Emerson. Thanks.
    Mr. Serrano. Thank you. And now under the 5-minute rule, 
with a very nice gavel in my hand, I am honored to introduce 
the newest member of our committee attending his first hearing, 
the legendary gentleman from New York, a legend in his own 
time, Congressman Steve Israel.
    Mr. Israel. Thank you, Mr. Chairman. Mr. Chairman, thank 
you for your hospitality. I have heard references to the 
Yankees and the Cardinals, but nothing about my beloved New 
York Mets, by the way, and I hope that changes.
    Mr. Serrano. The chairman is a Yankee fan.
    Mr. Israel. Mr. Chairman, although I am new to the 
subcommittee, back in December I sent you several letters 
expressing concern for the deterioration of negotiations on 
retransmission agreements between broadcast companies and 
Comcast providers. Both parties have intended to do 
brinkmanship, but it is the American people who hang in the 
balance. In Chairman Serrano's community and my community about 
3 million subscribers in New York, New Jersey, and Connecticut 
lost access to their ABC affiliate 15 minutes into the 
presentation of the Oscars when it went dark until the switches 
were turned on. And in the letter I asked you to consider 
ordering carriage on an interim basis when this happens, 
ordering arbitration, other alternative dispute resolutions so 
that the American people don't hang in the balance.
    Two questions. One, what can the FCC do to ensure that 
there is not a repeat of this kind of brinkmanship and protect 
consumers? And second, I believe that this is just a tip of 
iceberg and as we move forward there are going to be more and 
more cases where the American people suddenly find themselves 
literally in the dark with respect to their access to 
programming. And so what are you planning to do in order to 
keep pace? The regulations that were promulgated in the early 
1990s clearly are not keeping pace with the intensity of failed 
negotiations, and so what can we do moving forward to provide 
those consumer protections?
    Mr. Genachowski. I share your concerns, particularly with 
respect to viewers, consumers who don't have a seat at the 
negotiating table and can wake up and find out that what is 
expected of them doesn't make any sense. You mentioned the 
February/March issue. I remember back to December/January when 
there was a possibility that viewers might find out on the 
Friday before a holiday weekend that they would lose their 
signal over the weekend for when there were high interest, in 
that case football programming on that they would want to 
watch. And at one level making sure if consumers have a real 
ability with sufficient time and notice to change providers 
that is debatable, that is something we can debate and think 
about. But the idea that a viewer would find out on a Friday 
that, oh, you can't watch some programming that is very 
important to you on a Monday unless you go to a store that is 
closed and order a product that you can't get in time, that 
doesn't make any sense at all. So we have announced that we are 
looking at the retransmission framework, and it is largely a 
statutory framework that has been the same framework in place 
for a very long time. And we are running a process to see 
whether it can and should be updated. I do think that the 
private parties in this should have the ability to negotiate 
their own deals, but I think something--the consumers and 
viewers who are not at the table, their interests have to be 
taken into account as we analyze the framework and make sure 
that it fully serves the whole ecosystem.
    Mr. Israel. And what is your timeframe for the review of 
the retransmission process?
    Mr. Genachowski. It is ongoing now. I believe we are in the 
public comment process, and our staff is having discussions 
with the various players to see what recommendations we can 
come up with to improve and update the process.
    Mr. Israel. Thank you, Mr. Chairman.
    Mr. Serrano. Thank you. The distinguished Mr. Crenshaw.
    Mr. Crenshaw. Is that all you have to say, Mr. Chairman?
    Mr. Culberson. That is all you get.
    Mr. Crenshaw. Is that all I get?
    Mr. Serrano. I spent the last year and 6 months praising 
you.
    Mr. Crenshaw. Thank you, Mr. Chairman. And thank you for 
being here, Mr. Chairman.
    One of the things that when I talk to my folks back home 
what drives them crazy is every time there is a problem 
Washington says we will either spend more money, we will pass 
more laws, we will implement more rules, more regulations. And 
I guess I am trying to understand what the problem is that you 
are trying to solve, trying to understand why if Congress, if 
you have the chairmen of the authorizing committees saying they 
are trying to identify the problem, they want to solve the 
problem, that is kind of Congress' role. So when I look at the 
telecommunications industry it seems to be fairly innovative, 
it seems to be growing, there is a lot of private investment. 
And it would seem that I hear you saying you want to have a 
light touch, but it sounds like there is going to be more 
regulation and more regulation is going to bring more 
uncertainty. And I would like you to maybe just touch on a 
couple of things. One is kind of succinctly tell me what the 
biggest problem that you are going to solve, or maybe Congress 
is going to try to solve as well, tell me why it is important 
that you solve it through rules and regulations before Congress 
has a chance to solve it through input from their constituents, 
et cetera, more accountability. And then the third thing, maybe 
can you tell us, because this committee is interested in the 
money that we are going to spend, what kind of expenditures are 
going to be necessary if you put in place whatever rules and 
regulations you think you are going to put in place. It would 
seem to me you are going to need more people which would cost 
more money. So you know, and I guess you are also going to face 
a bunch of lawsuits and things like that. So can you highlight 
that as quickly as you can? I know that is probably not that 
easy to do quickly, but help me understand those three things.
    Mr. Genachowski. Sure. First of all, I have been and the 
Commission has been very transparent over the last year on what 
policy objectives we believe need to be pursued to advance our 
broadband goals as a country, I think a greater level of 
transparency and openness about that than anyone remembers.
    Mr. Crenshaw. Now is that the problem, there is not enough 
transparency?
    Mr. Genachowski. Transparency at the Commission? No, no, I 
don't think that is the problem at all. What the court decision 
did and our reaction to it doesn't change at all, not one bit, 
the policy goals that we have articulated in terms of getting 
broadband to rural America and all Americans, dealing with 
public safety issues, addressing basic consumer protections, 
nothing changes with respect to our goals. What this uninvited, 
undesired court decision does is it forces us to look at the 
legal foundation underneath it, to go into the basement and 
say, all right, we need to do these things for the country, 
they really matter. Even though we liked the structure that 
existed, the court told us you got to go into the basement and 
fix the foundation so that what you are doing for all these 
other things stands up. That is what we are trying to do.
    Mr. Crenshaw. So that is the problem.
    Mr. Genachowski. That is the issue.
    Mr. Crenshaw. Okay. And is that not being done now?
    Mr. Genachowski. Well, that is the process. We believe we 
have an obligation at the Commission to say, look, this court 
decision came down, it raises questions, we need to have a 
public, open, transparent process to identify what to do going 
forward. A lot of other people are looking at it, and I 
encourage that. This is an area where it is in our national 
interest to have all stakeholders come together, roll up their 
sleeves, get into the basement, get their tools out and fix 
this.
    Mr. Crenshaw. What needs to get fixed? What is the big, 
big, big problem? You got goals, you got objectives and some of 
them I guess are being accomplished. But is there one big thing 
that is not, that you got to fix?
    Mr. Genachowski. Well, in terms of the legal foundation the 
court said, hey, your foundation is broken, we need to go fix 
it. With respect to the broadband policies and objectives, 
transforming the Universal Service Fund so that we can extend 
broadband to all Americans, a vital thing we have to fix.
    Mr. Crenshaw. Is that not being done now?
    Mr. Genachowski. It is something we are working on very, 
very hard. The court decision raises questions about the legal 
basis on which it can rest. None of us want to spend a long 
time working together to build consensus for universal service 
reform and then have the court say, oh, you weren't listening, 
we told you that you can't rest it on this part of the 
Communications Act.
    Mr. Crenshaw. That is the big problem. All right. Now so 
you are working on that. Why are you working on that and not 
Congress working on that?
    Mr. Genachowski. Well, I think we have an obligation as the 
agency that administers the Universal Service Fund to work on 
it and improve it. We have obligations with respect to public 
safety, obligations with respect to basic consumer protections. 
And as I said, all of these policy goals have been very 
transparent and open. And nothing about the litigation or this 
process that we are dealing with now to deal with it affects 
our policy goals, affects our desire to have light touch 
regulation, to promote investment, to cut red tape, to focus on 
consumers' real needs, to focus on broadband and education.
    Mr. Crenshaw. Won't you end up with more regulation?
    Mr. Genachowski. No.
    Mr. Crenshaw. So you might actually reduce regulation, your 
new rules might be less restrictive than the rules you have 
now?
    Mr. Genachowski. Our goal is to go into the basement, fix 
the foundation so we can continue to work on exactly the same 
house that we have been working on and do that in a spirit of 
bipartisanship and consensus and global competitiveness in the 
United States.
    Mr. Crenshaw. And what do you think the Congress' goal is?
    Mr. Genachowski. I am not sure that I would--I am not 
sure----
    Mr. Crenshaw. Would they be working on--I assume that 
Congress is going to--I don't sit on the Energy and Commerce 
Committee, but I assume somebody there is. As you say, the 
authorizing committee chairmen are talking about fixing the 
telecommunications industry or rewriting laws or whatever. Is 
that a mutually shared goal they have with you?
    Mr. Genachowski. Yes. And I wouldn't want to speak for 
other Members of Congress, but we work closely with our 
authorizing committees and have great respect for the chairmen 
of those committees.
    Mr. Crenshaw. So why don't you wait and let them do it? It 
is that urgent?
    Mr. Genachowski. I think success in broadband is urgent for 
the country, I do believe that.
    Mr. Crenshaw. Thank you, Mr. Chairman.
    Mr. Serrano. Thank you. Ms. Wasserman Schultz, the 
gentlewoman from the great State of Florida.
    Ms. Wasserman Schultz. Thank you very much, Mr. Chairman. 
And a lifelong Yankee fan I might add, having been born in your 
home State.
    I am going to be the fly in the ointment among the members 
here and tell you, and not be afraid to say out loud, that I 
don't really have a problem with your move towards light touch 
regulation and am very interested in seeing what benefits to 
the consumer we might have. I mean, we have been struggling 
with issues related to the Internet like net neutrality, like 
how to make sure that we decide how much a company should be 
able to restrict access to a piece of network or control a 
piece of the network and package that and sell it. I would like 
to hear from you, to the degree you haven't already touched on 
it, what consumer benefits you think would come from light 
touch regulation.
    I also, though, would like you to touch on the whole issue 
of child pornography trafficking across the Internet. That is 
something that I have been very focused on since passing the 
Protect Our Children Act in 2008. I mean just to give you an 
example, last year a major ISP in the world tried to determine 
the magnitude of child pornography trafficking across their 
network in just one country, and it was a small country, fewer 
than 10 million people, something like the size of New Jersey, 
they used known child pornography identifiers, hash values from 
a registry provided for them by Interval. They determined that 
120,000 transactions for receipt, distribution and possession 
of child pornography had occurred in one day in one country. If 
we were to extrapolate a similar demand on the United States it 
would mean that there could be as many as 3 million hits for 
child pornography in our own country.
    I would like to know what the intended policy is toward 
anonymity on the Internet. Does the agency see a need to 
mandate that broadband providers keep and manage information 
like that? And I have a couple other questions related to that 
as well. But I know the easiest thing in the world to do 
politically is to just stay away from the Internet, stay away 
from Internet taxation, stay away from Internet regulation. The 
Internet has been off limits to any suggestion of anything 
governmentally related in touching it since its explosion. And 
I think as far as the answer to the question why not leave this 
to Congress, I mean sometimes Congress leads and sometimes we 
are pushed. And to be honest with you, I am not sure, as much 
respect as I have for the chairmen working on the issue now, I 
am not sure that they would have taken the issue up quite as 
soon if the FCC had not begun exploring the avenues that you 
are exploring. So I would love to hear from you.
    Mr. Genachowski. Thank you very much. Consumer benefits, 
the FCC has always promoted consumer benefits with respect to 
the main access to communications that goes into people's 
homes. And a lot of this issue is about preserving the ability 
to do, to take necessary steps for consumers. I will give you 
an example. We have been working recently on the issue of bill 
shock. There are consumers who get their bill in the mail for 
their mobile service and where they thought they were going to 
have a bill of $70, $80, $90 they get one for $2,000 because 
they exceeded their limits and they just didn't know. Our 
survey found that as many as 30 million Americans are affected 
by this at some level. And there are some basic things that we 
are exploring that might be able to fix this; making sure that 
consumers get text messages when they exceed their limits, for 
example, number one. Number two, I believe that information 
technologies actually provide a whole new range of 
opportunities to address consumer confusion, deal with basic 
consumer issues in a way that is lighter touch and more 
beneficial than in the past, because it is easier now to put in 
front of consumers of broadband access services information 
that will help them understand their speeds, their services. 
You know we found an international Broadband Plan that the 
speeds that consumers actually get for broadband are about half 
of what is advertised. Well, there are things that we ought to 
look at with respect to transparency rules that make it clearer 
to consumers. All of these issues are tied up in do we have 
basic authority to adopt sensible rules with respect to 
broadband access.
    With respect to preserving a free and open Internet, I 
believe that is a huge consumer issue. The ability of consumers 
to have choice, to access services that they would like, I 
think about consumers too as small businesses who want to have 
the opportunity to put a business on line and know that they 
can reach an audience, I think it is a very, very big consumer 
issue.
    To your child pornography point I would say that that focus 
is about lawful content and services. And I feel very strongly 
that we need to preserve the freedom and the openness of the 
Internet for lawful communications, lawful business relations, 
but unlawful content and services are in a different category. 
And in fact I think for the success of our Internet in the 
future we need to recognize both the need for openness and the 
need for safety, being very cognizant of the First Amendment 
and its vital importance.
    Ms. Wasserman Schultz. Can I just ask you, because you just 
described reasonable network management practices. Mr. 
Chairman, if I can just finish this sentence and get an answer 
that would be great. Thank you.
    Does the FCC intend to allow ISPs to block, thwart and 
encourage identification of legal content? I mean, during this 
light touch regulatory process I would think that that is 
something that you could take up that would really protect 
children and address the explosion of illegal content that is 
being transmitted across the Internet.
    Mr. Genachowski. Yes. Preserving a free and open Internet 
and making sure that reasonable steps can be taken to deal with 
unlawful content or unlawful activities, we need to get that 
balance right, and I think we can.
    Ms. Wasserman Schultz. Thank you very much.
    Mr. Serrano. Let me just say that that is, and that was a 
great line of questioning, that is my biggest concern, that you 
allow the freedom that we Americans always love to enjoy and at 
the same time not allow the Internet to be used to destroy 
people or to commit unlawful acts. And that is a challenge and 
a half, because it has to be done carefully. And we can't do it 
every time there is a crisis. Because when we respond to a 
crisis we tend to go too far to one side. And so it is a 
balance. I don't envy the job you have to do, but we do remind 
you on both sides that this is a huge challenge you have.
    Mr. Culberson.
    Mr. Culberson. Thank you, Mr. Chairman. Following up on Ms. 
Wasserman Schultz's question, and she is absolutely right, all 
of us are deeply concerned about the proliferation of child 
pornography, exploitation of children on the Internet, but the 
District Court of Appeals for the D.C. Circuit, the Supreme 
Court in this most recent decision from the D.C. Circuit, you 
don't have ancillary jurisdiction to regulate in areas that are 
not specifically authorized by the statute. I saw you were the 
general counsel of the FCC from 1994 to 1997. And when you tell 
us blithely and broadly that you are going to go work on the 
foundation, you don't have the statutory authority to do what 
you are attempting to do. You have a unanimous decision from 
the D.C. Court of Appeals, you have 10 years of precedent from 
the FCC in decisions and from the U.S. Supreme Court that you 
do not have the authority or jurisdiction to do what you are 
attempting to do. And all that is necessary if you are, if you 
are passionate about this and concerned about it is to go to 
the authorizing committees and ask them to amend the 
Communications Act to give you authority to regulate 
information services. And I would suggest that what you need to 
ask for specifically is the authority to prohibit illegal 
content and in particular the abomination of child pornography. 
And anybody that traffics in it, promotes it, allows it to be 
transmitted ought to be boiled in oil. And you guys ought to be 
able to have authority to regulate that. And I am confident the 
authorizers would do so. But you do encounter strenuous 
opposition from all of us in any broader effort to regulate 
lawful content on the Internet. You don't have the authority to 
do what you are attempting to do, do you?
    Mr. Genachowski. Well----
    Mr. Culberson. Where in any court decision and where in the 
statute--you were the general counsel from 1994 to 1997--tell 
me specifically in what court decision and where in the statute 
does it explicitly give you the jurisdiction to do what you are 
attempting to do? It is not there, is it?
    Mr. Genachowski. Well----
    Mr. Culberson. Where?
    Mr. Genachowski. With respect, I believe that the proposals 
that have been laid out--actually, by the different 
stakeholders in this there are many who agree that there are 
different ways under the statute to pursue broadband, and a lot 
of the debate is which is the best way. So we would be happy to 
provide a fuller legal--go on, please.
    Mr. Culberson. You can do it I am sure off the top of your 
head. You were the general counsel for the FCC, you are an 
attorney, I am an attorney. Tell me specifically, show me, just 
tell me where in the statute, what court decision is it that 
gives you the authority to attempt to regulate the Internet in 
the way that you are attempting to do? I don't see it, it is 
not there. Can you tell me as the former general counsel and 
the Chairman, where in the statute and what court case gives 
you that authority.
    Mr. Genachowski. Just one correction, I wasn't the general 
counsel. I was chief counsel to the Chairman.
    Mr. Culberson. Same thing.
    Mr. Genachowski. Yes. But nevertheless, the third way 
proposal would go back to the definition that the FCC had of 
broadband access providers as telecommunication service 
providers, the people who provide the pipe into your home for 
broadband access.
    Mr. Culberson. You would just issue a regulation that says 
they are telecommunication?
    Mr. Genachowski. The Commission had that in place in the 
past and then it adjusted that, and I think lawyers would agree 
we have the discretion to adjust it back.
    Mr. Culberson. Ancillary jurisdiction is what you are 
talking about and the D.C. Circuit said you don't have 
ancillary jurisdiction, and you would also be reversing 10 
years of explicit decisions from the FCC classifying the 
Internet as information services, not telecommunication, right?
    Mr. Genachowski. Well, if I could, there are people who 
believe we continue to have ancillary jurisdiction.
    Mr. Culberson. Despite the court decision?
    Mr. Genachowski. Yes. But by the way, those are some of the 
carriers who would urge us to continue moving under Title I. 
With respect to whether the classification of broadband access 
can be changed there are many, many lawyers, our general 
counsel currently at the agency believes that it is well within 
Supreme Court decisions and D.C. Circuit decisions to adjust 
that clarification.
    Mr. Culberson. Forgive me. My chairman is correct on the 5-
minute rule and I will have follow-up. Harry Truman used to say 
he always wanted to meet a one-armed economist so they couldn't 
say on the one hand and then on the other hand. There are 
always lawyers that can tell you that no matter despite this 
mountain of Supreme Court decisions, and this most recent 
explicit Court of Appeals decision, that you do not have 
ancillary jurisdiction, and despite all these decisions from 
the FCC over the last 10 years that you don't have the 
jurisdiction or authority to regulate the Internet, we are just 
going to do it anyway is what you are telling me.
    Mr. Genachowski. No, sir, that is not what I am telling 
you.
    Mr. Culberson. Sure.
    Mr. Genachowski. We are not going to regulate the Internet.
    Mr. Culberson. Let me just ask you again. Where in the law, 
what statute specifically gives you this authority and what 
court case gives you this authority explicitly when you have 
got a unanimous opinion from the D.C. Circuit that says you do 
not have, quote, untrammeled freedom to regulate activities 
over which the statute fails to confer you that authority?
    If you don't have the authority, all you need to do is go 
to the authorizing committee, go to Mr. Waxman. As Ms. 
Wasserman Schultz suggests, child pornography is vile. I mean 
you ought to go in and just ask for authority to regulate 
illegal activity. You would get it. Ask for the authority. You 
don't have it in statute, you don't have it under court cases, 
do you? Tell me the case.
    Mr. Genachowski. With respect, I believe we have authority.
    Mr. Culberson. Where?
    Mr. Genachowski. Under Title II. Many believe authority 
under Title I.
    Mr. Culberson. Where? I have got it right here. Where?
    Mr. Genachowski. Section 201, Section 202.
    Mr. Culberson. 201 and 202. Hold on. I will do my follow 
up. Where else?
    Mr. Genachowski. In general Title II applies to 
telecommunications providers.
    Mr. Culberson. But telecommunication is not information 
services, that is my point. The D.C. Circuit said the Internet 
is information services. You are given authority to regulate 
telecommunications, right? You are an attorney, come on.
    Mr. Genachowski. Yes. I would be happy to continue this 
discussion.
    Mr. Culberson. Don't dodge.
    Mr. Genachowski. No, sir. I am trying to answer your 
questions directly. The question is whether the provision of 
broadband access to consumers is----
    Mr. Culberson. Is information or telecommunications. The 
chairman has been very generous. But Ms. Wasserman Schultz is 
exactly right, we need to absolutely shut down child 
pornography. Go to the authorizers. You don't have the 
authority to do what you are attempting to do. Why don't you go 
to the authorizers, will you?
    Mr. Genachowski. I understand your point. We are in 
discussion with our authorizers.
    Mr. Culberson. Thank you, Mr. Chairman. You have been very 
gracious. Thanks for the indulgence.
    Mr. Serrano. Were you a prosecutor?
    Mr. Culberson. I just feel as strongly as we all do. And my 
good friend Debbie Wasserman Schultz is right about this. I 
mean these people ought to be boiled in oil and it is 
inexcusable that this vile material is allowed to be broadcast. 
And we can find them and roast them. She is right, toast them 
up.
    Mr. Serrano. We all agree.
    Mr. Fattah.
    Mr. Fattah. Mr. Chairman, just let it be for the record I 
would rather you go deal with the child pornographers and if 
someone wants to say you don't have the authority let them 
defend on the other side. But I want to pass this round to 
Congressman Ryan, and then I will catch him on the next round 
because he wants to do something to facilitate us continuing in 
this particular vein.
    Mr. Serrano. Well, in that case----
    Mr. Ryan. Mr. Chairman, I feel like this is a basketball 
game because I am going to pass to Ms. Wasserman Schultz so 
that she can follow up on her line of questioning.
    Mr. Serrano. Right. Who is in charge here?
    Mr. Ryan. I don't know. This is my first meeting.
    Mr. Serrano. I was going to welcome the newest member of 
our committee, Mr. Ryan, who already has broken three other 
rules.
    Mr. Fattah. I think the gentlelady from Florida is in 
charge.
    Mr. Serrano. Of the time now I guess. Okay. Ms. Wasserman 
Schultz.
    Ms. Wasserman Schultz. I will only take a couple of the 
very generous 5 minutes that my colleagues have tossed me. I 
actually agree with Congressman Fattah that to the degree that 
you have authority, whatever authority you possess today to 
restrict the transmission of child pornography and to be able 
to go after pornographers who are transmitting content on the 
Internet and to be able to expose them and deal with a 
telecommunications policy that prohibits them from being 
anonymous, then you should use all that authority and you 
should seek more. So if we can split the difference and say 
that you may not have all the authority you need, but whatever 
authority you have you should pursue that.
    Mr. Genachowski. If I could say done, like many of us, I 
have three kids, including two young ones, and it is a huge, 
huge terrible issue that needs to be tackled very fully, and so 
I completely agree.
    Ms. Wasserman Schultz. Good. And then the other quick 
question I had is just about the life line service, because 
life line has not, has traditionally been for land line 
services. Obviously it is very important now given how many 
people use cell phones. In September, Congresswoman Matsui, our 
colleague, introduced legislation that would require the FCC to 
establish a broadband assistance program for low-income people 
by expanding the life line program. Have you had a chance to 
review that legislation and are you supportive of it?
    Mr. Genachowski. Yes and yes. And our national Broadband 
Plan recommends that we move forward on it, and we have 
actually begun the process in May looking at doing exactly 
that.
    Ms. Wasserman Schultz. Does your fiscal year 2011 budget 
request reflect it?
    Mr. Genachowski. It would be part of our overall Universal 
Service Fund reforms, it would be inside the Universal Service 
Fund.
    Ms. Wasserman Schultz. Which I guess if you had some light 
touch regulation you would be able to advance even further?
    Mr. Genachowski. Yes.
    Ms. Wasserman Schultz. Thank you very much for my 
colleague's indulgence.
    Mr. Ryan. Thank you. I just have--it is me, right? I just 
have one question. The national Broadband Plan recognizes that 
we have this huge gap in funding, $24 billion. And we have 
similar issues with our transportation budget. We have a $1.4 
trillion transportation infrastructure gap. And we are trying 
to come up with some creative ways through transportation banks 
and leveraging private financing and those kind of things, 
creative ways to try to address this issue.
    Are you exploring some creative ways that we can address 
this issue, because we have got a lot of work ahead of us? And 
I think economic development and a lot of communities, not just 
rural but urban centers as well, who are trying to regenerate 
and restore their local economies, for example, in the 
industrial Midwest where a lot of this stuff was steel, rubber, 
manufacturing that is now trying to move into some higher 
technology, biofuels, whatever the case may be, software, this 
is very important for us. And so the only question is, and if 
we can help you in any way figure out creative ways to finance 
this and then to maintain it over the long term.
    Mr. Genachowski. And I agree with the premise of your 
question completely, and there is always the opportunity for 
new ideas, and I welcome that.
    Transforming the Universal Service Fund, it is 
approximately an $8 billion a year fund that needs to be 
focused in a smart way on new technologies to benefit people 
all over the country. There are opportunities in thinking 
creatively about spectrum options, and so the kinds of policies 
that we have proposed, some of which require legislation, to 
recover and auction off new spectrum, it has this win-win-win 
effect, because it can free up more spectrum, and spectrum is a 
form of infrastructure when it comes to wireless technologies 
for mobile broadband in urban and rural areas, which can make a 
big difference. It can generate substantial funds for the 
Treasury, which can help funding across the board, and there 
are ways to do it that work and are wins from the perspective 
of entities that hold spectrum licenses now.
    And so there are some creative ideas there around two-sided 
auctions, incentive auctions that we would be happy to follow 
up with you on because it is an important area where we do need 
to work with Congress to make sure that we have the spectrum 
infrastructure that will allow us to lead the word.
    And to your earlier question, Chairman, about what the U.S. 
hasn't done right in the past, this is an opportunity in the 
future for us to focus on our mobile infrastructure, on our 
wireless infrastructure to make sure we get it right for the 
next 10, 20 years.
    Mr. Ryan. Thank you.
    Mr. Serrano. Thank you, Mr. Ryan.
    Let me go into an area that is of great interest to me and 
I know to members on both sides, and that is the treatment of 
the PEG channels. In 2008, this subcommittee held a hearing on 
Public, Educational, and Governmental, or PEG, access 
television subscribers. At that time, several companies were 
denying PEG channels treatment equal to basic commercial 
channels. PEG supporters have filed petitions at the FCC to 
ensure fair treatment of PEG channels.
    When I urged prompt resolution of those petitions at our 
FCC hearing last year, Acting Chairman Cox said, it is my 
hope--this is a quote--that the Commission will take whatever 
steps are necessary to ensure that PEG channels remain a 
vibrant and valuable service.
    One year later, the FCC has apparently still not resolved 
the situation.
    Now, some of us have been around long enough to remember 
that when this great bonus, cable television, went out, it was 
with an understanding that the local community would have 
access through these channels, and everything from the local 
Little League football team being able to present their awards 
live, or taped on a local channel, to the local church having a 
Sunday service to whatever cultural and ethnic groups wanted to 
go on the air; they could do it.
    And what has happened is that more and more, the people are 
making them--making it hard for them to function. And in some 
cases, we hear stories out in the West Coast and other places 
where the channels now have moved from the first 15, 20, 30, 50 
channels to channel 800, and it is a dropdown menu, and making 
it almost impossible for you to get.
    Now, I think eventually, as we begin to trade off support, 
as we always do, where you have some issues that you want 
Congress to support you and Congress needs for you to do 
something, this little issue of PEG channels may become a very 
difficult issue, because on both sides, people support the fact 
that there is this public access, and it is important.
    So, before I ask you what is happening, I am telling you 
that this has to be dealt with fairly and strongly; otherwise, 
we are going to have some very difficult times between this 
subcommittee and the FCC, because we will not sit by and allow 
the FCC to allow commercial carriers to just push these folks 
aside.
    Mr. Genachowski. I appreciate the question. There has been 
some good news with respect to PEG, and there is also a lot 
more work that needs to be done. So one of the major disputes 
that existed was one involving Comcast, and that now has been, 
there has been a satisfactory solution there. We would be happy 
to review it with your staff and make sure it is satisfactory 
to you and your staff. But it is our understanding that the PEG 
community is satisfied with how that was resolved, and that 
obviously involves many communities across the country. There 
is at least one other major provider where there is an ongoing 
dispute that has not been resolved, and I can assure you that 
we will go back and make sure that it is on a track toward 
resolution.
    Mr. Serrano. Now, do you feel that there is a concentrated 
effort to move them off the bands, if you will? Is there 
indifference by the major carriers, or is there a plan here?
    Mr. Genachowski. Well, I don't know that I would be 
comfortable characterizing their points of view. The issues 
tend to come up, as you know, in convergence to digital. And 
sometimes the conversions are done to digital transmission of 
video services in a way that leaves PEG behind. That is what 
creates the issue.
    Mr. Serrano. When you buy a house or get a car, you don't 
leave some of the members of the family behind. Right? You move 
them all to the new place and you all celebrate. And I think 
that what has happened is that the FCC has not regulated these 
folks. And you do have the authority to do so on this 
particular issue, to say, this is part of the deal. And we 
remember the deal. I remember, in the Bronx, which took longer 
than most places, as you know, to get cable, that those were 
the agreements. Now, they have done pretty well there, but in 
some places, they are totally forgotten.
    Mr. Genachowski. The issue remains, and we will work with 
you closely on this. My hope is that the successful resolution 
in one case can be a model for successfully resolving it in 
others. But there is no question that the rights of PEG 
channels to have access to systems and access to the audience 
have to be honored and enforced.
    Mr. Serrano. Okay. Now, taking Mr. Culberson's approach of 
being more direct. You do have the authority. Do you intend to 
use it to make sure that they are not left behind?
    Mr. Genachowski. We intend to honor the statute here and 
take this very seriously and make sure that PEG channels are 
not left behind.
    Mr. Serrano. Okay. I understand your desire to honor it. I 
am going to take it a step further. I hope you get angry. 
Because I think as we deal with bigger issues, or what some 
people perceive as bigger issues, these will be left off the 
table again. And we can't do that.
    Which brings me to my next question, which is another 
favorite subject of mine. And that is, why can't the FCC do 
what some of us would want to do with all Federal agencies, but 
since you have a broader understanding of a lot of issues, why 
do you find it so difficult to understand that we have 50 
States and territories? Why do the territories always drag 
behind, lag behind in everything the FCC does? Why do we have 
American citizens who have the least access to the Internet in 
places like Puerto Rico and the Virgin Islands and Samoan and 
so on, why when we put forth a plan we always seem to say, for 
the States and the territories?
    And understand, this is a mantra of mine with every Federal 
agency. But I don't have oversight over all Federal agencies, 
and we do over the FCC. So why is it that at every turn the 
territories are always left behind?
    Mr. Genachowski. Well, we take this very seriously. And in 
fact, in the universal service proposal that we put out last 
month, there is a specific discussion of territories and 
looking at a proposal to modernize Lifeline and Link-Up to take 
into account the unique situations of Puerto Rico and other 
territories. So it is something that we take seriously, that we 
are looking at. And I do believe the FCC has made progress over 
the last few years in thinking about the Universal Service Fund 
applying to everywhere, including the territories.
    Mr. Serrano. But there are disparities, and you acknowledge 
that.
    Mr. Genachowski. Yes.
    Mr. Serrano. Well, despite these disparities, you recently 
declined to set up an insular specific Universal Service Fund 
mechanism to provide wireline voice service in Puerto Rico, 
citing recent improvements in overall voice service.
    In light of this, what can the FCC do to narrow this wide 
gap in Internet and especially broadband use in the territories 
versus the States, and make sure that a similar gap does not 
develop in the future?
    Because what is happening is you have got this gap that 
exists already. Then every time you move into a new area, you 
leave them behind again. And so they are not only catching up 
to what we have now, but they are already in line to have to 
catch up to what we will have a year or 10 years from now or 5 
years from now.
    What is so difficult for the members of the Commission to 
understand that these folks are American citizens living under 
the American Flag?
    Mr. Genachowski. I believe that we do understand that. And 
in fact, this is why specifically in our proposals to modernize 
the Universal Service Fund, we are focused on this issue. The 
biggest gap that we see and look forward to ongoing discussions 
with you on this is on the adoption gap. The adoption levels in 
Puerto Rico, for example, are well, well beneath national 
averages. There is no question that there is serious lagging 
behind, and of course, that affects people's ability to look 
for jobs, to get access to health care information, to be 
entrepreneurial and start businesses. And it is why this reform 
that we have proposed with respect to Lifeline and Link-Up to 
make significant progress on broadband adoption is so 
important.
    On the deployment side, we are looking at both wireline 
deployment and wireless deployment, and we would like to see 
progress on both because they are both essential to 
participating in our economy, connecting with family and 
friends.
    And so we hear you on this. It is very important. I think 
the Commission is paying very close attention to this.
    Mr. Serrano. In closing, before I turn to Mrs. Emerson, let 
me do a combination of Mr. Fattah and Mr. Culberson.
    Assume you had the authority, if you think you don't have 
the authority, go and make believe we have 55 States and not 
50, and let Congress get upset at you later for treating all 
Americans equally.
    Mrs. Emerson.
    Mrs. Emerson. I am not going there.
    Thank you, Mr. Chairman.
    Let me ask you a question. Do other countries in the world 
have interoperable first-responder networks?
    Mr. Genachowski. It varies from country to country. I would 
be happy to get you detail.
    Our military has better interoperability than our first 
responders. And one of the things that we have been trying to 
do is increase the best practices, the information, the 
knowledge that go from our military being able to solve some of 
the interoperability issues to our first responders. And I 
think that is an area where we can make progress.
    Mrs. Emerson. But I am asking you, is there another 
country? Are you aware of any other country in the world that 
has an interoperable network for public safety folks?
    Mr. Genachowski. Countries that are comparable to ours in 
the sense that they have so many different local authorities, 
it is hard to find that level of comparability. It may be that 
countries that have one single communications force don't have 
the issues that we have. So the locally-based system that we 
have is very important to our country. It does create 
interoperability issues that I think are somewhat unique to the 
United States.
    Mrs. Emerson. Well, that may be well true. And it is pretty 
embarrassing that it is this long after 9/11 and we still don't 
have a network.
    And, as a matter of fact, even after Hurricane Katrina 
within the military, the military itself, active-duty folks had 
a pretty darn good interoperable system, which has been much 
improved even since then. But the Guard and--the National Guard 
and the Reserves couldn't talk to the active duty folks. And I 
don't know if that has been fixed since then, but it was very 
apparent during Katrina that they couldn't even do that.
    I know that--I mean, I am all for building out and securing 
a first-responder network, and I know that you all have worked 
really hard on getting that plan done. I guess I am a little 
bit confused, because on the one hand, your plan proposes to 
provide $6.5 billion in assistance to first responders to build 
out a network, but then the National Governors Association 
wrote and asked that your plan be amended to allow the D block 
to be allocated to public safety. And then first responders say 
that they actually want to control the spectrum, and that 
priority access on--on a commercial network is insufficient in 
a crisis. And then we are told that all these different people 
are coming at it from different approaches.
    I guess I want some clarification from you, if you would, 
because I don't know, why would it be preferable to auction the 
spectrum commercially and give first responders $6.5 billion, 
while hoping the industry will work with them? Why wouldn't you 
just allocate the D block to first responders without giving 
them the $6.5 billion, and then they can control the spectrum 
and establish their own relationship with industry to build out 
a reliable and a resilient network?
    It is all a little bit too many different competing 
interests here. And, you know, the bottom line is, we want a 
system that works, and I don't know why we would pay $6.5 
billion for it if they could get it for free and then do it 
themselves. So I want to hear your reasoning behind it, if you 
wouldn't mind.
    Mr. Genachowski. A couple points. One is the goal of 
finally delivering on the recommendation of the 9/11 Commission 
that we have interoperable communications, number one. And, 
two, that we have a mobile broadband first responders is 
absolutely vital. Two, we don't have the authority to do 
anything other than auction the spectrum. This was the 
allocation that Congress made, and for that to change, we 
couldn't do that on our own.
    In connection with the National Broadband Plan, we put 
together a team led by a retired admiral who is just completely 
dedicated to tackling these issues. And the team developed a 
multi-part plan, that there is no single thing that can solve 
this. But their biggest concern was that the record of the last 
number of years suggests that if spectrum is allocated for 
public safety, and there isn't a plan to build the network, it 
doesn't get built. And there is spectrum out there that has 
been allocated. This isn't like other areas that the FCC deals 
with where private investors will come and invest in networks 
and they would get them built.
    And the conclusion of our staff on this was that if the 
funding issue isn't tackled directly, the towers and the 
equipment and everything else that needs to get done won't get 
done. And that is a suggestion and a request that we have made 
to Congress, making the point that if this is done now while 
the commercial four G networks are getting built out, the cost 
will be much, much less than if it is done in the future.
    There are a series of things that are part of the plan that 
need to be done to make sure that the network not only gets 
built but that it gets built in a way that is interoperable. 
And so we have set up an office for interoperability 
coordinating with Homeland Security Department and the Justice 
Department to make sure that we don't repeat the errors of the 
past, and that there are people looking at standards for 
interoperability, so that as the new network is built out, that 
can happen.
    And the team of course looked at the sufficiency of the 
spectrum as Congress had allocated it and came to the 
conclusion, dispassionate staff just looking at the facts, that 
the issue wasn't quantity of spectrum; the issue was funding to 
get the network built.
    Mrs. Emerson. Have the first responders even presented a 
plan? I don't know. I am really asking you, have you seen any 
kind of plan on the part of first-responder community?
    Mr. Genachowski. There have been many, many discussions 
between the first-responder community and the agency. And I 
know from my own conversations with them that many parts of the 
plan they feel strongly represent real progress, as I think 
Chairman Serrano mentioned, on a bipartisan basis. The four 
members, two Democrats, two Republicans on the 9/11 Commission 
supported the ideas and the plan as the best thing that they 
have seen to really make progress on this. We will continue to 
work with the public safety community.
    Our goals are the same, and we look forward to working with 
the public safety community, with this committee, with other 
committees to get this done for our country. It has not been a 
proud history. We have made much less progress over the last 10 
years. Different people have different views on why that has 
occurred. But what is important to me was to set up the kind of 
team that had the right level of experience and could 
dispassionately look at it and make recommendations to Congress 
and for our own actions that we believe would accelerate 
interoperability and accelerate a mobile broadband public 
safety.
    Mrs. Emerson. So let's just say we all agree with you. 
Hypothetically, we all agree with you, and you have the go 
ahead and you are going to get this done, and you will get your 
$6.5 billion to give out, hypothetically. How long will it take 
from start to finish to put in place a nationwide public safety 
network that is going to resolve all the communications issues 
we faced during both 9/11 and Katrina?
    Mr. Genachowski. Two answers. Several years. And I would be 
happy to get back to you with something more specific. But I 
can tell you, it would be roughly built out on the same pace as 
the buildout of commercial networks. Because part of the idea 
is, as the commercial carriers are building up four G networks, 
let's take advantage of that buildout; let's do one truck roll, 
not two. Let's have equipment go out at the same time. Let's 
take advantage of the same towers. So the pace would be the 
pace that is driven by the commercial buildout, and the cost 
would be much less than if we didn't move forward on this, 
allow the commercial networks to be built out, and then came 
back and said, okay, now let's do another set of truck rolls to 
put in the equipment for public safety.
    So I wish we could do it in 6 months. We can't. It will 
take several years. But it will be much faster than any other 
approach that we have seen.
    Mrs. Emerson. So several years. Is that under 10?
    Mr. Genachowski. Yes.
    Mrs. Emerson. Is it more than 5? I am not--and I am not 
going to hold you to it. But just to give us a sense of--
because we already have this other broadband deployment in 
place. I mean, I am happy to get EDGE in my district. You know? 
I mean, I am happy to get EDGE in some places. So what can I 
tell you, but nonetheless, it is worrisome in deploying a 
system like that. I mean, I just watched the nightmares that 
all of these little companies are going through trying to get 
approval from either RUS/NTIA just to do the broadband 
deployment from the stimulus bill, let alone some major 
national network. So I appreciate your answer. Thanks.
    Mr. Serrano. Mr. Fattah.
    Mr. Fattah. Thank you, Mr. Chairman. And I wish the Yankees 
well this year.
    Mrs. Emerson. What about the Cardinals?
    Mr. Fattah. But the Phillies are going to be the number 
one.
    Mr. Serrano. I suspect it will be the Yankees and the 
Phillies again.
    Mr. Fattah. I am with you.
    Welcome to the committee. And you have a recommendation for 
an increase of $19 million over your base from last year. Now, 
in part, you got some technology initiatives. There is also an 
additional 900,000 you are asking in terms of the, I guess the 
replacement of the vehicles you use now to protect public 
safety networks from interference. Would those dollars over the 
long term be backed out in future year budgets, assuming we do 
the Nationwide D block plan?
    Mr. Genachowski. I am not sure they would. The public 
safety work that we do, and I am very proud of this, we have 
developed technologies over the years that have the ability to 
identify spectrum uses in different markets that has been of 
tremendous value to our sister agencies in government in 
dealing with disasters, and we would be happy to follow up with 
you and give you more examples. Some of them can't be discussed 
in a public setting. But they have been very valuable 
throughout the United States, especially with respect to 
disasters, and I think it is a program that has earned its 
presence.
    Mr. Fattah. Another part of this increase request is to 
recruit and hire talent on it, on cybersecurity issues and some 
other issues. Right? So, now, I assume you do have authority to 
be concerned about cybersecurity.
    Mr. Genachowski. We are very concerned about----
    Mr. Fattah. This is on the Internet. Right?
    Mr. Genachowski. Yeah.
    Mr. Fattah. There was some debate about whether you had any 
authority to have interactions around the Internet.
    Mr. Genachowski. It is a very significant challenge for the 
country. As the FCC, as the expert agency responsible for 
communications, we have an important role to play here. It is 
vital that we have the expertise, the engineers and others, who 
can play a role in our system with respect to cybersecurity.
    Mr. Fattah. Now, in regards to one of your major goals of 
the agency, as you have identified, is to advancing a vibrant 
media landscape. In this regard, one of the big concerns has 
been about making sure that we continue to advance the 
interests of ownership, both in the media for African 
Americans, Hispanics, Native Americans, women. And I am, 
wondering whether it would be, as your role as chair, you see 
any major initiatives in this regard given the dearth of 
interest over the last decade in this issue.
    Mr. Genachowski. It is a very important issue. And it 
becomes even more important as technologies change, as the next 
generation is looking at new media channels instead of old 
media channels. So we are both, with respect to older media, 
getting our arms around the data and pursuing initiatives to 
continue to encourage those goals with respect to older media. 
And I also think it is vitally important that we look at a 
broad opportunity with respect to new media and new 
technologies. And in some ways there is an even greater 
opportunity to make a difference there because there are new 
entrepreneurs starting every day. And so it is one of the 
reasons, if I may, that I think preserving a free and open 
Internet is so important, because it gives the opportunity from 
anyone from any background to start a media company, start a 
business, reach an audience and have a realistic chance to 
succeed.
    Mr. Fattah. Well, I concur. And I want to thank you for 
your work. And I know there is a libertarian streak that we 
should--that free and open might mean unfettered. I mean, we 
have a Federal highway system that is free and open, but you do 
have to be moving on the right direction. You can't be coming 
up the opposite way. So I want to concur with my colleagues' 
interest in this child pornography issue, that we need to be 
clear that, even though we are very interested in a free and 
open Internet, we don't mean that in that context that people 
should be able to abuse children and feel as though they can be 
anonymous and out of the reach or touch of the society in terms 
of addressing what is a, I think my Republican colleague said, 
an abomination. But we should be passionate about addressing at 
every turn people who are involved in that type of activity. So 
thank you very much.
    Mr. Genachowski. I totally agree.
    Mr. Serrano. Thank you, Mr. Fattah.
    I want to echo his words. I think it has to be said again 
that, on behalf of all members of this committee, we do believe 
in a free and open Internet, but not one that then has the 
ability to bring harm to people. And that is, again, that is 
your challenge. That is the challenge for all of us. But it is 
clear that, as he says, you can't use the highway going in the 
wrong direction. You shouldn't use the Internet to bring harm 
to people.
    Mr. Genachowski. Absolutely. We have free and open 
commercial markets in our regular business, and we enforce the 
hell out of our child pornography laws. And that should be the 
same approach with respect to these new technologies. It is 
vital.
    Mr. Serrano. Mr. Culberson.
    Mr. Culberson. Thank you, Mr. Chairman.
    If I could throw out an idea that would allow you to very 
rapidly permit interoperability of our first responders and law 
enforcement, and I don't think it would cost much money, if 
any, and that would be to authorize the television broadcasters 
to use the currently unused part of their digital spectrum, and 
let them become Internet providers. If you authorize television 
broadcasters to function as Internet service providers, they 
can use the digital spectrum they currently broadcast on, large 
portions of which are unused, to sell that spectrum to the 
public, number one.
    And then, number two, you can then also simply require them 
as they do, they have to carry public service messages and 
broadcast the--PBS, for example, it would be probably within 
your authority under the statute to authorize the television 
stations to provide a certain piece of that spectrum to law 
enforcement community. And then you would have instant 
interoperability. The whole country has got television service 
and the towers are there; the digital broadcast is there. That 
would work. And it is there, and you don't have to do anything 
other than change the rules and the marketplace to take care of 
it. Right?
    Mr. Genachowski. Those are issues that we look at. There 
are some challenges. Broadcasting is a one-way medium; big 
towers transmitting in one way. And converting that 
infrastructure into something that works for two-way 
communications on a nationwide basis is--I wish it were easy.
    Mr. Culberson. Sure. But the marketplace would solve it. If 
you authorize it--I guarantee you, I have talked to the 
television people about it because it occurred to me when I was 
looking at what they were doing, they have got big gaps. They 
have got big areas of the digital spectrum they are not using. 
I throw that out as an idea.
    Number two, I know that Puerto Rico and others have 
cellular phone service, have television service. The cellular 
service alone, Mr. Chairman, I know provides people with iPhone 
or BlackBerry access to the Internet. And the purpose of what 
you are attempting to do you say is to provide the country with 
greater access to the Internet, but the broadband plan, the 
National Broadband Plan acknowledges that 95 percent of the 
country already has access to broadband at 4 megabits per 
second, and that, by 2013, 90 percent of the country is going 
to have access at 50 megahertz per second. So the marketplace 
is already taking care of this.
    And, number two, I want to go back to your statement a 
minute ago. You said you are going to honor the statute. Now, 
if you are going to honor the statute, as we were just 
discussing, the statute does not give you the authority to 
regulate the Internet. You acknowledged that--and I am reading 
from the District Court of Appeals opinion--in this case, the 
FCC does not claim that Congress has given it express authority 
to regulate the Internet. You acknowledge that. It was 
stipulated. And you are an attorney; you know what that means. 
You don't even contest it. By the way, you did not even appeal 
this decision to the U.S. Supreme Court.
    So, Mr. Chairman, Chairman Serrano, the FCC stipulated in 
Federal court that they do not have the authority to regulate 
the Internet. And when the District Court of Appeals said you 
don't have the authority to regulate the Internet, they didn't 
even appeal that to the Supreme Court. They didn't even appeal 
it. So what they need to do is go to the authorizers and ask 
for statutory authority to do what you are attempting to do.
    The Commission, Mr. Chairman, Chairman Serrano, and I know 
you know this, Chairman Genachowski, the FCC has ruled that the 
Internet is not a telecommunications service. You have ruled 
that it is an information service.
    They simply don't have the authority, Chairman Serrano, to 
do what they are attempting to do. And it is not within the 
jurisdiction of this committee to fund unauthorized and, in 
this case, specifically prohibited activity.
    So, therefore, Mr. Chairman, I don't think--we need to 
have--a hard part of our bill needs to say that none of the 
funds appropriated by this act may be used by the FCC to 
regulate the Internet, because it is not authorized by law.
    I would repeat my question. Tell me, show me where in the 
statute you have the authority to.
    Mr. Fattah. Mr. Chairman, you have asked this question 
several times.
    Mr. Culberson. But he can't answer it.
    Mr. Fattah. But yeah, but that is fine. But we don't badger 
witnesses.
    Mr. Culberson. No, sir, I am not attempting to badger.
    I mean to make the point to the committee, Mr. Fattah and 
Chairman Serrano, and this is really important, that the FCC 
stipulated in court they don't have this authority. They didn't 
appeal it. When the District Court of Appeals said, you don't 
have this authority, they didn't even appeal it. So they 
acknowledged, you don't have statutory authority to regulate 
the Internet.
    Mr. Serrano. Well, I understand that. But I know what you 
are trying to get at. But why don't you let him answer the 
question.
    Mr. Culberson. And the question would be, where in the 
statute do you have the authority to regulate the Internet, 
when you stipulated to the D.C. Court you don't have this 
authority? And I just looked at title 2, section 201. That 
talks about communication services. These are the duty of every 
common carrier to furnish communication services and to hook up 
other carriers. And then section 202 of title 47, USC, again 
deals with communications services. That does not give you the 
authority to regulate the Internet, and you stipulated in Court 
of Appeals that you do not have the authority to regulate the 
Internet, and the standing rules of the FCC say you do not have 
the authority to regulate the Internet.
    So my question is, where explicitly in statute or rule do 
you have the authority to regulate the Internet?
    Mr. Genachowski. So, if I may. It has been a long time 
since I have been a practicing lawyer, so I would say a couple 
of things. One is, we have a great experienced legal staff at 
the FCC, and I would refer you to a long explanation of the 
legal issues that our general counsel has written.
    If I could attempt to summarize some of it. The question 
of, does the FCC have the authority to determine, not that the 
Internet, but that providers of broadband communication 
services are providers of communications services under the 
provisions you mentioned. I believe one that they do, and that 
the Supreme Court in the Brand X decision and other decisions 
confirms that we have the authority to do so.
    But we would be happy to provide a legal briefing for the 
committee. I have excellent lawyers that I rely on for this, 
institutional lawyers of the FCC, who are committed to making 
sure that consumer interest, competition interest, promoting 
innovation and investment are protected with respect to 
broadband communications.
    Mr. Serrano. Your time is up.
    Mr. Culberson. He can't answer the question. It is not 
authorized.
    Mr. Serrano. No, no, he gave you an answer; but that you 
don't accept the answer. I understand that.
    Mr. Culberson. May I ask him one follow-up? I will do 
another round.
    Mr. Serrano. One follow up. But let me preface your follow 
up by telling you that some members of this committee feel he 
has the authority to do so and the Commission does, and we are 
hopeful that they move ahead and do what they have to do, and 
then run into trouble with Congress if that is going to happen 
on behalf of the American people and the consumers. That is a 
good confrontation that I am willing to be supportive of on the 
Commission side. I don't want them to sit around waiting to see 
if they have when they feel they have it, and many of us feel 
that they have it and should use it.
    Mr. Culberson. You are very gracious with the time, Mr. 
Chairman, and I do appreciate it. You are a gentleman and a 
scholar. It is fun working with you. I really mean it. I 
appreciate the extra time.
    But I want to make sure Chairman Serrano and the committee 
members understand that the FCC stipulated, you would agree, 
Chairman Genachowski--I am quoting from the District Court of 
Appeals' opinion: In this case, the FCC does not claim Congress 
has given it express authority to regulate the Internet.
    That is your position in court. You did not appeal it to 
the Supreme Court. And you do not have and have never claimed 
in court that you have the authority to regulate the Internet. 
Isn't that correct?
    Mr. Genachowski. It is not, sir.
    Mr. Culberson. I am quoting from the opinion.
    Mr. Genachowski. I understand. We will provide you and the 
other members of the committee a full legal analysis. I will be 
happy to discuss it on an ongoing basis. But as I tried to 
indicate, I think we disagree on these legal points. And I do 
have excellent counsel at the FCC that is focused on these 
issues.
    Mr. Serrano. They did not claim it.
    Mrs. Emerson. Let me just say something, because one, we 
are talking about the Internet. Otherwise, we are talking about 
reclassifying the transmission component of broadband. And so 
it is not necessarily the same thing. So I just raise that as a 
question as a point of refereeing.
    Mr. Genachowski. Thank you.
    Mr. Serrano. We don't always claim what we think we are. 
You are the greatest Member of Congress. You don't claim that 
all the time.
    Mr. Fattah.
    Mr. Fattah. Just to clarify. I agree with the ranking 
member.
    What the chairman has said is that they have the authority 
to regulate the providers of broadband. And it is different 
from the question regulating the Internet, even though the 
broadband providers are operating on the Internet.
    So we can play games here, but the reality is that I think 
the question has been asked and answered. There has been an 
offering of a legal briefing. And none of us can assert what 
the law is. That is what we have the courts to determine, and 
that is why we have lawyers on all various sides of this. But 
let's proceed.
    Thank you, Mr. Chairman.
    Mr. Serrano. Thank you.
    And let's do this officially. Why don't we invite your 
legal staff to come and speak to our staffs and to discuss this 
at length. Because this chairman would rather you upset some 
Members of Congress when you defend the rights of the American 
people as consumers than to wait around to interpret totally 
whether you have one right or not.
    Mr. Genachowski. Thank you. We will provide that briefing.
    Mr. Serrano. Ms. Lee.
    Ms. Lee. Thank you very much. I apologize if this question 
is redundant due to my being late. I had things off the Hill I 
had to do. But good morning. Good to see you.
    Mr. Genachowski. Good morning.
    Ms. Lee. I know that you are concerned that the National 
Broadband Plan meets the digital future and is accessible to 
every American.
    We talked with the Congressional Black Caucus when you came 
in. So it is very important I think to continue this discussion 
as it relates to diversity in media ownership, management, 
access, how it is integrated into the National Broadband Plan. 
Also, the fair and equitable contracting opportunities for 
minority- and women-owned contractors and subcontractors and 
the fulfillment of this national effort. So I just want to get 
a sense of how you are doing in terms of this, in terms of the 
diversity question and the inclusion question.
    And also, it is really important, and I wanted to ask you 
this before, in terms of businesses and organizations that 
require people to submit their resume or information only 
through the computer, only through the Internet, they won't 
accept any other way of submission, how is that fair to people 
who don't have access? I mean, the digital divide is alive and 
well, unfortunately. And so when people--and I know, in my 
district, say, look, they won't accept my resume unless I put 
it online. My God, can we stop that, at least until everyone 
has access to broadband and to the Internet and has enough 
money to buy a computer?
    Mr. Genachowski. It is such a powerful point and such an 
important issue. The costs of digital exclusion today are so 
much higher than they were 10 years ago. Ten years ago, if you 
were looking for a job, you could get the newspaper and find a 
job and apply for it. Today, as you mentioned, more and more 
job postings are online only and job applications require 
online submissions.
    Ms. Lee. But how can we stop that?
    Mr. Genachowski. Well, I am not sure that our authority 
extends to address the hiring practices of companies.
    Ms. Lee. Not hiring practices.
    Mr. Genachowski. In the way they take applications. But we 
are very focused on tackling these digital divide issues as 
fast as we can. It is part of the urgency for moving forward on 
broadband, on the adoption issues, the inclusion issues, where 
there are clear gaps, low-income Americans, minority Americans, 
rural Americans, seniors are behind a level that is already too 
low. Students and others. So it is vital that we do this.
    We suggested a series of things in our plan. Reforming the 
Universal Service Fund in a way that efficiently tackles this 
is vital. We suggested the creation of a digital literacy corps 
that would focus on the communities that are most behind and 
tackle that with a kind of energy that we are capable of as a 
country. And on the ownership entrepreneur side, we are doing a 
series of things working closely with the Small Business 
Administration to make sure that the programs that exist, the 
mentoring programs and others, are modernized to help small 
businesses, entrepreneurs from all communities take advantage 
of new technologies.
    There is no silver bullet here, as you know, but there are 
a series of things we can pursue with energy. Some of them are 
within our jurisdiction. We will pursue them. Some of them are 
suggestions we have made to other agencies and to Congress. But 
it is very important, and I think the urgency is increased by 
the fact that the costs for jobs, for health care, for 
education, of not being online are much higher than they used 
to be, and they are getting higher every day.
    Ms. Lee. But can't the FCC send out an, I won't say 
directive, but a suggestion that organizations and businesses 
not require resumes and information to be submitted online 
only? That that could be discriminatory, and until everyone, 
every household is wired, that they have to or they should have 
other means of being able to receive submissions that are 
critical to people in terms of their lives? Because I think if 
the FCC just said that, you know, the country would listen. And 
I know, oftentimes, I talk to companies and nonprofits even. I 
say, you guys are shutting out a whole population of people 
because you require online-only submissions. And they say, oh, 
yeah, we hadn't even thought about that.
    So if the FCC would think it through and talk about it a 
little bit and send out a suggestion that this stop until every 
household is wired, you know, we may see a bit more fairness in 
terms of this whole system now.
    Mr. Genachowski. We will work with you on this. And I think 
we also would need to work together on the other half of it. 
More and more companies tell me that they need their employees 
to have basic digital skills and tools.
    Ms. Lee. Why sure. That is a given. You know, especially 
for many of our districts that are not wired and where the 
digital divide is huge. That is what we intend to do.
    Mr. Genachowski. I agree. So working on the front end, as 
you said; this back end, we set goals in the plan with respect 
to schools and libraries in every community that are open to 
people to make sure that even as we try to get broadband into 
every home, that there is meaningful access in every local 
community to the ability to both have access to the Internet, 
and also to the digital skills and tools that one needs in 
order to have meaningful access and to be eligible for a lot of 
the jobs that more and more require digital skills and tools.
    Ms. Lee. I look forward to working with you on that, 
because we have to send out that message that people can't be 
discriminated against because they don't have access to the Web 
and to the Internet and to broadband and to a computer. Okay. 
That is basic. Thanks a million.
    Mr. Serrano. Thank you, Ms. Lee.
    I am going to try to wind this down. So I am going to 
submit most of the rest of my questions for the record. I have 
two quick ones, and then I will turn it over to the rest and 
wrap it up.
    On wireless contract termination, something we all deal 
with, I went in recently just to reduce my minutes and ended up 
with a new phone and a new contract. Don't ask me why. And they 
told me if I reduce my minutes, then I couldn't get my five 
friends and relatives on it or whatever. And if I did that--it 
was like a scene from Mad, Mad, Mad, Mad World where they are 
all trying to figure out how to get the loot, and Sid Cesar 
says, well, you were in the car, so you get one share for 
having a car and one share for being you. You were on foot, but 
you had two people, so you get three shares. And Jonathan 
Winters says, It doesn't matter, I still get less than 
everybody else because I was alone. So it is every man for 
himself.
    Have you ever tried going to redo your contract? It is 
where you reduce your minutes, you get less options. You get 
more options, then you are going to fall under this plan. You 
walk out of there and you say, I speak English, I speak 
Spanish, I don't speak this language. Very embarrassing.
    So what happens when a new generation of iPhones or a new 
version of an android becomes available? Providers increase 
their cancellation fees to prevent customers from changing 
service providers. The FCC survey shows 43 percent of consumers 
have remained with their current service provider because of 
high early termination fees. What can the FCC do to restrict 
anti-competitive behavior so that consumers are not prevented 
from swapping service providers as technology improves and 
options increase?
    And for the record, my explanation of my own personal 
account is not a statement about what I want done either for me 
or for the industry. It is just that I pride myself on the fact 
that I do a lot of these things myself and therefore I know 
what consumers go through. But I am not asking for any special 
favors from anyone.
    Mr. Genachowski. Our surveys and our complaints show a 
tremendous amount of consumer confusion over many different 
aspects of wired and wireless communications. It is a thing 
that we are very concerned about, because the more confused 
consumers are, the less they can make the market work and drive 
competition. So whether it is speed of broadband, whether it is 
how early termination fees work, we believe that there are real 
opportunities using information technology to provide greater 
disclosure, greater transparency to consumers in a form that 
ordinary people would understand so that consumers can help 
make the market work better. And we are pursuing that around 
bill shock. We are pursuing that around early termination fees. 
We are pursuing that around broadband speeds. And I think this 
is a promising approach that should empower consumers to help 
make the market work. With respect to--and one of the things 
consumers are confused about what choices they have with 
respect to different services and alternatives to signing up 
for long-term contracts.
    We are also looking at the issue in general with respect to 
ETFs. We pay close to this. We are in active discussion with 
companies. On various occasions, we have seen things that have 
caused us to write letters to companies to ask them to explain 
some of what they have done, and in some cases, those letters 
have caused some of the companies to say, Oh, we didn't really 
mean that, and to adjust behaviors in ways that were more 
consumer friendly. But there is no question, there is 
tremendous confusion here, and I think we can play a helpful 
role in increasing transparency and disclosure and lessening 
consumer confusion.
    Mr. Serrano. I hope you do. And I know that I speak for all 
members of the committee when I say that. I hope you move in 
that direction to make life a little easier for folks. And not 
only that, to give them a real chance to be able to make wise 
decisions, because sometimes you are lost.
    My last question. As you know, we are big-time baseball 
fans and believe that all American households should have 
regular access to baseball games from both leagues. Currently, 
Time Warner and the Mid-Atlantic Sports Network, MASN, are 
engaged in a dispute over Time Warner's cable carriage in 
Eastern North Carolina. In the past, that cable franchise 
carried the MASN which shows games of both the Nationals and 
the Orioles, the closest teams to the area. I understand that 
there have been two arbitration decisions in favor of MASN and 
that, in October of 2008, the media bureau of the FCC also 
ruled in MASN's favor. Time Warner has since appealed the 
decision. In the meantime, baseball fans there are missing out 
on these two teams.
    So I asked you the question last year, but--I asked this 
question last year, but I understand there has still not been a 
ruling. Is there a reason that it has taken so long? And do you 
have any sense of how long it will take the commission to make 
a final decision so that folks in that part of the country will 
know where they stand?
    Mr. Genachowski. The Bureau is actively working on it, and 
we need to bring it to conclusion. The issue of sports 
programing and consumers and video carriage is one that 
occupies a good deal of our time. We adopted rules a couple of 
months ago that will make it easier for competitors to cable 
companies to get access to local regional sports networks. It 
had been both a real barrier to competition and also unfair to 
consumers who were signing up to the other networks. The 
retransmission consent issue that we talked about before, one 
of the areas where it tends historically has had some real 
impact on consumers is that that becomes a leverage point for 
negotiations between cable companies and broadcasters and 
consumers who want to watch the programming they want to watch 
end up getting hurt. And then there are issues like the one 
that you mentioned. So these are all activity on the plate of 
the FCC. On some, we have moved on, and I think we have made 
really good progress. On this particular one, we still need to 
act, and I will make sure we do soon.
    Mr. Serrano. Well, with that statement that you will move 
on it so that the folks know what is going on, especially with 
this kid in Washington who is going to keep striking people 
out. Okay.
    Mrs. Emerson.
    Mrs. Emerson. Thanks. I have some questions I would like to 
submit to the record, Mr. Chairman. And just on that--one 
little quick question again on that retransmission thing, 
because my smaller carriers who cannot necessarily afford it 
pay much, much higher rates than my larger carriers for 
retransmission rights. And it is problematic because they just 
can't compete; but yet, quite frankly, the larger cable 
companies don't come in there, anyway, into these communities 
because they are very rural anyhow. So it is really--and those 
are also the communities where folks aren't allowed, don't have 
the means necessarily to be paying outrageously high cable 
bills. And so, quite frankly, if you can figure out how to make 
that work. I realize you believe in negotiation between the 
parties, and I think that is grand. But for some reason, the 
little guys, because they don't have as many people over whom 
to spread their higher costs, it makes it really problematic. 
And I am just making that statement. You don't have to really 
respond, but just because Joe brought it up.
    Let me ask you a really quick question about Universal 
Service Fund, and you will have to forgive me, because I am 
actually late to be somewhere. How will this proposal--is it 
possible this proposal could increase the cost of phone service 
to customers living in high-cost areas? Number one. That is the 
first question. And how are you going to allocate the new 
funding? Is it going to be based on populations that are the 
most underserved or unserved? And is every State going to 
receive money? All sorts of things like that.
    I just--you know, I know these are questions that I have, 
and of course, where I live, people still have land-line 
telephones. So I don't know if that, how regular, old-fashioned 
phone service is going to be impacted as well.
    Mr. Genachowski. The Universal Service Fund is one of our 
most complex, challenging issues, but it also affects so many 
Americans, and it is so important to get it right for our 
broadband future, especially when it comes to rural America.
    In putting together the broadband plan, we made the 
following recommendations. One is we need to transform the fund 
to apply to broadband, as we have discussed, particularly for 
rural areas. Our recommendation was that we do this not in a 
flash cut because we are concerned about ongoing provision of 
telephone service as broadband is coming in, but also not in a 
way that goes on indefinitely. So we put out a multiyear plan. 
It is a 10-year plan to gradually move the system from 
telephone service to broadband in a way that doesn't increase 
the rate of growth of the fund, because someone has to pay for 
it; in these times, it is very important for us to be fiscally 
prudent.
    We have also suggested that there is a way to accelerate 
the transition. This is not something that we will do on our 
own, but we have suggested that Congress has the ability to 
authorize, appropriate essentially a bridge fund that would be 
sort of a one-time capital infusion into the Universal Service 
Fund that would allow the transition to happen more quickly in 
rural areas. And I would encourage the committee to look at 
that. We encourage Congress to look at it. We understand that 
it is a challenging time fiscally, but we wanted that option to 
be available because it would accelerate the transition.
    And then, with respect to your question about unserved and 
underserved, the priority is unserved. It is getting broadband 
to the parts of the country that don't have it. So we are 
looking at all the various ways we can cut and cap the existing 
fund to free up money as quickly as possible for the Americans 
who are most in need and who don't have service wherever they 
live. And it applies both to high cost and the Lifeline and 
Link-Up as well as the rate program and the rural health care 
program.
    Mrs. Emerson. So where you have unserved, that means, 
unfortunately, in my district, a lot of white, you know, on the 
red and white maps on TV in a lot of the white area. And I have 
so much National Forest and so therein lies part of the issue, 
so that parts of my district are totally unserved as far as any 
kind of broadband. On the other hand, I have underserved areas, 
too, whereby like one half of--for example, you have got a 
little town, and on one side of Main Street, it is dial-up; 
other side, it is not 3G, but it may be EDGE or something like 
that. So would that be considered underserved, and would only 
be in the main part of the town, but if you lived anywhere on 
the outlying areas, you are out of luck?
    Mr. Genachowski. I would say the principle is every 
American, wherever they live, should have access to broadband 
infrastructure. And one of the issues that comes up, including 
in the 95 percent figure that we heard earlier, is that it 
often looks at things on a zip code basis, on a county basis, 
and it obscures some of the real issues inside, where a county 
might be counted or a zip code might be counted as having 
broadband infrastructure, even though 20, 30, 40, 50 percent of 
the people inside don't have it. So we are going to be very 
practical about making sure that the Universal Service Fund 
goes to actually get people service where they need it. If you 
are part of the 20 percent that lives in a county or a zip code 
that doesn't have it, you shouldn't be penalized because you 
are in that zip code. We also have to figure out a way not to 
overfund areas that don't need it so we can target the money 
where it is really necessary. It is not easy, but we are 
committed to taking it on. And not to reintroduce the authority 
issue, but this is part of what is at stake.
    Mrs. Emerson. I don't have as much of an issue with this 
part of it. And it is critically important, and it helps for 
lots of reasons, not the least of which is when you go to a 
little clinic and we can do telemedicine--you don't need it in 
your district. You can do telemedicine with MD Anderson, for 
example. That is pretty significant. And I would like for all 
of my constituents to have those same opportunities.
    So, anyway, best of luck as you get that whole system 
deployed.
    Mr. Genachowski. Thank you.
    Mr. Serrano. The last question goes to Mr. Culberson. 
However, the singular ruling does not allow him to ask anything 
about authority.
    Mr. Culberson. If I could just ask Mrs. Emerson if you have 
got television service in all parts of your district, 
broadcast, where they can put rabbit ears.
    Mrs. Emerson. No, I do not. There are parts of my district 
where you have to use satellite in order to get television. And 
it is not necessarily local.
    Mr. Culberson. But it is all digital now.
    Mrs. Emerson. Yes, it is.
    Mr. Culberson. The way to do this, I am serious, if you 
would consider just granting television stations the ability to 
be Internet service providers, the marketplace will take care 
of this. And they can install the equipment, let them charge a 
fee for it, and through the satellites or through the 
transmission towers, they could provide Internet service on 
that unused portion of their digital spectrum to the country. 
Just consider it. Try to think outside the box, you know?
    And a couple of follow ups, Mr. Chairman, because it is 
truly not a matter--and I am really not--this is not a matter 
of interpretation on my part. The D.C. Circuit Court of Appeals 
in the first week of April just handed down this decision in 
the Comcast case.
    And if I could, Chairman Serrano, during the last part of 
my 5 minutes here, the remainder, just a couple of sentences. 
Let me quote for the record that the D.C. Court of Appeals 
says: In this case, we must decide whether the FCC has 
authority to regulate an Internet service provider's network 
management practices. The FCC acknowledges, Mr. Chairman, that 
it has no express statutory authority over such practices. And 
the commission relies on section 4(1) of the Communications Act 
which authorizes the commission to, quote, perform any and all 
acts and make such rules and regulations and issue such orders 
that are not inconsistent with this chapter as may be necessary 
in the execution of its functions.
    Sort of like the necessary and proper clause, Chairman 
Serrano, of the Constitution, which has been interpreted very 
broadly to give Congress authority in areas that the Founders 
did not intend.
    But here, the D.C. Court ruled explicitly you do not have 
authority to regulate the Internet service providers, regulate 
the Internet, not only because the statute doesn't allow you to 
do it, and you acknowledge that the FCC stipulated in court 
that you don't have this authority expressly in statute, but 
you are relying on this necessary and proper clause. And the 
FCC has repeatedly ruled that the Internet is information 
services, not telecommunications services. Everything I have 
just said is accurate.
    Mr. Genachowski. I disagree with you, sir. We will provide 
a full legal briefing.
    Mr. Culberson. I just quoted from the D.C. Court. Did I 
misquote the D.C. Court of Appeals? I just read it to you.
    Mr. Genachowski. I don't have it in front of me. I don't 
think you misquoted it. But the issue of whether transmission 
services by broadband providers is inside the Communications 
Act under its various titles is one in which many lawyers, 
including the career staff at the FCC and our excellent general 
counsel, believes that, under Brand X and other decisions, 
there is clearly the authority to move on it.
    Mr. Culberson. Therefore, let me just quote you. This is 
the D.C. Court of Appeals: The FCC acknowledges that you have 
no express statutory authority over the regulation of the 
Internet. I am quoting from the D.C. Court of Appeals' opinion. 
That was your decision in court. Are you telling this committee 
that your position today on June 10 is different from the 
position you had in the D.C. Court of Appeals in April?
    Mr. Genachowski. You are raising issues around definitions 
of information services, transmission services, 
telecommunication services that are very complex. We would be 
happy to----
    Mr. Culberson. I am quoting from the Court of Appeals' 
opinion. You told the Court of Appeals you don't have 
authority. Have you changed that position?
    Mr. Genachowski. The Court invalidated the approach that 
the Commission had taken. It did not invalidate other 
approaches that are now on the table for consideration. I would 
have preferred the other approach.
    Mr. Culberson. Well, of course. You are an attorney.
    Mr. Genachowski. But because the court disagreed with the 
mechanism that the FCC had used to protect consumers, promote 
competition, particular form, and the reasoning.
    Mr. Culberson. I understand. My time is very limited. And 
forgive me for interrupting, and the chairman is very gracious 
with the time.
    But, Mr. Chairman, it is a fact, and Chairman Genachowski 
cannot disagree that the FCC has standing rules that the 
Internet is information services, and he has not disagreed that 
the FCC stipulated, told the Federal Court of Appeals that the 
FCC has no--and I am quoting from the opinion--has no express 
statutory authority to regulate the Internet.
    He can't quote me the statute. You haven't changed your 
position that you had in court. So, therefore, you, the FCC, 
has no express statutory authority to regulate the Internet.
    So what my point is, Mr. Chairman, is that we need to have 
an amendment--and I will be offering an amendment--that none of 
the funds appropriated by this committee can be used to 
regulate the Internet. Because that is the ruling of the Court 
of Appeals; that is the ruling of the FCC.
    And you have not appealed this to the Supreme Court. Have 
you?
    Mr. Genachowski. Well, I look forward to working with you 
and others making sure that we can pursue investment on a 
broadband future for all Americans, because that is what is at 
stake in this debate.
    Mr. Culberson. Leave that to the marketplace.
    Mr. Genachowski. I disagree with you on the legal 
interpretations, but we will provide a full legal briefing, and 
I look forward to ongoing discussions about it.
    Mr. Culberson. Mr. Chairman, you have been very gracious, 
and I appreciate the time.
    Mr. Serrano. I shouldn't alert you to what my comeback 
would be in committee when you propose that amendment. But my 
comeback will be, for the record, that what you are proposing 
also will not allow him to do anything about pornography if 
that is the case. And I am not a lawyer, but that is the way I 
would read it; that he could not move on anything, including 
something that we all agree he should be moving on this 
afternoon.
    Mr. Culberson. Could we work together on an amendment to 
let him have that on the pornography?
    Mr. Serrano. See, I am not chairman of this committee to 
take power away from this committee only in the case of 
Washington, D.C., which I have stated I don't want to supervise 
Washington, D.C. So I am not going to be sending him to the 
authorizers to get powers I think the Commission has to carry 
out their duty. It is a matter of interpretation: Does he have 
all the total powers? Maybe not. Does he have enough powers to 
move on some very specific issues? Absolutely. And so as long 
as they are fighting on behalf of the American consumer and 
allowing the digital divide to be narrowed and done away with, 
I take--and maybe it is because I am not a lawyer and I take 
irresponsible stances--that some people say, stop, you can't do 
that much on behalf of the consumer. That would be a great day 
in America when people tell them to stop and tell the 
commission to stop. That is what I want to see happening. Thank 
you.
    Mr. Culberson. Could I offer a suggestion? I would love to 
work with you on the amendment with Ms. Wasserman Schultz.
    Mr. Serrano. I always work with you. But we are not going 
to work on an amendment that says they cannot move ahead and 
do. That is something you will have to do on your own, because 
I think they should move ahead and do as much as they can.
    Mr. Culberson. I was going to suggest a very narrow one to 
give them the authority to regulate child pornography and keep 
it off the Internet. We could work one up together with Ms. 
Wasserman Schultz and target that rifle shot authority in that 
one area, and otherwise----
    Mr. Serrano. Well, this is not the time.
    Mr. Culberson. I would love to help you with that.
    Mr. Serrano. I think they should move on everything.
    Mr. Chairman, thank you so much. I think it is clear to you 
that, notwithstanding the fact that the average American may 
not know what FCC stands for, that certainly this committee 
understands the major role you play. And from the unemployed 
person carrying a cell phone to the folks who sit at the major 
corporations, you can affect them all. And I think at the end 
of the day, just my personal position, the ones who need the 
most protection are the ones at the bottom of the totem pole 
who get ripped off a lot of times. We are not here asking you 
to do a number, if you will, and not support major corporations 
in their desire to make the industries grow. You know, it is 
all for the country. But this whole issue of consumerism is 
very important to us.
    But I think you have noticed that while we all agree on 
most of the issues and the approaches to them, we have certain 
interests. So Ms. Lee reminded you of diversity and how 
important it is, and it is something we all subscribe to. I 
would be very happy if I saw communications coming out of your 
office saying the territories are treated equally and that an 
American citizen with a need for the Internet in the Virgin 
Islands has the same right as one in L.A. and in Chicago and in 
D.C.
    You have agreed to--and you are going to hate me for this. 
You have agreed to bring the legal team here, and I invite the 
gentleman to join the staff. That is the part you are just 
going to hate me for. Every member is always allowed to join 
the staff.
    Mrs. Emerson spoke about the rural areas. With all the 
problems we have in the inner city, and God knows we have a lot 
of problems, it is hard for me to understand how you can be in 
a place where you can't get a telephone signal at all. And I 
don't mean an apartment in the Bronx or a television signal. So 
those are issues.
    And, lastly, we all want you not to wait for any court 
ruling, but to move on the pornography issue.
    We commend you for your work. We will support you in your 
challenge. And understand that, notwithstanding at times the 
tone of this committee, it wants to be a partner with you in 
moving ahead and resolving all of these issues. And thank you 
so much for your testimony today.
    Mr. Genachowski. Thank you very much.
    Mr. Serrano. And this hearing is adjourned.

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Davidson, Donetta................................................   121
Genachowski, Julius..............................................   195
Nord, Nancy......................................................     1
Tenenbaum, Inez..................................................     1

                                  
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