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


 
   OVERSIGHT OF THE AMERICAN RECOVERY AND REINVESTMENT ACT: BROADBAND

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

                                HEARING

                               BEFORE THE

      SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY, AND THE INTERNET

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 2, 2009

                               __________

                           Serial No. 111-26


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov



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                    COMMITTEE ON ENERGY AND COMMERCE

                      HENRY A. WAXMAN, California
                                 Chairman
JOHN D. DINGELL, Michigan            JOE BARTON, Texas
  Chairman Emeritus                    Ranking Member
EDWARD J. MARKEY, Massachusetts      RALPH M. HALL, Texas
RICK BOUCHER, Virginia               FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey       CLIFF STEARNS, Florida
BART GORDON, Tennessee               NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois              ED WHITFIELD, Kentucky
ANNA G. ESHOO, California            JOHN SHIMKUS, Illinois
BART STUPAK, Michigan                JOHN B. SHADEGG, Arizona
ELIOT L. ENGEL, New York             ROY BLUNT, Missouri
GENE GREEN, Texas                    STEVE BUYER, Indiana
DIANA DeGETTE, Colorado              GEORGE RADANOVICH, California
  Vice Chairman                      JOSEPH R. PITTS, Pennsylvania
LOIS CAPPS, California               MARY BONO MACK, California
MICHAEL F. DOYLE, Pennsylvania       GREG WALDEN, Oregon
JANE HARMAN, California              LEE TERRY, Nebraska
TOM ALLEN, Maine                     MIKE ROGERS, Michigan
JANICE D. SCHAKOWSKY, Illinois       SUE WILKINS MYRICK, North Carolina
HILDA L. SOLIS, California           JOHN SULLIVAN, Oklahoma
CHARLES A. GONZALEZ, Texas           TIM MURPHY, Pennsylvania
JAY INSLEE, Washington               MICHAEL C. BURGESS, Texas
TAMMY BALDWIN, Wisconsin             MARSHA BLACKBURN, Tennessee
MIKE ROSS, Arkansas                  PHIL GINGREY, Georgia
ANTHONY D. WEINER, New York          STEVE SCALISE, Louisiana
JIM MATHESON, Utah
G.K. BUTTERFIELD, North Carolina
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
DORIS O. MATSUI, California
DONNA M. CHRISTENSEN, Virgin 
    Islands
KATHY CASTOR, Florida
JOHN P. SARBANES, Maryland
CHRISTOPHER MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
BETTY SUTTON, Ohio
BRUCE BRALEY, Iowa
PETER WELCH, Vermont
      Subcommittee on Communications, Technology, and the Internet

                         RICK BOUCHER, Virginia
                                 Chairman
EDWARD J. MARKEY, Massachusetts      FRED UPTON, Michigan
BART GORDON, Tennessee                 Ranking Member
BOBBY L. RUSH, Illinois              J. DENNIS HASTERT, Illinois
ANNA G. ESHOO, California            CLIFF STEARNS, Florida
BART STUPAK, Michigan                NATHAN DEAL, Georgia
DIANA DeGETTE, Colorado              BARBARA CUBIN, Wyoming
MICHAEL F. DOYLE, Pennsylvania       JOHN SHIMKUS, Illinois
JAY INSLEE, Washington               HEATHER WILSON, New Mexico
ANTHONY D. WEINER, New York          CHARLES W. ``CHIP'' PICKERING, 
G.K. BUTTERFIELD, North Carolina         Mississippi
CHARLIE MELANCON, Louisiana          VITO FOSELLA, New York
BARON P. HILL, Indiana               GEORGE RADANOVICH, California
DORIS O. MATSUI, California          MARY BONO MACK, California
DONNA M. CHRISTENSEN, Virgin         GREG WALDEN, Oregon
    Islands                          LEE TERRY, Nebraska
KATHY CASTOR, Florida                MIKE FERGUSON, New Jersey
CHRISTOPHER S. MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
PETER WELCH, Vermont
JOHN D. DINGELL, Michigan (ex 
    officio)
  


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Rick Boucher, a Representative in Congress from the 
  Commonwealth of Virginia, opening statement....................     1
Hon. Cliff Stearns, a Representative in Congress from the State 
  of Florida, opening statement..................................     3
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, opening statement.................................     5
Hon. Lee Terry, a Representative in Congress from the State of 
  Nebraska, opening statement....................................     6
Hon. Donna M. Christensen, a Representative in Congress from the 
  State of Virgin Islands, opening statement.....................     7
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     7
Hon. Doris O. Matsui, a Representative in Congress from the State 
  of California, opening statement...............................     8
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, opening statement..........................     9
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     9
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................    10
Hon. Zachary T. Space, a Representative in Congress from the 
  State of Ohio, opening statement...............................    11
Hon. Bart Stupak, a Representative in Congress from the State of 
  Michigan, opening statement....................................    12
Hon. Edward J. Markey, a Representative in Congress from the 
  Commonwealth of Massachusetts, opening statement...............    13
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, prepared statement..............................   119

                               Witnesses

David Villano, Assistant Administrator, Telecommunications 
  Program, Rural Development, U.S. Department of Agriculture.....    14
    Prepared statement...........................................    17
    Answers to submitted questions \1\...........................
Mark Seifert, Senior Policy Advisor, National Telecommunications 
  and Information Administration.................................    24
    Prepared statement...........................................    26
    Answers to submitted questions...............................   145
Scott Deutchman, Acting Senior Legal Advisor, Federal 
  Communications Commission......................................    38
    Prepared statement...........................................    40
    Answers to submitted questions...............................   156
Hon. Rachelle Chong, Commissioner, California Public Utilities 
  Commission.....................................................    43
    Prepared statement...........................................    46
Nicol Turner-Lee, Senior Vice President, External Affairs, One 
  Economy Corporation............................................    54
    Prepared statement...........................................    56
Brian Mefford, Chairman and CEO, Connected Nation................    62
    Prepared statement...........................................    65
    Answers to submitted questions \2\...........................
Jonathan Large, Dan River District Supervisor....................    94
    Prepared statement...........................................    97

                           Submitted Material

Paper by National Cable & Telecommunications Association, March 
  17, 2009, submitted by Mr. Stearns.............................   122
Letter of March 25, 2009, by Mr. Barton and Mr. Stearns, 
  submitted by Mr. Shimkus.......................................   138
Statement of Minority Media and Telecommunications Council, March 
  31, 2009, submitted by Mr. Weiner..............................   141

----------
\1\ Mr. Villano did not respond to submitted questions for the 
  record.
\2\ Mr. Mefford did not respond to submitted questions for the 
  record.


   OVERSIGHT OF THE AMERICAN RECOVERY AND REINVESTMENT ACT: BROADBAND

                              ----------                              


                        THURSDAY, APRIL 2, 2009

              House of Representatives,    
Subcommittee on Communications, Technology,
                                  and the Internet,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:35 a.m., in 
Room 2322 of the Rayburn House Office Building, Hon. Rick 
Boucher (chairman) presiding.
    Members present: Representatives Boucher, Markey, Rush, 
Eshoo, Stupak, Inslee, Weiner, Butterfield, Matsui, 
Christensen, Space, Dingell, Stearns, Shimkus, Radanovich, 
Walden, Terry and Blackburn.
    Staff present: Roger Sherman, Senior Counsel; Pat Delgado, 
Policy Coordinator; Tim Powderly, Counsel; Shawn Chang, 
Counsel; Greg Guice, Counsel; Philip Murphy, Legislative Clerk; 
Sarah Fisher, Staff Assistant; Neil Fried, Minority Counsel; 
Amy Bender, Minority FCC Detailee; and Garrett Golding, 
Minority Legislative Analyst.

             OPENING STATEMENT OF HON. RICK BOUCHER

    Mr. Boucher. The hearing will come to order.
    I want to welcome our witnesses this morning and thank you 
for testifying before us today.
    The United States has a unique opportunity, although the 
circumstances which have brought this opportunity about are 
unpleasant, and the condition of our economic emergency is 
dire.
    The $7.2 billion contained in the American Recovery and 
Reinvestment Act for broadband programs is welcome and in fact 
is much needed. The United States is 16th in the world today in 
broadband deployment as measured by the percent of our 
population that subscribes to broadband, and for the sake of 
our national economy we have got to be better. Broadband, in my 
view, is as essential an infrastructure today as telephone 
service or electricity services were when they were introduced 
more than 100 years ago and communities that do not have access 
to broadband will lag behind in commercial competition and so 
it is important that we take steps in Congress to develop a 
national broadband plan and we are doing that. It is also very 
welcome that the American Recovery and Reinvestment Act 
provided $7.2 billion for broadband deployment. That, I think, 
is an important first and properly deployed by the agencies 
responsible can help elevate our standing in the world in terms 
of broadband usage.
    Congress has widely divided this money between the National 
Telecommunications and Information Administration at the 
Department of Commerce, which was allocated a total of $4.7 
billion, and the Rural Utilities Service of the Department of 
Agriculture, which received $2.5 billion. I am very pleased 
that the Administration is treating these two allocations as 
two parts of a continuous and uniform program. The agencies 
should work together to ensure the maximum amount of 
consistency in program management and development, and it is my 
understanding that with facilitation from the Administration, 
that is what today they are both doing. We will learn more 
about that this morning.
    The money is among other things to provide broadband 
service including infrastructure and equipment both in unserved 
and in underserved parts of the Nation. Both unserved and 
underserved areas are important and are deserving targets for 
these expenditures. The statute in fact requires that the 
program be targeted both toward unserved and underserved areas 
of the country. We want to ensure that everyone has access to 
broadband and we also want to ensure that everyone has access 
to broadband at meaningful speeds and at truly affordable 
prices and can benefit from competition among service 
providers.
    For the broadband programs to be truly effective, we also 
need a sensible definition of unserved. We would not, for 
example, want to exclude areas where there is a smattering of 
broadband service but where the service is generally absent 
throughout the community. As Mr. Large will testify this 
morning, when agencies define ``unserved'' unreasonably and 
disqualify an entire community from a broadband grant program 
because a single home within that community has access to high-
speed Internet services, large numbers of people, the entire 
balance of that community, most of which does not have access 
to broadband, will suffer.
    Similarly, the agencies must craft a definition of 
``underserved'' with great care. It is, for example, 
appropriate to provide support where there is currently only 
one broadband provider and so a community gets the benefit of 
market competition by another provider or perhaps multiple 
additional providers entering that community and then providing 
that service, and we should not equate underserved only with 
the absence of competition. Underserved means other things as 
well. It can also refer to communities that have inadequate 
broadband speeds. A community should not be disqualified from 
the program because there are multiple providers offering 
broadband with a download speed, for example, of 256 or perhaps 
512 kilobits per second. That is a slow speed and not adequate 
for what most people would consider to be broadband and high-
speed Internet access.
    And finally, communities where broadband is only available 
at unreasonably high prices should also in my opinion be 
considered to be underserved.
    The NTIA funds are subject to non-discrimination and 
interconnection requirements and the art of applying this 
provision will be to develop standards that meet a number of 
separate tests. First, are they meaningful and do they ensure 
open and non-proprietary networks. Secondly, it is important 
that they not be overly burdensome for the providers of the 
services. And third, can they be put into place quickly, and I 
would suggest that all three of these standards should be met. 
We do not want to deter applicants and therefore need 
definitions that will not inhibit private sector providers from 
applying for this program. If the program is going to work 
truly effectively, we want to encourage a broad range of 
private sector applicants everywhere across the country and the 
standards that are put in place for openness and non-
discrimination must be consistent with that objective.
    The programs should also honor the principle of 
technological neutrality that will ensure that we build out our 
broadband more efficiently. The agencies should truly consider 
all available technologies for broadband offering including 
wireline, wireless, satellite and point-to-point microwave as 
appropriate for the terrain, for the size of the population 
that will be served through the project and other location-
specific factors that are relevant to the circumstances.
    I think it is also important to keep in mind that the 
stimulus program contained in the American Recovery Act is not 
our national broadband policy. As I suggested earlier, it is an 
important first step in getting broadband out to more unserved 
and underserved areas but the subcommittee is going to be 
actively involved in looking at ways that will achieve truly 
universal broadband deployment and this stimulus fund, ample as 
it is, is insufficient to achieve that larger purpose. We made 
a direction in the Recovery Act for the FCC to develop within 1 
year a national broadband plan and this subcommittee looks 
forward to working closely with the FCC as the work is 
undertaken by the agency to develop that plan and produce it 
within that 1-year period.
    I want to commend the NTIA and the Rural Utilities Service 
as well as the FCC for the tremendous work that these three 
agencies have done so far in developing in these very early 
stages a plan for expending the broadband funds contained in 
the stimulus measure. We will be hearing from our witnesses 
this morning about that progress to date and the future 
direction that you will be taking as the program takes final 
shape.
    I want to thank you once again for your participation here. 
We welcome your testimony.
    Mr. Boucher. At this time I am pleased to recognize the 
ranking Republican member of our subcommittee, the gentleman 
from Florida, Mr. Stearns.

            OPENING STATEMENT OF HON. CLIFF STEARNS

    Mr. Stearns. Good morning, Mr. Chairman, and thank you for 
your opening statement. I hope there won't be a test on your 
opening statement.
    Thank you, and I hope this will be the first in a series of 
oversight hearings on broadband. Obviously we live in a very 
exciting time. New applications, innovations are created all 
the time. In a relatively short period of time we have gone 
through primitive computers--I remember the original Mac--to e-
mailing to streaming video with billions of dollars of 
investment. The future is very bright and we are only limited 
by our imagination.
    Broadband has the potential to transform our everyday lives 
from how we work, how we receive medical attention and how of 
course we are entertained. Accordingly, we need a long-term 
investment in broadband infrastructure that is based on free 
market principles and not government run. Broadband technology 
will spur long-term economic growth by creating jobs, fostering 
innovation, increasing international competitiveness and 
improving the quality of life for all Americans. It can 
fundamentally alter our economy so we have obviously a 
tremendous opportunity.
    Now, the American Recovery and Reinvestment Act of 2009 
provides a total of $7.2 billion for broadband, $2.5 billion of 
which will go to the Rural Utilities Service and the remaining 
$4.7 billion will go to the National Telecommunications and 
Information Administration. In addition, the Federal 
Communications Commission will consult with the NTIA and RUS 
and develop a national broadband strategy.
    I applaud the focus on this type of transformational 
infrastructure. However, this can only be transformational if 
done right and can provide an enormous long-term economic 
boost. Unfortunately, the haste with which the legislation was 
drafted and enacted and the short time frame the respective 
agencies are afforded to accomplish their task may prevent the 
agencies from achieving these worthwhile goals as effectively 
as might otherwise have been possible. The very real risk of 
course will be that taxpayers dollars are once again wasted on 
another ineffective government program.
    Now, to prevent this, NTIA and RUS and the FCC need to take 
three basic principles into mind when distributing this grant 
money. First, a comprehensive nationwide broadband inventory 
map must be conducted. It is common sense that we should know 
where to spend the money before the money is actually spent. 
Nationwide broadband mapping may not be complete before the 
stimulus requires the funds to be spent. However, maps have 
already been completed in a number of States and maps in other 
States may also be finished before it runs out.
    Perhaps we can prioritize funding for projects in States 
where mapping is complete. This can also help to ensure that 
requests are well thought about and provide a valuable 
incentive to complete maps in the remaining States as 
thoroughly and as quickly as possible. By identifying the areas 
that currently lack broadband service, the agencies will be 
better equipped to make decisions on how to best spend 
taxpayers' money. The likelihood of waste, fraud and abuse 
increases if we act before having the benefit of this 
information. A ready, fire, aim approach could be bad.
    The second principle is to focus on unserved areas before 
underserved. We should ensure that everyone gets firsts before 
others are allowed to get seconds and thirds. Allocating funds 
to underserved areas first could distort the marketplace, 
either because companies will wait for government funding 
rather than go forward with their own investments or will be 
forced to complete with a government-subsidized competitor.
    The third and final principle is that the allocation of 
broadband funding needs to include a strong criteria based on 
whether a project will be sustainable without additional 
government funding. According to the statute, most of the 
broadband grant money must be awarded by next September and 
each project must be substantially complete within 2 years of 
the award. I am reminded of Milton Freeman's quote when he 
said, ``Nothing is so permanent as a temporary government 
program.'' Grant receipts must demonstrate that they exist 
without the generosity of the federal government so that in 3 
to 4 years we do not need to bail them out.
    As these agencies begin the process to set the rules for 
the broadband grant program, I urge them to follow these three 
principles and ensure that the rules are technologically 
neutral. We have a tremendous opportunity to boost our economy 
and transform the way we live. Throwing money indiscriminately 
at the problem will prevent us from accomplishing the long-term 
economic growth broadband investment can deliver and will only 
cost us more money down the line. We cannot let this 
opportunity pass by. It is too important.
    Thank you, Mr. Chairman.
    Mr. Boucher. Thank you very much, Mr. Stearns.
    The gentleman from Michigan, Mr. Dingell, the chairman 
emeritus of the full committee, is recognized for 5 minutes.

           OPENING STATEMENT OF HON. JOHN D. DINGELL

    Mr. Dingell. Thank you, Mr. Chairman, and I commend you for 
holding today's hearing. These are important matters. I am 
delighted with your early initiative in ensuring that the 
broadband grants and loans provided in the American Recovery 
and Reinvestment Act of 2009, ARRA, are subject to adequate and 
ample oversight. ARRA's authorization of the Broadband 
Technology Opportunities Program, BTOP, at the National 
Telecommunications and Information Administration, NTIA, and a 
new grant program at the Department of Agriculture's Rural 
Utilities Service represents a significant and urgently 
required commitment on the part of this government to building 
out its broadband infrastructure, which according to an OECD 
report, ranks a shameful 15th among the 30 top industrialized 
economies in the world. Although encouraging such technology 
growth is vital to transforming the telecommunications 
infrastructure of the United States and preparing it for the 
economic realities of this new century, we must guard against 
doing so in a disorganized fashion, and furthermore wasting 
taxpayers' funds on what might degenerate into boondoggles.
    As my time is short, I will confine myself to those 
activities and those agencies subject to the jurisdiction of 
this committee, namely NTIA and the Federal Communications 
Commission. Much discretion is left to NTIA and FCC in 
implementing BTOP and I hope these agencies will today provide 
us with detailed information concerning how they propose to 
prioritize grant applications, the roles of the States in the 
grant process, NTIA's strategy for consumer education, 
conserving broadband literacy and each agency's plan for 
combating waste, fraud and abuse in the largest federal 
broadband infrastructure development grant program in the 
history of the United States.
    Similarly, I would urge both agencies, NTIA and FCC, to 
move expeditiously to define a number of terms left open in 
ARRA, in particular, what constitutes an underserved area, 
which I believe should be based on speed of available 
connections rather than number of service providers in a given 
area. This is urgent to accomplishing an orderly development of 
broadband and seeing to it that ARRA in fact does work.
    Finally, on a related note, I am curious how the witnesses 
assembled here today believe the broadband infrastructure 
created as a result of BTOP and RUS programs should be 
maintained in the future. For example, should the Universal 
Service Fund also disburse funds to make certain that all 
Americans have affordable access to broadband communications.
    I have a matter of personal pleasure and privilege here. I 
wish to note with great pleasure that Mark Seifert is appearing 
before us today as NTIA's representative. Welcome back, Mr. 
Seifert. Mark was an invaluable and indispensable member of the 
Committee on Energy and Commerce staff when I was the chairman 
and I can think of no person more dedicated or qualified to 
administer NTIA's great responsibility under ARRA. Welcome 
back, Mark Seifert.
    I yield back the balance of my time.
    Mr. Boucher. Thank you very much, Chairman Dingell.
    The gentleman from Nebraska, Mr. Terry, is recognized for 2 
minutes.

              OPENING STATEMENT OF HON. LEE TERRY

    Mr. Terry. Thank you. I just want to start by thanking you, 
Mr. Chairman, for holding this hearing so that we can get a 
grasp of the programs that I think will be of great benefit, 
particularly to rural America in making sure that they have 
access to broadband like most other parts of America, and I 
also want to thank Mr. Villano and Mr. Seifert for briefing 
staff members this week. Bart Stupak and I have the honor of 
being the co-chairs of the Telecom Taskforce of the Rural 
Caucus. I appreciate your efforts there.
    What we have lacked in Congress, well, as a Nation, is a 
real true broadband policy. We barely have been even able to 
come together to define broadband, let alone a policy of 
getting it out to the consumers and our constituents. I think 
between the chairman's and mine USF reform bill and now this 
$7.2 billion going to NTIA and RUS, puts us in a position where 
we really have to develop that policy now. I am not sure 
technically you put the money before the policy but whatever 
gets us the policy, I guess that is what we are going to 
embrace.
    So now we are going to have to develop the definition of 
broadband, what the speed is, what is unserved and underserved. 
I think the chairman did a great job of outlining the multitude 
of questions that must be answered rather quickly by these two 
entities. My hope is that we see coordination between the two 
entities so you are working off of the same playbook and we 
don't have funds that compete against each other. With limited 
funds, I think it would be poor policy to have competing 
agencies, government entities, funding competitors in a small 
rural area. So I appreciate your efforts in that case and I 
want to hear how those efforts are progressing to make sure 
that there is a playbook from which all are running the same 
plays.
    So with that, Mr. Chairman, I will yield back my time.
    Mr. Boucher. Thank you very much, Mr. Terry.
    The gentlelady from the Virgin Islands, Ms. Christensen, is 
recognized for 2 minutes.

         OPENING STATEMENT OF HON. DONNA M. CHRISTENSEN

    Ms. Christensen. Thank you, Mr. Chairman. As it is this 
committee's responsibility to monitor the progress on the 
portions of the ARRA over which we have oversight, I want to 
take this opportunity to thank Chairman Boucher and Ranking 
Member Stearns for holding this timely hearing.
    As a person of color and one who represents an area that 
generally is considered rural, which has a high rate of poverty 
and is largely unserved, I am pleased that the tone of almost 
all of the testimony that has been submitted focuses on 
reaching the marginalized communities and bridging the digital 
divide.
    I want to draw attention as we prepare to disburse these 
funds to some of the unique circumstances of our Nation's 
territories: one, our small market size; two, the more than two 
times higher cost, sometimes as high as eight times higher 
cost, of deployment due to a number of factors, the need for 
additional mitigation funds because of our propensity for 
hurricanes and even earthquakes, and we are pleased to see that 
there is such collaboration actually between the three 
agencies. It is our hope that the definition of ``unserved'' 
and ``underserved'' will be helpful and forthcoming shortly and 
that there will be neutrality so that all forms of transmission 
will be equally able to access funds either singularly or 
together.
    Thank you, Mr. Chairman, and I return the balance of my 
time.
    Mr. Boucher. Thank you very much, Ms. Christensen.
    The gentleman from Oregon, Mr. Walden, is recognized for 2 
minutes.

             OPENING STATEMENT OF HON. GREG WALDEN

    Mr. Walden. Thank you very much, Mr. Chairman. I appreciate 
it and I will say in advance, I have a conflicting set of 
scheduling issues today so I have to leave a little before 
10:30.
    I appreciate your holding this hearing and I think this 
oversight is especially important. I was the one who raised 
issues about the timing of the process leading up to how this 
money will be spent and so I will have some questions for the 
witnesses. I would like to know, for example, from NTIA and FCC 
how the agencies will balance costs to time to deploy broadband 
speed, affordability of the service, all those sorts of things. 
I think it is important to get some adequate level of broadband 
underserved and unserved markets and say the 1 to 3 megabit 
rate as opposed to waiting a long time to get the gold-plated 
service out there perhaps. Reasonable access to broadband at 
reasonable speeds I think is really important.
    I represent a district that is 70,000 square miles and 
probably represents some of the most unserved areas and so of 
course part of my passion is, how do we make getting broadband 
out to those unserved areas a priority, I think our ranking 
member addressed that as well, as opposed to bringing the 
third, fourth, fifth, sixth service into a market that already 
has it and so these definitions really do matter, and I wonder 
if you would agree that all compliance requirements associated 
with USF funding need to be known by the applicants prior to 
the funding being awarded. We are having quite the mess of it 
around here, and after the TARP vote and after the stimulus 
vote and a few other things, trying to figure out what we 
expected out of companies that took the money and what we 
didn't and now we are in this whole retroactive effort, which 
is sort of disgusting, and so I look forward to reading your 
testimony and hearing from you on these matters.
    And finally, I know I have been in conversations with my 
own State public utility commission and they had a proposal I 
think nationally to take a tranche of the money, pool it and be 
responsible for it to get it out there in areas where they know 
it could be properly used and I would be curious to get your 
reaction to that concept as well.
    Thank you, Mr. Chairman. I thank our panelists for their 
testimony.
    Mr. Boucher. Thank you very much, Mr. Walden.
    The gentlelady from California, Ms. Matsui, is recognized 
for 2 minutes.

           OPENING STATEMENT OF HON. DORIS O. MATSUI

    Ms. Matsui. Thank you, Mr. Chairman. Thank you very much 
for calling today's hearing. I would also like to thank the 
witnesses for appearing before us today.
    We are here to examine the efforts by NTIA, the FCC and RUS 
in carrying out the broadband programs established by the 
Recovery Act. As our economy continues to face unprecedented 
challenges, it is clear that we must invest in new, sound 
national projects to get people back to work immediately. The 
economic recovery package that Congress passed in February 
includes a number of strategic investments that will create new 
jobs and expand our economy. In particular, the package 
included a $7.2 billion investment in our Nation's broadband 
system that will be administered by NTIA and RUS for new grant, 
loan and loan guarantee programs. This investment will improve 
access to broadband in unserved and underserved areas and to 
increase the adoption of broadband by public safety agencies, 
schools, libraries and medical providers.
    It is no secret that our country has progressively fallen 
behind much of the industrial world in broadband access. For 
the Nation that invented the Internet, this is simply 
unacceptable. I am pleased that the Administration recognizes 
the importance of investing in the next generation of broadband 
technology and infrastructure as a critical element of economic 
development and growth for the United States. It will also lead 
to new well-paying jobs. Leading economists estimate that 
investment in broadband infrastructure will create thousands 
and thousands of good jobs throughout this country. Moreover, a 
recent Department of Commerce study revealed that communities 
with broadband added one percentage point to the employment 
growth rate in that particular area. Broadband expansion is a 
strategic investment that will benefit the education of our 
children, the delivery of health care and will provide the 
impetus for future growth of our great country.
    I thank you, Mr. Chairman, for holding this important 
hearing today and I yield back the balance of my time.
    Mr. Boucher. Thank you very much, Ms. Matsui.
    The gentlelady from Tennessee, Ms. Blackburn, is recognized 
for 2 minutes.

           OPENING STATEMENT OF HON. MARSHA BLACKBURN

    Ms. Blackburn. Thank you, Mr. Chairman.
    Welcome to our witnesses. We are glad that you are here 
because we know we are going to have to work together to make 
certain that broadband is expanded in this country. We had some 
legislative timeline and goalposts in the language that was 
passed. We know that the stimulus was a very confusing deal. It 
is confusing for our constituents. But reviewing those 
timelines, this is kind of what we know and I think where I am 
going to want to proceed with some of my questioning. The NTIA 
must complete a national broadband map by 2011, and we know 
that the Broadband Data Improvement Act enacted last year has a 
separate mandate for NTIA to compile this within 2 years. So we 
have got a little bit of conflict there. We know the FCC must 
unveil a national broadband plan by February 10, so we are all 
on different timelines, and then we have the NTIA and the RUS 
that must finalize and distribute the lion's share of the 
grants by September 30, 2010. Key terms will determine who is 
eligible to receive grant funds and where those funds can be 
used including broadband and unserved and underserved areas and 
so we will want to talk about that a little bit. And finally, 
NTIA and RUS expect to release the first round funding 
availability notices before the end of the summer.
    So I am curious about what this is going to mean for grant 
applicants who consider a grant proposal to the federal 
agencies being tasked with administering all of these programs 
because they know it is going to be a lot of work and I think 
they are trying to figure out if the work is going to be worth 
it, and a lot of the work is going to take place--you all are 
going to do a lot of the work. It is going to take place 
outside of our direct control. And sometimes I know that makes 
those of us in Congress a little bit nervous and it does me, 
and I couldn't help but think of that as I read Mr. Large's 
testimony about what had transpired in Patrick County, 
Virginia. I have counties that are similar to that and I am 
going to be interested in hearing from you.
    Thank you for the time, Mr. Chairman. I yield back.
    Mr. Boucher. Thank you very much, Ms. Blackburn.
    The gentlelady from California, Ms. Eshoo, is recognized 
for 2 minutes.

            OPENING STATEMENT OF HON. ANNA G. ESHOO

    Ms. Eshoo. Thank you, Mr. Chairman, for organizing today's 
hearing on the $7.2 billion that is going to be expended on 
broadband from the American Recovery and Reinvestment Act.
    That Act was really aptly named because this is an 
investment and it is going to help us recover from the 
position, the standing that we have in the world relative to 
broadband which depending on whose survey you look at, we are 
either 14th, 15th, 16th or 17th in the world with Latvia, 
Slovenia and a whole host of countries that are ahead of us. 
That is not a good record. It is less than a 20th century 
record, much less a 21st century record.
    There are some of us that were contacting the House 
leadership before the November elections in anticipation of 
what the outcome would be that broadband be addressed in the 
stimulus package. So I am very pleased that these monies were 
approved. Now, how are they going to be spent, how efficient, 
how effective, what is the reach and where it will take us. I 
think it is a very important first step. I for one do not 
consider this a prescription that is going to catapult the 
United States of America into position number one. But it is an 
important first step, so I welcome it. I think restoring our 
competitive edge in this area is a must. It is an imperative. 
It is an urgent priority for our country because the reach is 
so far with broadband.
    But how we do this is really going to be important and so 
the witnesses today I think are going to teach us something or 
try to instruct us. There is an example in California, the 
California Emerging Technology Fund, and it was established to 
accelerate adoption of broadband in unserved and underserved 
areas, and I want to extend a special welcome to Commissioner 
Chong, who is so highly respected in California, known 
nationally as an expert in telecommunications policy and the 
architect of the broadband map of California, which she 
completed in 6 months. So we need to learn from you and out of 
that take the lessons of how best these dollars can be applied 
so that we can then move on, I think, to other steps. If we 
bungle this, most frankly, if this $7.2 billion is bungled, I 
don't think the Congress and the American people are going to 
have confidence in our moving no to take the even larger steps 
for deep and broad penetration and higher speeds in our 
country.
    So welcome to all the witnesses. It is great to see you, 
Commissioner Chong. And thank you, Mr. Chairman.
    Mr. Boucher. Thank you very much, Ms. Eshoo.
    The gentleman from California, Mr. Radanovich, is 
recognized for 2 minutes.
    Mr. Radanovich. Thanks, Mr. Boucher. Mr. Chairman, I will 
pass on my opening statement for questions.
    Mr. Boucher. Thank you very much, Mr. Radanovich. There 
will be 2 minutes added to your time for witness questioning.
    The gentleman from Illinois, Mr. Rush, the chairman of the 
Consumer Protection Subcommittee, is recognized for 2 minutes.

            OPENING STATEMENT OF HON. BOBBY L. RUSH

    Mr. Rush. I want to thank you, Mr. Chairman, and commend 
you for holding this very, very important and strategic 
hearing.
    Mr. Chairman, if the stimulus package is going to be as 
effective as we think and hope it will be, Congress will play 
an important oversight role in its implementation. So I want to 
thank you again for holding hearing. My focus would be on the 
provision in the broadband title of the stimulus package that 
requires NTIA to consider whether a potential candidate for 
grant money is a ``socially or economically disadvantaged 
business'' as defined under section 8A of the Small Business 
Act. This provision was an amendment that I introduced during 
markup and I sincerely want to thank my Democratic and 
Republican colleagues for accepting the amendment and I also 
want to thank you, Mr. Chairman, and Chairman Waxman and the 
committee staff for fighting to conserve this particular 
provision during conference with the Senate. This mandate is 
not only important to me but it is important to all the women- 
and minority-owned businesses out there that continue to face 
steep barriers when trying to compete in the telecommunications 
market.
    Mr. Chairman, since I have been on this committee, I have 
insisted that more diversity is needed in this multibillion-
dollar industry. I intend to closely monitor how this provision 
is being implemented. I do not want to see the same 
indifference we have seen in the past on these matters.
    In this regard, I am very pleased and excited to see our 
former colleague and friend, Mark Seifert, at NTIA in charge of 
this important grant program. I want to associate my comments 
along with the comments of the Chairman Emeritus Dingell as it 
relates to Mark. Welcome, Mark. We certainly are happy to see 
you. Under Mark's leadership, I am confident that these grants 
can play a significant role in helping small, women- and 
minority-owned business create jobs and deliver advanced 
telecommunications services to the American public.
    Again, I thank you, Mr. Chairman, and I yield back the 
balance of my time.
    Mr. Boucher. Thank you very much, Mr. Rush.
    The gentleman from Ohio, Mr. Space, is recognized for 2 
minutes.

           OPENING STATEMENT OF HON. ZACHARY T. SPACE

    Mr. Space. Thank you, Mr. Chairman.
    I was delighted to find that the total amount of money 
devoted to the expansion of broadband in unserved and 
underserved areas was as high as it is. It is a lot of money 
and the money is there for a very good cause. I come from a 
rural district like many other members of the committee here 
and we face a lot of challenges and disadvantages that 
oftentimes go overlooked. Whether it is access to health care, 
whether it is access to education and certainly access to 
technology, it puts us at extremely disadvantages, not just 
with respect to economic development, which is obviously very 
important, but also with respect to basic and fundamental 
quality-of-life issues. Certainly health care and the role that 
broadband plays in health care delivery is significant. 
Telemedicine is something that we all understand can bring 
quality health care to rural areas. It is a way to help bridge 
that gap. Distance learning, a way to bridge the gap and some 
of the disadvantages that rural America suffers from.
    So this is an exciting and bold opportunity for us. In my 
district, this is a map of the State of Ohio. Connect Ohio 
prepared these maps. And if you will notice this large gray 
area in southeastern Ohio, that is my district. It is a glaring 
hole in Ohio and it is one that causes the people that I 
represent to suffer. It is one of the reasons we have some of 
the highest unemployment rates in the State of Ohio. We have 
one of the highest poverty rates in the State of Ohio. It is 
one of the reasons we have tens of thousands of people who work 
every day yet remain in poverty, the working poor. We need to 
bridge that gap, and I have been working very hard to do that. 
We have got a great opportunity now with these stimulus funds.
    The plan that I have developed is one which consists of 
four components. The first is expanding on the southern Ohio 
health care network fiber backbone that the FCC funded last 
year. The second stage covers the rural expanse via wireless 
coverage. The third is increasing industrial park connectivity 
and the fourth, expanding telemedicine. The limitations on my 
time prohibit me from expanding upon that but suffice it to say 
that we have received the backing and the cooperation of the 
governor, the numerous local development districts in the 
region, county commissioners. This plan covers five 
Congressional districts and it is absolutely vital to bring 
these people that we represent up to a relatively level playing 
field.
     I also look forward to working with Mr. Seifert, and while 
we have not met, I am well aware of your qualifications and 
would echo what Chairman Rush and Chairman Dingell have already 
iterated about your qualifications, and I thank you, Mr. 
Chairman, and apologize for extending my time.
    Mr. Boucher. Thank you very much, Mr. Space.
    The gentleman from Michigan, Mr. Stupak, chairman of the 
Oversight Subcommittee, is recognized for 2 minutes.

             OPENING STATEMENT OF HON. BART STUPAK

    Mr. Stupak. Thank you, Chairman Boucher, for holding this 
hearing. I would like to start off by expressing my thanks to 
RUS and NTIA staff, especially our witnesses David Villano and 
Mark Seifert, who came to Capitol Hill this past Monday to 
speak at the first Rural Caucus staff briefing. I would also 
like to thank Chairman Waxman's staff for accommodating the 
Rural Caucus by providing this hearing room and thank 
Congressman Terry for co-chairing the Rural Telecommunications 
Taskforce with me and for his help in putting together this 
briefing.
    As co-chairs of the Rural Telecommunications Taskforce, we 
felt it was important to have the Administration provide rural 
members with an early opportunity to hear the latest 
developments in the broadband stimulus program. Nearly 100 
Congressional staff members turned out for the briefing, 
demonstrating a high level of eagerness and anticipation from 
rural America. That is because broadband access gives our 
businesses the ability to compete in a global economy, gives 
our students an education for tomorrow's workforce and it gives 
our health care facilities the ability to provide better health 
care through telehealth.
    Broadband access is as fundamentally important to quality 
of life in today's world as electricity was in the 1930s. It is 
a utility for my constituents, not a luxury. So it is my hope 
with more than $7 billion in funds we have provided to the 
Departments of Commerce and Agriculture, that we can take a 
significant step forward in reaching universal access. I fully 
believe that we should implement this program effectively. It 
will lay a foundation for our country's economic recovery as 
well as its future prosperity. I look forward to discussing 
with our witnesses how we can work together to effectively 
deploy throughout our Nation.
    Mr. Chairman, thank you for holding today's hearing. I was 
down at the cable show, as I know many of our other colleagues 
were, and they have already spent the money a couple times over 
in the Economic Recovery and Reinvestment Act but that will be 
our decision to see how it is implemented and I hope we do it 
effectively, and the cable show is quite interesting and they 
gave us their view of it but we have to be efficient and make 
sure that the money is used efficiently and conveniently for 
all Americans, especially those of us in rural areas. Thank 
you, Mr. Chairman.
    Mr. Boucher. Thank you very much, Mr. Stupak.
    The gentleman from Massachusetts, Mr. Markey, former 
chairman of this subcommittee, is recognized for 2 minutes.

           OPENING STATEMENT OF HON. EDWARD J. MARKEY

    Mr. Markey. Thank you, Mr. Chairman, so much and thank you 
for having this hearing, and welcome back to Mark Seifert. We 
welcome you to the place where you served so well and so long, 
and actually I think you are in the right place right now. You 
can now implement a lot of the things that we were doing on 
this committee over the last 2 or 3 years and there is no one 
better qualified than you, and Commissioner Chong and all the 
rest of our distinguished panelists, thank you for being here 
as well.
    You know, one of the things that unfortunately was lost 
over the last 8 years was that broadband deployment and speed, 
access and pricing is really a proxy for an economy of a 
country and we dropped from number two to number 15 in the 
world during that 8-year period. Unfortunately, that has a 
correlation with the path that our economy has taken and so 
this stimulus bill was a way for us to look at a plan that we 
could put together to ensure that the unserved and the 
underserved, rural and urban, were dealt with in a way that 
gave them access to this essential tool in the economic growth 
of our country so that their skill sets could be used in the 
best possible way. And that is why, you know, the $350 million 
which is in this bill to do a map of America. What is the 
broadband map of our country? What is our problem? Who has it? 
Who doesn't? What is the speed? How much does it cost? Where is 
it? That $350 million is essential to just diagramming the 
program, the problem that we have, and when we complete that 
map and this money is spent, I think we will have gone a long 
way towards solving the problem, and I think Mr. Chairman, 
making this a top priority is really just part of your vision 
for this subcommittee and I think that the implementation of 
this bill, its oversight will largely determine long-term 
American competitiveness and I thank you for holding the 
hearing.
    Mr. Boucher. Thank you very much, Mr. Markey.
    The gentleman from Washington State, Mr. Inslee, is 
recognized.
    Mr. Inslee. I will waive, Mr. Chair. Thank you.
    Mr. Boucher. Mr. Inslee waives his opening statement, and 
the gentleman from New York, Mr. Weiner, is recognized for 2 
minutes.
    Mr. Weiner. I waive my opening statement.
    Mr. Boucher. Mr. Weiner also waives his opening statement.
    We now turn to our panel of witnesses and I again want to 
welcome each of them to our subcommittee this morning and 
commend you at the outset on the outstanding work you are doing 
at the agency level in order to implement the Recovery Act. Mr. 
David Villano is the assistant administrator of the 
Telecommunications Program and Rural Development for the 
Department of Agriculture. Mr. Mark Seifert, who has been 
acknowledged in his presence here by many members of this 
subcommittee, and I want to add my thanks to Mr. Seifert for 
his outstanding service when he was here in the Congress and 
congratulate him upon his new position. I agree with Mr. 
Markey, he is very well situated in this new role. He is the 
senior policy advisor for the National Telecommunications and 
Information Administration. He was previous staff for this 
subcommittee as a detailee from the FCC. Mr. Scott Deutchman is 
acting senior legal advisor at the Federal Communications 
Commission. The Honorable Rachelle Chong is a commissioner of 
the California Public Utilities Commission. Ms. Nicol Turner-
Lee is the senior vice president of external affairs at One 
Economy. Mr. Brian Mefford is chairman and CEO of Connected 
Nation. And I want to welcome my constituent and close personal 
friend, Mr. Jonathan Large, who is a member of the Patrick 
County Board of Supervisors in southwestern Virginia 
representing the Dan River District and has a truly compelling 
story this morning about how current restrictions within the 
existing grant programs have disqualified a community from 
receiving broadband where the vast majority of residents in 
that community do not have access to that service. It is a 
cautionary tale that suggests to us that better standards are 
needed as we go forward with the new stimulus program.
    Without objection, the prepared written statements of all 
of our witnesses will be made a part of the record. We would 
welcome your oral summaries and ask that you keep those 
summaries to approximately 5 minutes so that we will have time 
for questions. Mr. Villano, we will be happy to begin with you.

     STATEMENTS OF DAVID VILLANO, ASSISTANT ADMINISTRATOR, 
TELECOMMUNICATIONS PROGRAM, RURAL DEVELOPMENT, U.S. DEPARTMENT 
 OF AGRICULTURE; MARK SEIFERT, SENIOR POLICY ADVISOR, NATIONAL 
   TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION; SCOTT 
DEUTCHMAN, ACTING SENIOR LEGAL ADVISOR, FEDERAL COMMUNICATIONS 
   COMMISSION; HON. RACHELLE CHONG, COMMISSIONER, CALIFORNIA 
  PUBLIC UTILITIES COMMISSION; NICOL TURNER-LEE, SENIOR VICE 
  PRESIDENT, EXTERNAL AFFAIRS, ONE ECONOMY CORPORATION; BRIAN 
   MEFFORD, CHAIRMAN AND CEO, CONNECTED NATION; AND JONATHAN 
              LARGE, DAN RIVER DISTRICT SUPERVISOR

                   STATEMENT OF DAVID VILLANO

    Mr. Villano. Thank you, Chairman Boucher, Ranking Member 
Stearns and members of the subcommittee for the opportunity to 
discuss USDA's telecommunication program and in particular 
implementation of the broadband provisions of the American 
Recovery and Reinvestment Act of 2009.
    Rural broadband is of vital importance to expanding 
economic opportunity and improving the quality of life in rural 
America as well as improving the U.S. economy as a whole. We 
appreciate the continuing support of the President and Congress 
for that mission through the provision of $2.5 billion in ARRA 
funding as well as over $1 billion in fiscal year 2009 
appropriations for existing telecommunications programs.
    USDA Rural Development has extensive experience in 
supporting rural communities with critical infrastructure and 
economic development initiatives. We administer over 40 
programs, providing funding for water and wastewater, electric, 
telecommunications, housing, essential community facilities, 
renewable energy and business development. At Rural 
Development, we are truly committed to the future of rural 
communities.
    2009 marks the 60th anniversary of USDA's 
telecommunications programs. Since the program began in 1949, 
USDA has provided over $20 billion in telecommunications loans 
and grants in rural America. As with electricity under the REA, 
there was a need for a low-cost source of financing to enable 
rural telephone companies to affordably serve low-density 
areas. USDA loans achieve that goal, thus improving 
significantly the quality of life for rural residents and 
facilitating economic development in rural communities. Rural 
broadband is the next evolution of the 60-year commitment to 
rural America. It is as essential to rural businesses and 
economic development today as was the provision of rural 
electric and telephone service in an earlier era.
    Currently, USDA administers four major telecommunication 
loan and grant programs with a $4 billion portfolio. These 
programs include our Infrastructure Loan Program, our Broadband 
Loan Program, Community Connect grants, and distance learning 
and telemedicine loans and grants. All these programs create or 
leverage investment in broadband infrastructure. Since 1993, we 
have required that all telecom infrastructure that we finance 
be broadband capable. Because of this investment, our rural 
telephone borrowers have widely deployed broadband service in 
their service territories.
    In 2001, we implemented a pilot broadband program and in 
both 2002 and 2008 Rural Development received authority under 
the Farm Bill to administer a broadband loan program. Despite 
our experience, Rural Development has challenges in 
implementing our broadband program. The historical model 
provided by the electric and telephone programs did not 
translate easily to broadband. Rural electric and basic 
telephone service were built out in an earlier era of 
relatively stable technologies and a natural monopoly 
environment and on the realized assumption of essentially 100 
percent take rate. All these factors are quite different in the 
21st century broadband arena.
    As a result, both our staff and the service providers had a 
steep learning curve. We recognized these challenges and 
published a proposed rule in May of 2007. This rulemaking 
action, however, was delayed to the 2008 Farm Bill legislation 
which proposed significant changes to the program. Our new 
regulations implementing the 2008 Farm Bill have been drafted 
and are in departmental clearance. This rulemaking action will 
address the changes presented in the 2008 Farm Bill and the 
challenges identified by the industry, Congress, our inspector 
general and our own internal analysis. We expect these 
regulations to be published as an interim final rule within the 
next 60 to 90 days.
    Despite these challenges, we are pleased to report that our 
programs have had countless success bringing broadband service 
to remote, rural and unserved areas, for example, Rose Hill, 
Virginia. We provided a broadband grant to serve this community 
with a population of 714 individuals in the central Appalachian 
Mountains of southwestern Virginia. The project provided fiber 
to this unserved and very isolated area. The results to date, 
we have had more than 450 participants that have attended 
computer and Internet training workshops at the community 
center that was funded by the project and more than 115 
households and businesses have been connected with broadband 
service.
    Another example is the Havasupai Reservation, which is 
located in a remote rural area at the southwest corner of the 
Grand Canyon. Mail and food for the reservation are brought 
into the canyon by mule trains several times a week. The 
Havasupai Tribe was awarded a Community Connect grant in 2004. 
The grant also funded construction of a community center which 
provides free broadband service to trial members. The Supai 
Canyon had a flash flood in 2008 and communication between the 
tribe and the outside world relied heavily on broadband service 
made possible with this grant.
    One of our latest loans in our broadband program is IBEC. 
IBEC was awarded loans to work with rural electric cooperatives 
to install broadband over power lines to provide Internet 
access to thousands of rural residents in six States across the 
United States. Recently IBEC started providing support to the 
Cullman Electric Cooperative for their smart grid project using 
broadband over power line at a substantial cost savings over 
previous methodology. IBEC has also recently entered into a 
partnership with IBM to further advance its cutting-edge 
technology to the smart grid.
    At Rural Development, we have the experience, staff and 
processes in place to implement the Recovery Act within the 
challenging timeframes provided. Not only do we have dedicated 
Rural Utilities staff, we also have thousands of dedicated 
Rural Development personnel throughout rural America ready to 
assist with the delivery of this program, and we are not going 
to do it alone. We have been working very closely with NTIA and 
FCC on a comprehensive approach. We are confident that together 
with our partners we will deliver a new program that will 
successfully deploy broadband service in rural America. Mark 
Seifert from NTIA is going to talk a little bit of our joint 
efforts, our public meetings and our request for comments but I 
can assure you that we are working very closely with NTIA and 
FCC in deploying this program.
    Thank you for the opportunity to discuss Rural 
Development's implementation of the broadband provisions of the 
Recovery Act and we welcome any questions of the committee.
    [The prepared statement of Mr. Villano follows:]

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    Mr. Boucher. Thank you very much, Mr. Villano.
    Mr. Seifert.

                   STATEMENT OF MARK SEIFERT

    Mr. Seifert. Chairman Boucher, Ranking Member Stearns, 
Chairman Emeritus Dingell and members of the subcommittee, it 
is indeed a pleasure and honor to appear before you this 
morning. You have some of the finest staff on the Hill, and I 
have great affection and respect for my friends and colleagues 
on this subcommittee.
    Thank you for this opportunity to testify on the 
implementation of the Recovery Act's Broadband Technology 
Opportunities Program, or as we call it, BTOP. President Obama 
believes in the transformative power of broadband. Broadband is 
about jobs. It serves as an engine of economic development, 
enabling communities and regions to develop and expand job-
creating businesses and institutions. Through the BTOP grant 
program and in coordination with the Department of 
Agriculture's grants and loan programs, we are taking a 
critical first step in realizing President Obama's vision of 
broadband for all of America.
    The Administration has set five goals for the broadband 
stimulus funding. First, we want to create jobs. Second, we 
want to begin to close the broadband gap in America by bringing 
high-capacity pipes closer to users in rural, remote and 
underserved communities. The Administration and Congress agree 
that the public interest requires these publicly funded high-
capacity pipes should operate in conformity with basic 
principles of openness which will spur competition and bring 
better service to more people and businesses. Third, we want to 
stimulate investment by requiring grantees to invest their own 
funds. We want broadband grant applicants to look to other 
sources of Recovery Act funds to find synergies such as those 
at HUD, HHS or the Department of Energy. Fourth, these grants 
should ensure that more anchor institutions have high-speed 
access, anchor institutions like schools, libraries, community 
colleges, hospitals and public safety. And finally, we want to 
encourage the demand for broadband. When more people understand 
how broadband access can help them find new ways of making a 
living, we are sure they are going to want to have it for 
themselves.
    Now, the statute provides several important goals for BTOP 
such as accelerating broadband deployment in underserved and 
unserved areas, improving access for public safety, providing 
funds for broadband education, awareness, training, access and 
support to anchor institutions as well as to those 
organizations that provide broadband assistance to vulnerable 
populations, the access that we should also stimulate demand 
for broadband economic growth and job creation, and as directed 
by the Act we are consulting with the States. We are also 
consulting with the FCC about a variety of issues including the 
very important project which many of you have mentioned in your 
statements, our national broadband mapping program. We are 
working closely with our colleagues at RUS to make these 
programs as seamless as possible for applicants. We believe 
accountability is extremely important.
    One of our first actions was to transfer the $10 million to 
the IG and his staff. We want to ensure that the program design 
incorporates appropriate safeguards to protect taxpayers' 
investment including measurements of success for both 
individual applicants and for the program overall. Because 
these grants will not resolve all of the issues of broadband 
deployment, we envision these grants as a test bed or a proof 
of concept for sustainable, viable and scalable projects. We 
are encouraging partnerships between small businesses, 
municipalities and others that may demonstrate non-traditional 
but effective ways of getting broadband into communities. When 
the economy recovers, and it will, these proof-of-concept 
projects should show future investors the way forward.
    Now, public input is critical to the success of this 
program. We have asked the public how they believe we should 
invest their money in the program. We also want to give the 
public maximum visibility into the results. To that end, we 
have held six public meetings and two in the field at Las Vegas 
and Flagstaff. These meetings were webcast and those that could 
not attend in person or via the Internet could join us on a 
teleconference. We have an active public comment cycle, which 
closes April 13. As part of our efforts toward great 
transparency, detailed information about both the applications 
and the awards will be posted on our website. The NTIA is 
currently staffing up to address this responsibility. We are 
adding to our core team of experts, who have significant grant-
making experience, and we are standing up the technical systems 
to handle a large volume of applications.
    We anticipate publishing our final rule, known as a Notice 
of Funds Availability, or NOFA, in the next few months. The 
NOFA will describe the application process, the evaluation 
criteria and grantees' reporting responsibilities. We are 
contemplating three waves of funding spread out over the next 
18 months. We believe this approach will afford the greatest 
number of applicants an opportunity to participate.
    Now, we face many challenges in the upcoming months. By 
far, our greatest challenge, however, will be the selection of 
those projects that would be funded. Our task is to design a 
program that is transportable, fulfills the statute's goals and 
that results in grant projects that wisely invest the people's 
money to create jobs and offer models of future investment to 
accelerate the deployment of broadband.
    We are committed to ensure that BTOP funds are awarded and 
distributed in a prompt, fair and efficient manner. We look 
forward to getting stimulus funds into the hands of those who 
can use them to create new jobs and promote broadband 
deployment in unserved and underserved areas.
    Thank you, and I look forward to your questions.
    [The prepared statement of Mr. Seifert follows:]

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    Mr. Boucher. Thank you very much, Mr. Seifert.
    Mr. Deutchman.

                  STATEMENT OF SCOTT DEUTCHMAN

    Mr. Deutchman. Thank you. Good morning, Chairman Boucher, 
Ranking Member Stearns and members of the subcommittee. I am 
pleased to be here to discuss the Commission's role in the 
broadband programs established in the American Recovery and 
Reinvestment Act of 2009.
    I first want to commend the subcommittee, Congress and the 
President for recognizing the importance of broadband to our 
Nation at this critical time. As the country seeks to maintain, 
restore and develop its infrastructure, it is imperative that 
we look towards building out broadband, which is the 
infrastructure we need to succeed in the Digital Age. As FCC 
Acting Chairman Copps like to say, broadband is the great 
infrastructure challenge of our time, and the Commission is 
pleased to be starting down the road toward meeting this 
challenge.
    I also want to thank you for recognizing the substantial 
expertise of the Commission and its staff when it directed the 
Commission to play a consultative role in the development of 
the Recovery Act's grant and loan programs, and while that is a 
large part of the discussion already this morning, many of us 
at the Commission believe that Congress charged us perhaps with 
the most important responsibility since implementing the 1996 
Telecom Act: the development of a comprehensive national 
broadband plan to make sure that all Americans have the 
benefits of affordable, high-speed broadband. At this juncture, 
Acting Chairman Copps would almost certainly point out, and I 
feel compelled to do the same, that all means everyone, whether 
you are rich or poor, live in a rural or urban area, 
underserved, unserved or on tribal lands, have a disability or 
a small business or a senior citizen or high school grant, 
ubiquitous, affordable high-speed broadband has the power to 
help restore our economic well-being and open the doors of 
opportunity for all Americans. With broadband's potential 
benefits for jobs, education, public safety, the environment, 
health care and so much more, there could not be a better time 
to begin developing and implementing a national broadband plan.
    The Commission is moving forward simultaneously on several 
broadband-related fronts. Pursuant to the Recovery Act, we are 
lending our expertise to our colleagues at the NTIA and RUS as 
they implement the grant and loan programs. The Commission is 
currently seeking comment on the definitions that we have been 
asked to consult on. In addition, as required by the Farm Bill 
of 2008 and in coordination with the Secretary of Agriculture, 
Acting Chairman Copps will be preparing a report for Congress 
by May 22nd on a rural broadband strategy. The Commission has 
sought comment on these rural broadband issues as well. We very 
much appreciate the interagency coordination and consultation 
that is occurring with NTIA and RUS on all of these issues.
    As we continue to refine our views, the Commission staff 
will be hearing from a broad array of stakeholders including 
public interests, private sector, governmental and consumer 
groups to ensure they will receive the benefit of a wide range 
of perspectives. The information the Commission gleans from 
these efforts will undoubtedly help inform the Commission as it 
develops the vital national broadband plan, and this gets 
arguably to the most important piece of the puzzle for us. At 
its next open meeting on April 8th, the Commission plans to 
kick off its efforts to develop a national broadband plan. The 
acting chairman has circulated a notice of inquiry to his 
colleagues that is intended to be broad in scope. This is of 
course only the beginning of the process. The Commission among 
other things plans to receive input from traditional and non-
traditional stakeholders, complete consumer surveys and 
international comparisons as required by statute, and work with 
federal, State and local agencies in gathering the best ideas.
    By next February, the Commission will complete the tasks 
that Congress entrusted us with: to provide Congress and the 
American people with a national broadband strategy, a plan for 
action for meeting the broadband infrastructure challenge 
facing the Nation.
    Thank you for the opportunity to testify today. I would be 
happy to answer any questions you may have.
    [The prepared statement of Mr. Deutchman follows:]

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    Mr. Boucher. Thank you, Mr. Deutchman.
    Ms. Chong.

                  STATEMENT OF RACHELLE CHONG

    Ms. Chong. Good morning. I would like to thank Chairman 
Boucher, Congressman Stearns and the members of the 
subcommittee for inviting me back to Washington, D.C. I was a 
former FCC commissioner in the mid-1990s and it is always a 
tremendous personal pleasure to be back to my old stomping 
grounds.
    California is certainly grateful for the opportunity 
presented under ARRA to continue our improvement of our 
broadband infrastructure in California. In California, we know 
that broadband is as important as the roads and the bridges in 
terms of our businesses and our people. We began with 
leadership from Governor Arnold Schwarzenegger. He established 
a broadband taskforce in 2006, and the first thing we did was, 
we took the initiative of doing our broadband mapping project, 
and if we had not done our broadband mapping project, I do not 
think we would have spent our broadband money as wisely as if 
we had not.
    We also initiated two programs after the mapping project 
and these programs were done by my agency, the California 
Public Utilities Commission. The first program is a broadband 
infrastructure grant program called the California Advance 
Service Fund. The second program was the PUC's establishment of 
a successful nonprofit organization which we call the 
California Emerging Technology Fund, CETF. CETF provides grants 
to community-based organizations who bridge the digital divide 
and we got the CETF seed money, $60 million, from voluntary 
donations from AT&T and Verizon related to 2005 mergers.
    Last Monday we held a workshop in San Francisco on the ARRA 
broadband provisions. We have in California a collaboration of 
the governor's office, the California PUC, the Emerging 
Technology Fund and others to get ready to submit applications. 
Based on our meeting, it is far to say California will have a 
number of shovel-ready projects ready to submit to NTIA and RUS 
at the right time to continue the work we have done in 
California.
    The Recovery Act broadband programs are strikingly similar 
to what we have done in California. It begins with the funding 
of broadband maps. It is my personal view that a mapping 
project is a critical prerequisite to any broadband program in 
a State. Put very simply, a State needs to know where broadband 
is and where it ain't before it spends its money. I speak from 
experience because quite candidly, if we had undertaken our 
broadband program before doing our mapping exercise, I believe 
we would have misspent some of our funds.
    I have to tell you that the mapping exercise brought some 
surprises to the regulators and, frankly, to the broadband 
providers themselves, and so I would urge the States who have 
not yet done a broadband mapping project to swiftly undertake 
one. It took us about 7 months.
    Recovery Act funding is also provided for two main 
categories of programs: broadband infrastructure programs and 
programs designed to increase computer usage and adoption. I do 
think it is wise to pursue both paths at the same time. Some 
States have done the broadband mapping and they are ready to 
move forward on some of the adoption programs. Other States 
probably will want to do their broadband mapping first and then 
proceed to the next step but you can proceed on both paths 
simultaneously. Now, we did our mapping exercise first and then 
we attacked adoption programs and the access problem, and on 
access we were trying to basically reach 1.4 million people and 
2,000 little communities in California that had no service or 
very slow broadband service.
    We do have a definition to suggest to our colleagues at 
NTIA and RUS and the FCC. We defined ``unserved'' as any area 
that isn't served by any form of facilities-based broadband or 
where Internet connectivity is available only through dial-up 
or satellite service. The California PUC further defined 
``underserved'' as an area where broadband is available but no 
facilities-based provider offers service at speeds of at least 
3 megabits per second down and 1 megabit per second up. I will 
talk about speed in a minute.
    We established a 2-year-long .25 surcharge on our 
intrastate telephone revenues--it comes out to about a nickel a 
month--to create a $100 broadband infrastructure fund at the 
PUC. The PUC then told our broadband providers it would pay 40 
percent of the cost of a project but we did require the 
applicant to match it with 60 percent. We wanted them to have 
skin the game. I commend your work on ARRA because you decided 
to give federal funds of 80 percent and suggesting a 20 percent 
match. Now, we have a 40 percent match level and we have seen 
about 50 applications at the PUC requesting about $35 million 
covering about 160,000 households. We have actually decided on 
applications that commit $9.15 million so far and we are 
covering about 8,800 households that have benefited. So the PUC 
has left a lot of money that we could use to match ARRA funds 
to continue our broadband work.
    I asked my staff on average, how much did it cost to get to 
the unserved households. I thought that might be of interest to 
you. And as of the applications we have granted so far, and we 
are not done yet, it costs about on average $2,800 to reach an 
unserved household in California. Our program is only available 
to any company that holds a certificate of public convenience 
and necessary as a phone provider or is a registered wireless 
carrier. We are now looking at rules to extend our program to 
wireless Internet service providers, for example.
    Speeds, just a quick moment. We wanted to tell you that we 
had used a current-generation broadband speed of about 3 
megabits per second down and 1 megabit per second up. We did 
not make it a minimum, though, because we felt if there was an 
applicant who is the only applicant willing to serve an 
unserved area, any broadband speed was better than no broadband 
speed. However, we did look at speeds in terms of how we rank 
the applications. We did award more points for faster speeds 
but we did it at a diminishing level in order to favor 
applications that would provide current-generation speeds, 3 
megabits down, 1 megabit up, over those that sought next-
generation speeds but you can change the formula to have faster 
speeds as you go on. I have listed in my testimony the criteria 
that we used in our infrastructure grant program hoping that 
might be helpful to the federal agencies, and we did allow some 
transport or middle mile costs to be covered.
    I also wanted to highlight the work of CETF, who is our 
nonprofit organization, and they are focusing on the 
affordability and adoption issues, which are just as 
important----
    Mr. Boucher. Ms. Chong, if you could wrap up, that would be 
helpful.
    Ms. Chong. Yes. Thank you. All I wanted to say about CETF 
is that they have very successfully used community-based 
organizations with already successful programs to bring it to 
the next step and we hope that the criteria that they use might 
be useful to our colleagues.
    Thank you.
    [The prepared statement of Ms. Chong follows:]

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    Mr. Boucher. Thank you very much, Ms. Chong.
    Ms. Turner-Lee.

                 STATEMENT OF NICOL TURNER-LEE

    Ms. Turner-Lee. Chairman Boucher, Ranking Member Stearns 
and esteemed committee members, I thank you for the opportunity 
to address you today.
    One Economy is a global nonprofit that leverages the power 
of technology and information to connect low-income people to 
the economic mainstream, and we bring broadband into the homes 
of low-income people. So much of what I am going to talk about 
today in my summary statement is around the home. We also 
produce public purpose media and we engage young people in 
serving as technology ambassadors to move this movement 
forward.
    Today as we examine issues related to the ARRA, I want to 
share a framework for success. As the witnesses here alongside 
of me talking about mapping it and building it, we also have to 
think about using it and the relevance behind the use, 
particularly for low-income people. Many examples of our work 
are provided in our written testimony but I do want to 
highlight the chair's commitment to a national policy, which I 
think is the whole of all the parts.
    When we look at data on broadband, we see both good and bad 
news, which reflects the incongruencies that we today in 
society around broadband access. Most Americans by far have 
access but a recent report released by Pew suggests that they 
don't understand the relevancy or the usefulness of the 
broadband. So again, we can build it, but does that mean people 
will come?
    When we look at the affordability of broadband access, we 
have got to see that as a significant inequality that exists as 
a barrier to adoption. How can people afford broadband if there 
are other things that they are working on or trying to survive 
with that get in the way of looking at the value proposition 
behind having broadband access? We would like for us to 
consider as we go forth that a goal of the broadband 
opportunities program, for example, should be to create a 
digital ecosystem comprised of the home, the school, community 
centers, libraries, workforce development centers and even 
mobile devices that support what we call a culture of use, and 
the home should be the core of that digital ecosystem.
    A second goal should be focused on promoting broadband with 
a purpose that educates, motivates and empowers people to take 
control of their lives. In our work at One Economy, we have 
seen the power of broadband give low-income people tools for 
improving education, their health and their economic lives. 
When it is all said and done, the priority of what we have 
right now with the broadband stimulus program should be to put 
low-income people first in line, whether they are unserved or 
in underserved neighborhoods. Being first in line is critical 
to this first tranche of serving a pilot to show how effective 
we can be in this area. What better way, and I want to echo the 
home, to improve the quality of lives, through the provision of 
broadband into the home which will broaden the aspiration of 
people who are currently sitting back right now not 
participating in this economy. That action alone can take us on 
a chart towards leveling the playing field.
    In our work a few years ago, we actually went to housing 
finance agencies and looked at the low-income tax credit, for 
example, to provide broadband access into affordable housing. 
As a result of that work, one in 300,000 units of housing now 
have broadband access from New York to Chicago to San 
Francisco. So I want to put that out there as one of the 
drivers.
    Affordable, availability and usefulness are critical to 
this program and I would like to just leave us with six key 
drivers that we have learned from our work that should be 
included in the framing of how this money is allocated. They 
should include adoption, public-private partnerships, 
intentionality, affordability, sustainability and innovation. 
Adoption can be promoted in a variety of ways in local 
communities. Public awareness about the benefits of digital 
access, online public purpose media that puts vital information 
directly into the hands of citizens, digital literacy that 
creates or enhances aptitude are all valuable in adoption. For 
low-income people who are often caught in the web of government 
programs and services, simple and direct online access to 
programs can mean the difference between missing a day of work 
or standing in line at a municipal building.
    Second, stimulus investments can be multiplied through 
public-private partnerships. Partnerships that create synergy 
between government programs and private sector interests help 
expand access for the public good. The example that I shared 
about the repurposing of the housing tax credit is one way to 
look at that synergy that could exist.
    Third, the need to be intentional about how broadband 
stimulus funds are used to serve low-income or disenfranchised 
groups is crucial to the deployment of services and expansion 
of use. Stimulus funding can be used to move the meter, move 
the meter and support aging in place programs, educational 
programs, health care and workforce development programs and 
support the emerging needs of vulnerable populations whether 
unserved or underserved in location, and the allocation of 
stimulus funding, if we don't do this right, we are going to 
fail, at least this first time around.
    And affordability of course is the fourth driver. When we 
look at the free or low-cost provisioning of services in 
communities that need it most, we should not reduce the quality 
of content or speed available to those communities and we 
should consider innovative pricing models that help people 
maintain use and not just become sporadic or one-time users of 
the Internet.
    Sustaining engagement is equally important and I think 
under the current Administration coupling this with service may 
also be a critical aspect. We have a program that engages young 
people who I think by many of us in this room are far more 
active around technology where service becomes critical to 
their use in sustaining engagement.
    And finally, innovation, and my final point. Unproven 
experiments should not be our goal here and technology bias 
should not hinder solutions. Innovative programs that are 
scalable, replicable and outcome-driven should be supported, 
especially when they leverage private and public partnerships.
    Thank you.
    [The prepared statement of Ms. Turner-Lee follows:]

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    Mr. Boucher. Thank you very much, Ms. Turner-Lee.
    We now have a series of five recorded votes pending on the 
Floor of the House of Representatives, and it will probably 
take somewhere on the order of 45 minutes for that to be 
completed, so we are going to recess now and when we return we 
will hear from Mr. Mefford and Mr. Large and then have an 
opportunity to question all the witnesses. The subcommittee 
stands in recess until the conclusion of the final recorded 
vote.
    [Recess.]
    Mr. Weiner. [Presiding] The subcommittee will come to 
order.
    Mr. Mefford, you are recognized for 5 minutes to make an 
opening statement.

                 STATEMENT OF BRIAN R. MEFFORD

    Mr. Mefford. Mr. Chairman and Ranking Member Stearns, 
members of the committee, thank you for the opportunity to be 
with you today and to discuss these important elements of the 
broadband stimulus.
    When I had the honor of testifying before this subcommittee 
nearly 2 years ago, our country's broadband policy was in a 
very different place. Today, thanks in large part to the hard 
work of this committee, Congress has enacted the Broadband Data 
Improvement Act of 2008 with unanimous bipartisan support. 
Through this Act, Congress established a clear path for 
broadband expansion through State-based public-private 
partnerships and now through the broadband stimulus Congress 
and the Obama Administration have provided funding for 
implementing the Broadband Act, setting the course to realize 
the numerous promises of broadband technology for all 
Americans.
    For the last 5 years, Connected Nation has worked directly 
with States, local leaders and consumers and broadband 
providers to build partnerships that accelerate broadband 
availability and use. We work on behalf of American consumers 
and businesses and we continue to find that those previously 
underserved or overlooked people can and will overcome 
broadband challenges when the public and private sectors are 
working together for meaningful change.
    Mr. Chairman, while there are many promising components of 
the broadband stimulus that I could address in remarks, those 
things that will be carried out by the RUS, the NTIA and the 
FCC, my remarks today will focus on the elements associated 
with the Broadband Data Improvement Act with an emphasis on 
ensuring that these important elements are not lost in the 
pursuit to rapidly address the----
    Mr. Weiner. Mr. Mefford, can I interrupt you for a moment? 
I understand your microphone is not on and we are not picking 
it up. Is it on there?
    Mr. Mefford. So again, Mr. Chairman, my emphasis in my 
remarks today will focus specifically on the elements--not 
working?
    Mr. Weiner. Try it again. I have been the chairman for 15 
seconds and already I have broken something. Ms. Chong, try 
yours. Is yours working there?
    Ms. Chong. Testing one, two, three. It sounds like they are 
all muted up here for some reason.
    Mr. Weiner. That is the most important thing that we have 
your comments on the record and apparently we do, so Mr. 
Mefford, why don't you continue and we will reset some time on 
your clock there.
    Mr. Mefford. So again, just to emphasize my emphasis for 
the committee, I will focus my remarks on the elements 
associated with the Broadband Data Improvement Act so that we 
can talk about ensuring that these important elements are not 
lost in the pursuit to rapidly address the supply side elements 
of the stimulus.
    Specifically, we would like to offer two suggestions that 
would help ensure that all broadband stimulus funding is 
invested in a manner that is effective, accountable and 
achieves the ultimate goal of sustainable broadband access and 
adoption. On the point of broadband mapping, I want to offer 
our view that effective mapping must take place as Congress 
determined through a collaborative public-private partnership 
approach. The Broadband Act clearly establishes----
    Mr. Weiner. The mic is on now.
    Mr. Mefford. On the first point of broadband mapping, I 
want to offer our view, Connected Nation's view, that effective 
mapping must take place as Congress determined through a 
collaborative public-private partnership approach. The 
Broadband Act clearly established a straightforward policy for 
broadband mapping. The law calls for mapping at a household and 
business level and it clearly states that the public and 
private sectors should work together to achieve all components 
of the program. Today, at least 9 States are already using this 
collaborative approach for household-level broadband mapping 
and these States have achieved or will soon achieve a broadband 
map that identifies areas unserved and underserved down to the 
street and individual household. Those States now have an 
effective tool for targeting projects through the stimulus, and 
additionally, once those projects are funded and deployed, the 
broadband maps which are updated continuously will show exactly 
where and how broadband stimulus grants are being used to fill 
the broadband gaps. This household-level mapping of provider 
service availability data is the only way to truly understand 
where the broadband gaps exist, particularly in rural areas. If 
broadband mapping is done at any higher level using any other 
source of data, the result will be a severe overestimation of 
broadband deployment across the United States, creating, Mr. 
Chairman, an impractical way to effectively track and measure 
the effectiveness of those investments. It is imperative, and 
we would encourage the NTIA to implement broadband mapping in 
the manner that Congress has set forth through the Broadband 
Act of 2008. It is this local on-the-ground approach that 
produces maps of broadband availability and speeds which are 
accurate, detailed, publicly accessible and verifiable, 
continuously updated and most importantly, they are useful for 
filling the broadband gaps.
    The second point I would like to make today after spending 
the first half of my time establishing the importance of 
broadband mapping, I want to remind us all that the $350 
million that is provided in the broadband stimulus act for 
implementing the Broadband Data Improvement Act is not just 
about mapping. Indeed, mapping is just one piece of the larger 
grant program within the Broadband Act. The bulk of that grant 
program enables grassroots awareness and adoption programs, 
programs that will ensure that once the infrastructure funding 
is invested, Americans in most need of broadband will directly 
benefit from it. What we know is that broadband is available to 
roughly 90 percent of Americans yet only about 57 percent of 
Americans subscribe to broadband. In areas where the recession 
has hit the hardest, broadband adoption is much lower, and even 
in areas where broadband is already universally available. This 
doesn't diminish the need for deploying broadband to areas that 
remain unserved or underserved. Broadband deployment in those 
areas is a critical piece of the broadband stimulus. However, 
the ultimate measure of success and accountability for the $7.2 
billion of funding in the broadband stimulus will come down to 
whether or not people use broadband once it is made available.
    Connected Nation's work in more than 400 communities as 
well as a vast body of research reinforces the need for 
broadband infrastructure funding and further reinforces the 
need for affordable broadband offerings. However, this 
experience and research indicate that the top barrier to 
broadband adoption is not price or availability but rather a 
lack of demand for broadband services. In fact, Mr. Chairman, 
more than half of those who have not adopted broadband say that 
is it not relevant to them. They are not interested or they 
simply don't see the point of having a broadband-connected 
computer at home. The results are similar in both urban and 
rural areas. Basically there is a dire need for broadband 
awareness, education and training, and it is only when people 
actually use broadband that we start to see the real long-term 
economic benefits.
    The State grant program in the Broadband Act of 2008 
includes a series of requirements for State-based expansion 
programs that address all these demand-side challenges, and 
these five elements of the Broadband Act have provided the 
thrust of Connected Nation's State-based programs in places 
like Kentucky, Tennessee and Ohio, and the results from these 
three States, these States and others, continue to demonstrate 
that all five of those Broadband Act elements are critical for 
success in accelerating broadband.
    In conclusion, it is clear that it has been demonstrated 
that public-private partnerships have proven to be the most 
effective vehicle for accelerating broadband availability and 
use. There will be voices that choose to ignore the path that 
Congress has laid out. However, when we look past the self-
interested positioning in order to objectively assess what 
really works to map broadband availability, to fill the 
broadband gaps and to bridge the digital divide for all 
Americans from Main Street to Butcher Hollow, it is clear that 
a successful approach is a collaborative model where the public 
and private sectors work together to bring broadband to all 
Americans. Congress has charted that course and we are 
confident that the executive branch will steer the ship with 
the same spirit of collaboration.
    [The prepared statement of Mr. Mefford follows:]

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    Mr. Weiner. Thank you, Mr. Mefford.
    Mr. Large, you are recognized for 5 minutes.

                  STATEMENT OF JONATHAN LARGE

    Mr. Large. Thank you, Mr. Chairman and Ranking Member 
Stearns. I appreciate the opportunity today to share our story 
with you.
    Patrick County was formed in 1791 and is currently home to 
19,517 citizens. Patrick County is composed of 483 miles. The 
land is generally characterized as gently rolling terrain and 
the Blue Ridge Mountains and on the south side of the North 
Carolina border. The topographical changes cause distinct 
seasonal and temperature differences within the county. It is 
also the reason for Patrick County's beautiful scenery and 
varied outdoor recreation opportunities and some of its most 
renowned tourist attractions. However, it also creates a 
problem for Internet connection and cell phone reception. 
Patrick County has long depended on the textile and lumber 
business to provide the county's residents with job 
opportunities and employment benefits and a sense of 
satisfaction for a job well done. Our textile and tobacco 
industry has been devastated by a loss of jobs to foreign 
counties like many other communities in Southside Virginia and 
Piedmont North Carolina. There are empty factories which 
provided citizens with jobs for decades. Those plants now sit 
empty with little or no hope of any other such industry coming 
into the county to fill those buildings and offer employment to 
those who need work. Our residents have to leave the county and 
State in some instances to find employment where their skills 
can be utilized or the jobs they take require very little 
skills or training. This normally leads to lower wages to 
replace the earnings around which they build their household 
budget.
    Our lumber industry has fed the housing market and other 
lumber industries such as furniture also. Since the housing 
market has drastically dropped, the demand for lumber is 
limited. Again, those who were lucky enough to find employment 
somewhere else normally had to take a reduction in take-home 
pay and thus the standard of living. The county is working hard 
to try to provide jobs for the residents that live there and 
also the remaining businesses. Our education foundation under 
the leadership of former Governor Gerald Baliles, a Patrick 
County native, has worked hard to bring us up in ranking from 
number 43 to 2nd among 45 Virginia rural counties based on 
population per 1,000. Eighty-five percent of our students that 
graduated high school last year went on to higher education as 
a result also yet one-third of our students have high-speed 
Internet access. The students need the capability to connect 
via high-speed Internet to do research or complete course 
assignments from their home. The schools simply cannot provide 
enough computers simultaneously for all students who want to 
use them.
    We believe Patrick County must provide the infrastructure 
to build a network which will provide the broadband connections 
at affordable prices. Due to Patrick County's rural and 
mountainous nature, the Extension of Last Mile 
Telecommunications Initiative was enacted in 2000. The project, 
funded through grants from the Tobacco Commission, provided 
construction of the Mid-Atlantic Broadband Project. Along with 
local providers, Patrick County completed an advanced fiber 
backbone along the main road arteries in the populated regions 
of the county. Although this improved backbone for high-speed 
Internet capability assisted local demand, as mentioned 
previously, with the mountainous terrains, peaks and valleys, 
it still resulted in large gaps throughout the county of 
unserved populations. It is important to have both wired and 
wireless broadband capability to fully serve the remote regions 
of the county. A recently completed broadband study confirmed 
that there is a significant unserved population for high-speed 
Internet. Based on the study, high-speed Internet itself will 
create a new business, employment and education advancement for 
our county. We have waited and fallen behind communities that 
have many choices for high-speed connectivity which will keep 
and bring new jobs to their people. We can wait no longer.
    Changing economies in the industry have resulted in closing 
of textile and furniture factories within a 50-mile radius so 
jobs are unavailable to fill the void. We now have been forced 
to diversify. Some farms have converted to alternative farming 
such as cattle, small grain, and produce. However, these will 
never bring the revenue provided by manufacturing and tobacco 
production. Others that have lost jobs are finding ways to earn 
money by starting online Internet businesses.
    We have high-speed Internet service to all our public 
schools in Patrick County but our students cannot take 
advantage of the system's full potential without high-speed 
Internet in their homes.
    In January of 2007, our chairman of our broadband 
taskforce, Roger Hayden, worked with Representative Boucher to 
develop a plan for a USDA Rural Connectivity Grant, partnering 
with Embarq to supply high-speed Internet connectivity to the 
Claudville community. This also included updating our community 
building by building a 10-computer learning center and funded 
and operated for 2 years. Everyone in the community was very 
happy. We also worked with Embarq representative Rick 
Schollman. Everyone was upbeat about the progress. We had the 
survey reports ready for March 2008 broadband meeting. After 
all the groundwork had been done, another Internet provider in 
the area came forward to the meeting and said that they had 
established a presence in this area and were supplying high-
speed Internet service to the Claudville area. Therefore, the 
community was ineligible for a grant because the program rules 
stipulate that there could be no high-speed service in the 
area. There was disappointment after all the preparation. Our 
hopes of receiving a grant were thwarted. We read the RUS 
requirements regarding existing service and confirmed that 
high-speed Internet service to one household was enough to make 
the entire Claudville community ineligible for the grant. This 
was some time back now, and the company has still not served 
any households other than the one.
    The Claudville experience is an example of the importance 
of having a reasonable definition of ``unserved'' and 
``underserved.'' In this case, the definition of ``unserved'' 
used by RUS could be construed as overly restrictive because if 
just one or two households in a community have access to 
broadband, RUS considers the community served and it is not 
eligible for----
    Mr. Weiner. You can start to wrap up, Mr. Large.
    Mr. Large. Okay. And is ineligible for grant programs. 
Communities should not be disqualified from receiving stimulus 
support on the handful of homes in an otherwise unserved 
community to have access to broadband.
    Thank you again.
    [The prepared statement of Mr. Large follows:]

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    Mr. Weiner. I thank all the witnesses. I yield myself 5 
minutes.
    There is no doubt that the gray areas in Mr. Space's chart 
and the unserved areas that we obviously need to address those. 
It seems to me you are going to have some tough questions about 
the notion of underserved. Is it the intention to allow 
communities that might have Wi-Fi already experiment with 
WiMAX, experiment, college campuses, for example, experiment 
with some of the next generation of technology. I know, 
Commissioner Chong, you said there is a basis against that use 
in California, to first try to serve those that are 
underserved. But Mr. Seifert, is it your sense--I know that the 
regulations haven't been written but that is going to be an 
opportunity for us to experiment with perhaps the next 
generation of Wi-Fi as well?
    Mr. Seifert. Well, Congress has been very clear. In fact, 
in the committee report for this section of the Recovery Act, 
they said that it was the--both the House and the Senate said 
that they believed next generation would reach more people at 
greater speeds. Again, as you noted, we haven't made any 
determinations. We are waiting to hear from the public. I can 
tell you that we have heard a range of opinions about that 
including the one that you have expressed that if we are going 
to build, we should use next generation, if we are going to 
invest money in the future, and as I said in my statement, we 
are talking about proof of concept. Folks are looking to invest 
in scalable or things that can continue to develop, not dead-
end technologies but technologies that can continue to expand 
and bring greater----
    Mr. Weiner. But WiMAX is not a brand-new thing. I mean, 
there are other nations that have higher, fatter pipes than we 
do so it is not like it is completely unheard of. So if someone 
presents--again, this is all subject to rules that haven't been 
made yet. But if someone presented to you the notion, you know, 
we want to make this corner of Tucson, Arizona, a test, 
although we have Wi-Fi, we are not like Mr. Large's community, 
that we have Wi-Fi that is accessible but this college campus, 
for example, comes and says we want to be a laboratory to see 
just how, what kind of businesses would pop up if we really had 
expanded access. Again, without prejudging what the regulations 
would say, there is nothing in the Act that prevents this money 
from being used for that purpose?
    Mr. Seifert. No. My recollection would be that there is 
nothing in the Act that would prevent that. There are things in 
the Act that would say is this sustainable, is this a working 
business model, those sorts of things which we would use to 
test all applications and so I think you are correct that there 
is nothing that would prevent that sort of application pending 
whatever rules we put in place about how those applications are 
going to be received.
    Mr. Weiner. Thank you.
    Mr. Stearns, you are recognized for 5 minutes.
    Mr. Stearns. Thank you, Mr. Chairman.
    Commissioner Chong, you had indicated in your opening 
statement how critical the step is for mapping, and if States 
start today with broadband mapping, can the applicants still 
meet the deadlines set forth in the Act?
    Ms. Chong. Oh, I think so. Just to give you an idea, it 
took us about 7 months total. Three to 4 months was convincing 
the carriers to voluntarily give us the data, and they did that 
once we agreed to have an independent third party take the 
data, aggregate it and then give it to the government agencies 
to protect confidential data. In terms of mapping, it went very 
quickly. We had street-address-level mapping so it is very 
granular, more so than what is being required at the FCC today, 
and it took us about 3 to 4 months to map the entire State, and 
we are a big State, and we used mapping personnel who was at a 
State health agency. He was the only guy we had, and he was 
doing it literally nights and weekends and it took 3 to 4 
months. So if he had been working full time on it, we probably 
could have gotten it done a lot faster.
    Mr. Stearns. Mr. Mefford, how long do you think it will 
take? I mean, she did California, but do you know how many 
States have already been mapped?
    Mr. Mefford. There have been roughly 10 States that have--
--
    Mr. Stearns. So out of 50, there is 10 that have. Can we do 
it in less than 6 months here?
    Mr. Mefford. We actually can. I mean, if the Nation--well, 
6 to 9 months is a reasonable time frame to have the entire 
country mapped down to the household level.
    Mr. Stearns. Mr. Chairman, I ask unanimous consent to enter 
into the record a paper by the National Cable and 
Telecommunications Association which notes that 9 to 10 million 
American households are unserved by broadband, and that is, 
that are in areas that lack physical infrastructure for 
broadband.
    Mr. Weiner. Without objection.
    Mr. Stearns. NCTA recommends that the Act funds be 
prioritized to serve these unserved areas rather than the 90 
percent of the country that has broadband availability. Let us 
start with you, Commissioner Chong. What do you think about 
that?
    Ms. Chong. Well, I think the Act clearly says we have to do 
both. I did in my State put a priority on unserved first, so we 
opened a filing window only for unserved first. Then secondly 
we opened a filing window for underserved.
    Mr. Stearns. You heard Mr. Mefford mention that there is 
lack of interest. I mean, 90 percent available, 60 percent. 
What were your figures? Ninety percent available and 60 
percent?
    Mr. Mefford. Roughly 57 percent, according to Pew data.
    Mr. Stearns. That are actually----
    Mr. Mefford. That are actually subscribing to it, yes, sir.
    Mr. Stearns. So you would have a large percentage that just 
really--it is available but they are not interested in having 
it, right? So how do you deal with that?
    Ms. Chong. Well, we have been dealing with that, and the 
way we have attacked it is, we have opened community technology 
centers in some of the underserved or disadvantaged 
communities. We also have programs teaching seniors how to use 
a computer and access e-mail. We have been refurbishing 
computers through programs, taking donated computers from 
businesses, refurbishing and then getting them out for about 
$100, $200 into low-income communities. So these types of 
demand-side stimulation have been working in California and we 
submitted some statistics to you from our Emerging Technology 
Fund to show that in really just a year and a half, they have 
reached out and touched thousands and thousands of 
Californians' lives so it is doable.
    Mr. Stearns. Okay. Mr. Seifert, what do you think of Mr. 
Mefford's and Commissioner Chong's idea that we can do it in 
less than 6 months, the mapping of all the 40 States?
    Mr. Seifert. Again, and I don't--we are in the middle of 
receiving all these comments and I hope, I believe California 
has filed or is filing it and I am hoping that the other folks 
are filing. We are looking at these issues very closely. We 
know that----
    Mr. Stearns. Just offhand, would you say you can do it?
    Mr. Seifert. I don't know because I haven't seen and 
reviewed the whole record but I know that the stimulus act says 
that our primary job is to----
    Mr. Stearns. Commissioner Chong, you admitted it took you 2 
or 3 months once you got going to map it, right?
    Ms. Chong. Yes.
    Mr. Stearns. Okay, so if you got 40 States to do and 
Seifert has to do this, I don't know how he could possibly get 
it done by the 30th of September.
    Ms. Chong. Well, the first thing is, you need to have clear 
standards about what the mapping is going to cover and that 
needs to happen first.
    Mr. Stearns. Do you have those in place?
    Mr. Seifert. That is part of the rulemaking is, what level 
of granularity, what things should we look at. We have 11 maps 
right now of different States but it is a map of apples, 
oranges, pears because people have done things differently, so 
for a national broadband map, you would need something that 
uses all the same data points in order to get a real picture so 
you would know when you are looking at Kentucky versus Ohio 
versus Indiana that you are comparing apples to apples to 
apples.
    Mr. Stearns. I note that the NTIA has considered 
sustainability to be a critical part of consideration of grant 
proposals, and that is good. What evidence will NTIA look at to 
determine whether a project will not require additional 
taxpayer money once the Act funds have been spent, and will you 
commit to require all projects to be sustainable to be eligible 
for funding so you are not coming back, you know, like the DTV, 
keep coming back for more money?
    Mr. Seifert. The Act says look at sustainability, look at 
viability, and we intend to fully implement the Act as Congress 
drafted it or has enacted it, and sustainable is important 
because these are supposed to be test bed proof of concept for 
down the road, and if you have a project that can't live on its 
own after the 2 years, that may not really teach us all the 
lessons we need to know in order for future investments to take 
place so it is a very serious consideration. We are receiving 
comment from across the board about how to test that, how to 
demonstrate the projects are workable and workable.
    Mr. Stearns. Thank you, Mr. Chairman.
    Mr. Weiner. Thank you, Mr. Stearns.
    Ms. Christensen, you are recognized for 5 minutes.
    Ms. Christensen. Thank you, Mr. Chairman, and thank you to 
all of the panelists.
    Mr. Seifert, among the recommendations from MMTC, which I 
am sure would be seconded by the Alliance for Digital Equality, 
is that minority-serving institutions should not be expected to 
meet a 20 percent match in the BTOP, and there is precedent set 
in at least one other section of the ARRA. Do you see any 
barriers to waiving this match in this or any other special 
circumstances?
    Mr. Seifert. The statute clearly contemplates waiver where 
parties demonstrate financial need, and I take your point very 
seriously. We had this discussion at one of our field hearings 
where tribal interests were represented and the issue came up 
and it was a matter of great debate amongst the tribes 
themselves about whether if you did not require the match, 
wouldn't that shorten the amount of dollars you could get out, 
it might shorten the number of tribes you could reach, or if 
you did require the match, that would allow you to stretch 
dollars further. So that is kind of the range of debate we are 
seeing about this, and then other folks have said what about if 
I give you staff, does that staff account for, and so we are 
looking at those issues and trying to make sure that we figure 
out the best way to make the most of--out of these dollars and 
to get this--to stretch these dollars as far as we possibly 
can.
    Ms. Christensen. Thank you. And again to Mr. Seifert and 
Mr. Villano as well, Representative Rush mentioned his 
amendment that says consider whether an applicant is a small, 
disadvantaged business under the Small Business Act section 8A. 
Civil rights groups suggest a point system where you would give 
extra points to a disadvantaged business applicant or 
subcontractor. Is that possible? Is that something you would 
support? I noted in some meetings that we had with the agencies 
overseeing TARP and TALF that even though some of them had some 
outreach to disadvantaged business, they really didn't have any 
way to monitor it or to make sure it happened. So is a point 
system possible and are you able--do you have goals set and a 
way to reach those folks?
    Mr. Seifert. A point system is certainly possible. So that 
is part of the selection criteria or the evaluation of 
prioritizing and so we are definitely looking at that. We have 
received comment on that. We had a number of members from the 
MMTC group on our panels to talk about those very issues. One 
thing I am excited about is really, we have a subdivision of my 
agency, the Minority Business Development Agency, that we are 
working with very closely that has some great staff. That is in 
Commerce. And then within my agency, we have the Minority 
Telecom Development Program. So I have gone to them already and 
asked them to develop a program to make sure that we have 
outreach, that when folks who are doing these projects are 
either looking for contractors that they have the ability to 
marry up those interests with these people who want to provide 
this. So it is our intent to make sure that there is a wide-
open door for folks to walk through and participate in this 
program.
    Ms. Christensen. And are you the same?
    Mr. Villano. Definitely the same. We are looking at all 
those options also.
    Ms. Christensen. Ms. Turner-Lee and Mr. Mefford, I had the 
same question about growing demand. Everybody talked about the 
need to grow demand and I wonder if you had anything to add to 
what Commissioner Chong spoke to.
    Mr. Mefford. Yes, ma'am. Thank you for the question. I will 
reference how important it is to carry out these activities at 
the very local level and so part of what we do is build 
community technology leadership teams. We call them e-community 
leadership teams and they bring together a cross-segment of the 
local community and so you have local elected officials and 
folks representing the health care sector and education and 
agriculture and on down the line, tourism, et cetera, and they 
own their local plan for how they are going to use the 
broadband once it becomes available and so as we work to help 
school districts figure out how they could improve their 
product and their educational system with broadband, that then 
sparks a community-wide interest in people owning computers to 
be able to take advantage of that while the local school 
district is investing. Specifically from Tennessee, I want to 
note that our program there after 18 months of that kind of 
activity, home broadband adoption has increased by 26 percent 
compared to 15 percent growth nationally, and underserved 
populations have seen actually the largest increases in 
adoption in computer ownership, particularly among the 
demographics where we sort of micro-targeted so we have had----
    Ms. Christensen. Right. My time is running out. Thank you 
for your answer. I would like to let Ms. Turner-Lee get a few 
seconds in.
    Ms. Turner-Lee. To echo Mr. Mefford's comments on growing 
demand, I mean what we do in our work daily is to figure out 
how to deal with that side of the equation, and I think we can 
again build it but it doesn't necessarily guarantee that the 
value proposition is there for potential consumers. I would 
like to just suggest as we look at programs to fund that we 
think in scale. Many things that we do from the stuff that we 
are doing in housing to ensure that where people live that 
there is a connection that is tied to their ability to get 
resources from government services, from educational outlets 
where people also--where you can engage young people. Young 
people serve as a catalyst in many neighborhoods. Our digital 
connector program, which has reached almost 3,000 youth to 
date, those kids have provided 56,000 hours of community 
service teaching their neighbors about technology. 
Applications--we have not talked yet about the application side 
of broadband. Once the broadband is available, what will people 
do on it. We have been very successful at creating what we call 
public purpose media applications, much like public 
broadcasting, to digitize that space and ensure that people get 
the resources that they need. So I would just encourage us to 
think bigger in terms of institutionalizing any efforts that we 
do on the adoption side.
    Mr. Weiner. Thank you.
    Ms. Christensen. Thank you, Mr. Chairman.
    Mr. Weiner. Ms. Matsui, you are recognized for 5 minutes.
    Ms. Matsui. Thank you, Mr. Chairman.
    I want to get back to the issue of broadband mapping, which 
I believe is really very important as this process moves 
forward, and obviously Ms. Chong was talking about California, 
which I am very proud to be from, and it is one of the few 
States that have a broadband mapping system in place to 
determine which areas are in need of expanded broadband 
service. Now, that being said, you told us, Ms. Chong, how long 
it took you to put it together. How much did it cost the State 
of California to do this?
    Ms. Chong. We paid the outside contractor $360,000 to 
collect the data from the broadband providers and aggregate it, 
and then we had a State employee, who was a GIS mapping expert, 
spend time actually creating the maps, both regionally and on a 
State level, and his time we believe was worth about $71,000. 
So I think it puts the cost of the map for all of California, 
which is a big State, a little over $400,000.
    Ms. Matsui. Okay. Thank you.
    Mr. Mefford, how much money are you recommending NTIA to 
give to each State for their mapping?
    Mr. Mefford. We haven't yet made that recommendation but it 
is a great question, and I think the California example is a 
good model. We would expect a similar cost per State, and so it 
is a good question, particularly because there is a lot of 
feeling and discussion around that $350 million being just for 
mapping but in fact a very small fraction of that $350 million 
will pay to create a national map.
    Ms. Matsui. So you haven't yet determined how you will 
divide up the funding for this and it is not determined on the 
size of the State exactly then? Because California is a big 
State.
    Mr. Mefford. It is. I mean, the cost for a State map is 
going to depend on State size, it is going to depend on 
population, it is going to depend on the number of broadband 
service providers who are there, but really $10 million roughly 
to start a first phase, a baseline map, that is a reasonable 
kind of figure to have in mind.
    Ms. Matsui. Okay. Commissioner Chong, California is 
considering using its own broadband grant fund. It is a 20 
percent for entities within the State. What is California's 
process for identifying potential matching grant recipients for 
the broadband program?
    Ms. Chong. We go out and we beat the bushes to tell 
everybody we have got a program. That is the first thing, a lot 
of outreach. And then secondly, we have set criteria of what 
they need to do to apply, which I put in my testimony. You 
know, we look at a lot of things. One of the most important 
things we look at is how many people they are going to cover, 
the area they are going to cover, how much cost that is per 
household, and we also look at their speeds because speed does 
matter, and then finally we look at their pricing. We have a 
little extra goody point for them if they will commit to a 
price for at least a year and we also give them another goody 
point if they will give a special price to low-income persons 
in that area, and then we basically just crunch the numbers and 
decide what to approve.
    Ms. Matsui. Okay. Thank you. I want to go on to, let us say 
we are successful, I think about 96 percent of California 
residents have access to broadband, but let us talk about 
adoption because you could have it there but if it is not 
adopted, it is no good either, and in most cases adoption rates 
are associated with income as seen in the 2007 data from the 
Public Policy Institute in California, that only 51 percent of 
Californians earning under $40,000 a year subscribe to either 
dial-up or broadband at home but over 95 percent of those 
earning over $80,000 or more subscribe to either one of these 
services.
    I have a question for Mr. Seifert. Considering that a large 
part of the funding of the broadband initiative will be 
targeted to rural areas, how will the grant programs address 
urban areas?
    Mr. Seifert. I first want to make sure that folks 
understand that we are trying to work together to make sure 
that the rural program and NTIA's program work together and it 
is one of those fundamental things that broadband pipes don't 
really understand borders, and that folks are trying to connect 
rural areas to urban areas. So the demand side is very 
important but I think we have to make sure that we don't forget 
that there are urban areas that are also underserved, or if 
they have been functionally redlined, you could say they 
probably are unserved. If a person in an inner city can't 
afford the price of broadband, that person is not served with 
broadband. So those are things we are looking at. We are 
seeking comment and we have heard lots of comment in our 
panels.
    Ms. Matsui. So you will--income will be considered as far 
as the definition of underserved then?
    Mr. Seifert. We are certainly being encouraged to do that. 
I can't tell you that we have decided one way or the other but 
that is certainly part of the public commentary.
    Ms. Matsui. Okay. Thank you very much.
    Mr. Weiner. The gentleman from Illinois, you are recognized 
for 5 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman. Sorry I am late. I 
have Thomas Denenberg, who is a student in my district, and it 
is interesting that his father is a captain in the fire 
department in one of my communities so he asked me what my role 
was in that sector, and as a lot of people know on this 
committee, you know, I deal with the 911 caucus and this kind 
of segues into this, and this is serendipity. I didn't plan 
this. But it works out well because Mr. Seifert, talk to me 
about the PSAP issue and the deployment. And then I would like 
to know from Mr. Villano, the debate, is this NTIA money or RUS 
money?
    Mr. Seifert. Certainly. I will do mine and then pass it to 
Dave. We had the western regional coordinator for NINA on a 
panel. She spoke about the need to make sure that when we put 
big broadband pipes in, that public safety had access to that. 
You know that is the next generation of PSAP is that if I am on 
my BlackBerry and I want to send something in, right now if you 
are not next-generation coordinated for your PSAP, you can't 
get that information in. Folks--deaf students at Gallaudet who 
use BlackBerries can't call that in, they can't call into the 
911 thing until we get the PSAPs upgraded so that is a very 
important part of what Congress has told us we need to do, is 
to make sure we are looking at how to track public safety 
including the PSAPs into those issues.
    Mr. Shimkus. So both would be involved. Which pot of money? 
I mean, who is doing it?
    Mr. Villano. It can be either pot of money. I mean, we are 
looking at it as one pot of available funds and wherever we can 
best serve the needs of the applicant, we would try to fund it 
from either source.
    Mr. Shimkus. Based upon a description of the area by which 
we are--great. Thank you.
    We have had a great debate, and I missed some of this, and 
it is great to have Commissioner Chong here because of what 
California has done on this whole unserved debate, which is 
just critical because there are areas that aren't served and 
they need to be served, and I think that is the first place 
that we should be going, and I think my colleague from Ohio 
talked about the areas in his district. I have areas that 
aren't served. I would just lobby in support of making sure 
that we connect everybody with something before--and I do know 
there is a speed issue too of what speed--you know, dial-up, I 
don't think you can really call dial-up-only service being 
served. But if they have high speed, I am not sure--I would be 
careful about moving in that direction before you put money in 
the unserved areas.
    Mr. Seifert, if you already have access to 10 broadband 
maps, why not just distribute money based upon those areas 
first?
    Mr. Seifert. So one issue we have is making sure that the 
maps are telling us what we need to know. There are different 
levels of granularity. There are different issues that the 
different folks mapping looked at, and in order for us to have 
a national broadband map, we need to make sure that everybody 
is giving us--some of these folks may have to go back and 
tinker with what they have already done to submit that, so that 
is part of our focus right now is to get that information out.
    Mr. Shimkus. And I would say it would make sense to me if 
we know, then we ought to put money there first.
    Ms. Chong, I kind of mentioned you earlier. Would you agree 
with some of those premises?
    Ms. Chong. Yes, I would. I really think that we would have 
wasted some of our money if we hadn't done our mapping first, 
and we learned it from Connect Kentucky because I went out 
there and did a field trip out there and I realized the 
importance of really knowing with granularity where those areas 
were, and they showed up in places you wouldn't expect. I had 
an unserved area in the middle of Silicon Valley. I mean, why? 
But we filled that one. So you never know.
    Mr. Shimkus. Yes, and we have had a lot of hearings on 
Connect Kentucky. Of course, the southern part of my district 
abuts Paducah so we have been following that, Connect SI, 
trying to do southern Illinois, trying to do very similar to 
that aspects, and that is why we know there are areas that 
aren't served, period, and we know them now.
    My last question, Mr. Chairman. Mr. Villano, Mr. Seifert, 
Mr. Deutchman states we will have a consultative role in 
awarding of grants but they are also potential recipients. How 
will the agencies account for the conflict of interest?
    Mr. Seifert. I think asking the States, you know, their 
opinion about how things should be done is like asking the 
public how they believe things should be done. Many of the 
public that have submitted comment are going to be applying for 
grants. There are folks on this panel that are probably going 
to be applying for grants. So we can take all that public 
commentary and analyze it and then set up competitive criteria, 
a gold standard that you compare all those applications coming 
in to. They have to meet the test that the statute sets out.
    Mr. Shimkus. Okay, Mr. Chairman, if the other two can 
answer and I will be done.
    Mr. Villano. I would agree 100 percent with that.
    Mr. Deutchman. I would just--they will be making the grants 
what they perceive reasonable.
    Mr. Shimkus. Yes, our biggest challenge is trying to follow 
the money and follow the money that you guys are apportioning 
through the States, and my guys at the grassroots level are 
trying to figure this out because we have people asking. 
Because I think we are going to be trying to account for the 
dollars as they get passed out. Thank you, Mr. Chairman.
    Mr. Weiner. The gentleman from Ohio, Mr. Space.
    Mr. Space. Thank you, Mr. Chairman.
    First of all, I would like to thank Mr. Mefford for being 
here and the good work that they have done, primarily with the 
mapping strategies, not just mapping, however, and is your 
father also involved in Connect Kentucky?
    Mr. Mefford. He is. He was actually one of the original 
organizers of the Connect Kentucky initiative.
    Mr. Space. Please extend to him my gratitude for his help. 
He has been to Ohio a couple of times to help with our 
projects.
    I have some technical questions I would like to direct to 
Mr. Seifert and Mr. Villano about the process, I think touching 
upon something that my colleague brought up earlier about the 
match, the 20 percent match. I am hopeful that you will 
undertake a liberal interpretation of the term ``financial 
need'', one that is not overly restrictive, because of the 
clear economic impact that this technology brings to an area 
and the fact that almost to, you know, every single region 
where you have got underserved areas, you have got poverty, and 
those are the areas most in need clearly, the poorer areas, 
that in many cases would not be able to afford the 20 percent 
match. I am also hopeful that you will be willing in your 
interpretative process to broadly define the types of monies or 
services that can be applied toward that match, whether it is 
in-kind services or other grants, for example, the FCC grant 
that is now operating in the Southern Ohio Health Network. We 
would like to ensure that that could be seen as an offset 
because that is part, for example, our plan, our four-stage 
plan. So I am optimistic you will understand that the areas 
most in need are the last that should be precluded from 
qualifying because of their access to money.
    I am curious about the process. Well, I know that wasn't a 
question. The questions that I have, have to do more with the 
process, and I know you are going to be going through this 
rulemaking process and we are going to have three levels of 
funding and all that, but at the point where someone or some 
entity or some group of folks may submit a plan to you, 
presumably sometime this summer, what kind of process do you 
envision? Who will be the final arbiter? What kind of deference 
will governors, for example, be given, local government 
officials? How do you envision that process from a more 
practical perspective panning out?
    Mr. Seifert. So again, we are hearing from folks about what 
they think we should do and one of the major comments they have 
made to us is, make it understandable for applicants. You 
shouldn't have to be a very sophisticated applicant to apply. 
We should go to small communities. Innovators should be able to 
apply. So that is one of our driving concerns. The statute 
establishes some threshold criteria about how we need to 
evaluate these and then we are looking to what the public has 
said about other criteria. The statute doesn't talk about 
deference to any particular body. It says look for sustainable, 
look for the greatest speed, the greatest populations, those 
sorts of, I think we would call just standards so that any 
application can stand next to any other application. You 
compare it to that standard and see how it matches up. Someone 
mentioned earlier a point system. You know, I could imagine 
where at the end of this notice and comment we say you get X 
points for the following things or you get a scale of zero to 
some points, but we are still trying to figure all that out. 
Our goal is to get that out in a way that is understandable and 
then after the rule comes out is to go out into the communities 
and do training on how the application works.
    Mr. Space. And do you envision an effort, a conscious 
effort to ensure that these funds are distributed on a 
relatively widespread and State-by-State equitable basis? I 
mean, obviously based on needs but is there going to be an 
intent to ensure that this is spread out, notwithstanding those 
standards? I understand you may have 10 or 12 worthwhile 
projects in central California but we would like to make sure 
that this money is evenly disbursed in those rural areas. Is 
there going to be a conscious effort to do that?
    Mr. Seifert. So the statute directs us to fund to the 
extent practicable at least one in every State, and that is a 
minimum from the statute and we intend to comply with that to 
the greatest extent possible. I would caution to say that 
although $7.2 billion sounds like a lot of money, when you 
divide it by 50 States, six territories and the District of 
Columbia, it works out to about $150 million apiece, and when 
you start looking at construction projects, middle mile 
facilities, you can burn through a lot of money very quickly. 
So I think our first desire and what we are hearing from public 
comment is to come up with standards that end up with proposals 
that stretch the dollars as far as possible, if they are using 
other Recovery Act funds, like if you are digging a road with 
some Department of Transportation funds and you can say we are 
going to lay the fiber at the same time so we have stretched 
the dollars that much further, but our goal is to make sure 
that we have sustainable projects so that when the economy does 
recover, people can go to that community and say this is how it 
needs to be done in the future.
    Mr. Space. The constraints of time prohibit me from getting 
into any more details. I would, however, look forward to having 
a meeting with you some time in the near future, either in your 
office or mine, if that would be acceptable.
    Mr. Seifert. It would be my pleasure.
    Mr. Space. Thank you.
    Mr. Weiner. I recommend going to his office, Mr. Seifert.
    Mr. Stupak, you are recognized for 5 minutes.
    Mr. Stupak. Thank you, Mr. Chairman.
    Mr. Villano, let me just--a couple things. You know, I keep 
hearing that the RUS program only funds the ILECs. Incumbent 
carriers don't really help out the others. They don't fund any 
wireless applications or wireless companies. And just looking 
at it and having been on the committee for a long time, what 
happens in my neck of the woods, that is probably true. The 
incumbents don't want to come to my neck of the woods because 
there is not enough people up there, and the few places they 
will go might be the affluent city or two in my district but 
after that, they won't go anywhere else. So I am really 
concerned. I know I have brought up repeatedly how before the 
changes were made in the RUS program in 2008, how some of these 
rather affluent communities got funded but we can't get funding 
up in the more rural, sparsely populated areas. So I just want 
to make sure that--all right. Let me ask you this. Does RUS 
anticipate issuing regulations to implement the statutory 
changes in the 2008 Farm Bill be part of the final rule issued 
with NTIA?
    Mr. Villano. The 2008 Farm Bill regulations are in final 
clearance at the current time and we intend upon publishing an 
interim final rule within the next 60 to 90 days. The funding 
that we received under the Recovery Act basically exempted us 
from the 2008 Farm Bill so it allows us to set up an entirely 
separate program. So that program will be doing NOFAs 
consistent with NTIA. We plan to do three NOFAs.
    Mr. Stupak. So wireless will be welcome to apply and other 
than incumbents will be welcome to apply and receive funding?
    Mr. Villano. Right. Wireless has always been welcome. We 
are technology-neutral. We do wireless, we do broadband over 
power lines.
    Mr. Stupak. That is what it says but in the application 
that really hasn't been the way it has been. At least that is 
not my experience. Let me ask you this. RUS already has 
hundreds of millions of dollars available for broadband loans.
    Mr. Villano. Correct.
    Mr. Stupak. Shouldn't the emphasis of the stimulus dollars 
be on grants in the same vein as NTIA then?
    Mr. Villano. We have $2.5 billion of flexible budget 
authority that we are envisioning being able to do loans, 
grants and loan-grant combinations.
    Mr. Stupak. Right, but I am talking before the stimulus. We 
had all these pendings here before the stimulus was even 
passed. You had a lot of applicants there. Are they going to go 
with this new, more discretionary as in the economic recovery 
package or are they going to follow RUS?
    Mr. Villano. Under our existing broadband program, we have 
less than five applications pending. They are all waiting for 
the regulations for the 2008 Farm Bill.
    Mr. Stupak. So they would go under the 2008 one even though 
they were pending prior to?
    Mr. Villano. Anybody that applied before the 2008 Farm Bill 
was enacted would be under the 2002 Farm Bill. We have two 
pending applications and both of those will be--a decision will 
be made on those shortly. We have been waiting for additional 
information from the applicants but there are only two carry-
over applications from the 2002 Farm Bill and there are four 
applications under the 2008 Farm Bill. So not a heavy demand 
for the existing programs until the rules come out.
    Mr. Stupak. Okay. A lot has been said about mapping. Mr. 
Mefford, let me ask you these questions. You receive 
information from the broadband providers to do your mapping, 
correct?
    Mr. Mefford. Yes, sir, that is correct.
    Mr. Stupak. Okay. The government needs to add on broadband 
to inform its policy, to make up its policy decisions. I would 
note that it can also use data to target resources, and the 
more granular the data, the better the targeting. With that in 
mind, let me ask you this question. There are reports that the 
State cable and telephone association groups in North Carolina 
hired your company and your company has since tried to hinder 
North Carolina State agency ENC from doing this broadband 
mapping, which it had been doing since 2001, because your 
company refused to provide them the information they need. 
Also, I have heard that before it would consent to providing E 
North Carolina with the information, AT&T insisted that the 
State agency enter into a non-disclosure agreement. So can you 
explain to me your organization's actions and how hindering the 
flow of information to State agencies is consistent with your 
testimony here today?
    Mr. Mefford. Yes, sir. I am happy to address that. With 
great respect, let me just say that the assessment of the North 
Carolina situation is not correct. We are actually partnering 
with ENC as the existing State entity to make sure that the 
information that we are now gathering from providers is going 
to be useful for their efforts to carry out much of the similar 
programs that we have discussed today.
    Mr. Stupak. But if your providers are insisting on a non-
disclosure, how can you provide the information then?
    Mr. Mefford. It is a great question and one that is broadly 
misunderstood. We actually in each of our----
    Mr. Stupak. Either you provide it or you don't.
    Mr. Mefford. Well, no, there are different aspects of the 
data that remain protected and so for instance the latitude-
longitude coordinates of where hardware exists is not 
information that we will provide, you know, as a database to 
anybody who wants to access it, but what we do is, we use those 
coordinates to determine where service is available from that 
hardware and that is how we create a footprint, a visual 
representation of where service is available. So that 
information, Congressman Stupak, is available on each of the 
State websites and so consumers and businesses can go there and 
validate it. We have ways for them to feed back on that to tell 
us if there are places where they see it as inaccurate and 
incorrect and we make those adjustments each time we receive 
that feedback.
    Mr. Stupak. Well, if that is available, why would people 
hire you then?
    Mr. Mefford. No, we actually make it available. So we 
gather--the maps over to my right are from Minnesota and there 
is, you know, 104 broadband providers represented on that map 
and so we gather that data. It is not available in a single 
place otherwise until we gather it. And so once we gather it 
and we protect that very basic fundamental competitive data, we 
then again make it available in a visual representation of----
    Mr. Stupak. But you brought up Minnesota. Could the 
committee or the State of Minnesota then take a look at the raw 
data to determine whether discrepancies arise? Will you give 
them the raw data?
    Mr. Mefford. We have those non-disclosure agreements in 
place so----
    Mr. Stupak. So see, once again, you are blocking the 
availability. How about the committee? Will you make it 
available to the committee for Minnesota?
    Mr. Mefford. Now, what we can do, yes, sir, is make 
available this raw data that represents these footprints so we 
are absolutely willing to demonstrate the validity of that by 
having the committee look closely at that and welcome that 
opportunity.
    Mr. Stupak. Well, if you are willing to provide it to the 
committee, why aren't you willing to provide it to the State of 
Minnesota then?
    Mr. Mefford. They actually do have it. I mean, you could 
log on to the Connect Minnesota website, ConnectMN.org, and you 
can see the data that is there and you don't have to be the 
State of Minnesota. I mean, you can be a consumer or company or 
anybody and you can do a household level search.
    Mr. Stupak. So then your testimony today, you don't mind 
providing that information to Minnesota?
    Mr. Mefford. We are providing it already, Congressman.
    Mr. Stupak. So you are going to provide it to Minnesota 
then, yes or no?
    Mr. Mefford. It is on the Internet at ConnectMN----
    Mr. Stupak. I am not asking that. I am asking if you will 
provide it to Minnesota, yes or no?
    Mr. Mefford. We already have. I mean, we did--as soon as we 
published the first map for Minnesota, the State was the first 
to get a copy of it.
    Mr. Stupak. Okay. They are telling us you are not giving it 
to them.
    Mr. Mefford. I mean, I would encourage the committee--I 
would be happy to provide the contact information of our State, 
you know, contract owner and the people we have liaised with 
there to----
    Mr. Stupak. So are you providing the map or just the raw 
data to them?
    Mr. Mefford. We are providing the map that includes the 
data that shows the footprints of where broadband is actually 
available, and again, Congressman, you can search--I mean, 
consumers can go and search down to a household level to see 
what data is available for a specific household level.
    Mr. Stupak. Thank you.
    Mr. Weiner. Thank you, Mr. Mefford. I think Mr. Stupak 
raised a good point. I think this information that is gathered 
should be entirely in the public domain, A, as a check, but B, 
for instance, there is so much federal funding going into the 
collection of the data.
    Mr. Shimkus. Mr. Chairman?
    Mr. Weiner. The gentleman from Illinois.
    Mr. Shimkus. Just to ask unanimous consent to have the 
letter written by the ranking member of the full committee, Joe 
Barton, and Cliff Stearns of the subcommittee be submitted for 
the record to the agencies along with their responses.
    Mr. Weiner. Without objection.
    The gentleman from North Carolina, Mr. Butterfield, you are 
recognized for 5 minutes.
    Mr. Butterfield. Thank you very much, Mr. Chairman. I wish 
our other chairman was here because I wanted to publicly thank 
him for his work on this subcommittee. He promised us that he 
would have a robust hearing today and this is obviously good 
work. The title of the hearing today is the oversight of the 
Recovery Act. We should have another word in there. I think we 
need to maximize the Recovery Act. The dollars are very 
limited, even though the public thinks that it is a lot of 
money, and it is, but we need to take what we have and get the 
most for our investment.
    Let me take off on where Mr. Stupak was a minute ago, and I 
think this is an appropriate area that we need to explore as a 
subcommittee. I don't know very much about Connect Nation but 
from what I have been told, it is a very credible organization 
and you are doing good work across the country and I want to 
applaud you for what you are doing, but I am also concerned 
about some of the issues that have arisen in North Carolina, my 
State, and so I want you, please, if you could to be a little 
bit more specific and tell us more about your transparency in 
North Carolina and the reliability of the data that you have 
collected in North Carolina and specifically who you are 
interacting with with the ENC.
    Mr. Mefford. Yes, sir. Thank you for the question, and I am 
glad to provide the answer. I think there was a challenge in 
North Carolina to create the broadband map, much as we have 
talked about today, and I am not privy to all the reasons in 
the history to why that was the case, but as we have done these 
types of maps across the country, we have established a 
history, we have established a track record for being able to 
do this in a way that is inviting to providers to participate 
in the process, and the driver for that is, we approach it as a 
business development opportunity for providers. We want them to 
be able to use this information and again, this is of more 
benefit for smaller providers than it is larger providers. It 
puts smaller providers on equal footing from a market 
intelligence standpoint with their larger counterparts and so 
they can use that data to build a business case then to 
identify unserved areas and to identify household density in 
those areas and to use our information to help build a business 
case. So because we have been able to do that time after time 
after time in different States, we have that trusted 
relationship, that credibility that says we can get the job 
done.
    Mr. Butterfield. And broadband mapping is not rocket 
science.
    Mr. Mefford. It is not. That is exactly right.
    Mr. Butterfield. It can be done in 6 to 9 months, I think 
we heard earlier today.
    Mr. Mefford. That is exactly right, but it does require the 
trust of those who are voluntarily providing the data, and so 
that is what we are able to bring to the mix, and in your home 
State of North Carolina, that is where we stand with the 
provider community recognizing that they could bring us into 
the State and provide the information that the State has been 
after for so many years, and again, that is done to empower 
existing efforts, certainly not to hinder ENC. ENC has a great 
history and a proven track record, and there is no desire for 
our organization to hinder their work but quite the opposite, 
to empower it----
    Mr. Butterfield. To partner with them as well?
    Mr. Mefford. To partner in a way that gives them the 
information that they have been seeking and allows them to 
then, you know, come to NTIA and RUS with maps in hand that 
identify where those areas are.
    Mr. Butterfield. Let me direct my next question to Ms. 
Turner-Lee. Thank you very much for coming. I thank all of you 
for your testimony today. I realize it has been a long day for 
all of you, and I particularly apologize for the disruption. We 
had to go to the Floor for about an hour and now we are just 
about to finish up.
    Ms. Turner-Lee, as you probably know, I represent the 
eastern part of North Carolina. It is the fourth poorest 
district in the country in terms of median family income, and 
one of my 23 counties is called Green County, and you have some 
involvement and some experience in Green County and I want to 
thank you for that. In your written testimony, you made 
reference to the need to build a digital ecosystem that can 
support not only the installation of broadband but a culture of 
use of broadband, and that is very important. I would like you 
to just touch on the success that you have experienced in Green 
County and also to address the ability that we have to use the 
stimulus funds to replicate that model in other similar 
communities across the country.
    Ms. Turner-Lee. Thank you. We don't mind the wait. I think 
on behalf of the people here, it is a long time coming to 
actually talk about this, so thank you for acknowledging the 
time spent on this.
    You know, in Green County, that was a case where I think 
takes and captures the heart of a lot of the testimony you have 
heard today. There was a change in industry from tobacco to 
other opportunities that people were searching for and working 
hand and hand with stakeholders in the North Carolina area. We 
really worked on a plan and we were invited to come in and work 
alongside of those providers to make sure this worked, and what 
we introduced to them was the power of the Internet at that 
time, and this was a project that started a few years back. 
That thought and that idea of looking at the Internet as a way 
to change an economy led to the successes that we saw in Green 
County. Not only were former tobacco workers seeing the power 
of the Internet and seeing the power of economic development 
opportunities and being retrained on how to use the Internet, 
they were also using it to build a local economy. There is a 
story in Green County of signs on lawns of ways that people 
that could use the Internet to connect resources to one 
another. We had a section on the beehive, which was a community 
bartering section. It was the eBay of Green County where people 
were trading goods among each other. As a result of our efforts 
there, we have seen young people become less truant. We have 
seen reductions working hand in hand with the stakeholders 
there in teenage pregnancy. In fact, we honored a young person 
that came out of Green County who looked at his dyslexia not as 
a hindrance but as a way to use technology to talk to other 
people about how to solve that. I think the example of Green 
County demonstrates a few things that we need to capture going 
forward.
    Mr. Butterfield. You are going to have to wrap it up. The 
chairman is going to hit the gavel in just a second.
    Ms. Turner-Lee. You know, again, stressing collaboration, 
transparency, ensuring that the ecosystem becomes 
institutionalized and it is not a case where we use this 
funding where we don't look back and make the meter move on 
various things that we want do around this as it has been 
stated as a proof of concept but also as a way to move people 
that have been disconnected and detached.
    Mr. Butterfield. Thank you.
    Mr. Weiner. Thank you, Mr. Butterfield. I yield myself a 
couple minutes here. Can I just ask, Mr. Large, do you have 
coaxial cable television in your area?
    Mr. Large. We have Comcast in the city of Stuart, which is 
the county seat, and then Citizens Internet provides to the one 
household that we spoke of, but other than that----
    Mr. Weiner. No, but I mean, do you have cable television, 
traditional cable television in your area?
    Mr. Large. In the town of Stuart only.
    Mr. Weiner. And do you have landline telephones?
    Mr. Large. Yes.
    Mr. Weiner. Mr. Seifert, as a philosophical matter, 
probably the quickest way to get Mr. Large's jurisdiction 
Internet access, broadband, is just to do DSL or have the cable 
company there provide the service, right? It is probably 
quicker than having a wireless outfit come in and wire the 
community.
    Mr. Seifert. I am not so sure that is the case because if 
that were the case and it could be done, I think Mr. Large 
would say that it already would have been done.
    Mr. Weiner. Well, there is the economic imperative. Perhaps 
one of the questions is whether what we are doing here is 
priming the pump for business to do what they should have been 
in the business of doing anyway. But from just pure expedience, 
if our object is to get as many people wired as quickly as 
possible, isn't that probably the technologically fastest way 
to get it done?
    Mr. Seifert. Again, I don't want to make a determination 
there because I don't know if he is in a mountainous region 
where point-to-point access with fiber attached to the bottom 
of the towers would be a way to get it quicker and cheaper, and 
quicker I think has to encompass some sort of cost aspect. If 
we had unlimited funds, you know, there are all sorts of quick 
ways we could do it, but I don't know enough about the 
topography and the folks and the sorts of things they are 
looking for.
    Mr. Weiner. But there is nothing that would disqualify 
them--I mean, I know the rules haven't been made but nothing 
that would disqualify the local cable company or the local 
phone company saying you know what, we are going to amp up our 
traditional ISDN line and make it a DSL line in this community. 
There is nothing that prevents them from getting funds under 
this Act or bidding to be the service provider in that area?
    Mr. Seifert. So the statute says that there is a public 
interest test for for-profit companies to participate so that 
is one of the things that we in consultation with the FCC have 
to determine and we have received comment on that, but given 
that they have met that public interest test, then they can 
apply and present proposals for that.
    Mr. Weiner. Got you. So one of the things that you are 
not--we were just having a conversation while the question was 
going on. You are not trying to create necessarily--one of your 
imperatives is not to create jobs in the wiring of communities?
    Mr. Seifert. I think it is a benefit. If you think of 
Department of Transportation money building roads, one of the 
initial benefits is the folks actually building the roads but 
there are greater benefits that come from down the road from 
the investment. It is not just the building of the wire.
    Mr. Weiner. Right. It is the economic faucet that gets 
turned on from that.
    Mr. Seifert. Correct.
    Mr. Shimkus. Mr. Chairman, can I just follow up on that?
    Mr. Weiner. Certainly.
    Mr. Shimkus. What about this debate on the wiring, the 
fiber wiring that is called the middle mile, which is, maybe 
there is access as you are talking about it but it is really 
the fiber connection from--I just got briefed today by folks 
who Newton, Illinois, is an unserved area but what they would 
like this money to go to is the fiber to connect to the fiber. 
Then they have access. Is there a discussion in that way?
    Mr. Seifert. I can tell you it is one of the 
Administration's priorities in this program, it has been 
expressed, that middle mile provides the opportunity for 
unconnected communities or communities that are not as 
connected as much as they would like to be to get to the 
Internet, and the more folks you can get involved in that, 
community centers, hospitals, public safety, they help fund the 
viability and the sustainability. We talked about 
sustainability, the sustainability of that project.
    Mr. Shimkus. Mr. Chairman, can Commissioner Chong just 
follow up on that?
    Mr. Weiner. Certainly.
    Ms. Chong. Thank you. I was just chomping at the bit.
    Mr. Shimkus. I could tell.
    Ms. Chong. Well, the middle mile is critical because for 
the unserved areas, the main reason the carriers tell me they 
are not there already is they can't get an Internet point of 
presence close enough, so that is the critical piece, and the 
point is, if you put the fiber in going out to the unserved 
area, it is really expensive, and so in our program we did 
allow the cost to be reimbursed but we had them proportion it 
between how much goes to serving the unserved and underserved 
area versus currently served people.
    Now, the other thing I wanted to add is, we are leveraging 
the California Telehealth Network money, which we got through a 
$22 million grant from the FCC pilot program, and that was 
critical because that will help push this middle mile farther 
out into the rural areas where these rural health care networks 
are that we are connecting and that will make a huge 
difference. So the last thing to add is, we are also looking at 
the health IT money, the electronic records, and we will parlay 
some of that into the project. So we are trying to grab every 
possible pot to make this happen but fiber is really critical 
and it should be paid for.
    Mr. Weiner. Let me just conclude with this thought, and I 
think it represents the aspirations of both sides of the aisle. 
You know, we had an experience after September 11, Homeland 
Security money, we all knew we wanted to improve safety. We 
dumped a lot of money out there and we found out years later it 
wasn't terribly well spent, it wasn't terribly well thought 
through. You know, the political ideal that we all have of 
wanting to get the service, the economic idea, if we don't get 
this right, the political will is going to evaporate pretty 
quickly on doing things like this in the future so there is an 
enormous amount of burden on you, and we have talked a lot 
about the stimulus, being a necessity to do things quickly and 
we have already had a remarkable number of hearings in a brief 
period of time. The rulemaking is moving along with alacrity. 
But it is very, very important, I think, that at the end of 
this process people say you know what, not only do we get 
service to people that didn't have it, it made economic sense, 
it worked, people were seeing the benefits, because if we are 
going to push this envelope in next generations of Congress 
trying to figure out how you expand it even more, this is going 
to be the laboratory that a lot of people are going to look to 
for arguments pro and con.
    So I thank you very much all of you for your testimony. I 
thank you for being so patient while we had the series of 
votes. I ask unanimous consent to include for the record a memo 
from the Minority Media and Telecommunications Council. Without 
objection.
    Mr. Weiner. I would also ask that members have to revise 
and extend their mark. We will keep the record open. I thank 
you all. This committee hearing is closed.
    [Whereupon, at 1:25 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

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