[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
                    NETWORK NEUTRALITY AND INTERNET 
                     REGULATION: WARRANTED OR MORE
                        ECONOMIC HARM THAN GOOD?

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

                                HEARING

                               BEFORE THE

             SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 16, 2011

                               __________

                            Serial No. 112-8


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov



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                    COMMITTEE ON ENERGY AND COMMERCE

       FRED UPTON, Michigan          HENRY A. WAXMAN, California
              Chairman                 Ranking Member
JOE BARTON, Texas                    JOHN D. DINGELL, Michigan
  Chairman Emeritus                    Chairman Emeritus
CLIFF STEARNS, Florida               EDWARD J. MARKEY, Massachusetts
ED WHITFIELD, Kentucky               EDOLPHUS TOWNS, New York
JOHN SHIMKUS, Illinois               FRANK PALLONE, Jr., New Jersey
JOSEPH R. PITTS, Pennsylvania        BOBBY L. RUSH, Illinois
MARY BONO MACK, California           ANNA G. ESHOO, California
GREG WALDEN, Oregon                  ELIOT L. ENGEL, New York
LEE TERRY, Nebraska                  GENE GREEN, Texas
MIKE ROGERS, Michigan                DIANA DeGETTE, Colorado
SUE WILKINS MYRICK, North Carolina   LOIS CAPPS, California
  Vice Chair                         MICHAEL F. DOYLE, Pennsylvania
JOHN SULLIVAN, Oklahoma              JANE HARMAN, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MICHAEL C. BURGESS, Texas            CHARLES A. GONZALEZ, Texas
MARSHA BLACKBURN, Tennessee          JAY INSLEE, Washington
BRIAN P. BILBRAY, California         TAMMY BALDWIN, Wisconsin
CHARLES F. BASS, New Hampshire       MIKE ROSS, Arkansas
PHIL GINGREY, Georgia                ANTHONY D. WEINER, New York
STEVE SCALISE, Louisiana             JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin 
BILL CASSIDY, Louisiana                  Islands                      
BRETT GUTHRIE, Kentucky              
PETE OLSON, Texas                    
DAVID B. McKINLEY, West Virginia     
CORY GARDNER, Colorado               
MIKE POMPEO, Kansas                  
ADAM KINZINGER, Illinois             
H. MORGAN GRIFFITH, Virginia         
                                     
                                  (ii)
             Subcommittee on Communications and Technology

                          GREG WALDEN, Oregon
                                  Chair
LEE TERRY,                           ANNA G. ESHOO, California
  Vice Chairman                      EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida               MICHAEL F. DOYLE, Pennsylvania
JOHN SHIMKUS, Illinois               DORIS O. MATSUI, California
MARY BONO MACK, California           JANE HARMAN, California
MIKE ROGERS, Michigan                JOHN BARROW, Georgia
BRIAN P. BILBRAY, California         EDOLPHUS TOWNS, New York
CHARLES F. BASS, New Hampshire       FRANK PALLONE, Jr., New Jersey
MARSHA BLACKBURN, Tennessee          BOBBY L. RUSH, Illinois
PHIL GINGREY, Georgia                DIANA DeGETTE, Colorado
STEVE SCALISE, Louisiana             JOHN D. DINGELL, Michigan
ROBERT E. LATTA, Ohio                HENRY A. WAXMAN, California
BRETT GUTHRIE, Kentucky
ADAM KINZINGER, Illinois
JOE BARTON, Texas
FRED UPTON, Michigan
  


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     1
    Prepared statement...........................................     3
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     4
    Prepared statement...........................................     5
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     6
    Prepared statement...........................................     7
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, prepared statement......................................     8
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, prepared statement................................    11

                               Witnesses

Julius Genachowski, Chairman, Federal Communications Commission..    12
    Prepared statement...........................................    14
    Answers to submitted questions...............................   230
Michael J. Copps, Ph.D., Commissioner, Federal Communications 
  Commission.....................................................    19
    Prepared statement...........................................    21
    Answers to submitted questions...............................   247
Robert M. McDowell, Commissioner, Federal Communications 
  Commission.....................................................    28
    Prepared statement...........................................    30
    Answers to submitted questions...............................   252
Mignon Clyburn, Commissioner, Federal Communications Commission..    68
    Prepared statement...........................................    70
    Answers to submitted questions...............................   261
Meredith Attwell Baker, Commissioner, Federal Communications 
  Commission.....................................................    77
    Prepared statement...........................................    79
    Answers to submitted questions...............................   265

                           Submitted Material

Letters of May 28, 2010, May 24, 2010, and December 16, 2010, 
  submitted by Mr. Terry.........................................   137
Article entitled ``What Net Neutrality Means for You,'' Trend 
  Micro Consumer Newsletter, submitted by Mr. Terry..............   158
Letter of December 15, 2010, from Amplex Internet to Mr. Latta, 
  submitted by Mr. Latta.........................................   159
Report by Seth P. Waxman, submitted by Mr. Bass..................   161
Phoenix Center Policy Bulletin No. 25, submitted by Mrs. 
  Blackburn......................................................   171
Editorial entitled ``Net Neutrality: No One Will Be Satisfied, 
  Everyone Will Complain,'' by David J. Farber and Gerald R. 
  Faulhaber, The Atlantic, submitted by Ms. Eshoo................   194
Letter of February 14, 2011, from the United States Conference of 
  Catholic Bishops, submitted by Ms. Eshoo.......................   196
Letter of February 16, 2011, from The American Library 
  Association (ALA), The Association of Research Libraries (ARL), 
  and EDUCAUSE, submitted by Ms. Eshoo...........................   198
Letter of February 14, 2011, from the American Association of 
  Independent Music, submitted by Ms. Eshoo......................   204
Letter of February 15, 2011, from the Asian American Justice 
  Center, submitted by Ms. Eshoo.................................   206
Letter of February 14, 2011, from Computer & Communications 
  Industry Association, submitted by Ms. Eshoo...................   208
Letter of February 16, 2011, from the Free Community Paper 
  Industry, submitted by Ms. Eshoo...............................   210
Letter of February 14, 2011, from the Future of Music Coalition, 
  submitted by Ms. Eshoo.........................................   212
Letter of February 15, 2011, from the Leadership Conference, 
  submitted by Ms. Eshoo.........................................   214
Letter of February 15, 2011, from the Economy Corporation, 
  submitted by Ms. Eshoo.........................................   216
Letter of February 14, 2011, from various members of the music 
  community, submitted by Ms. Eshoo..............................   217
Letter of February 15, 2011, from the National Urban League, 
  submitted by Ms. Eshoo.........................................   219
Letter of February 16, 2011, from various organizations 
  supporting the Open Internet, submitted by Ms. Eshoo...........   221
Letter of February 15, 2011, from various businesses in support 
  of the Open Internet, submitted by Ms. Eshoo...................   223
Letter of March 1, 2011, from various faith leaders in support of 
  the Open Internet, submitted by Ms. Eshoo......................   225
Letter of April 6, 2011, from Netflix in support of the Open 
  Internet, submitted by Ms. Eshoo...............................   228


                    NETWORK NEUTRALITY AND INTERNET 
                     REGULATION: WARRANTED OR MORE
                        ECONOMIC HARM THAN GOOD?

                              ----------                              


                      WEDNESDAY, FEBRUARY 16, 2011

                  House of Representatives,
                  Committee on Energy and Commerce,
             Subcommittee on Communications and Technology,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:33 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Greg 
Walden (chairman of the subcommittee) presiding.
    Members present: Representatives Walden, Terry, Stearns, 
Shimkus, Bono Mack, Rogers, Bilbray, Bass, Blackburn, Gingrey, 
Scalise, Latta, Guthrie, Kinzinger, Barton, Upton (ex officio), 
Eshoo, Markey, Doyle, Matsui, Harman, Barrow, Towns, Pallone, 
Rush, Dingell, Inslee, and Waxman (ex officio).
    Staff present: Neil Fried, Majority Chief Counsel; Michael 
Beckerman, Majority Deputy Staff Director; David Redl, Majority 
Counsel; Jeff Mortier, Majority Professional Staff; Carly 
McWilliams, Majority Legislative Clerk; Roger Sherman, Minority 
Chief Counsel; Shawn Chang, Minority Counsel; Jeff Cohen, 
Minority Counsel; Sarah Fisher, Minority Policy Analyst; Bruce 
Wolpe, Minority Advisor; Pat Delgado, Minority Chief of Staff 
(Waxman); and Phil Barnett, Minority Staff Director.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. Please take your seats, and the hearing is 
about to begin. I call to order the Subcommittee on 
Communications and Technology hearing on net neutrality. I want 
to welcome our witnesses who are here today, and we look 
forward to your testimony and the responses to your questions.
    We all want an open and thriving Internet. That Internet 
exists today. Consumers can access anything they want with the 
click of a mouse, thanks to our historical hands-off approach. 
Changing direction now will only harm innovation and the 
economy. But before we even get into the harm the network 
neutrality rules will cause, it is important to realize the 
FCC's underlying theory of authority would allow the Commission 
to regulate any interstate communication service on barely more 
than a whim and without any additional input from the United 
States Congress. In essence, the FCC argues it can regulate 
anything if in its opinion doing so would encourage broadband 
deployment.
    I am relieved, however, the FCC declined, under its 
newfound authority, to regulate coffee shops, bookstores, 
airlines, and other entities. This of course means the FCC 
believes it has the authority that it has so far declined. It 
could have subjected these entities to the new rules under its 
decision.
    If left unchallenged, this claim of authority would allow 
the FCC to regulate any matter it discussed in the National 
Broadband Plan. Recall that the FCC concluded that consumers' 
concerns over privacy are deterring broadband. Does that mean 
the FCC can regulate Internet privacy?
    The National Broadband Plan also addresses health IT, 
distance learning, smart grid, smart homes, smart 
transportation. Can the FCC regulate all of these matters too 
in the name of promoting broadband? Under the FCC's rationale, 
its authority is bounded only by its imagination.
    Former FCC Chairman Kevin Martin tried to go down a very 
similar path. In the wake of Hurricane Katrina, he claimed that 
his authority over wireless services allowed him to require 
backup power at cell sites. During oral arguments, the courts 
questioned the FCC's logic, asking whether it would grant him 
seemingly endless authority over things like electric utilities 
and employees of wireless providers. The FCC eventually backed 
down. This overreach was problematic with a real disaster like 
Hurricane Katrina. I don't see how it is justified here.
    From the Internet's inception, we have taken a hands-off 
approach. The Internet started as a defense agency project to 
connect computers to research facilities. It did not become the 
explosive driver of communications and economic growth it is 
today until we turned it over to free enterprise. Dating as far 
back as 1971, the FCC has consistently treated data services as 
unregulated information services and not as regulated 
telecommunications services. Congress codified this distinction 
in the 1996 Telecommunications Act.
    FCC Chairman William Kennard reaffirmed this approach. In 
rebuffing requests to regulate cable Internet access service, 
Chairman Kennard explained in a 1999 speech, and I quote, 
``that the fertile fields of innovation across the 
communications sector and around the country are blooming 
because from the get-go we have taken a deregulatory 
competitive approach to our communications structure, 
especially the Internet.'' There is no crisis warranting 
departure from this approach.
    The FCC hangs almost its entire case for regulating the 
Internet on Comcast's past attempt to combat network congestion 
by managing peer-to-peer traffic, but Comcast and the peer-to-
peer community resolved that issue by gathering their engineers 
and developing alternative solutions that advanced traffic 
management techniques to everyone's benefit. No network 
neutrality rules were in place, and the D.C. Circuit overturned 
the FCC's attempts to regulate Comcast's network management 
because the Federal Communications Commission failed to 
demonstrate it had the authority to do so. Most everything else 
the order discusses is either an unsubstantiated allegation or 
speculation of future harm.
    The FCC even confesses in its order that it has done no 
market analysis, none. It just selectively applied the rules to 
broadband providers, shielding web companies. If the mere 
threat of Internet discrimination is such a concern and if the 
FCC has done no analysis to demonstrate why one company has 
more market power than another, why would discrimination by 
companies like Google or Skype be any more acceptable than 
discrimination by companies like AT&T and Comcast? Instead of 
promoting competition, such picking of winners and losers will 
stifle the investment needed to perpetuate the Internet's 
phenomenal growth, hurting the economy.
    Section 230 of the Telecommunications Act makes it the 
policy of the United States to ``preserve the vibrant and 
competitive free market that presently exists for the Internet 
and other interactive computer services unfettered by federal 
or state regulation.'' Statutory statements of policy are not 
grants of regulatory authority but they can help delineate the 
contours of that authority. In light of Congress's statutory 
pronouncement that Internet regulation is disfavored, the FCC's 
theory of regulation by bank shot stretches too far.
    At bottom, this is little more than an end run around the 
D.C. Circuit is April 2010 ruling in the Comcast case that the 
FCC failed to show it had the ancillary authority to regulate 
network management.
    [The prepared statement of Mr. Walden follows:]

                 Prepared Statement of Hon. Greg Walden

    We all want an open and thriving Internet. That Internet 
exists today. Consumers can access anything they want with the 
click of a mouse thanks to our historical hands-off approach. 
Changing direction now will only harm innovation and the 
economy.
    But before we even get into the harm the network neutrality 
rules will cause, it's important to realize that the FCC's 
underlying theory of authority would allow the commission to 
regulate any interstate communication service on barely more 
than a whim and without any additional input from Congress. In 
essence, the FCC argues it can regulate anything if, in its 
opinion, doing so would encourage broadband deployment. I am 
relieved, however, that the FCC declined under its new-found 
authority to regulate coffee shops, bookstores, airlines and 
other entities. This of course means that the FCC believes if 
it had not so declined, it could have subjected these entities 
to these new rules.
    If left unchallenged, this claim of authority would allow 
the FCC to regulate any matter it discussed in the national 
broadband plan. Recall that the FCC concluded that consumers' 
concerns over privacy are deterring broadband. Does that mean 
the FCC can regulate Internet privacy? The national broadband 
plan also addresses health IT, distance learning, smart grids, 
smart homes, and smart transportation. Can the FCC regulate all 
these matters, too, in the name of promoting broadband? Under 
the FCC's rationale, its authority is bounded only by its 
imagination.
    Former FCC Chairman Kevin Martin tried to go down a very 
similar path. In the wake of Hurricane Katrina, he claimed that 
his authority over wireless services allowed him to require 
backup power at cell sites. During oral argument, the courts 
questioned the FCC's logic, asking whether it would grant him 
seemingly endless authority over things like electric utilities 
and employees of wireless providers. The FCC eventually backed 
down. If this overreach was problematic with a real disaster 
like Hurricane Katrina, I don't see how it is justified here.
    From the Internet's inception we have taken a hands-off 
approach. The internet started as a defense agency project to 
connect computers at research facilities. It did not become the 
explosive driver of communications and economic growth it is 
today until we turned it over to free enterprise. Dating as far 
back as 1971, the FCC has consistently treated data services as 
unregulated information services and not as regulated 
telecommunications services. Congress codified this distinction 
in the 1996 Telecommunications Act.
    FCC Chairman William Kennard reaffirmed this approach. In 
rebuffing requests to regulate cable Internet access service, 
Chairman Kennard explained in a 1999 speech that ``[t]he 
fertile fields of innovation across the communications sector 
and around the country are blooming because from the get-go we 
have taken a deregulatory, competitive approach to our 
communications structure-especially the Internet.''
    There is no crisis warranting departure from this approach. 
The FCC hangs almost its entire case for regulating the 
Internet on Comcast's past attempt to combat network congestion 
by managing peer-to-peer traffic. But Comcast and the peer-to-
peer community resolved that issue by gathering their engineers 
and developing alternative solutions that advanced traffic 
management techniques to everyone's benefit. No network 
neutrality rules were in place, and the D.C. Circuit overturned 
the FCC's attempts to regulate Comcast's network management 
because the FCC failed to demonstrate it had any authority to 
do so. Most everything else the order discusses is either an 
unsubstantiated allegation or speculation of future harm.
    The FCC even confesses in its order that it has done no 
market analysis. It just selectively applied the rules to 
broadband providers, shielding web companies. If the mere 
threat of Internet discrimination is such a concern, and if the 
FCC has done no analysis to demonstrate why one company has 
more market power than another, why would discrimination by 
companies like Google or Skype be any more acceptable than 
discrimination by companies like AT&T and Comcast? Instead of 
promoting competition, such picking of winners and losers will 
stifle the investment needed to perpetuate the Internet's 
phenomenal growth, hurting the economy.
    Section 230 of the Communications Act makes it the policy 
of the United States ``to preserve the vibrant and competitive 
free market that presently exists for the Internet and other 
interactive computer services, unfettered by Federal or State 
regulation.'' Statutory statements of policy are not grants of 
regulatory authority but they can help delineate the contours 
of that authority. In light of Congress's statutory 
pronouncement that Internet regulation is disfavored, the FCC's 
theory of regulation by ``bank shot'' stretches too far.
    At bottom this is little more than an end-run around the 
D.C. Circuit's April 2010 ruling in the Comcast case that the 
FCC failed to show it had ancillary authority to regulate 
network management.

    Mr. Walden. With that I now turn to the ranking member for 
her opening statement.

 OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Eshoo. Good morning, Mr. Chairman, and thank you, and 
warm welcome to all of the commissioners of the Federal 
Communications Commission. It is very good to see you. I want 
to thank Chairman Walden for calling the commissioners before 
us early in this Congress. It is vitally important that we hear 
from the full Commission to help members make informed 
decisions on the key telecommunications issues that will be 
before us in this Congress.
    Today's hearing is intended to examine the FCC's action to 
preserve an open Internet and a proposed mechanism to unravel 
these rules. Since being elected to the House in 1992, I have 
witnessed my district lead a technology revolution, and the 
Nation has prospered as has the world. This success has come in 
large part due to the Internet's growth, an open forum where 
companies compete online and consumers have a choice in the 
content they consume.
    In only a few years, innovative companies like Netflix, 
Skype, and eBay have flourished. These companies have created 
tens of thousands of jobs and new competition in areas like 
telephone service, video, and online shopping, not just in my 
district but across the Nation. By one estimate, the open 
Internet ecosystem has resulted in more than 3 million new 
jobs, U.S. jobs, over the past 15 years. To promote the next 
Google or Facebook, we must preserve these essential qualities 
and ensure that the Internet remains open and free.
    While the FCC's open Internet rules are not perfect, they 
are an important step forward. Without some clear rules of the 
road, large corporations can carve up the Internet into fast 
and slow lanes, charging a toll for content and blocking 
innovators from entering the information superhighway. I 
believe consumers, not corporations, should be in the driver's 
seat to pick the content they view, listen and watch over the 
Internet.
    We are now faced with at least two legal challenges and the 
use of legislative maneuvers like the Congressional Review Act 
to overturn the FCC's work. These actions will inevitably 
create market uncertainty, and I want to repeat that, Mr. 
Chairman. These actions will inevitably create market 
uncertainty and delay future innovation in broadband 
technology.
    Each member of this subcommittee has made it clear where 
they stand on the issue, and I don't expect this hearing to 
change those views. What is important to remember is what the 
FCC agreed to is a compromise, a word that a lot of Americans 
celebrate. That understand that compromises have to be made, 
reflecting the views of both sides of the issue, with more than 
100,000 comments from more than 2 million people across the 
country, 90 percent of whom were in favor of open Internet 
rules. So the American people have really weighed in with the 
FCC.
    There is broad agreement for the adoption of these rules. 
Comcast, the Nation's largest broadband provider, voluntarily 
agreed to abide by open Internet conditions for the next 7 
years as part of its joint venture with NBC Universal. AT&T has 
said it will not engage in efforts to overturn the FCC's order. 
If these commonsense rules are good enough for the Nation's two 
largest broadband providers, then I think it is time we refocus 
our efforts on the next steps needed to promote jobs, broadband 
deployment, and new investment.
    I think it is time to look forward. That is really what 
America is about, and on what we can work on together in a 
bipartisan way. We are faced with important issues like 
universal service reform, spectrum reform and ensuring that our 
country's first responders have a nationwide, interoperable 
public safety network. We will be coming up to the 10th 
anniversary of the attack on our country and we still do not 
have interoperability with our public safety community. That is 
what this Congress, this committee and full committee should be 
tackling. And when we tackle these issues, we will have an 
opportunity to create jobs in our country, grow the economy, 
and a platform we can all agree on.
    I look forward to hearing from the distinguished chairman 
all of the commission, all the distinguished commissioners and 
their thoughts on how we can ensure that the Internet remains a 
vital resource, an American resource to improve the lives of 
every citizen and everyone around the world for generations to 
come. Thank you, Mr. Chairman, and I yield back.
    [The prepared statement of Ms. Eshoo follows:]

                Prepared Statement of Hon. Anna G. Eshoo

    Good morning Mr. Chairman and welcome to the FCC 
Commissioners.
    I commend Chairman Walden for calling the Commissioners 
before us early in this Congress. It's vitally important that 
we hear from the full Commission to help Members make informed 
decisions on key telecommunications issues.
    Today's hearing is intended to examine the FCC's action to 
preserve an open Internet and a proposed mechanism to unravel 
these rules. Since being elected to the House in 1992, I've 
witnessed my District lead a technology revolution and the 
nation has prospered. This success has come in large part due 
to the Internet's growth--an open forum where companies compete 
online, and consumers have a choice in the content they 
consume.
    In only a few years, innovative companies like Netflix, 
Skype and eBay have flourished. These companies have created 
tens of thousands of jobs and new competition in areas like 
telephone service, video and online shopping, not just in my 
District, but across the nation. By one estimate, the open 
Internet ecosystem has resulted in more than 3 million new U.S. 
jobs over the past 15 years. To promote the next Google or 
Facebook, we must preserve these essential qualities and ensure 
the Internet remains free and open.
    While the FCC's open Internet rules are not perfect, a view 
I've made very clear, they are an important step forward. 
Without some clear rules of the road, large corporations can 
carve up the Internet into fast and slow lanes, charging a toll 
for content, and blocking innovators from entering the 
information superhighway. I believe consumers, not 
corporations, should be in the driver's seat to pick the 
content they view, listen and watch over the Internet.
    We're now faced with at least two legal challenges and the 
use of legislative maneuvers like the Congressional Review Act 
(CRA) to overturn the FCC's work. These actions will inevitably 
create market uncertainty and delay future innovation in 
broadband technology.
    Each Member of this Subcommittee has made it clear where 
they stand on the issue and I don't expect this hearing to 
change those views. What's important to remember is what the 
FCC agreed to is a compromise, reflecting the views of both 
sides of the issue, with more than 100,000 comments from more 
than 2 million people, 90 percent of whom were in favor of open 
Internet rules.
    There is broad agreement for the adoption of these rules. 
Comcast, the nation's largest broadband provider, voluntarily 
agreed to abide by open Internet conditions for the next seven 
years as part of its joint venture with NBC Universal. AT&T has 
said it will not engage in efforts to overturn the FCC's order. 
If these common sense rules are good enough for the nation's 
two largest broadband providers, then I think it's time we 
refocus our efforts on the next steps needed to promote jobs, 
broadband deployment and new investment.
    It's time to look forward and focus on what we can work on 
together in a bipartisan way. We're faced with important issues 
like universal service reform, spectrum reform and ensuring 
that our country's first responders have a nationwide, 
interoperable public safety network. By tackling these issues, 
we have an opportunity to create jobs and grow the economy -a 
platform we can all agree on.
    I look forward to hearing the Chairman and the 
Commissioners' thoughts on how we can ensure the Internet 
remains a vital resource to improve the lives of Americans and 
everyone around the world for generations to come.

    Mr. Walden. I thank the gentlelady for her comments.
    I now yield 2 minutes to the chairman of the full 
committee, the gentleman from Michigan, Mr. Upton.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Thank you, Mr. Chairman.
    The FCC's recent adoption of network neutrality rules to 
regulate the Internet is perhaps the most striking example of a 
troubling trend that we have seen at this very important 
agency. Rather than serving as an impartial expert and 
authority, the Commission seems to be advancing a policy agenda 
of its own, often by twisting the arms of those who have come 
before it. The activist agenda is particularly embodied in the 
network neutrality regulations that are the subject of today's 
hearing.
    We are pleased to see Chairman Genachowski today alongside 
of his fellow commissioners who announced plans in September of 
2009 to codify four network neutrality principles as 
enforceable rules. However, the history of these principles is 
clear. First put forward in 2004, they were intended for all 
facets of the industry in lieu of regulations. Even when 
adopted as policies in 2005, the FCC made clear that they were 
not established as rules nor were they enforceable. The 
decision came only 3 months after taking the helm of the FCC 
despite the fact that he made no mention of those plans 4 days 
earlier during his first appearance before this committee.
    I have made it clear that the Energy and Commerce Committee 
will be focused on jobs. As we have seen in the first couple 
weeks of the 112th Congress, one of the greatest threats to job 
creation in our current economy is runaway regulation. 
Regulations are not the problem in and of themselves. In fact, 
it is regulations that implement the laws passed by Congress. 
The problem comes when unelected personnel in the maze of the 
federal bureaucracy began using the regulations to impose their 
own agendas, and when they do so without congressional 
authority or thoughtful consideration of the economic 
consequences. Net neutrality is a case in point. The FCC has 
done nothing to specifically quantify any harm requiring 
intervention or the potential harm to consumers, innovation or 
the economy from the proposed rules. Where is the cost-benefit 
analysis that President Obama called for in his recent 
Executive order?
    This hearing is to look into that, and I look forward to 
the answers of those that are here, and I ask that the rest of 
my statement be included as part of the record.
    Mr. Walden. Without objection.
    [The prepared statement of Mr. Upton follows:]

                 Prepared Statement of Hon. Fred Upton

    The FCC's recent adoption of network neutrality rules to 
regulate the Internet is perhaps the most striking example of a 
troubling trend we have seen at this important agency. Rather 
than serving as an impartial expert and authority, the 
commission seems to be advancing a policy agenda of its own--
often, by twisting the arms of those who come before it. This 
activist agenda is particularly embodied in the network 
neutrality regulations that are the subject of today's hearing.
    Chairman Genachowski--who we are pleased to see today 
alongside his fellow commissioners--announced plans in 
September 2009 to codify four network neutrality principles as 
enforceable rules. However, the history of these principles is 
clear: First put forward in 2004, they were intended for ``all 
facets of the industry'' in lieu of regulations. Even when 
adopted as policies in 2005, the FCC made clear they were not 
established as rules, nor were they enforceable.
    Chairman Genachowski's decision came only 3 months after he 
took the helm at the FCC, despite the fact that he made no 
mention of those plans four days earlier during his first 
appearance before the House Energy and Commerce Committee.
    I have made it clear that the Energy and Commerce Committee 
would be focused on jobs. And as we have seen in the first few 
weeks of the 112th Congress, one of the greatest threats to job 
creation in our current economy is runaway regulation. 
Regulations are not the problem in and of themselves--in fact, 
it is regulations that implement the laws passed by Congress. 
The problem comes when unelected personnel in the maze of the 
federal bureaucracy begin using regulations to impose their own 
agendas, and when they do so without congressional authority or 
thoughtful consideration of the economic consequences.
    Net neutrality is a case in point. The FCC has done nothing 
to specifically quantify any harm requiring intervention, or 
the potential harm to consumers, innovation, or the economy 
from the proposed rules. Where is the cost-benefit analysis 
that President Obama called for in his recent executive order?
    In addition to these economic concerns, there are serious 
legal questions. In April 2010, the D.C. Circuit found the FCC 
had failed to demonstrate it had the authority to impose these 
network neutrality rules against a particular provider. Rather 
than re-evaluating the wisdom of regulating the Internet, the 
FCC began scrambling to find an alternative legal theory.
    The FCC proposed classifying Internet access service for 
the first time as a telecommunications service. This rightfully 
drew bipartisan alarm from more than 300 members of the House 
and Senate, as well as from industry. The FCC pivoted once 
more, now claiming it has authority to adopt any rules 
regarding information services that might have an impact on 
broadband, traditional wireline and wireless phone service, or 
broadcast and subscription television.
    Chairman Walden and I have made no secret about our 
objections to this policy and our plans to overturn it using 
the Congressional Review Act. In fact, here in my hand is the 
resolution Chairman Walden and I intend to drop in the hopper 
down on the House floor. Before we do that, we are giving you 
this one last chance to convince us that you have a sound legal 
and policy basis for regulating the Internet.
    We believe these rules will hurt innovation and the 
economy. But we are also concerned that this power grab will do 
irreparable harm to the FCC as an institution, and to the role 
of Congress as elected representatives of the people to 
determine the law of the land. We do not intend to allow either 
to occur.

    Mr. Walden. And now I think we go to Mr. Barton for a 
minute on our side.
    Mr. Barton. We have a little high-tech problem getting the 
button on over here. It just went off again.
    Welcome, our four commissioners and chairmen of the FCC. 
You are all great individuals. You are all very bright. I 
disagree with the majority of you on your net neutrality 
regulations that you put in place but I am impressed by your 
intellect.
    Mr. Chairman, I will put my statement in the record. 
Suffice it to say that I do not see how this Commission with 
the intelligence that they have could have adopted the rule 
they did on a 3-2 partisan vote knowing that there was probably 
going to--in fact, knowing there has been a change in the 
Congress and that every candidate who ran on the net neutrality 
principle that they tried to establish was defeated and knowing 
that the majority of this committee and a majority of the 
Congress on both sides of the aisle opposed the rule that they 
have now put in place.
    We have two hearings going on simultaneously so Mr. Upton 
and myself and others will be going up and down and back but I 
hope to come back in time to question the Commission and try to 
delve into why they did what they did when they did it, knowing 
that it was not going to be well reserved. Thank you, Mr. 
Chairman.
    [The prepared statement of Mr. Barton follows:]

                 Prepared Statement of Hon. Joe Barton

    Thank you, Mr. Chairman, for holding this important 
hearing. I would like to welcome our impressive witnesses: all 
four commissioners and Chairman Genachowski.
    This morning, Mr. Chairman, we are going to hear a familiar 
story about federal bureaucrats taking government regulations 
too far. The target this time is the Internet. This is the same 
Internet that has become a thriving force in this country and 
all without any type of formal federal government regulation.
    If strict regulation of the internet was warranted, 
Congress would have taken appropriate action. However, 
Congress, the American people, and those in the industry saw no 
looming danger.
    To say that I was stunned to see the backhanded tactics of 
the FCC when they adopted their network neutrality rules at the 
end of last year would be an understatement. The motives of the 
FCC on this matter are suspect. It is evident that the FCC's 
agenda comes straight out of the Obama Administration's 
playbook; destroy the economy without any regard for the 
current economic situation and do so without showing an 
imminent threat.
    The actions taken by the FCC have denied the markets from 
policing themselves. The rules for network neutrality serve 
only to stifle innovation of the services offered by broadband 
providers. I hope through Congressional action we can return to 
a mindset where we champion platforms that foster a healthy 
environment for competition.
    As a Member of Congress, it is my duty to ensure that 
actions taken at the federal level are not harmful to citizens 
that elected us into office. The Internet has provided users 
from all backgrounds with an opportunity to freely explore new 
worlds and express new ideas across an unlimited number of 
networks. It should be our goal to preserve the vibrant 
competitive free market which allows for continued success and 
growth of the Internet.

    Mr. Walden. I now yield a minute to the gentleman from 
Nebraska, the vice chair of the committee, Mr. Terry.
    Mr. Terry. Thank you, Mr. Walden.
    I believe it is safe to say that everyone in this room 
today wants an open and thriving Internet. It is therefore 
important to point out that such an Internet exists today. It 
is no coincidence that today's Internet users can access 
anything they want very quickly and easily. This was made 
possible due to our historical hands-off approach to the 
Internet. As users demand more-sophisticated content, service 
and applications, we must maintain a similar course or face the 
inevitable decline in investment, service and overall blow to 
our economy.
    I am worried that the FCC's adoption of its network 
neutrality rules regulating the Internet will do just that, and 
I am further concerned that they were adopted strictly on the 
speculation of future harm.
    On October 5, 2009, my colleagues and I sent a letter 
asking that the Commission undertake a full market analysis 
prior to any consideration of network neutrality rules. It is 
made clear in the order that no such analysis took place. 
Instead the order selectively applies the rules to broadband 
providers while shielding Web-based companies. I am interested 
in learning today why the Commission instead of promoting 
competition decided it was more appropriate to pick the winners 
and the losers. If the were a mere threat of Internet 
discrimination is such a concern and the FCC has done no 
analysis to demonstrate why one company has more market power 
than another, why would discrimination like companies like 
Google or Skype be any more acceptable than discrimination by 
companies like Verizon and Cox?
    Hopefully these questions will be answered today. I plan on 
seeking the answers to these questions and about impact on the 
market, and I yield back.
    Mr. Walden. I now recognize the gentleman from 
Massachusetts, Mr. Markey, for a minute.
    Mr. Markey. I thank you, Mr. Chairman.
    I just want to speak on behalf of those of us who ran on 
net neutrality who are still in Congress, which starts with Ms. 
Eshoo to Mr. Waxman, to Mr. Markey, to Mr. Doyle, Ms. Matsui, 
all the way down just so the record is clear that we are here 
as we have been, and I also want to point out that AT&T was 
offered the contract to build the Internet in 1966 and they 
turned it town because they said they had a monopoly already 
and long lines and they did not want to build a packet switch 
network because they had to go to BB&N, a small company up in 
Cambridge, Massachusetts, to build the Internet. AT&T didn't 
want it.
    In 1996, after we passed the Telecom Act, Verizon sued 
saying we don't want to open up our network under that law to 
competitors, and the story goes on and on that the broadband 
barons, any time they have control of something they don't want 
competition, but this Internet revolution that created Google 
and eBay and Amazon and YouTube and Hulu and all of the rest of 
these companies, it is all as a result, not of the policy of 
Verizon, the policy of these other large companies, it is that 
the government acted.
    So here is the interesting thing. The paradox of 
competition is that it takes regulations in order to create 
deregulation, in order to create a marketplace for small 
entrepreneurial companies can get into the marketplace. That is 
what has happened over the last 30 years. The government has 
acted in order to make sure that a company that had already 
invented broadband, already invented digital, that is AT&T, but 
had not deployed it so we were all still using black rotary 
dial phones 100 years after Alexander Graham Bell in our living 
room. You don't go from black rotary dial phones to BlackBerrys 
unless the government finally intervenes and says we want these 
entrepreneurs, we want these small new companies that are 
entering into the marketplace. That is what has happened over 
this last generation. That is what this debate is all about.
    I wish the FCC had gone further so that we could have 
hundreds, thousands of newer companies coming in and not just 
relying upon Verizon to innovate because that will be a long 
day before you hear about the first new product that comes from 
Verizon. That has never happened and it is unlikely to ever 
happen in your lifetimes.
    I yield back, Mr. Chairman.
    Mr. Walden. There is Mr. Waxman. We are waiting for the 
chairman emeritus. Mr. Waxman, you have the remaining 2 minutes 
and 35 seconds once you are comfortably seated and ready to go.
    Mr. Waxman. Thank you very much, Mr. Chairman, and I regret 
that this committee has another subcommittee meeting at the 
same time.
    I am pleased you had this hearing today. This is the first 
FCC-related hearing of the subcommittee. I think it is 
appropriate that our witnesses are the five members of the 
Commission.
    Last December, the FCC took landmark action to preserve the 
open Internet. These rules are a bill of rights for Internet 
users. They contain four key provisions: restore the FCC's 
authority to prevent blocking of Internet content applications 
and services, which was struck down by the court in the Comcast 
decision, prevent phone and cable companies from unreasonably 
discriminating against any lawful Internet traffic, prohibit 
wireless broadband providers from blocking Web sites as well as 
applications that compete with voice or video conferencing 
while preserving the FCC's authority to adopt additional 
standards and safeguards under existing authorities, and to 
direct the FCC to issue transparency regulations so consumers 
know the price, performance and network management practices.
    We are going to hear about these regulations to protect the 
open Internet, and I think that we have to recognize that some 
of the claims that are being made and repeated over and over 
again are just not accurate. The most vibrant sector of our 
economy today is our Internet economy. U.S. companies like 
Google, Facebook, Amazon and eBay lead the world in innovation. 
They all urged the FCC to act to protect an open Internet 
because ``commonsense baseline rules are critical to ensuring 
that the Internet remains a key engine of economic growth, 
innovation and global competitiveness.''
    We need to make sure that the Internet is free and open and 
not regulated by anyone who is just simply delivering the 
service. Even AT&T and Comcast, which are two of the Nation's 
largest network operators, support the rules. AT&T's CEO 
stated, ``We didn't get everything we wanted. I wanted no 
regulation but we ended at a place where we have a line of 
sight and we know can commit to investments.'' And earlier 
today we received letters from a broad and diverse coalition of 
more than 100 organizations that oppose efforts to use 
legislation to block the open Internet regulations.
    The American people want us to be focusing on creating jobs 
and rebuilding our economy. We have important opportunities in 
this subcommittee to contribute to that effort by making more 
spectrum available, ensuring universal access to broadband. We 
have a lot of things we need to work on together, and I look 
forward to that. This issue has been resolved by the FCC, and I 
look forward to our following the implementation of it.
    I would like to ask unanimous consent to put in the full 
statement.
    Mr. Walden. Without objection, all members are allowed the 
opportunity to put their full statements in the record.
    [Additional statement for the record follows:]

               Prepared Statement of Hon. John D. Dingell

    Thank you, Mr. Chairman, and I commend you for carrying on 
the Committee's long tradition of fair and measured oversight. 
I would also like to welcome our witnesses this morning, 
especially Chairman Genachowski. I am confident he and his 
fellow commissioners will answer my questions and those of my 
colleagues with unequivocal candor and keen insight.
    I understand my Republican colleagues intend to use this 
hearing to lay the groundwork for a resolution to nullify the 
Commission's recently adopted Open Internet order. While I 
agree with them that the Commission lacks the statutory 
authority with which to regulate broadband Internet access 
services, the fact remains that the order has been finalized, 
and its future now resides within the purview of the courts. I 
respectfully suggest we not re-litigate the past and instead 
focus our attention on matters pending the Commission's 
consideration which have the potential to expand our country's 
communications infrastructure, enhance U.S. competitiveness, 
and, most importantly, create jobs. Chief among these matters 
are reform of the Universal Service Fund and spectrum policy.
    I look forward to Chairman Genachowski's and his fellow 
commissioners' responses to my questions. I also hope they will 
affirm anew that the Congress is, as I have said so many times, 
the sole progenitor of the Commission's authority and commit to 
working with this Committee in advancing that agency's most 
important work.
    I thank you for your courtesy, Mr. Chairman, and yield the 
balance of my time.

    Mr. Walden. With that, I thank the folks who have offered 
up the opening statements, and I would now like to turn to our 
panel of witnesses, the distinguished members of the Federal 
Communications Commission, and I will start with that 
Commission's chairman, Mr. Genachowski. Thank you for being 
here today, and we look forward to your statement.

      STATEMENTS OF JULIUS GENACHOWSKI, CHAIRMAN, FEDERAL 
      COMMUNICATIONS COMMISSION; MICHAEL J. COPPS, PH.D., 
  COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; ROBERT M. 
  MCDOWELL, COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; 
     MIGNON CLYBURN, COMMISSIONER, FEDERAL COMMUNICATIONS 
 COMMISSION; AND MEREDITH ATTWELL BAKER, COMMISSIONER, FEDERAL 
                   COMMUNICATIONS COMMISSION

                STATEMENT OF JULIUS GENACHOWSKI

    Mr. Genachowski. Chairman Walden, Chairman Upton, Ranking 
Members Eshoo and Waxman, members of the subcommittee, this 
committee has jurisdiction over an area of increasing 
importance: communications and technology, including the 
Internet. I look forward to working with this committee in a 
variety of ways to strengthen our economy, promote our global 
competitiveness and extend opportunity to all Americans. I have 
submitted a written statement on our actions to preserve 
Internet freedom and openness. I will be brief here.
    As we considered a framework for Internet freedom, I had 
three priorities. First, consumers, promoting consumer choice, 
making sure that people who use the Internet have the freedom 
to say what they want, go where they want and access any legal 
content or services on the Internet. Second, innovators, making 
sure that the Internet will continue to be a vibrant platform 
for American entrepreneurs, that the next inventor in his 
garage, the next Mark Zuckerberg in his dorm room, the next 
Jeff Bezos traveling across the country in his car can start 
and build the next great business on the Internet, creating 
jobs, growing our economy and helping us lead the world in 
innovation. It is essential that we incentivize billions of 
dollars of private investment in Internet content, applications 
and services businesses. Now, my third priority is the 
networks, promoting wired and wireless Internet networks in the 
United States that are the best in the world, fast, robust and 
universally available. We have to incentivize billions of 
dollars of private investment to the core of the network, to 
network infrastructure.
    Throughout the history of Internet, innovative online 
applications and service have spurred broadband deployment and 
adoption which in turn have encouraged new applications and 
services. This virtuous cycle of innovation and investment 
throughout the broadband economy, that is what we want to 
maintain and advance. Why? Because the free and open Internet 
has led to the creation of tens of thousands of small 
businesses, millions of jobs and billions of dollars of 
investment.
    Now, since 2005 the FCC on a bipartisan basis has made 
clear it would act to enforce open Internet protections. It did 
so several times but it did so without an appropriately adopted 
framework. That is why we acted to bring some resolution and 
certainty to this area, and after an open and participatory 
process with published rules, public workshops, extensive 
engagement, feedback from over 200,000 commenters, we 
established a sensible high-level framework to preserve 
Internet freedom and openness. The rules fit on one page and 
boil down to four things.
    First, transparency so that consumers and innovators can 
have basic information to make smart choices about broadband 
networks or how to develop and launch the next killer app. 
Empowering them with information will reduce the need for 
government involvement. Second, no blocking so that consumers 
can be free to access lawful content or services and so startup 
and other Internet companies can be free to reach Internet 
consumers. Third, a level playing field, a fair, non-
discrimination principle so that winners and losers online are 
picked by who should pick them: consumers and the market. And 
fourth, flexibility for Internet service providers, flexibility 
to manage networks, to deal with congestion and harmful 
traffic, flexibility to pursue innovation and business models 
and get a real return on investment.
    Now, I understand that some people think this framework 
doesn't go far enough. Others think it goes too far. I believe 
it gets it about right: light-touch approach consistent with 
the FCC's history of bipartisan action on this issue. Informed 
by earlier FCC and Congressional initiatives, supported by the 
broadest consensus ever assembled on this challenging topic, 
the framework we adopted preserves Internet freedom, preserves 
the Internet job creation engine, protects consumer choices and 
promotes private investment throughout the broadband economy.
    Now, while the Commission was divided on this particular 
issue, we resolve over 95 percent of our votes on a bipartisan 
basis, and I believe we are united on the need to promote 
broadband access, its importance to our 21st century economy 
and our global competitiveness and to expanding opportunity 
broadly.
    So I look forward to working with my colleagues and with 
the committee on a series of initiatives including unleashing 
spectrum, reforming universal service, and removing barriers to 
broadband build-out, to harness the opportunities of 
communications technologies for all Americans.
    Thank you, and I look forward to your questions.
    [The prepared statement of Mr. Genachowski follows:]

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    Mr. Walden. Chairman, thank you for your testimony. We look 
forward to your answers.
    I now recognize the distinguished gentleman, the 
commissioner, Mr. Copps. We are delighted to have you here this 
morning.

                 STATEMENT OF MICHAEL J. COPPS

    Mr. Copps. Thank you, sir. Good morning, Chairman Walden 
and Chairman Upton and Ranking Member Eshoo and Ranking Member 
Waxman and all friends on the committee. I appreciate your 
invitation to participate in this discussion to share with you 
my perspectives, and more importantly, to hear yours. I look 
forward to your counsel as we begin what I think can be a truly 
productive year in tackling many telecommunications challenges 
facing Congress, the Commission and the country.
    It is my firm belief, first of all, that broadband is key 
to America's 21st century prosperity. The President, the 
Congress, and the Commission are all looking to this 
communications infrastructure as a key tool for ensuring a 
better and brighter future for America.
    There is much work to be done to be ensured that everyone 
in this country has equal opportunity in the Digital Age. I 
believe that preserving a free and open Internet, the focus of 
today's hearing, is a central part of that challenge. I know 
there are disagreements among us about the issue but I have 
always been open and candid with you before the subcommittee 
and in your personal offices on where I stand, and I believe I 
have consistent in what I say both here and at the FCC. Most 
Americans have a broadband monopoly or at best, duopoly, from 
which to choose. Without adequate competition in the Internet 
access service market, allowing these companies to exercise 
unfettered control over America's access to the Internet not 
only creates risk to technological innovation and economic 
growth but also poses a real threat to freedom of speech and 
the future of our democracy. This is why I have long advocated 
for some limited rules of the road to maintain openness and 
freedom on the Internet. It is why the Commission adopted in 
2005 on a bipartisan basis an Internet policy statement that 
contained the basic rights of Internet consumers. This is not 
about government regulating the Internet. It is about ensuring 
consumers rather than Big Telephone or Big Cable have maximum 
control over their experiences when they go online.
    During the FCC's proceeding to examine the need for open 
Internet rules, I swung my door open wide so I could hear from 
every interested stakeholder. I met with broadband providers, 
online entrepreneurs, technology investors, consumer groups and 
many individual citizens from across the country. In the end, 
given that fewer and fewer places are controlling access to the 
Internet, I concluded again that we must make sure a few 
gatekeepers cannot favor their own content, throttle certain 
types of applications and block access to information at will. 
With the adoption of the open Internet order last December, we 
have at least some concrete rules to prevent gatekeepers from 
circumventing the openness that made the Internet the Internet. 
The Commission has acted using the authority I believe it has 
and that I lay out in greater length in my formal statement, 
and now both Congress and the courts will help to determine 
where we go from here.
    While we may not always agree on how to proceed on every 
policy front, there are so many challenges confronting us where 
you and I share common cause and where I think we can make real 
progress this year. First and foremost among them is ensuring 
that our first responders have the communications tools they 
need to protect American lives and property. We are fast 
approaching the 10th anniversary year of 9/11. I believe we 
must make good on our promise to create a nationwide 
interoperable public safety network and make progress in 
significant and tangible ways this year.
    Another area crying out for attention is spectrum policy as 
consumers expect ever-faster speeds and mobility for their 
broadband, the demand on our finite spectrum resource 
skyrockets. Just last week, the President set an ambitious goal 
of getting high-speed wireless coverage to 98 percent of 
Americans. This is another area where we can work hand in hand 
to find ways to maximize our spectrum resource. In addition, to 
help meet our shared broadband goals, the Commission took an 
important step last week toward transforming the Universal 
Service Fund, an intercarrier compensation system to address 
our going-forward communications infrastructure needs.
    There are other challenges, privacy, digital literacy, to 
name a few, where I believe we can work together to ensure that 
our citizens have the tools they need for our increasingly 
online world. In addition, while I will not dwell on it here, I 
think most members of this subcommittee know of my concerns 
about America's current media environment, and this goes to the 
question of broadband and online too. A vibrant media 
landscape, traditional and online, is critical to providing our 
citizens with the news and information they need to participate 
in our democracy. There are some huge problems here.
    Finally, as I do every time I come up here, I urge you to 
take action to modify the closed-meeting rule, which prohibits 
more than commissioners from ever talking with one another at 
the same time outside of a public meeting. I believe this 
prohibition has on many occasions during my 10 years at the 
Commission stifled collaborative discussions among colleagues, 
delayed timely decision-making and discouraged collegiality. 
Removal of this prohibition would, in my mind, constitute as 
major a reform of Commission procedures as anything I can 
contemplate.
    Thank you again for the opportunity to be here today. I 
look forward to your comments, your counsel and your questions.
    [The prepared statement of Mr. Copps follows:]

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    Mr. Walden. Thank you, Commissioner, and that is why we 
have you all here so that you can all get along and chat. It is 
a good thing. And we have never questioned, Commissioner Copps, 
your forthright approach to telling us your opinions, either, 
nor has anyone in America, and we appreciate that.
    I would like to go now to the commissioner, Mr. McDowell. 
Thank for you for being here. We welcome your comments and 
testimony as well.

                STATEMENT OF ROBERT M. MCDOWELL

    Mr. McDowell. Thank you, Mr. Chairman and Ranking Member 
Eshoo and Chairman Upton and Ranking Member Waxman, and I also 
want to special shout-out to Congresswoman Harman. This is a 
sad day for me. This is the last time all of us will testify 
before you. I want to thank you for your years of public 
service. It is a sad day for the McDowell household. I know my 
brother, Kelly, the former mayor of El Segundo, California, is 
sad to have you leave the U.S. Congress, but I know the Woodrow 
Wilson Center will be in excellent hands with you at the helm, 
so thank you for your service.
    Mr. Chairman and members of the Committee, the markets 
under the purview of the FCC are dynamic and ever evolving. 
Both the core and the edge of the Internet are growing at 
breakneck speeds, all to the benefit of American consumers. For 
instance, the United States leads the world in 4G wireless 
deployment and adoption. Wireless broadband is the fastest 
growing segment of the American broadband market. The United 
States I also the global leader in the creation and use of 
mobile apps. In fact, the top 300 free mobile applications in 
the U.S. app stores enjoyed an average of more than 300 million 
downloads per day last December, and I think most of those were 
on the McDowell kids' phones, actually. Not surprisingly, 
smartphone sales have outpaced PCs for the first time.
    On the other hand, in spite of these positive developments, 
last year the private sector invested an estimated $44 billion 
in new broadband technologies, which is significantly lower 
than years past. I am hopeful that the FCC can work 
constructively to increase opportunities for investment and job 
growth by bringing regulatory certainty to the broadband 
marketplace. With Congress's guidance I look forward to 
adopting policies that put the power of more spectrum into the 
hands of consumers, help accelerate broadband deployment and 
adoption, make our universal service subsidy program more 
efficient, and modernize our media ownership rules, among many, 
many other endeavors.
    In addition, the FCC should also strive to clear away 
regulatory underbrush that may have outlived its usefulness and 
now only deters constructive risk taking. Congress empowered 
the Commission to do just that when it codified section 10s 
forbearance mandate more than 15 years ago. Streamlining our 
regulations could take significant burdens off the backs of 
entrepreneurs and give them more freedom to invest and 
innovate. Such deregulatory action could serve as a much-needed 
short in the arm for America's economy. President Obama said as 
much in his recent Executive order.
    And a little secret about the FCC, which the chairman has 
already touched on. More than 90 percent of our votes are not 
only bipartisan but are unanimous. I have enjoyed working with 
my colleagues on many recent initiatives including continuation 
of our longstanding work on unlicensed use of the TV white 
space, simplifying the process for the construction of cell 
towers, spectrum reallocation, and initiating the next step to 
perform our universal service subsidy system.
    Obviously we have had a few respectful disagreements as 
well such as our differences concerning the new regulations of 
Internet network management, and I have included for your 
convenience a copy of my dissent. Nonetheless, I am confident 
that the five of us have the ability and the desire to continue 
to find common ground on an array of other issues that touch 
the lives of every American every day.
    Thank you, Mr. Chairman, and I look forward to the 
questions from the committee.
    [The prepared statement of Mr. McDowell follows:]

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    Mr. Walden. We appreciate your testimony.
    Now I'd like to go to the distinguished member of the 
Commission, Ms. Clyburn. Thank you for being with us today. We 
look forward to your comments.

                  STATEMENT OF MIGNON CLYBURN

    Ms. Clyburn. Thank you very much. Mr. Chairman, 
Congresswoman Eshoo, members of the subcommittee, good morning, 
and thank you for inviting me to testify.
    The current success of the Internet is largely due to this 
open architecture. This tremendous technological leap is a 
great equalizer. It allows traditionally underrepresented 
groups to have an equal voice and equal opportunity. It enables 
any connected individual to distribute his or her ideas to a 
global network or run a business right from their very own 
home. The Internet reduces the barriers to entry for new 
players. It is a gateway to success at a low capital cost. That 
is why it is so important for me to see that this technological 
marvel remains open, accessible and affordable for every 
American regardless of where they live, work or play.
    There have been strong criticisms over the past several 
months regarding the Commission's Open Internet Order. Some say 
that nothing was broken so rules aren't needed and that this 
will kill job opportunities and stifle innovation and 
investment. We have also heard that the order is riddled with 
loopholes, provides inadequate protections for wireless 
technologies and prioritizes profits over the general public 
good.
    First, I want to speak to the assertion that the Internet 
marketplace is functioning fine and does not need fixing. There 
have been formal complaints filed and allegations lodged at the 
Commission about Internet service providers' behavior despite 
their expressed belief in an open Internet. To that point, the 
rules we codified in December will serve to ensure that the 
Internet remains open and vibrant and that millions of surfers, 
innovators and everyday consumers will have the essential 
protections they need so that an open Internet is still there 
tomorrow. The action we took in December will allow people to 
view photos, sitcoms and full-length movies without deliberate 
interruption, distortion or blockage by any ISP which may have 
competing economic interests.
    I believe one of my primary obligations as an FCC 
commissioner is to protect consumers and allow for activities 
on the Internet. Our Open Internet Order does just that. I 
embrace the position that without clear rules, investment in 
new services and applications will be uncertain, overly 
cautious and will result in an underperforming marketplace. We 
have heard this repeatedly from innovators and small 
businesses. A number of companies told me of their difficulty, 
sometimes inability to obtain financing because the rules of 
the road were unclear or that open Internet protections were 
inadequate. Venture capitalists fear that ISPs would 
discriminate against their possible competitors, they said. 
Small businesses like these are the lifeblood of this Nation 
and the uncertainty and lack of investment in this sector will 
stifle the full potential of these American enterprises.
    Others argue that existing law provides sufficient consumer 
protections and safeguards. I disagree. My understanding of 
current antitrust law is that violations and harms are 
addressed only after an incident has occurred, thus ISPs have 
the ability and potentially the incentive to stifle new 
competitive businesses. No government action after the fact 
could properly address such significant impact. Therefore, I 
believe that putting basic protections in place was not a 
reckless act. The Commission did this in order to prevent very 
real and irreversible harms that could occur in the 
marketplace. Hugely effective business models that were not 
even in existence 10 years ago have experienced staggering 
growth due to their ability to directly offer their services to 
consumers on the Internet without ISPs demanding payment for 
prioritizing their Web sites. I want to ensure that many more 
businesses have those same opportunities in 2021.
    Most people rely on the Internet on a regular basis as 
indicated in a recent Pew Research Center study, which shows 
that 78 percent of American adults sign on daily. The President 
has said that the Internet is a vital infrastructure and has 
become center to the daily economic life of almost every 
American, and you recognize its significance too by charging 
the FCC with developing a National Broadband Plan to ensure 
that high-speed Internet is available to all Americans no 
matter where they live. So I do not think we acted recklessly 
nor do I believe that we have harmed the Internet. What we did 
was put a policy in place that will ensure access to lawful Web 
sites, applications and services so that consumers, not their 
Internet service providers, can choose which companies, 
products services and ideas will succeed.
    Thank you for this opportunity this morning and I look 
forward to answering any of your questions.
    [The prepared statement of Ms. Clyburn follows:]

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    Mr. Walden. And we appreciate your testimony and look 
forward to your answers.
    Now I would like to recognize Commissioner Baker. We are 
delighted to have you here as well. We look forward to your 
testimony and your answers. Please go ahead.

              STATEMENT OF MEREDITH ATTWELL BAKER

    Ms. Baker. Thank you very much. Good morning, Chairman 
Walden, Ranking Member Eshoo, Chairman Upton and Ranking Member 
Waxman. I could on. Thank you all, distinguished members of the 
subcommittee for the opportunity to appear before you.
    Today, 95 percent of U.S. households have access to 
broadband, and the vast majority of those have broadband 
choice. Our regulatory approach has attracted over half a 
trillion dollars to build a new network infrastructure since 
2000. Billions more have been invested in devices and 
applications that ride on those networks. This is an area of 
our economy that is clearly working. The Commission's most 
significant challenge is how to build on this success. Given 
our Nation's significant budgetary constraints, it is clear 
that the next generation of networks will be constructed 
primarily by private capital just as today's networks were 
built. It is through this prism, how do we craft policies to 
promote greater investment in our Nation's infrastructure, that 
I view all FCC decisions.
    With that perspective, I believe that net neutrality was 
both the wrong policy and the wrong priority. Further, 
establishing a nationwide policy is Congress's role, not the 
FCC's. We exceeded our statutory authority. Preserving open 
Internet is non-negotiable. It is a bedrock principle shared by 
all in the Internet economy. The Internet is open today without 
the need for affirmative government regulation.
    Lacking an evidentiary record of industry-wide abuses, the 
Commission's net neutrality decision was based on speculative 
harms. The word ``could'' alone appears over 60 times. By 
acting in anticipation of hypothetical harms, the result is 
overly broad rules which I fear will force the government into 
too prominent a role in shaping tomorrow's Internet.
    The genius of the Internet is that there is no central 
command to dictate how innovation is to occur. The Commission 
has now inserted itself into that role of judging how the 
Internet will resolve. Government will be hard pressed to 
manage the next generation of the Internet as well as 
competition and consumer demand have done for previous 
generations. This risk is heightened because the Internet and 
our broadband networks are still very much in their infancy. 
The Internet will increase fourfold by 2014, and mobile 
broadband will more than double each and every year.
    To respond to the consumer demands for faster and more-
robust broadband services, operators will have to invest 
billions more in their infrastructure. They will need to 
experiment and innovate to serve consumers. Decisions about the 
future of the Internet will now be managed by the Commission 
subject to the uncertainty of government sanction and delay of 
government decision-making. The open-ended nature of this 
decision both in how it was legally justified and in the number 
of issues left undefined or undecided will only breed greater 
regulatory uncertainty which necessarily raises the cost of 
capital. In too many decisions, this decision was a first step, 
not a last.
    Congress has given the Commission clear statutorily 
mandated responsibilities, and net neutrality is not one of 
those. Lacking explicit authority, the Commission twisted the 
statute in order to establish a national Internet policy. Under 
the same unbounded claim of legal authority, the FCC could 
adopt any policies it desires to promote its particular vision 
of the Internet. Net neutrality was also the wrong priority for 
the Commission. The focus on net neutrality diverted resources 
away from the bipartisan reform efforts that could have 
directly addressed the core challenge of promoting broadband 
deployment. This lost opportunity is one of the gravest 
consequences of the net neutrality debate.
    While we may disagree on particular details, I welcome the 
chairman's renewed focus on universal service, spectrum and 
broadband infrastructure. All of these reforms are directly 
linked to broadband deployment, and I only regret that we did 
not place a higher priority on these efforts sooner. Our 
ability to successfully take any of these steps is dependent 
upon our strong working relationship with Congress to ensure 
that we prioritize and target our efforts appropriately and 
that we have sufficient statutory authority to move forward to 
promote our shared goals.
    I look forward to your questions. Thank you.
    [The prepared statement of Ms. Baker follows:]

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    Mr. Walden. Thank you very much for your testimony and the 
testimony by all the commissioners and the chairman. We 
appreciate it.
    Just for the Committee as an announcement, we are going to 
try and do two rounds at least of questions and we will go in 
the order in which you arrived and then by seniority after the 
gavel fell, and I want to just point out that in the great 
spirit of bipartisanship here on the subcommittee, the 
Democrats actually have three witnesses and we only have two.
    Mr. Upton. We are looking to change that after 2012.
    Mr. Walden. We will try not to let that happen again.
    All right. I will start with the first questions. 
Commissioner McDowell, you said on page 154 of your dissent 
that less than a year ago the Commission in attempting to 
defend its Comcast BitTorrent decision in the D.C. Circuit 
``acknowledged that it has no express authority over an 
Internet service provider's network management practices.'' 
They rely on section 706 to authorize the FCC in this order to 
adopt network neutrality rules. Section 706 also states that 
``each State commission'' and Commissioner Clyburn, you will be 
interested in this ``with regulatory jurisdiction over 
telecommunications services shall encourage the deployment on a 
reasonable and timely basis of advanced telecommunications 
capabilities to all Americans.'' If the FCC is relying on 
section 706 and perhaps B, not A, but you do trigger the entire 
statute, I believe, does that not mean that every State 
regulatory commission as authorized in 706(a) can also adopt 
its own network neutrality rules including price caps as 
specified in that statute?
    Mr. McDowell. It could absolutely, Mr. Chairman. One of the 
concerns is that in the FCC's order, there is no limiting 
principle on the FCC's authority so that is not defined or 
limited in the FCC order.
    Mr. Walden. Commissioner Clyburn, in early January just a 
few weeks after the Commission's open meeting, a complaint was 
already filed alleging that a wireless provider offering a low-
cost data plan to informed customers is violating the 
Commission's rules. The rules still have not taken effect. So 
the question is, is Metro PCS's low-cost data plan a violation 
of the Commission's order?
    Ms. Clyburn. Those type of complaints generally that come 
before the Commission, I generally do not comment on before a 
decision is rendered, so I don't know if you have a follow-up 
but that particular one I am not comfortable in commenting on.
    Mr. Walden. Well, I guess the question is not--let me back 
off then. Would a complaint like that violate the Commission's 
rules in general?
    Ms. Clyburn. I can say that in general to answer your 
question more broadly, in fact there have been complaints 
before the agency and that is why the chair and the 
commissioners voted to move in this particular direction. It is 
in order to be able to have the dexterity to address those 
particular issues as proof that there are some issues in the 
market.
    Mr. Walden. Commissioner Baker, the order argues that it 
can regulate cable Internet access because broadcasters are 
increasingly providing video over the Internet. Does that mean 
then, taken to an extreme, that the FCC could regulate Netflix 
since broadcasters are increasingly offering shows on DVD or 
Netflix Web service?
    Ms. Baker. Well, I think that is the concern with the 
statutory authority the Commission is using for this order and 
that we have unbridled access to regulate whatever we want to 
do on the Internet ecosystem.
    Mr. Walden. It has also been widely reported, Commissioner 
Baker, that you and Commissioner McDowell did not receive the 
final draft of the order until close to midnight the day before 
the vote. Is that correct?
    Ms. Baker. Yes, sir.
    Mr. Walden. Commissioner McDowell, do you want to speak to 
that at all?
    Mr. McDowell. That is true. We had received other drafts 
prior to that but the final draft that we were to vote on and 
base our dissent on didn't come until close to midnight the 
night before the meeting.
    Mr. Walden. And Commissioner McDowell, while the order does 
not explicitly apply Title II to broadband Internet access 
services, aren't the rules that were imposed tantamount to 
common carriage?
    Mr. McDowell. Mr. Chairman, as I point out in my dissent, I 
think the rules really is a Title II order in disguise, this 
sort of a threadbare Title I disguise, and that is part of the 
concern that you were asking Commissioner Clyburn about the 
potential for rate regulation. You know, last year, last 
January when the FCC argued before the D.C. Circuit in the 
Comcast BitTorrent case that the general counsel was cited in 
the D.C. Circuit's order from last April. The general counsel 
said that the Commission could have the authority to regulate 
broadband rates as well, and there is no limiting principle in 
the order that would restrain the Commission from regulating 
the----
    Mr. Walden. I think that the concern some of us have is, 
this box has been opened pretty widely. The tether seems to 
have been snapped and the authority could be taken clear to the 
extreme of where the States now under section 706(a) if it is 
read that way, it could trigger the statute and the States 
could enter into regulation of the Internet.
    Now, Commissioner McDowell, if the FCC has conducted no 
market analysis, which it says it has not, is there any 
principled reason for excluding companies like Google and Skype 
from these rules?
    Mr. McDowell. Again, there is no limiting principle in the 
order so I think under the logic of the order, the FCC's 
jurisdiction is boundless.
    Mr. Walden. And after all, Skype blocks access to competing 
application providers like fring, right? You have a blockage 
going there, and Google and Facebook have had some blocking 
issues involving consumer access to their own contacts.
    My time is expired. With that, I would recognize the 
gentlelady from California, Ms. Eshoo.
    Ms. Eshoo. Thank you, Mr. Chairman, and thank you to each 
of the commissioners for your excellent opening statements.
    Today's hearing is entitled ``Network Neutrality and 
Internet Regulation: Warranted or More Economic Harm than 
Good?'' The three basic rules that the chairman rolled out, 
which is the framework for what the Commission did--
transparency, no blocking, no unreasonable discrimination--I 
don't think anyone is against transparency, for blocking and 
for unreasonable discrimination. If you are, raise your hand on 
the subcommittee. But I want to examine the issue of harm and 
what led to the framework that the chairman stated and which I 
just restated. What were the harmful things that have arisen at 
the FCC that led to rules of the road? I mean, the Republicans 
are the ones saying the sky is caving in. Really, life is tidy. 
No one has crossed any lines. There isn't any reason to do 
this; in fact, it is really going to hurt our country. But I 
want to give you the opportunity to state as briefly as you can 
what led to this and what examples exist and were brought to 
the Commission's attention?
    Mr. Genachowski. Thank you. Well, going back to at least 
2005, the Commission made clear on a bipartisan basis that it 
would enforce open Internet violations. Against that 
background, it is surprising that there would be any violations 
of Internet freedom at all but there have been. There was a 
telephone company called Madison River that blocked access to 
competing voice over Internet providers. There was a cable 
company last year that became significant litigation that 
blocked competing video providers. Last year there was a mobile 
company that blocked access to mobile VoIP. There have been 
court settlements that are part of the record where as part of 
the settlements, Internet service providers agree that they 
engaged in conduct that was inconsistent with open Internet 
principles. So as against the history of bipartisan intention 
to enforce, it is surprising there were any violations at all.
    One of the harms that we looked at was, if we for the first 
time would be to remove basic open Internet protections, what 
we heard repeatedly from startup companies, entrepreneurs, 
investors was that without that, they would lose the confidence 
to invest in startup companies to develop the kind of 
innovative products and services and applications that we are 
all so excited about and that we need to lead the world in 
innovation in the 21st century.
    Ms. Eshoo. Thank you.
    I have a question for each one of the commissioners, and a 
yes or no will do. The Republican House leaders and members of 
this committee are considering using a resolution of 
disapproval under the CRA, the Congressional Review Act, to 
overturn the FCC's Open Internet Order. Do you support or 
oppose Congress using the CRA to overturn the order? Chairman 
Genachowski?
    Mr. Genachowski. Well, I don't have a vote in the Congress. 
I don't think it is the right idea because I think it will 
increase uncertainty in this area.
    Ms. Eshoo. Commissioner Copps?
    Mr. Copps. I would not be for it.
    Ms. Eshoo. Commissioner McDowell?
    Mr. McDowell. First of all, all the examples cited by 
Chairman Genachowski were resolved in favor of consumers under 
existing law before the FCC's action. I think that is important 
to note. But I also subscribe to the notion that Congress tells 
me what to do, I don't tell Congress what to do, so if Congress 
wants to overturn an FCC order under the CRA----
    Ms. Eshoo. But do you think it is a good idea? Do you 
support it?
    Mr. McDowell. Well, obviously I dissented so I think the 
order isn't founded in law or fact.
    Ms. Eshoo. Commissioner Clyburn?
    Ms. Clyburn. One of the things that I wanted to point out, 
if you will allow me a second, is that the companies that were 
cited by the chairman, those companies in fact have millions of 
customers who have potential vulnerabilities and who might not 
have the ability or the expertise to file a formal complaint.
    Ms. Eshoo. About the CRA?
    Ms. Clyburn. So in terms of your question, while I respect 
the body, I am not embracing of the idea.
    Ms. Eshoo. Thank you.
    Commissioner Baker?
    Ms. Baker. I will be respectful of your time. We take our 
orders from Congress so I think it is important for Congress to 
tell us what their opinion is.
    Ms. Eshoo. I don't know what that means.
    Ms. Baker. It means if Congress has------
    Ms. Eshoo. Do you think it is a good idea?
    Ms. Baker [continuing]. The CRA to tell us that they 
disapprove of this action, I think----
    Ms. Eshoo. Do you think a CRA is a good idea?
    Ms. Baker. I would say I also dissented in the order. I 
disagree with that we have statutory authority to do what we 
have done.
    Mr. Walden. The gentlelady's time has expired.
    Ms. Eshoo. Thank you.
    Mr. Walden. And just for the record, Ms. Clyburn, we have 
two chairmen here. I assumed you were referring to that 
chairman, not this chairman in your comments there.
    Ms. Clyburn. Yes.
    Mr. Walden. So now let us go to the other chairman, Mr. 
Upton, for 5 minutes.
    Mr. Upton. Thank you, Mr. Chairman.
    I know as George Will said not too long ago that most 
folks, most Americans are not real fans of how the U.S. 
government works. I don't think it works very well. But in fact 
the Internet does. Why in the world would you put the 
government in charge of the Internet? And as Ranking Member 
Eshoo said and also my good friend, Ed Markey, on net 
neutrality I think there is no secret that at least this side 
of the aisle is not particularly fond of the new net neutrality 
rules and I know that some 300 Members of Congress contacted 
the FCC in the last year voicing such concerns, and probably 
agree that it really isn't the light touch that we were hoping, 
which is why in fact a CRA may be introduced in the next couple 
of days and the Congress of course then has 60 days, 
legislative days, to act in both the House and the Senate.
    Commissioner McDowell, you were very outspoken in your 
dissent on the need for a market analysis. Would a market 
analysis have validated the order, the order's consent?
    Mr. McDowell. I don't think so. Each time the government 
has examined the broadband Internet access market, whether it 
was the Federal Trade Commission in 2005, or 2007, the FCC 
itself in 2007, the antirust division when they filed comments 
to the FCC a year ago in January, we can debate exactly what 
they said but what they did not say, they did not say that 
there was a concentration and abuse of market power or any sort 
of market failure and that actually in many of those cases 
independent government agencies had warned against the 
uncertainty and the negative collateral effects of potential 
regulation in this area.
    Mr. Upton. You mentioned a little bit earlier in response 
to the Madison River and the one phone company and a few others 
as it related to what the FCC had done. Do you believe that 
there are existing FCC remedies that are in place if in fact an 
Internet service provider engaged in that type of prospective 
conduct that this order is designed to prevent?
    Mr. McDowell. I think there are laws already on the books 
that would prevent this, whether it is section 2 of the Sherman 
Act or section 5 of the Federal Trade Commission Act. There are 
general consumer protection powers that the government has here 
so if it is refusal to deal or exclusive dealings and things of 
that nature, the government has the power to cure that.
    Mr. Upton. And that was a little bit of the result of that 
debate and that answer came out of the Judiciary Committee 
yesterday. Is that not correct?
    Mr. McDowell. That is what I read, yes, sir.
    Mr. Upton. Chairman Genachowski, wouldn't it have been 
prudent for the Commission to do a simple market analysis 
before adopting the rules that we hear so much will burden the 
industry if in fact the order is pursued?
    Mr. Genachowski. Mr. Chairman, the order engages in 
extensive market analysis. There is a specific section on costs 
and benefits. There is a footnote that points out that the 
order doesn't make a specific market power finding which would 
put this in the antitrust area but the order extensively 
analyzes the market. We received significant input and a record 
from market participants, economists and others and so I think 
the Commission engaged in extensive market analysis.
    Mr. Upton. Now, I know Verizon and others have threatened, 
will be taking this to court to look at a legal challenge. Has 
your legal team given you an analysis that they think this 
order will be able to stand on its two feet and will be 
verified by the courts?
    Mr. Genachowski. Yes, they have, that it is consistent with 
the Communications Act, with Supreme Court precedent in this 
area and with the D.C. Circuit Comcast decision last year.
    Mr. Upton. Mr. McDowell, do you agree with that?
    Mr. McDowell. Well, I disagree obviously. I wrote a very 
lengthy dissent with 130 footnotes, mainly focusing on our lack 
of legal authority, so I think it will fail on appeal.
    Mr. Upton. Thank you. Yield back.
    Mr. Walden. The gentleman yields back his time, and now 
recognize the chairman emeritus of the committee, Mr. Waxman.
    Mr. Waxman. Thank you very much, Mr. Chairman. I think the 
American people would be outraged if they had some Internet 
carrier or some provider of the service to their home, their 
cable or a telephone company blocking what they can get on the 
Internet or choosing something that benefited them economically 
and then keeping consumers from getting programs. I hope nobody 
would think the idea of stopping Internet freedom, allowing the 
Web to be treated in a neutral way, giving the consumers the 
power to access whatever they want, that is what I think 
American people would support. And if they found that this was 
happening, they would want it stopped.
    Now, Chairman Genachowski, you think you had enough reason 
to believe this could happen unless you set some rules in 
place. Is that correct?
    Mr. Genachowski. That is correct.
    Mr. Waxman. Freedom is a strange word. It is overused and 
misused a lot, especially around this place. Freedom for the 
consumer is to get whatever they hope to access but that 
freedom can be curtailed, some people say by government, but it 
also can be curtailed by other private interests, and 
government sometimes has to regulate hopefully in a light 
enough way that they don't discourage investment and 
competition and all the good things but the government needs to 
set rules of the road, saying you cannot do this. Otherwise we 
saw what happened in Wall Street, we see in other places. No 
regulation means less freedom for the consumers.
    Mr. Copps, is that what your thinking was when you looked 
at the Commission regulating in this area?
    Mr. Copps. I think that is absolutely correct. That would 
reflect the thinking I have, and you know we have talked about 
some of the specific problems that have come before the 
Commission but there is a historical dimension to this too. 
This is such an open and dynamic and opportunity creating 
technology and to make sure that it is unfettered as we go down 
the road is so important. The history of every other media 
generation that we have had shows that it goes from being open, 
first being touted as the great new opener and a great new 
vista for the American people's freedom and inevitably what you 
get is closure and consolidation and tighter and tighter 
control. That is happened to radio, that has happened to 
television. It happened to the film industry, and I think we 
need to be taking some precautionary steps to make sure that 
this doesn't happen in this particular technology.
    Mr. Waxman. Well, those precautionary steps could be taken 
by Congress and we could pass a law. We tried to pass a law. We 
even had most of the stakeholders agreeing to a law. We 
couldn't get the Republican members to pay attention to it. 
Congress could pass a law but evidently the FCC thinks it has 
the power, and there is some dissent as to whether you have the 
legal authority or not. That will be decided by the courts. But 
meanwhile, what you are trying to do is preserve the freedom of 
the Internet, and a lot of the complaints we hear about 
stopping innovation and investment seem to be quite remarkable 
when you look at the fact that most of the groups that are 
being regulated feel that this regulation, that there is a 
light enough approach that will not have an undue impact on 
them, and in fact, it is welcomed by everybody because it 
provides some regulatory certainty. Today in Bloomberg, they 
said investors so far don't seem to see the new rules as a 
threat, and they say that you look at Comcast, Time Warner 
cable, AT&T, they are all saving they can live with this. So it 
seems to me to sound the alarm over whether this was a good 
idea and whether we are hurting some of the industry in the 
United States is not accurate.
    But I found it interesting that one of the questions that 
was raised is how speculative the harm was for the interference 
in the Internet, and in order to attack the proposal, they 
raised the specter of price controls as a potential for the 
FCC. Does the FCC plan to do price controls? They say this is a 
slippery slope, opening the road to regulation that is 
unfettered. Is that what is happening, Chairman Genachowski?
    Mr. Genachowski. Not at all. This is in no way about price 
controls.
    Mr. Waxman. Does anybody in this group believe there ought 
to be price controls? If you think so, just say yes.
    Ms. Clyburn. Mr. Chairman, if you say those words inside of 
the walls of the FCC, there is trouble.
    Mr. Waxman. We don't want price controls either. You don't 
want price controls. So to raise that as a specter, it seems to 
be unfortunate. Now, this Congressional Review Act not only 
repeals this rule but it prevents the FCC from acting at all in 
this area, and I would hope that Commissioner McDowell and 
Commissioner Baker wouldn't want to take the power away from 
the FCC to act when they feel it is appropriate to act if 
Congress hasn't passed any legislation. I strongly hope we can 
stop that Congressional Review Act attempt to overturn the 
FCC's actions.
    I yield back my time, Mr. Chairman.
    Mr. Walden. The gentleman's time is expired. I now 
recognize the other chairman emeritus, Mr. Barton, for 5 
minutes.
    Mr. Barton. Thank you, Mr. Chairman. And again, nothing but 
compliments to the Commission for the intellectual ability that 
is assembled here. I am very proud that we have jurisdiction 
over the FCC, and on an individual basis, I consider each of 
you friends.
    Having said that, I am at a loss as I listen to what my 
good friend from California, Mr. Waxman, just said that no 
regulation means less freedom, that is Orwellian in the extreme 
just on the face of it. We are not so opposed, those of you 
that oppose this 3-2 ruling, because of what you ruled but the 
fact that you established the principle if it goes unchallenged 
that you can regulate the Internet. That is what troubles me, 
not the light touch that Mr. Waxman refers to, the fact that if 
we let this ruling stand, this Commission is not going to do 
price controls. I believe the gentlelady from South Carolina 
when she says, you know, if you mouth the word price controls 
within the walls of the FCC, bad things happen. I understand 
that. But a future FCC could. That is why Chairman Upton and 
Chairman Walden and others are going to introduce this 
Congressional Review Act or a standalone bill to overturn it. 
What Chairman Genachowski and the two commissioners that sided 
with him have said is, we have got the votes and we are going 
to establish the principle that we can regulate the Internet. 
Now, we understand how controversial that is so we are not 
going to do a lot, we are just going to try to get the nose of 
the camel under the tent, and once we have got that 
established, in the future some future Commission can come 
forward.
    I am so appreciative of Commissioner McDowell and his 
dissent and all the intellectual footnotes that he put into 
that. I am very appreciative of what Commissioner Baker put in 
the record in her opening statement and I associate myself 100 
percent with that. It just seems to me that this ruling, when 
you listen to the answers to my friends on the minority side, 
you are concerned about potential harm in the future so you 
have to establish the principle now that we can regulate to 
protect against some unknown harm in the future.
    Now, Commissioner McDowell, you said, I believe in your 
dissent and again in your opening statement and again in 
response to a question that the existing statutory law and 
authority that the FCC has is sufficient to handle any 
conceivable potential harm in the future without establishing 
these rules. Is that not correct?
    Mr. McDowell. I think what I said is that we have--the 
government in general under general consumer protection and 
antitrust laws has ample authority so there are a lot of 
agencies that could intervene.
    Mr. Barton. And Commissioner Copps, nobody has asked you a 
question yet and you are a bright fellow. Why do you disagree 
with what your fellow commissioner, oddly, to your left, just 
said?
    Mr. Copps. I have a little different take on this than 
probably all of my colleagues that the Commission has this 
authority, has had this authority for a long time, has had this 
authority recognized by Congress and the courts for a long, 
long period of time and that the best way for us to express and 
exercise that authority is to put advanced telecommunications 
transmission back where it belongs and that is in Title II. I 
think the Title I road that we went down has a substantially 
better chance in court than the previous decision that went on 
the Comcast case, but my best reading of the statute and the 
legislative history and the court decision is that this belongs 
within Title II. I do not know of a court in the land including 
the Supreme Court that has said we don't have that authority. 
In the Brand X case, I don't think the court could have been 
clearer in saying that deference is accorded to the Commission 
in these cases where there is ambiguity or difference in the 
definition of the statute or the terms of the statute. There 
are two or more reasonable ordinary ways to interpret it, that 
our choice of one of them was accorded deference and they 
accorded deference to the decision that was made on cable 
modems in 2005 over my objection but they also made clear that 
times change and our classification can change and our 
decisions can change, and Justice Thomas and others were 
eloquent in pointing out that that is where the expertise to 
make a lot of these judgments resides. I am not as much in 
search for that authority as some other folks are.
    Mr. Barton. Thank you.
    And we are going to do another round?
    Mr. Walden. Yes, we are, sir.
    Mr. Barton. Thank you.
    Mr. Walden. We appreciate your response.
    I now go to the gentleman from Massachusetts, Mr. Markey, 
for 5 minutes.
    Mr. Markey. Thank you, Mr. Chairman, very much.
    First of all, most of the industry supported the decision. 
Comcast has made a commitment to comply with them for 7 years 
as part of the Comcast/NBCU merger conditions regardless of the 
outcome of any judicial review. Many wished that the Commission 
had gone much further, restoring Title II authority as Congress 
originally intended in the Telecom Act of 1996. I wish the 
Commission had gone much further than they did.
    And let me also say that there is a misunderstanding here 
about the Commission's role here. When AT&T had 1.2 million 
employees and they were the only phone company, it was the 
Commission that made the decision that said if you want to go 
down to a store and buy another phone other than the black 
rotary dial phone, you could do so. AT&T said you are 
interfering with the free market if you let people go and buy 
another phone other than the black rotary dial phone. In the 
1970s when MCI and Sprint were starting up, AT&T said that a 
consumer should have to dial 21 additional numbers before you 
reached the number that your mother told you to memorize in 
case you were ever in an accident. Well, those additional 21 
numbers made it very hard to have competition but the FCC made 
sure that competition and consumers would be king and queen. 
That is what the FCC has been doing over the years.
    There is a long history here of AT&T and the Baby Bells of 
engaging in anticompetitive, anticonsumer activity. They said a 
phone call, a long-distance phone call should cost a dollar a 
minute before the government got in. When you were making a 
long-distance phone call or you got one, you would say hurry, 
grandma is calling from California, it is long distance, and it 
was. It was a dollar a minute until we got the competition in 
and the FCC ensured that there would be protection of 
consumers. Now it is under 10 cents a minute.
    So all of this history of light touch, yeah, light touch, 
to make sure that a two by four didn't come in from the big 
companies and crush the consumers, making them, you know, be 
tipped upside down and paying more than they should have to.
    So Mr. Chairman, we have fallen in the United States to 
15th in broadband ranking in price and accessibility and in 
capacity. Is this ruling part of your goal to make sure that 
America regains its position as number one and two in the world 
before George Bush was sworn in and appointed the FCC that was 
chaired by Michael Powell?
    Mr. Genachowski. Absolutely, and I would say before 
addressing that directly, in response to what you said before, 
in each of those cases where the FCC took action to protect 
consumers, promote competition and innovation, someone sued and 
someone said the sky would fall, and in each case that is not 
what happened. Competition was enhanced, innovation was 
enhanced and the authority was established.
    Mr. Markey. Who sued after we passed the 1996 Telecom Act?
    Mr. Genachowski. A number of the carriers.
    Mr. Markey. Verizon sued. They said oh, that is 
anticompetitive. Pac Bell sued, Bell South sued. They said, oh, 
that is anticompetitive, you are going to let more consumers 
in. The people who sued are the same companies that right--
actually AT&T and the NCTA and Comcast, they are not saying 
that. It is Verizon that is coming in and saying that they are 
going to sue but the rest of the industry so far has stayed on 
the sidelines. Yes, Mr. Genachowski?
    Mr. Genachowski. On your point about U.S. leadership in 
innovation, it is so tied to preserving, in my opinion, the 
freedom and openness of the Internet. I mentioned before some 
of the Internet openness violations that we have seen, even as 
protections were in place, one of the things that we heard from 
innovators, startup companies, technology companies in terms of 
harm that would occur now if we didn't adopt baseline rules is 
that without that investment would dry up. Investment in 
early----
    Mr. Markey. Predictability in the marketplace is very 
important to unleash billions of dollars in private sector 
investment.
    Mr. Genachowski. Exactly. For us to lead the world in 
innovation, in my opinion, we need to have rules and a climate 
that drive billions of dollars of investment throughout the 
broadband economy to technology companies, early-stage startups 
and investors and also to our infrastructure, and I think in my 
opinion what we have accomplished here, and it is why there is 
a broad consensus in favor of this approach, is a framework in 
which there is certainty----
    Mr. Markey. I agree with you.
    Mr. Genachowski [continuing]. And investment is driven 
throughout the broadband economy.
    Mr. Markey. Does the FCC intend on following through on the 
law and launching a set-top box unbundling proceeding and all 
video proceeding? Are you intending on doing that?
    Mr. Genachowski. Well, that is something that is under 
consideration. We haven't announced a timetable for that but 
clearly people would like to see more innovation on their TV 
sets in their living.
    Mr. Markey. That is the language Mr. Bliley and I put in 
the 1996 Act, and I really urge you--I think there are 100,000 
new jobs that can be created if we give consumers access to new 
applications and new hardware out there in the marketplace.
    I thank you so much for all your good work. I think it was 
a very good decision that you made at the FCC.
    Mr. Walden. The gentleman's time is expired. We now go to 
the vice chair of the committee, Mr. Terry, for 5 minutes.
    Mr. Terry. Thank you, Mr. Chairman.
    And let me just start with this observation, is that much 
of our side of this dais, our concern is that and what we are 
opposed to is an agency, whether it is FCC or EPA, sua sponte 
issuing a set of rules without congressional authority or 
specific authority from this body, and in fact a majority of 
Congress in the past term under Democrat majority signed on to 
letters opposing this rule or this procedure. And I would like 
to for the record submit unanimous consent, to submit for the 
record the three letters dated October 15th, May 28th, and 
November 19th.
    Mr. Walden. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. Terry. I think the signatures on these objecting to the 
procedures are over 300 members but yet the FCC continued.
    Now, I want to get to another issue that has been hit on 
here about price regulation. At home and my campaign, I have 
Trend Micro to block all of the viruses and spyware, and I got 
as my monthly newsletter, e-mail newsletter from Trend Micro 
yesterday coincidentally, and I am just going to read one part 
of Trend Micro Trendsetter newsletter here under net neutrality 
sent to all of their customers. ``For consumers, deregulation'' 
which is what we are trying to on this side of the aisle 
evidently do ``of the Internet could mean higher Internet 
access prices as ISPs institute tiered models that offer 
speedier downloads to higher-paying customers.'' Some people 
also worry that allowing businesses to choose what content or 
sites they will be offer will result in the commoditization of 
a formally free and open environment akin to the evolution of 
television from an essentially free service to a highly 
fragmented and fairly expensive, and like Anna Eshoo said, we 
all agree on the blocking and we can get into the issue of the 
principle base that seem to be working but obviously Trend 
Micro thinks that you have the power now and they want to get 
their customers lobbying here to make sure that you have the 
power of price setting. Then under 706, section--oh, and by the 
way, unanimous consent to submit----
    Mr. Walden. Without objection.
    Mr. Terry [continuing]. The Trend Micro e-newsletter on net 
neutrality.
    [The information appears at the conclusion of the hearing.]
    Mr. Terry. And in section 706(a) says that this is the 
basis for your authority and the order has stated that price 
cap regulation is part of this, so obviously if you are saying 
that section 706 is the basis for your authority, you have 
authority to regulate prices, and there are companies out there 
that are now manipulating this rule to see if they can get a 
price advantage from the FCC. This seems to me to be 
anticompetitive and creates an atmosphere of uncertainty to new 
entrants in business operations about what can the FCC do to 
them or for them, so I am going to ask Commissioner Baker, has 
the FCC in developing this rule made any conclusions about the 
cost effect of flattening a tier to a one-price system like 
Trend Micro is requesting and saying that you should be doing? 
Has that been thought through? Is there an economic analysis of 
how that will affect the marketplace?
    Ms. Baker. It is a good question and one of the biggest 
concerns that I have is where we are going with this in 
preserving the status quo of the Internet today where we are 
missing what the Internet may offer tomorrow, and so I think 
that through the special-interest groups as they push into 
tighten the regulations through wireless such as the Metro PCS 
complaint that has been mentioned or specialized services or 
prioritization eliminating these, they will eliminate what is 
going to fund our next generation of broadband networks. So I 
worry that we in the rush to put out net neutrality rules, we 
are missing--we are flattening to a one-size-fits-all broadband 
what may be the next generation of the Internet.
    Mr. Walden. The gentleman's time is expired. I now 
recognize the gentleman from Michigan, the chairman emeritus of 
the committee, Mr. Dingell, for 5 minutes.
    Mr. Dingell. Mr. Chairman, I thank you for your courtesy.
    To Chairman Genachowski, there is broad agreement that 
reform of the Universal Service Fund is necessary. I believe 
that if done properly, such reform can support broadband build-
out and create jobs. Will you commit to completing proceedings 
to reform USF by the end of the year? Yes or no.
    Mr. Genachowski. Yes.
    Mr. Dingell. To the remaining commissioners, going across 
starting with you, Mr. Copps, do you support the idea that we 
should have a completed survey by the end of the year?
    Mr. Copps. A completed survey of?
    Mr. Dingell. Of the spectrum.
    Mr. Copps. Yes, I think it would be most helpful to have a 
spectrum, and it is a time-consuming process but the sooner we 
can get it, the better it will be.
    Mr. Dingell. Thank you.
    Mr. McDowell?
    Mr. McDowell. Yes.
    Mr. Dingell. Commissioner Clyburn?
    Ms. Clyburn. Yes, we have already started in that direction 
with the Spectrum Dashboard and other initiatives.
    Mr. Dingell. And the last of our commissioners?
    Ms. Baker. Yes, sir, absolutely.
    Mr. Dingell. Again, Chairman Genachowski, I understand that 
the Commission is completing a spectrum inventory. Is that 
true? Yes or no.
    Mr. Genachowski. Yes.
    Mr. Dingell. Again to Chairman Genachowski, when will the 
Commission have completed this inventory?
    Mr. Genachowski. Well, we have already completed the first 
phase. Our Spectrum Dashboard is up on our Web site. We will be 
proceeding the next phase relatively soon and we want to 
provide the public more and more information about how spectrum 
is actually being used.
    Mr. Dingell. Now, again, Mr. Chairman, will that inventory 
be as comprehensive as the one mandated last year in the House-
passed Radio Spectrum Inventory Act? Yes or no.
    Mr. Genachowski. Yes, and we have been working with the 
committee on that.
    Mr. Dingell. Now, again, Mr. Chairman, similarly, will the 
results of the Commission's spectrum inventory be made 
available to the public? Yes or no.
    Mr. Genachowski. Yes, unless there is some compelling 
reason for a piece to not be, but yes.
    Mr. Dingell. Now, will the Commission also submit a report 
to the Congress concerning the inventory?
    Mr. Genachowski. Concerning the inventory?
    Mr. Dingell. Yes.
    Mr. Genachowski. We will make it public and we will provide 
Congress and the committee whatever reports it desires.
    Mr. Dingell. Good. Now again, Mr. Chairman, with respect to 
the spectrum auctions, I note the National Broadband Plan 
states on page 79 that the government's ability to reclaim 
clear and reauction spectrum is the ultimate backstop against 
market failure and is an appropriate tool when the voluntary 
process stalls entirely. Does this mean that the Commission 
will forcefully take spectrum from broadcasters if too few 
participate in voluntary spectrum auctions? Yes or no.
    Mr. Genachowski. Well, we haven't addressed the question. 
We have proposed a win-win-win incentive auction that will free 
up billions of dollars and bring market incentives into 
spectrum allocation, helping give this country what it needs, a 
lot more spectrum for mobile broadband.
    Mr. Dingell. Now, I am just a Polish lawyer from Detroit, 
and sometimes I have trouble understanding some of these 
things, but you are going to have a voluntary spectrum auction. 
How is it going to be voluntary if there is pressure which is 
placed on the holders of this spectrum by the Commission?
    Mr. Genachowski. Because the auctions themselves would rely 
on market incentives, allowing the market to set a price for 
existing owners of licenses to make the choice between 
continuing what they are doing or transferring the license in 
exchange for the offer from the auction.
    Mr. Dingell. Sounds kind of like a bank holdup to me. You 
hold a gun at the teller's head and say we know that you are 
going to voluntarily give me this money, and if you don't, I'm 
going to shoot you in the brains.
    Mr. Genachowski. Only if the free market is a bank holdup.
    Mr. Dingell. Well, I want you to know I have some dark 
suspicions on this matter.
    Now, Mr. Chairman, do you believe that a broadcaster who 
does not participate in voluntary incentive action should be 
forced to relinquish its current channel allocation and 
spectrum? Yes or no.
    Mr. Genachowski. Well, the first thing I would say is that 
broadcasting is a very important business in the country and 
everything we are doing----
    Mr. Dingell. No, no, no. Yes or no.
    Mr. Genachowski [continuing]. Recognizes its importance. 
That is something we are looking at. It is something that 
actually Congress is looking at because----
    Mr. Dingell. Would you please go off, contemplate your 
navel and come back with us an answer yes or no to this 
question? And would the other members of the Commission please 
do the same thing because I am having a hard time understanding 
this.
    Now, to all commissioners, does the Commission possess the 
necessary authority with which to engage in voluntary incentive 
auctions of a spectrum? Yes or no.
    Mr. Genachowski. We would ask Congress for the authority.
    Mr. Dingell. I am sorry?
    Mr. Genachowski. We would ask Congress for the authority.
    Mr. Dingell. All right. Would each of the commissioners 
submit to me a yes or no on that?
    Mr. Walden. And then the gentleman's time is expired.
    Mr. Dingell. I sure would like to have an answer to this 
question.
    Mr. Walden. Yes, if the commissioners could go ahead and 
respond to the chairman emeritus's question.
    Mr. Dingell. I do have a few other useful questions that I 
would like to get the answer to. I will be submitting a letter 
to the Commission and I would ask that the Commission respond, 
and Mr. Chairman, I would ask your courtesy and that of my 
colleagues on the committee in giving me unanimous consent so 
that both my letter and the response may be inserted into the 
record.
    Mr. Walden. Absolutely, Mr. Chairman, and just for the 
record, Mr. Chairman, the committee is going to have a second 
round of questions here today if other conflicts in your 
schedule don't preclude you----
    Mr. Dingell. I don't want you to take my comments as 
critical of you. Thank you.
    Mr. Walden. No, we are fine.
    All right. With that, we will--did the other members of the 
Commission want to answer that question the chairman emeritus 
asked yes or no?
    Mr. Copps. I think the chairman's answer, we have asked 
Congress for that authority is correct.
    Mr. McDowell. I don't think we have the authority to do the 
incentive auctions as many proposals have outlined.
    Ms. Clyburn. Right now, no.
    Ms. Baker. To do voluntary authority, we need congressional 
authority.
    Mr. Walden. Thank you.
    I am going to go now to Mr. Shimkus for 5 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman. It is great to have 
the Commission before us. I appreciate all the time. Many of 
you have come by to talk in the office one on one, and that 
really is appreciated. I learned a new Latin word, sua sponte.
    Mr. Copps, I think via sua sponte maybe we can address the 
two-member rule and we will legislate and maybe we can do that. 
I just think it is ridiculous, and if there needs to be someone 
to lead that small change, we might be able to do small things 
in this Congress that don't get devolved into too much, but 
that is really silly, and you say it every time and many of 
agree with you, and we don't seem to do anything on it, so let 
me see if I can take that up as a challenge.
    You know, this net neutrality debate, one side says it is 
going to create jobs, the other says no, it is going to hurt 
jobs, and we are focused in this Congress on job creation. The 
public is confused who is right and who is wrong. It is he 
said, she said. I boil it down to the simplest folks in my 
district who, you know, if they can get broadband service--we 
don't still have it. High speed, that is mapping and all the 
other things. But they really do want jobs. You know, if we are 
not going to spend money, we are not going to borrow money in 
this Congress to try to create jobs, we think that failed in 
the last Congress, plus we are talking about debt and deficit 
and job creation.
    Mr. Walden. This is government control of the microphones.
    Mr. Shimkus. Government control. I am on again. So if we 
are going to create jobs without spending money, we have to 
ease the regulatory burden. I don't know how because that 
provides more certainty. Capital borrowing is lowered when you 
have more certainty, ease in regulatory burden. The President 
has agreed to that. I think, Mr. Genachowski, you sent out an 
e-mail asking your agency to look at ways where regulatory 
burden might impinge job creation.
    So let me ask Commissioner Baker, had we done a cost-
benefit analysis, if we would have done a cost-benefit analysis 
on net neutrality job creation, do you think that would be 
something we want to get an answer to? What do you think we 
would have come up with?
    Ms. Baker. It is a good question. I think had we done a 
market analysis, certainly every government--every other 
government that has looked at this has come up with the fact 
that the hypothetical problem of net neutrality would be better 
served--if we are worried about on ramps to the Internet, the 
best way to solve that is to create more on ramps. So aside 
from the actual authority question, I think the policy would 
come up that the market benefit analysis would come out not in 
favor of this.
    Mr. Shimkus. This is just an interesting debate because we 
even heard Chairman Waxman make the statement, and I heard it 
yesterday in my Environment and Economy hearing, that 
regulations create jobs, and they really believe it, that 
regulations create jobs. I guess he also said--I am not sure. 
But in a hearing yesterday, the EPA also in their statement 
said we are not going to look at job creation, we are not going 
to look at effects on the economy. So that is why we think 
there should always be at least an analysis of cost-benefit 
analysis, and had this been done prior to promulgation of 
movement toward net neutrality through the Commission, maybe 
there would be more certainty and their side would be pointing 
out to your analysis and we would be looking at that analysis 
and saying yes, it is legit or--but nothing. Commission 
Chairman, do you want to respond?
    Mr. Genachowski. As I said before, we did do a market 
analysis, and I disagree with my colleague very strongly. I 
think the pro-job, pro-investment outcomes of this balanced 
framework that we adopted very much outweigh the burdens which 
people either say are very small indeed or highly speculative.
    Mr. Shimkus. Let me just chime in because I have been on 
the committee for a long time and just like Mr. Markey can talk 
about going back to the breakup of the Bells, I can talk about 
when the cell phone was a mini brick when I got elected and you 
had to change the roaming when you got here to now really voice 
is really the throwaway service. It has been an unregulated 
environment that has moved faster than we can even get there 
now. And again, our concern is, if we are not doing cost-
benefit analysis on regulations, the regulations may be 
important but the public needs to be able to make the decision 
based upon the impact on jobs versus benefits received, and 
that is our frustration.
    Let me ask one more question on this net neutrality debate, 
and it is not to pick on the chairman but recently you are 
offering applications to kind of spy on--``spy'' is not a good 
word but to patrol the Internet to see if there is abuse of net 
neutrality, and prepare to fly the winner out here. Do you 
think that is a good use of taxpayers' dollars?
    Mr. Genachowski. Promoting transparency, opening up, giving 
to consumers and early-stage innovators better information 
about how the networks work, I think promoting transparency is 
a very important part of this.
    Mr. Walden. The gentleman's time is expired. I now turn to 
the gentleman from Pennsylvania, Mr. Doyle, for 5 minutes.
    Mr. Doyle. Thank you, Mr. Chairman.
    Boy, I will tell you, there is probably not two words that 
have been more misused and confused than the words net 
neutrality, and I would venture to say if you asked the 435 
Members of Congress what their definition of net neutrality is, 
you would probably get 435 different answers. But let me tell 
you what it means to me. I have four kids. Now, my three boys, 
they were the first three kids we had all went to Penn State, 
my alma mater, but our youngest, who came 7 years after our 
youngest son, Ali, she is a free spirit and she decided to 
break tradition and go to the University of Dayton, where she 
is now finishing up her final semester. But one thing, you 
know, Ali growing up with three brothers, it was just obvious 
she was going to be a sports fan and she loves the Pittsburgh 
Steelers and she loves the Pittsburgh Penguins. Well, one of 
the things she discovered right away when she went to the 
University of Dayton is that she was being subjected to 
watching Cincinnati Bengal football and the Columbus Blue 
Jackets hockey team. I felt very badly for her.
    She came home one weekend and she had this little device in 
her hand, and she said ``Dad, we have to hook up this device in 
the house,''and I said ``what is it,'' and she said, ``it is 
called a Slingbox.'' I didn't know what a Slingbox was so I 
said, you have to be careful, your kids bring things home and 
you don't know what they are bringing home, and I said, ``Ali, 
what is it,''and her eyes lit up. She says, ``you are not going 
to believe this, you hook this to your cable and then you hook 
it to the Internet connection and then I can watch Pittsburgh 
Steelers and Pittsburgh Penguin games in Dayton, Ohio.'' And so 
we hooked it up and she gets to watch Pittsburgh Steelers and 
Pittsburgh Penguin games in Dayton, Ohio.
    So this is when I decided, this is what open Internet means 
to me. It means that one, my family can use any service on the 
Internet using any device we choose to use; two, we give 
innovators the ability to create new things for us so that we 
can use our Internet connections and new gadgets for us to use 
that we never dreamed possible; and then three, we provide a 
cop on the beat to make sure that all these promises of an open 
Internet are kept for us.
    Now, Mr. Chairman, that seems to me to roughly be what the 
FCC order is. Is that right?
    Mr. Genachowski. Well, in fact, Sling was one application 
that had been blocked and was an issue that gave rise to the 
concerns that led to our order.
    Mr. Doyle. So it seems to me that the rules that you 
promulgated, they are aimed to protect me, they are aimed to 
protect innovation, and I could quote from the companies, and I 
think we have heard them before, AT&T or Wall Street analysts 
from Bank of America, Merrill Lynch, Citi, Wells Fargo, Raymond 
James, who all called the ruling balanced or a light touch and 
no undue impact on carriers.
    I noticed that some of my friends on the other side of the 
aisle and I think also Commissioner Baker spoke to this, that 
they said that they believed the FCC should only issue rules 
when there is a market failure. I have to tell you, I think 
that is a bad model. That is like saying you can only create 
rules for mortgages when housing prices plummet or that you 
can't ensure new investors aren't being bilked until millions 
have lost their nest eggs.
    Mr. Chairman, do you think the FCC should only create rules 
when the Internet ceases to be useful as it is today or only 
when it won't do the things that our constituents expect it to 
do?
    Mr. Genachowski. No, of course not, and we heard from 
people who have been building all the content and services on 
the Internet that given the history, if we didn't adopt a 
sensible framework, we would see a decline in investment, a 
decline in new businesses starting, a decline in jobs being 
created. What I am proud of is that we were able to find a way 
to provide certainty and confidence to the entrepreneurs and 
companies building new businesses on the Internet and also give 
certainty and confidence to the infrastructure companies to 
increase their level of investment. I am proud of that. It took 
a lot of work.
    Mr. Doyle. Thank you.
    Commissioner Copps and Commissioner McDowell, and these are 
just some quick yes or no answers. One of the biggest areas of 
controversy in this Open Internet Order is the citation of FCC 
authority, but rather than debating whether a specific 
provisions of the Communications Act grants FCC direct or 
indirect authority to regulate broadband providers, which is 
now going to be up to the courts to decide, I want to ask you a 
few questions about the way Congress has approached broadband.
    In the 2008 Farm Bill, Congress directed the FCC to submit 
a comprehensive rural broadband strategy with recommendations 
for the rapid build-out of broadband in rural areas. Are you 
both familiar with that legislation?
    Mr. Copps. I was the acting chairman of the Commission at 
the time that helped produce the report.
    Mr. Doyle. Thank you. In that same year, Congress also 
passed the Broadband Data Improvement Act to improve FCC's data 
collection process and promote the deployment of affordable 
broadband services to all parts of the Nation. Have you both 
heard of that bill?
    Mr. Copps. Yes.
    Mr. McDowell. Yes.
    Mr. Doyle. And in 2009, Congress passed the Recovery and 
Reinvestment Act directing the FCC to produce a National 
Broadband Plan with a detailed strategy for achieving 
affordability of such service and maximum utilization of 
broadband infrastructure and service by the public. I know you 
are both familiar with that legislation. So given the number of 
laws that Congress has passed on broadband that directly 
involve the FCC, doesn't it seem logical to you that Congress 
assumed the agency would have the ability and the authority to 
implement and oversee our Nation's broadband policies?
    Mr. Walden. The gentleman's time has expired here. I want 
them to have an answer, but if we have a 5-minute answer, we 
could have issues.
    Mr. Copps. How about yes?
    Mr. Doyle. Thank you.
    Mr. McDowell. Congressman, you make a good point, which is 
Congress had a chance during each of those times to pass net 
neutrality legislation, and it did not.
    Mr. Doyle. Mr. Chairman?
    Mr. Genachowski. I would say yes as well. Congress has 
clearly given FCC the authority to look at competition issues 
involving voice and video. It is well accepted that the FCC has 
authority over Internet access providers, so I am quite 
confident in the legal basis of the decision and its 
constraints on the FCC.
    Mr. Doyle. Thank you, Mr. Chairman. I would yield back.
    Mr. Walden. Ms. Baker?
    Ms. Baker. Thank you. I have two quick points.
    Mr. Walden. Very quickly.
    Ms. Baker. The first is that the Slingbox, I am a big fan. 
I was one of the first adopters. The problem with Slingbox when 
it was blocked was because it was taking so much capacity on 
the wireless network that we needed to make it more efficient, 
which is why I promote entities like the BTAG, which is a non-
governmental group of engineers who can work to make more 
efficient a lot of these problems that are coming up much 
faster than the government process can be.
    And the other point I would like to say is that certainly 
you gave us the broadband plan job to do, which was very 
important and a terrific landmark of our tenure at the FCC. Two 
hundred of those recommendations came forward. Sixty are those 
are within the FCC's jurisdiction. I think this is something 
that is going to be multi-jurisdictional and we need to all 
work together.
    Mr. Walden. Ms. Clyburn, do you have any quick additions?
    Ms. Clyburn. My colleagues have amply----
    Mr. Walden. Yes, they have. Thank you.
    The gentlelady from Tennessee is recognized.
    Ms. Blackburn. Thank you, Mr. Chairman. Thank you all for 
being here. We indeed have looked forward to this.
    Chairman Genachowski, I want to start with you. We have 
tried to get together and visit on a few things, and I do have 
a couple of questions. Let us go to the Comcast/NBCU merger 
which I think was an overreach of power and a mismanagement of 
resources and it should have been a very simple straightforward 
vertically integrated merger, and it ended up becoming a forum 
for groups with complaints and grievances and then regulations 
and conditions and open Internet and net neutrality attachments 
to that merger. So I have got about three questions, and of 
course, you know we need to move quickly on this. Is this how 
you are going to approach mergers in the future?
    Mr. Genachowski. The Comcast/NBCU transaction was one of 
the biggest and most complex that ever came to the agency and 
we handled it in a way that was I think the most professional 
review process. Completing the process at about the time that 
people thought were on the earlier end and making sure that 
consumers and competition were protected.
    Ms. Blackburn. OK. Do you expect or is it the goal of the 
FCC as currently configured to legislate policy for every 
merger that comes before the Commission?
    Mr. Genachowski. We will continue to exercise the 
responsibilities that Congress gave us under the Communications 
Act to review mergers and determine that they are in the public 
interest.
    Ms. Blackburn. OK. Do you think that the review should have 
lasted for over a year?
    Mr. Genachowski. That was what the companies expected when 
they announced their decision. It was on the fast end for 
transactions of that size. It was done----
    Ms. Blackburn. See, I think it was on the slow end because 
you get in the way of jobs creation. We are all about making 
certain--the interactive technology sector is one of the few 
sectors creating jobs.
    Commissioner McDowell, in light of how long the merger 
took, have we reached the point that we need to initiate a stop 
clock, put that in place to prevent needless dragging on which 
hampers job creation?
    Mr. McDowell. Of course, the FCC has an 180-day shot clock 
but enforcement of that would be helpful.
    Ms. Blackburn. Thank you.
    Commissioner Baker, what would you like to have seen done 
differently in the merger reviews and what would you do 
differently in the future when you look at this merger?
    Ms. Baker. Well, I think it is clear that we need a 
comprehensive review but I agree that it can be timely, and our 
internal shot clock of 180 days is a good target and a good 
time frame that should be enforced. I think that the breadth, 
scope and duration of the restrictions placed on the merging 
companies shows sort of the extraordinary leverage that we held 
over the parties in front of us merging. I would like to see 
the merger conditions have a nexus to the actual merger.
    Ms. Blackburn. Excellent. Thank you.
    OK. Let us talk about peering and interconnectivity. We 
know that these arrangements have never been regulated, and the 
FCC net neutrality order says that the rules do not cover 
peering. So Mr. Chairman, do you believe the Commission's new 
net neutrality order and its underlying rules govern the level 
3 Comcast dispute?
    Mr. Genachowski. Well, you said the order says that it 
doesn't change anything with respect to existing peering 
arrangements. It applies to Internet access service provided to 
consumers and small businesses. You are referring to a dispute 
that is occurring outside the Commission, a commercial dispute. 
I hope those parties settle it and resolve it but it is not 
something that we have facts and data on. I do think the order 
speaks for itself in the way that you suggest.
    Ms. Blackburn. All right. Commissioner McDowell, do you 
believe the FCC has the authority it is claim to govern 
interconnectivity agreements?
    Mr. McDowell. Peering?
    Ms. Blackburn. Yes.
    Mr. McDowell. No, ma'am.
    Ms. Blackburn. Thank you, sir. I appreciate that.
    Commissioner Clyburn, thank you for coming in and visiting 
with me a few weeks ago. You and I discussed a little bit about 
market failure at that point, and you believe there has been, I 
believe there has not been. So why don't you tell me where you 
think the market failure lies and why the Internet is broken 
and why we need to look at these burdensome regulations? 
Because I am hearing every single day from innovators that are 
very concerned about the overreach that they see, what this 
might do and open the door for your Commission to regulate 
everything from set-top boxes to privacy to you name it.
    Ms. Clyburn. There have in fact been formal and informal 
complaints lodged at the Commission. There have been persons 
who have come to my office, who have called, who have e-mailed, 
when I go to different meetings and public forums, you know, 
they mention that there are issues, that these issues cause 
uncertainty in the market and cause them to have problems with 
financing. So there are issues. There have been formal 
complaints and a lot of these companies do not have the ability 
and technical know-how to come forward.
    Ms. Blackburn. My time is expired. Mr. Chairman, I look 
forward to the second round.
    Mr. Walden. We will now go to the gentlewoman from 
California, Ms. Matsui, for 5 minutes.
    Ms. Matsui. Thank you, Mr. Chairman, and I thank the 
commissioners and chairman for being with us today. I support 
the FCC's Open Internet Order because it lays a foundation to 
create market certainty that both protects consumers and spurs 
innovation and investment in our economy, and I believe that 
any attempt to repeal this order should be characterized as 
stifling innovation and discouraging job growth in the 
technology sectors of our economy.
    Now, I am co-chair of the High Tech Caucus, and one of my 
priorities is to new innovative sectors like smart grid and 
health IT that offer great economic and job growth 
opportunities for our Nation. Technology companies are poised 
to deploy a range of new technologies to businesses and 
residential customers alike to ensure and increase energy 
efficiency efforts and modernize our health care system.
    Mr. Chairman, I believe broadband will play a key role in 
advancing smart grid technologies and health IT. How does the 
Open Internet Order promote the advancement of these sectors?
    Mr. Genachowski. Well, I agree that those are very 
important areas for dramatic private investment in the years 
ahead for the United States to build industries that provide 
real benefits to the public and devices and products and 
applications we can export to the rest of the world. What the 
Open Internet Order does is give entrepreneurs, companies 
thinking about innovating in that space the confidence that if 
they invest the resources and the time to innovate, they will 
have access to a free and open market, be able to reach 
customers and let consumers and the market pick winners and 
losers and so it is a great opportunity for those segments.
    Ms. Matsui. OK. Thank you. And I believe one important way 
to move our economy forward is to increase access to affordable 
broadband service to more Americans, and that is why in the 
coming weeks I plan to reintroduce the Broadband Affordability 
Act to expand the Universal Service Fund lifeline linkup 
services for universal broadband adoption.
    Mr. Chairman, do you believe your Open Internet Order will 
further lay a foundation that helps increase broadband adoption 
rates in this country and further bridge our Nation's digital 
divide?
    Mr. Genachowski. I do, because it promotes a virtuous cycle 
of private investment throughout the broadband economy that 
will accelerate the opportunities and benefits of the Internet 
for all Americans.
    Ms. Matsui. Now, I want to follow up on Ranking Member 
Waxman's question earlier on market certainty because I believe 
this is an important point. Over the course of this debate, we 
kept hearing that industry wanted certainty so they could move 
forward with investment and their businesses. Now, it is widely 
known that a number of leading economists and financial 
institutions have stated that on balance, these rules represent 
a light touch that provides regulatory certainty that broadband 
providers and our tech community need to attract new 
investments and grow so that my sense is that any attempts to 
repeal in any form would create uncertainty for investors and 
the market, which puts American innovation investment and 
growth at risk. So again, what gives here? I mean, we need 
certainty, and this is sort of a light regulation and yet we 
are saying, the other side is saying that this is going to put 
a stranglehold on innovation. So any comments here?
    Mr. Genachowski. I am concerned about that. For years there 
has been a war in this space between the infrastructure 
companies on one side and the innovation technology companies 
on the other side. What we worked very hard to do over this 
process is to say hey, look, the gap isn't that large, let us 
resolve this in a sensible way with light-touch rules, move 
forward because we need all the companies in the broadband 
economy to work together to grow the broadband economy and to 
deal with the global competitive threats that we face. I 
believe we achieved that. I believe that injecting new 
uncertainty into it now will create more harm than good.
    Ms. Matsui. OK. Any other comments on that?
    Ms. Baker. All of us would love, we would all love 
certainty. Unfortunately, I think the only certainty would 
actually be is if Congress would act to give us authority. I 
think unfortunately--well, I think the courts will turn this 
around. I think we have a complaint process set up in our 
rules, that we also have a declaratory ruling process set up in 
our rules. I think all of these leave inroads for changes, and 
I also think we have a 2-year review that is also set up to 
change the rules that exist. So I think that the certainty is 
actually more uncertainty with the rule we adopted.
    Ms. Matsui. Well, my time is running out but I would just 
like to say that this is a debate that continues to go on, and 
we understand we must have some regulations. We understand 
that. And we are hopeful that in this case, this light touch 
will spur innovation which I believe it will. So thank you very 
much.
    Mr. Walden. The gentlelady's time is now expired, and I 
will turn to the gentleman from Georgia, Mr. Gingrey.
    Dr. Gingrey. Mr. Chairman, thank you, and let me thank the 
chairman and the other four commissioners for being here today. 
I associate myself with Mr. Barton's comments earlier, the 
gentleman from Texas, in regard to the level of expertise that 
you bring.
    Obviously we spent a lot of time talking about this, and I 
would say that the members on this side of the aisle feel like 
this net neutrality ruling, this 3-2 spilt decision, was really 
unnecessary, a hammer in search of a nail, if you will, and our 
colleagues on the other side of the aisle feel like it is very 
much necessary. In fact, my good friend from Pennsylvania 
talked about the necessity, I think he put it as the need for a 
cop on the beat. I would suggest that if there is no history of 
crime on the beat, is it cost effective to put a cop there? In 
fact, he went on to talk about his daughter using the Slingbox. 
I never heard of the Slingbox but it sounded like a heck of a 
good innovation, and I guess that certainly came online at a 
time before this 3-2 ruling.
    So with that in mind, I am going to ask my first question 
to the chairman. Chairman Genachowski, in the National 
Broadband Plan that was released by the Commission last March, 
page 5 stated that, and I quote ``The role of government is and 
should remain limited,'' yet I find the order delivered in the 
3-2 vote by the Commission to contradict this very statement. 
You say in your testimony that the so-called open Internet 
rules will promote innovation, and maybe you can give me a yes 
or no answer on this. Has there been a lacking of innovation in 
the absence of government regulation over the Internet during 
the past decade?
    Mr. Genachowski. As I mentioned, there have been Internet 
protections in place since at least 2005, and so in the space 
people were operating on the assumption that Internet freedom 
was assured.
    Dr. Gingrey. Well, the question again, yes or no, has there 
been a lack of innovation?
    Mr. Genachowski. Let me see. There has not been a lack of 
innovation because there has been----
    Dr. Gingrey. I will take that as a no. And if there has not 
been a problem with innovation, then why, why is it necessary 
to promulgate regulations that may well stifle innovation at 
least according to a December 31, 2010, report from Anna-Marie 
Kovacs?
    Mr. Genachowski. What we heard from the innovator community 
was that in the absence of sensible rules of the road, they 
wouldn't have the confidence and certainty they need to invest 
their time and resources to raise capital in order to continue 
to innovate, and they felt very strongly about it.
    Dr. Gingrey. But yet, you know, the innovation that we hear 
about like the example of the Slingbox and other things, I 
mean, you know, this is sort of speculative, it would seem to 
me, and as a result of this order, despite the assurance of 
your testimony, will there not be a subsequent drop-off in 
innovation due to this unnecessary, as we see it, government 
regulation?
    Mr. Genachowski. I think this is a spur to innovation both 
at the edge and in the infrastructure, and I think the 
statements from most of the companies in the space analysts in 
the space are consistent with that.
    Dr. Gingrey. I don't see how then you can make that sort of 
assurance without the proper market analysis which the 
Commission today has admitted did not occur.
    Mr. Genachowski. With respect, we did do a market analysis 
in our order.
    Dr. Gingrey. Is my time expired?
    Mr. Walden. No, but you might want to ask the chairman if 
it is an OIRA standard market analysis as recommended by OMB, 
and if so, if you can make it available.
    Mr. Genachowski. We will obviously make it available. It is 
in the order, and we will get back to you on whether it is 
specifically OIRA compliant.
    Dr. Gingrey. Mr. Chairman, if I have----
    Mr. Walden. You actually have another minute.
    Dr. Gingrey. Thank you.
    I want to ask Commissioner McDowell, Commissioner, isn't 
this order full of double-speak? To me, certainly it is. It 
says to keep the Internet free, we need to regulate it. To 
ensure no one needs permission to innovate, everyone will need 
to ask the FCC for permission to innovate. And it goes on to 
say to create certainty, as few as three commissioners now can 
decide what types of business arrangements and traffic 
management techniques are reasonable. Does that make sense?
    Mr. McDowell. It doesn't make sense, and I think what we 
are hearing today from the chairman as well as in the order is 
that innovation only happens at the edge, and he has referred 
to several times about innovators and the technology companies 
at the edge and there is just infrastructure on the other side, 
the network operators. We want to have innovators everywhere. 
You have companies like Microsoft and Google as well as Verizon 
and AT&T who have thousands of miles of fiber, have servers and 
soft switches. They offer voice, video and data services of all 
kinds and all sorts of applications, and you don't want 
government tilting the scales while putting its thumb on the 
scale to try to distort that market. You want innovation at all 
layers, all levels of that environment.
    Mr. Walden. The gentleman's time has expired. I will 
recognize the gentleman from New Jersey, Mr. Pallone, for 5 
minutes.
    Mr. Pallone. Thank you, Chairman Walden. I do want to say I 
am pleased to see the FCC commissioners here today, and I want 
to touch on two topics with Chairman Genachowski, and again, I 
have to apologize because I know that some of this is 
repetitive. I will try not to be.
    The first is the follow-up to a letter I wrote to you last 
spring regarding the Title II framework you initially laid out 
regarding the Internet principles, and I wanted to reiterate my 
concerns regarding agency action. I was the chairman of the 
Subcommittee on Health, and I am still the ranking member, and 
in that capacity, I am increasingly sensitive about the 
tendency of government agencies and in particular independent 
agencies to arrogate to themselves policymaking authority that 
is properly exercised solely by Congress, in my opinion. Now, 
while questions involving an agency exceeding the authority 
granted to it by Congress are decided in the courts, I think an 
agency ought to be mindful of the limits on its authority. So 
far, two companies have questioned your authority and brought 
suit against you. Can you tell me--this is sort of repetitive, 
so I wanted to ask if you could tell me why you believe the 
agency has legal authority to implement network neutrality 
rules or provisions of the National Broadband Plan in the order 
being examined today? But let me say specifically, because you 
have gone into this, where you believe you have the authority, 
what would you cite, and why you think you are going to win in 
the court. I will say it that way.
    Mr. Genachowski. I am glad you asked the question because 
it allows me to try to clear up one issue. There were many 
Members of Congress who in the course of our proceeding urged 
us not to rely on Title II as a basis for any decision in the 
area, and after a lot of discussion and input, we listened to 
that, we heard that, and in fact we didn't rely on Title II in 
adopting a final decision, and instead we adopted a framework 
that is consistent with the framework that historically has had 
consensus in this space, the light-touch Title I framework tied 
to specific provisions in the Communications Act like those 
instructing us to promote competition. And so I do remember 
getting your letter and it was something that we paid careful 
attention to and that we believe we responded directly to in 
how we ultimately ruled in this matter.
    Mr. Pallone. And why do you think you are going to win?
    Mr. Genachowski. Well, we think we are going to win because 
we think that the theory we have laid out is very consistent 
with Supreme Court precedent in this area, and it is consistent 
with the D.C. Circuit decision. The D.C. Circuit was asked to 
rule that the FCC had no authority at all with respect to 
broadband, and it didn't do that. It set a standard that the 
FCC has to reach in order to adopt sensible rules in this area, 
and we believe we met that standard. It is in litigation now. 
Almost everything that the FCC does ends up in litigation. 
There are some areas in which the D.C. Circuit is in tension 
with the Supreme Court but we believe we meet the standard of 
the D.C. Circuit case and we are certain that we meet the 
standards set out by the Supreme Court in this area and that we 
are operating well within our authority under the 
Communications Act.
    Mr. Pallone. All right. Let me get to my second issue. This 
was an issue I raised last summer, or I should say last May. 
Congress learned that Google had gained access to personal WiFi 
and collected information about consumers' Internet activities 
and at the time I called on the FCC and the FTC to investigate 
out of concern for consumers' privacy. Now, the FTC 
investigation was dropped in October without providing 
sufficient answers, in my opinion, to how the privacy breach 
was allowed to take place and who was affected, but I 
understand that the FCC is also investigating. So could you 
comment on any progress with that investigation, whether the 
FCC is examining the data for itself, what steps are being 
taken to avoid situations like this in the future in today's 
technology age?
    Mr. Genachowski. I can't comment on an open investigation 
but I will say that we certainly heard you in that letter, and 
any uses of spectrum or technologies that are within the FCC's 
purview that violate the privacy statute and the FCC's privacy 
rules are actions that we would take very seriously.
    Mr. Pallone. OK. As far as you can go, in other words. All 
right. Thank you.
    I yield back, Mr. Chairman. Thank you.
    Mr. Walden. I thank the gentleman for yielding back. I now 
go to the gentleman from Louisiana, Mr. Scalise, for 5 minutes.
    Mr. Scalise. Thank you, Mr. Chairman. I appreciate you 
hosting this hearing. I appreciate all of the FCC commissioners 
coming to talk about this important issue of net neutrality and 
its impact especially on the economy and our ability to 
continue to encourage the innovation and the job creation that 
I think has been one of the hallmarks of the Internet. I would 
actually agree with the commissioner back in 1999, Commissioner 
Kennard, who had talked about the innovations and also 
encouraged against the dangers of regulating the Internet, and 
this was President Clinton's FCC commissioner that talked about 
the dangers of regulating the Internet, especially in ways that 
it would stifle innovation. When I look at what has been 
happening in the industry, I think one of the few real positive 
signs in a struggling economy that we have today has been the 
technology sector, especially the companies that do operate and 
innovate using the Internet and its capabilities to allow 
commerce, to allow connectivity of people, of ideas. They are 
even talking about what is happening in Egypt being something 
that really in many ways came out of Facebook, and of course, 
these great innovations happened without net neutrality. These 
great innovations happened because there was a certainty and an 
ability for industry to go out there and invest, as I think it 
was Commissioner Baker who pointed out over $500 billion of 
private investment--this isn't Federal Government with stimulus 
but private investment coming out over the last 10 years of the 
private sector to encourage this innovation. This was again 
without net neutrality, without the big hand of the Federal 
Government or the big hammer, as you might want to call it.
    And so you can see why there is a big concern by many of us 
about this imposition of net neutrality, and this is not just a 
Republican issue. I know some on the other side have kind of 
inferred that this is the way it should be. I was a little bit 
surprised to hear the three Democrat commissioners saying that 
they don't think that this Congress should pass a resolution of 
disapproval because when I go back to the Constitution, which 
is of course our overarching document that lays out the 
structure, it is article 1, section 1 that talks about the 
legislative branch deciding policy, with all due respect, not 
the FCC, not the EPA, not all of these bureaucratic agencies 
that seem to think that their will is better than those of us 
who were actually elected by the people.
    And so with that, I want to at least try to get into this a 
little bit more, and Chairman Genachowski, starting with you. 
When we look at the private sector innovation that has come 
with the ability to innovate and then of course the business 
models that are built around the things that encourage private 
investment, do you have any concern that by changing the rules, 
by imposing net neutrality and in some cases opening the door 
for retroactive changes, that you are going to discourage that 
kind of innovation and investment?
    Mr. Genachowski. Well, I actually agree with what 
Commissioner McDowell said a few minutes ago about the 
importance of the investment and innovation throughout the 
broadband economy, both early stage and technology companies 
and also our infrastructure companies, wireless and wired. It 
is a full broadband economy where innovation and investment in 
any part of it fuels investment throughout. We paid very 
careful attention to this as we worked on this item, and I 
believe this will be a spur to investment and innovation 
throughout the broadband economy and overwhelmingly the 
analysts who looked at what we did characterized it that way, 
as a light-touch action that increases certainty and will 
unleash investment.
    Mr. Scalise. And I guess we will disagree about whether it 
is a light touch and whether it increases certainty versus what 
many of us think that it actually decreases certainty.
    I will ask Commissioner Baker, because you did make those 
comments about the $500 billion of private investment, if you 
can just answer that same question and what effects it would 
have on future investments.
    Ms. Baker. So I think it is important what has brought us 
here but I also think what it is important to take us to the 
new generation, so updating the networks by 2015, the number is 
going to be $182 billion. I think the network providers are 
going to have to have a return on that investment. It is a very 
tight capital market. I think things like network management, 
prioritization, specialized services have been turned into bad 
words as opposed to engineering marvels, and I think that we 
need to allow--I think the term is called wealth transfer and 
so what we are doing is taking away revenue streams from the 
providers how are building these networks. They need to have as 
much incentive as possible to have a return on their 
investment, which will then in turn allow all of the edge 
applications to innovate and continue this terrific ecosystem.
    Mr. Scalise. And we heard some concerns in a previous 
hearing last week about that in relation to the stimulus bill 
where the federal government was using taxpayer money to in 
essence other companies to compete against private companies 
who already made an investment of billions of dollars, hiring 
thousands of people, creating good jobs that now will not have 
that same ability to make those investments in the future.
    So again, we have seen those regulations killing jobs and 
that is a big concern. I know we will get into more of it in 
the second round. I appreciate it, and I yield back.
    Mr. Walden. The gentleman's time is expired. The Chair now 
recognizes the gentleman from Illinois, Mr. Rush, for 5 
minutes.
    Mr. Rush. Thank you, Mr. Chairman, and I want to welcome 
the commissioners here again. I want to begin by saying I agree 
with you, Chairman Genachowski. I think in essence you said, 
your statement was that regulations don't create incentives, 
they create certainty, and certainty is a catalyst for 
investment and innovation, and I certainly concur with those 
sentiments. When the FCC decided to issue a balanced set of 
open Internet rules, I for one urged industry not to challenge 
these rules in court. These rules largely track an agreement 
that this committee helped to negotiate among parties on all 
sides of the issue. Now that some of these companies have 
decided to take the court route, the question of the FCC's 
authority to adopt rules affecting broadband service providers 
will unfortunately be left in the hands of the federal 
appellate court, and to me, I would have liked to avoid that. 
And I would sincerely hope that after today that we in Congress 
will move on and move ahead to help you, the FCC, and our 
Nation tackle more immediate problems including our looming 
spectrum crunch and financing the build-out of and national 
interoperable public safety network, reforming universal 
service and designing all auctions and licensing opportunities 
to ensure that minority and small businesses have just as good 
a chance as the large fat cats, the large corporations, the big 
boys to become real participants and players in the 
communications and technology sector.
    As you know, Mr. Chairman, Chairman Genachowski, the 
President recently announced that he supports reallocation of 
the 700 megahertz D block to public safety. Further, both 
Senator Rockefeller and Representative King have reintroduced 
bills this year that will reallocate the D block to public 
safety. Last year, you testified in front of this subcommittee 
that you believe the plan to auction the D block recommended by 
the National Broadband Plan provides the best strategy going 
forward.
    Now, I want to ask each one of you, and I only have a few 
more minutes, so if you would quickly answer this question with 
a yes or no answer. Do you still support the recommendations 
auctioning the D block as laid out by the National Broadband 
Plan?
    Mr. Genachowski. Yes, and we need to get a mobile broadband 
public safety network built and funded.
    Mr. Rush. Commissioner Copps?
    Mr. Copps. Well, I think that is a viable proposal. I think 
we also need to hear from Congress. The central question to me 
is which of the options out there are going to provide money to 
actually build this infrastructure, and we need to identify 
where that is, and I think that will be the route to go.
    Mr. McDowell. I think this issue is more one of public 
safety needing more money rather than more spectrum. I would 
like to see the D block auctioned off cleanly but we need 
Congress's help to fund that build-out.
    Ms. Clyburn. I look forward to a Congressional engagement. 
At the bottom of this, at the core of all this is, we need the 
pathway for a truly interoperable public safety network. I 
think that is what we all want, and the best way to get that. I 
look forward to engagement from you.
    Ms. Baker. I think I agree with all my fellow commissioners 
and chairman. Last year we testified that an auction was a 
terrific way forward. It seems to me that some other ideas have 
surfaced from other places, and I think if we are going to look 
at reallocation too as a viable alternative, I think the 
important is to get the public safety interoperability network 
built as soon as possible and we will look to you as to how to 
do that best.
    Mr. Rush. My next question, when FCC auctioned 52 megahertz 
of spectrum in 2008, one of your predecessors, Chairman 
Genachowski, said it is also appalling that women and 
minorities were virtually shut out of this auction with women-
owned bidders winning no licenses and minority-owned businesses 
winning less than 1 percent. We clearly failed to meet our 
statutory obligations in 309(j) to expand diversity and the 
provision of special base services. In 2008, we raised about 
$20 million for the U.S. Treasury. Much of that spectrum has 
been now deployed to make 4G services a reality, giving 
subscribers faster broadband speeds, supporting more and more 
apps and more and more video. Many critics of the auction 
contend, however, that the FCC's auction design did not do 
enough to allow women, minority and rural phone companies to 
women any of the spectrum licenses. If you decide to auction 
the D block, what design improvements can FCC make to ensure 
that these types of bidders are more successful this time 
around?
    Mr. Genachowski. Well, you raise an important issue, and we 
would look at all possibilities to address those issues in any 
auction design that we take up our next auction design, and in 
connection with the topic of the day, I will say that one of 
the challenges in that area is the amount of capital that is 
required to build and launch a wireless business is very high 
and it is what makes the issue difficult. On the online area, 
the capital requirements to start a business are much lower and 
so the new opportunities for new entrants, diverse entrants on 
the Internet is something that I think is a promising 
opportunity.
    Mr. Walden. The gentleman's time has expired. Now I would 
like to go the gentleman from Ohio, Mr. Latta, for 5 minutes.
    Mr. Latta. Well, thank you, Mr. Chairman. I appreciate the 
opportunity. I want to also thank all of you for being here 
with us today. It is very, very enlightening, and what I would 
like to kind of do is maybe just kind of start off with, I 
really believe that we have got to keep government out as much 
as we possibly can because if we want to see an invasion of 
growth, it is not going to happen.
    One of the things, Mr. Chairman, I would like to submit for 
the record is a letter from a company doing business in my 
district from Amplex Internet, if I could ask unanimous consent 
that that be included in the record.
    Mr. Walden. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. Latta. I appreciate that, Mr. Chairman.
    And one of the things that--and just real quickly about 
this company. It is in a village in my district and they have 
2,100 household and businesses they supply service to and they 
employ eight people and they have added three new employees in 
the last year, which is how we grow things in America, small 
businesses and they grow large.
    But in his letter, it is interesting because he states a 
couple of things that I think that he might have been in your 
own meeting rooms because this letter is dated December 15th of 
last year, and he says in the letter, ``The Internet has grown 
incredibly rapidly without significant government regulation 
and continues to do so. There is no pressing reason for the 
government to act at this time.'' He goes on to say, ``In the 
limited number of cases to date involving questionable 
behavior, the existing consumer protection laws have been 
sufficient to address the issue,'' and I find that interesting 
because a lot of times I think we--I would like to ask this 
question. You know, we have been kind of talking at the 30,000-
foot level here today. What we need to do is talk to the people 
back home on main Street. These are the folks that have got to 
do this.
    And starting with Commissioner McDowell, I think that he 
must have been in your computer because when I am looking at 
your statement, you said it on December 21, 2010. You state on 
page 6, ``And my dissent is based on four primary concerns. 
Nothing is broken in the Internet access market that needs 
fixing, and existing law and Internet governance structure 
provide ample consumer protection in the event a systematic 
market failure occurs.'' Those two letters are just 6 days off 
but this is somebody from Main Street, again, somebody that is 
out there trying to live with this.
    And I guess I would like to read something that 
Commissioner Baker, you have written in your testimony, saying 
again that--you are pretty much saying that our surveys 
revealed that 93 percent of subscribers are happy with their 
broadband service, and you go into that we need broadband 
competition, we need private capital and that the Internet is 
open without the need of affirmative government regulation.
    So I guess if I could just start with Commissioner 
McDowell, what do I tell the folks back home? How do I explain 
what we do here in Washington that affects them right off the 
bat? Again, we are looking at--you know, we do things at 30,000 
feet but we are talking about people right at ground level, 
ground zero.
    Mr. McDowell. Well, I think you have touched on an 
important point which is that we have had wonderful innovation 
at the edge. The Twitters, the Facebooks, the eBays, the 
Amazons have all developed under the current environment, that 
there is no systemic market failure, that nothing is broken, 
and when you look around the globe it is not private sector 
mischief with the Internet that is the problem, it is state 
control of the Internet, and that is the concern here.
    But also I would like to sort of take issue with the notion 
that has been aired several times, that the December 21st order 
was somehow some active consensus because Comcast and AT&T and 
NCTA, Comcast Trade Association signed onto it. Comcast was 
very vulnerable, had a large merger before the Commission at 
that time. AT&T, it ended up was being on Qualcom 700 megahertz 
spectrum and was going to need FCC approval of that. And of 
course, those two entities are going to want to comply as best 
as possible. When you read their statements, they aren't 
ringing endorsements, and as we have seen debate over this 
peering issue as to whether or not the FCC is going to claim 
jurisdiction to regulate peering, NCTA and AT&T have submitted 
a joint letter to the Commission expressing grave doubts and 
feeling there is a bit of a bait and switch here.
    So, you know, there is not great consensus here, and Wall 
Street analysts aren't part of that as well. Back in October, 
October 1, 2009, we convened a workshop at the FCC on 
investment and broadband, and back when Title I was being 
discussed and not just Title II, and we had analyst after 
analyst and investor after investor of various stripes and 
sizes cautioning us against net neutrality regulation. Then 
Title II, the specter of Title II was aired last year in the 
middle of the year. I think what you saw from Wall Street in 
December was more of a sign of relief that it was not an overt 
or an explicit Title II reclassification. In reality, what it 
is, it is Title II with a Title I disguise, as I have said in 
my dissent. So that sign of relief doesn't necessarily equate 
to Wall Street's endorsement of what the FCC did.
    Mr. Walden. The gentleman's time is expired.
    Mr. Latta. I thank you, and yield back.
    Mr. Walden. The chair now recognizes the gentlewoman from 
California, Ms. Harman, for 5 minutes.
    Ms. Harman. Thank you, Mr. Chairman, and thank you to the 
subcommittee for years of friendship and partnership. I will 
miss this subcommittee very much and had been looking forward 
to my return here. I will also miss this Commission very much. 
Rob McDowell, thank you for your comments. Others of you, thank 
you for your notes, some of them quite blunt and humorous, 
which I shall treasure. But I want you to know that the set of 
issues that we are addressing this morning are a centerpiece 
for what will or won't keep our country safe, innovative and 
free--I do like that word--in the future.
    And so let me just turn to my top priority for this 
subcommittee and the Commission, and I have decided that since 
you all want to give me a parting gift, you will act on my top 
priority, which Michael Copps said he wanted to act on this 
year, that is, to build out in some efficient way a national 
interoperable communications network for first responders, and 
oh, by the way, while you are at it, I hope you will also 
consider some brilliant legislation that Mr. Shimkus and I 
introduced last year and that I hope he will take the lead on 
reintroducing this year called the Next Generation Public 
Safety Device Act, the point of which is to create a real 
competition for devices to use in this emergency space that 
will provide the users with much better performance at a much 
more competitive price.
    So having said that, I would like to ask the commissioners 
each of you whether you are ready to give me these wonderful 
and important national gifts as I depart the Congress.
    Mr. Genachowski. Well, we are--if I may, we really are 
going to miss your leadership on this committee and in 
Congress, particularly on these issues. Getting a mobile 
broadband public safety network built, it should be one of the 
country's top priorities. Now, it will require funding to build 
it and so we are ready as a Commission, I think this is true of 
all of us, to work on a bipartisan basis with everyone to 
support whatever legislation is necessary to move forward. We 
have begun to move forward on the interoperability piece. We 
want to be ready. But you are absolutely right that this is a 
major challenge for the country.
    Ms. Harman. Well, let me just add, Mr. Chairman, that I 
tend to favor the auction concept because I think it will 
generate funding and it will also push innovation. I think that 
the private sector has marvelous ideas to offer the public 
safety sector.
    Mr. Genachowski. I would just say, there are several 
different ideas that are now in circulation, in debate. They 
should be discussed, resolved quickly----
    Ms. Harman. Hear, hear.
    Mr. Genachowski [continuing]. So we can focus on what gets 
a mobile broadband public safety built quickly.
    Ms. Harman. Mr. Copps?
    Mr. Copps. Well, first of all, thank you very much for the 
opportunity to respond. Your leadership on this--you and I go 
back a long way in fighting for this issue, and I think maybe 
the time is nigh when we are actually going to get something 
done. I just sense that there is a willingness to move ahead. 
We have to be practical and pragmatic how we do that, but I 
think this is the year in a bipartisan because it is not a 
bipartisan issue to get done. As my old boss, Senator Fritz 
Hollings, reminded me many, many times, the safety of the 
people is always the first obligation of the public servant, 
and you have certainly met that obligation often and well, and 
I certainly will miss your leadership on this and a whole range 
of other issues but certainly look forward to the great work 
you will do at the Wilson Center and to continuing our 
friendship after you leave these hallowed halls.
    Ms. Harman. Thank you so much.
    Mr. McDowell?
    Mr. McDowell. I think an auction is the best way to raise 
the maximum amount of revenue for the Treasury to help fund 
this. In the meantime, the FCC has granted waivers to 20 
jurisdiction so the L.A. area, the D.C. area, for instance, are 
covered in that regard but great swaths of the country are not.
    Ms. Harman. Well, let me just, If I might, on those 
waivers, while I favor that and thank you very much, I worry 
that we may be building regional interoperable networks that 
will not be interoperable nationally and so it is critical, I 
think, to have some common rules of the road and also to focus 
on the devices that are used in these regions.
    Mr. Genachowski. And if I may, we share that concern and it 
is why we are working together on interoperability and why we 
are moving in that proceeding to make sure that we don't end up 
with that problem.
    Ms. Harman. Thank you.
    Mr. Chairman, can the last two witnesses answer my 
question?
    Mr. Walden. Absolutely, yes. Of course.
    Ms. Clyburn. Again, thank you for your service and I look 
forward to more and better to come in your new capacity.
    I too, you know, being from a State that is very vulnerable 
from a weather perspective, I too think that this is way 
overdue, long time coming. While I know you have some concerns 
about those waivers, those waivers give us a better pathway 
forward. They let us know in very small, relatively small 
footprint some of the challenges that will lie ahead. So that 
type of flexibility does have its advantages and I am looking 
forward to a better and more robust interoperable system.
    Ms. Baker. I agree with all my colleagues about the 
comments on your leadership and your advocacy, and I very much 
hope that your legacy is that we will get this done in the 
window of opportunity that we have right now while 4G networks 
are being built out, so thank you.
    Ms. Harman. Thank you very much. I yield back, Mr. 
Chairman, but I will look forward to this giant gift of a 
national interoperable network and a competitive system to 
develop devices all wrapped up with a bow by December 2011. 
Would that be all right with you?
    Mr. Walden. As long as you stay here on the committee. I 
appreciate your service on the committee, Ms. Harman, and your 
service on the Intelligence Committee too. You have been a real 
leader and we will miss you.
    Ms. Eshoo. If I might, I hope it will be by the anniversary 
and not December but by September 2011.
    Mr. Walden. We will have some further discussion about D 
block and broadband plans and money and the access and where we 
go from there before this committee at some point in the not 
too distant future but we are going to try and stay on net 
neutrality today for the most part.
    Mr. Kinzinger, we recognize you now for 5 minutes.
    Mr. Kinzinger. Thank you, Mr. Chairman, and thanks for 
coming out to see us and all the patience you are having to put 
in. I know it is not always overly enjoyable to sit there for 
2\1/2\ hours or more and answer questions. Some of them are the 
same.
    Let me just ask a few, kind of express a few concerns I 
have, ask a couple of questions and then we will move because I 
don't want to rehash a lot of the old stuff. But let me just 
say, in 2003 I think it was 15 percent of Americans had access 
to broadband technology. As of 2010, it is 95 percent. So as I 
look over the stretch of just 7 years, I see an extreme 
flourishing of what we see in technology today in just one 
decade. I mean, when you even look through history, you are 
going to see that this--I mean, this is a relatively short 
period of time. I am glad--you know, I often wonder if I could 
go back 15 years or 10 years or whatever to the FCC 
commissioners and ask them what do you foresee as challenges 
and how can you respond to that right now because of these 
potential challenges that are coming. I actually fear what they 
might come up with as solutions for what they could potentially 
see as a challenge that doesn't fully exist yet.
    That is what I see when I look at the net neutrality issue 
is, OK, well, we see potentially what could happen so let us 
preemptively pass this law without really not passing a law 
because Congress isn't even approving of this, and it is that. 
I mean, look, I am a pilot. That was my job before this. I 
still love flying airplanes. I love the idea that some day we 
may have flying cars. I think that would be great. We could get 
around all this traffic. But I don't think it is appropriate 
for the transportation department to now take a look at when we 
have flying cars and go ahead and implement rules for when that 
is going to happen. That is a concern I have.
    And, you know, beyond the issue, beyond the merits of the 
issue and all that, where we have a lot of heartburn and where 
again a supermajority of Congressmen in the last Congress, the 
111th, not even this one, which significantly looks different 
now, but when a supermajority basically stand up and say we 
don't want this or we have concerns about this, where I think 
the heartburn is not so much in the rule, we can talk about the 
rule, you know, I disagree and all that, but is the fact that 
three of the five commissioners felt that you had the authority 
to go around Congress implementing this rule, knowing very well 
if you think it exists on its merits, there can be an effort to 
talk to all of us about the importance of net neutrality and we 
will be sold on these great merits and we may pass it out of 
the House of Representatives and you can do whatever you want, 
but that didn't happen. In fact, I have heard from a few 
concerned that well, we think it is going to hold up in court. 
OK. You ought to be real sure. ``We are pretty sure we have the 
authority to do this.'' You ought to be real sure you have the 
authority, and if you don't have the authority to do it or you 
are even questioning whether you have the authority, why not 
come to the people's house and ask for it? If it can stand on 
it merits, we will give it to you. So that is my thoughts.
    Let me ask, and this will be basically my final question so 
I may give you all mercy and not to have to stay here the whole 
5 minutes of my questioning. But as I look through these 
concerns, and right now on the Floor of the House of 
Representatives and for a few weeks going forward we are going 
to talk about--actually a few years going forward we are going 
to talk about budget issues. We are going to talk about how 
much money this government spent that it doesn't have. You are 
seeing amendments talking about where we can't spend money and 
all this. That is a very big concern.
    My question is, how much money--and, Chairman, I will ask 
you this. You may not have the number. I would love to get it 
if you do eventually. How much money has this already broke 
government spent in the Comcast v. FCC case and how much do you 
see that you will potentially spend in defending the Verizon 
appeal? I will just ask that, if you have a number of how much 
money that the government spent that we don't have in defending 
something that frankly has been implemented without the 
authority of Congress.
    Mr. Genachowski. I don't have a number but we will work on 
answering your question, and to your larger point, which I 
completely respect, we continue to be available as a resource 
to work with Congress on legislation that would provide 
certainty and address issues around broadband, and so that is 
our job and we look forward to being a resource to Congress.
    Mr. Kinzinger. And I hope as new issues come up and new 
concerns you have, if you are questioning whether or not you 
really do have the explicit authority that you would take that 
route, and I think all of us on this subcommittee would be 
happy to work with you in discussing the pros and cons.
    So at that, I will yield back and I thank you for your 
time.
    Mr. Walden. The gentleman yields back his time. We go now 
to Mr. Towns for 5 minutes.
    Mr. Towns. Thank you very much, Mr. Chairman and the 
ranking member, for holding this hearing.
    Also, let me say to my colleague, Ms. Harman, we are 
definitely going to miss her, and I have taken this sort of 
somewhat personal because I returned to the committee and you 
leave the committee, but we will miss you, and it has been 
great working with you over the years.
    Let me say first of all, Commissioner Genachowski, I heard 
your opening statement and you mentioned jobs, and I think that 
one thing today more than anything else is that we need to 
focus on jobs. I mean, people are unemployed. Many of them 
attended the most prestigious universities in this country but 
now have no jobs. So let me ask you, how can we bridge the 
digital divide and encourage greater access to technology in 
economically disadvantaged areas where it is lacking? With the 
speed in which technology is developing, what action has the 
agency taken or planned to take in the future to make sure 
those left behind by our economy are part of this innovation 
generation?
    Mr. Genachowski. This is a very significant issue. There 
are 24 million Americans who don't have any broadband 
infrastructure at all and then there are hundred million 
Americans, about 33 percent of the population, who haven't 
adopted broadband and the number of Americans who don't have 
basic digital tools and skills and literacy to participate in a 
digital economy is way too high. There is no silver bullet to 
solve this. We are working on a series of initiatives, some 
together with other agencies, some looking at our programs that 
have addressed similar issues in the telephone era. It is an 
area where I think there is great opportunity for public-
private partnerships because every new subscriber benefits 
these broadband goals and also benefits the infrastructure 
companies that are signing people up, so I acknowledge the 
importance of this issue and look forward to working with you 
on it.
    Mr. Towns. Thank you very much, because when we leave 
people behind, it does not make us more competitive.
    Commissioner Copps?
    Mr. Copps. Thank you very much for your question. You know, 
there was a time, historically speaking, when one-third of the 
Nation was ill-housed and ill-clad and ill-nourished when 
Franklin D. Roosevelt was President of the United States and we 
all were very concerned about that. Now we have a situation 
where one-third of the country are not having access or to 
being able to take advantage of access to this liberating 
technology. That should certainly put this whole problem at the 
top of our list or close to the top of our list of national 
priorities and making sure it goes to every American no matter 
who they are, where they live, the particular circumstances of 
their individual lives, white or black, rich or poor, city or 
country. That has got to be the policy. That the universal 
service policy we need to design.
    Mr. Towns. Thank you very much.
    Mr. McDowell, Commissioner McDowell?
    Mr. McDowell. Yes, sir. Actually in our work since the 
chairmanship of Michael Powell on the unlicensed use of the 
television white space is one area where this can be 
particularly helpful, and Chairman Genachowski deserves great 
credit for continuing to move that ball down the field. But 
unlicensed use of this fabulous spectrum will really speed 
deployment and make things more affordable. Also, it will help, 
a release valve should there ever be sort of anticompetitive 
behavior in the last mile, and this is an antidote to the 
concerns that net neutrality proponents have.
    But as with WiFi, nobody had heard of WiFi on Friday but 
Monday it was everywhere practically. So I think with white 
spaces, that is going to help tremendously for affordability, 
access and adoption.
    Mr. Towns. Is there anything here we need to do on this 
side of the aisle, as Members of Congress to help move this 
forward?
    Mr. McDowell. White spaces in particular?
    Mr. Towns. Yes.
    Mr. McDowell. Well, I think we are good on that as long as 
we can move forward. I think the spectrum reallocation 
legislation is causing some concern. I was just telling 
Congresswoman Eshoo, I was just in Silicon Valley in her 
district a few weeks ago and until we know whether or not the 
incentive auction legislation is going to pass and become law, 
chip makers and software designers are withholding their work 
until they can know how to innovate and how the spectrum is 
actually going to be used. So the sooner Congress can have 
resolution one way or the other on the incentive auction idea, 
I think that would be fabulously helpful.
    Mr. Towns. Commissioner Clyburn?
    Ms. Clyburn. Thank you, Congressman. I think about this. I 
wrote down three things that came to mind: affordability, 
availability and education. You touched on those. One thing 
that was great about the National Broadband Plan is that it has 
forced us to concentrate on those challenges, the challenge of 
that 5 percent was mentioned that is not served right now, the 
challenge of literacy issues which translate into digital 
literacy issues that you asked how possibly Congress could 
help. When things get better--I know things are a little tight 
budgetarily now--we put forward--well, the National Broadband 
Plan talked about a digital literacy core. That is something 
that these digital navigators could come in these communities 
to help educate and augment the experiences of people. 
Availability and affordability--I know time is short. Those go 
hand and hand, and there are a number of things happening. We 
talked about a major transaction that just took place. There 
are a couple of things that are being offered that I hope are 
replicated: affordable, under $10 a month, high-speed Internet 
access. That is coming, that is possible, can be replicated. 
Support for equipment, which is another barrier to entry, that 
is an important barrier to entry, affordability from that 
perspective. That is coming. That can be replicated. And 
availability in terms of the infrastructure, the things that we 
could put forward to encourage infrastructure development, that 
is here now and we look forward to working more with you to 
encourage that to continue.
    Mr. Towns. I know my time is expired, but being I am new to 
the committee, can Ms. Baker answer as well?
    Mr. Walden. We will go ahead and do that.
    Ms. Baker. I agree with everything that my fellow 
commissioners have said. We have done relatively well in 
deployment. We want faster, broader, bigger, better networks to 
be built but some of the focus we really need to do is on 
adoption. The only thing I would add is that we figured how to 
reach consumers for the first time during the digital 
television transition, and I think if we could revisit some of 
those public-private partnerships to focus since it is not a 
one-size-fits-all problem that we can really use those 
partnerships to focus on bringing more people to the Internet 
as it becomes very much critical infrastructure.
    Mr. Towns. Thank you, Mr. Chairman, for your generosity.
    Mr. Walden. You are welcome, Mr. Towns.
    Now we go to Mr. Rogers from Michigan for 5 minutes.
    Mr. Rogers. Thank you, Mr. Chairman. Good morning, and 
thank you for your time today.
    Mr. Chairman, we all know that the Internet regulation in 
your order regulates Internet service providers, but how does 
this impact content providers from discriminatory actions?
    Mr. Genachowski. Are you asking about intellectual property 
issues?
    Mr. Rogers. Well, companies like Google and Skype and other 
companies are not impacted by your order. I am just curious if 
you believe that the ISPs are conducting some discriminatory 
action, which you claim they are not. Is that correct?
    Mr. Genachowski. There have been instances of 
discriminatory conduct.
    Mr. Rogers. OK. So how do you prevent in this order 
discriminatory conduct for content providers?
    Mr. Genachowski. Historically, this issue, the open 
Internet protections that have been in place since 2005 have 
been focused on the Internet service providers, and that is 
good reason. That is fundamentally where the Communications Act 
points us to companies that----
    Mr. Rogers. I understand, but this particular order does 
not impact content providers.
    Mr. Genachowski. Correct.
    Mr. Rogers. Yes? That is correct?
    Mr. Genachowski. Yes.
    Mr. Rogers. In your December 21st press release, you 
describe, and I quote, ``The Internet has thrived because of 
its freedom and openness, the absence of any gatekeeper 
blocking lawful uses of the network or picking winners and 
losers online.'' But I am curious. When I read the order, 
aren't you merely making the government the gatekeeper in this 
particular case?
    Mr. Genachowski. Not at all. With respect, I don't think 
that is what we are doing. We are simply saying that certain 
conduct by the companies that do control access to the Internet 
aren't consistent with Internet freedom and shouldn't be 
permitted, and companies have----
    Mr. Rogers. Which means you are the gatekeeper because you 
are the sole determinant of that.
    Mr. McDowell, you wrote a dissenting opinion that 
basically, I don't think you used the word ``gatekeeper'' but 
can you help me understand? I clearly believe the government is 
going to make those decisions about who is and who is not on 
access.
    Mr. McDowell. It all boils down to the word ``reasonable'' 
and how three FCC commissioners will define that term on a 
case-by-case basis. So when we talk about price tiering, for 
instance, there are some advocacy groups who have pushed for 
net neutrality rules who are worried about price tiering as 
somehow being discriminatory, and it is discriminatory but not 
in a bad sense. What this actually does, it allows low-income 
users, for instance, to have a price they can afford for, let 
us say, wireless services provided by Metro PCS. But is that 
reasonable? That is going to be determined by three FCC 
commissioners.
    Mr. Rogers. It certainly opens the standard. They were 
talking about applications and the next generation of Facebook, 
but just because nobody wants to buy my particular product or 
app, I find it unreasonable that I don't have some unusual 
access to the Internet. Could I bring a case like that to the 
Commission?
    Mr. McDowell. I think under the logic put forward in the 
order, the Commission has boundless authority and you could 
bring such cases. The Commission basically says it has 
authority for direct economic and indirect economic regulation 
but is choosing not to go to certain places, but it could, it 
said in the order.
    Mr. Rogers. I have met no inventor of any application that 
didn't think that this was the one that should make it. That is 
why we have thousands and thousands of applications, and I am 
stunned by these very polite terms of ``light touch,'' of 
regulation, but what we are doing is creating the government as 
the gatekeeper for the Internet for the first time in its 
history after it has exploded with innovation, and you use 
Facebook as your term for the future but Facebook was there 
before you got there and so was Netscape and so was Google and 
so was YouTube and it explodes and it is fantastic, and for the 
government to step in and get the keys to the gate scares me to 
death.
    I will ask you this, Mr. McDowell. Was this a controversial 
order, I mean, given the sense that 300 Members of Congress, 
yes or no?
    Mr. McDowell. Yes.
    Mr. Rogers. Have you ever seen in your time--well, actually 
I am going to ask Mr. Copps. You have been there 10 years. Have 
you ever done such a controversial order the week before 
Christmas at the change of a Congress where there was going to 
be a power switch in the body? I mean, a lot going on, a lot of 
chaos. This is major. It is controversial. Have you ever seen 
that in your 10 years on the Commission?
    Mr. Copps. Yes, I have.
    Mr. Rogers. Oh, really?
    Mr. Copps. I have seen it a couple of times with regard to 
media ownership, the newspaper broadcast cross-ownership, a 
number of other things where----
    Mr. Rogers. Where we were in such a hurry that you didn't 
feel you needed a full market survey?
    Mr. Copps. Yes, sir.
    Mr. Rogers. Wow. Interesting.
    Ms. Baker, you described that the market surveys before, 
the European Union, not known for its bashfulness about 
regulating anything if it moves, what was their determination 
on regulation of the Internet in relation to this?
    Ms. Baker. The European Union took a look at this and 
actually said what we need to do is have a transparency, a very 
consumer-friendly transparency approach so that if there is a 
problem there, we would be able to address it. So in some 
regards, we took a much more regulatory approach than the 
European Union.
    Mr. Rogers. So the French even argued that we have gone too 
far. Interesting.
    Mr. Walden. The gentleman's----
    Mr. Rogers. I see my time is expired. I look forward to 
another round of questions, Mr. Chairman.
    Mr. Walden. I now turn to the gentleman from Washington, 
Mr. Inslee, for 5 minutes.
    Mr. Inslee. Thank you, and thank you, Mr. Chair and Ranking 
Member Eshoo, to allow me to participate in this. I think this 
is very important and I appreciate the Commission's work on 
this effort because I really do believe the Internet does run a 
risk of becoming the Outernet if we don't protect Americans' 
access to it, and I say ``Outernet'' because you will be out of 
luck if your service provider decides that they want you to go 
to their content provider that they have struck a deal with or 
they have struck a merger with rather than what you want to go 
to on the Internet. And anyone who doesn't understand that 
threat doesn't understand the enormous commercial interests in 
cornering lanes of this freeway.
    Now, everyone has a metaphor. I will just tell you how I 
look at it, and that this is a freeway, and the risk we face is 
that individual entrepreneurs out of commercial instinct will 
and do the control the on lanes to the freeway. Now, I don't 
know how my Republican colleagues think about it but I will 
tell you, if some commercial entity today put down gates on I-5 
on the Mercer Street entrance to Interstate 5 in Seattle, 
Washington, and said you couldn't go past that gate unless you 
agreed to go to my favorite shopping center, I will just pick 
Walmart for a minute, not that there is anything bad about 
Walmart, instead of Costco, which my competitor has a deal 
with, and that is the risk we face. We face people putting 
gates on this freeway if you don't go to my favorite shopping 
center that I have struck a deal with as a service provider.
    And I want to thank you for your work on this, but I do 
want to ask you about some concerns because I think there are 
some things we need to continue to explore, and one of them I 
have a principal interest in is how we prevent this from 
happening in the wireless space because we know so much is 
going to the wireless space, and I guess I do have a concern 
that we have acted in the wired space which you can think of a 
little bit as yesterday but not in the wireless space, which I 
think of as tomorrow, which is going to be the future of this 
thing. I hate to think we did the right thing in the wired 
space but not in the wireless. I just wondered, Mr. Copps and 
Mr. Chairman, and if you could both address that concern, what 
the options may be for us, I would appreciate it.
    Mr. Copps. Well, for my part, I would agree and express 
some concern about that because in many ways I think wireless 
is now too where lots of people are cutting their lines and 
taking the wireless and accessing broadband that way too. I 
understand that there are differences, and when you implement a 
network neutrality rule, you have to be cognizant and sensitive 
to those differences in how you proceed but I think the 
principle should apply and the rule generally should have 
applied.
    If I can just say one more thing real quickly, I really 
appreciated your illustration of the I-5 example that you used 
because I was sitting here thinking during much of the 
discussion, the last great infrastructure build-out that this 
country was the interstate highway system, and we made darn 
sure there were on ramps and they were open, and all this talk 
about oh, it is prospective and all, we put safety precautions 
on there prospectively. We put speed limits on there 
prospectively. There is nothing wrong with doing things 
prospectively, particularly when you are talking about 
safeguarding such a transformative infrastructure as we are 
talking about here.
    Mr. Genachowski. Well, I would just add that I agree that 
the importance of mobile access to the Internet is growing 
every day. In the order we adopted, we did take steps to 
promote Internet freedom, the transparency provisions, no 
blocking. We also wanted to be cognizant about some of the 
differences between wireless and fixed and it is something that 
we will continue to pay attention to and do what we can to make 
sure that Internet freedom is protected on mobile Internet 
access as well as fixed.
    Mr. Inslee. Well, there may be some challenges in wireless 
but I hope you all will consider them because we hate to create 
a safety system for the horse-and-buggy day but not for the car 
day, and I think that is kind of the transition we are in.
    Any of the other commissioners, if you would like to 
comment, feel free.
    Ms. Clyburn. Yes, Congressman. I too do not want the 
development of two separate worlds, one wired and one wireless. 
Increasingly, individuals cutting the cord, as my colleague 
said, is approaching 30 percent, especially in communities that 
might have economic challenges that have to choose which 
direction to go, and interestingly enough, certain communities 
only access the Internet because this is the only affordable 
means with these mobile devices. So it is important that their 
experience is as robust as those in the wired world, and I 
share your concerns and again, there is no presumption that 
these open Internet rules do not apply. They do apply in this 
space.
    Mr. Walden. The gentleman's time is--go ahead and finish.
    Ms. Baker. I was going to say that this isn't really a 
question of politics or philosophy, it is actually a question 
of physics, and then there are actual technical parameters that 
justify this decision. None of us want--you know, consumers are 
the ones that don't benefit if their phones don't work. I got 
into a cab the other day. He was streaming CNN on his iPhone, 
which I thought was really great, and then I thought actually 
you are the reason why I can't make a phone call. So I think 
there are technical parameters that we need to work with that 
actually exist in the wireless world that justify this 
distinction.
    Mr. Inslee. Thank you.
    Mr. Walden. The gentleman's time is expired. We will now go 
to the gentleman from New Hampshire, Mr. Bass, for 5 minutes.
    Mr. Bass. Thank you very much, Mr. Chairman. I had the 
honor of serving in this body for 12 years, and on this 
committee for six, and now as a returning Member of Congress, I 
am learning a lot as a new freshman. One thing I learned today 
is don't be late to the beginning of a subcommittee hearing. We 
are hitting exactly 3 hours now, and to the credit of the chair 
of the committee and the subcommittee chair, that is without 
opening statements.
    It is a very interesting debate that we are having here 
today. My ancestors lived in southern New Hampshire for many, 
many generations. We have correspondence between my great-
grandmother and the Keene Coal Company trying to figure out a 
way to run an electric line and a phone line actually later 
from Keene over to Peterborough. There was nothing there. And 
so when we developed the utilities that we have today, they 
were done because there was no other way for that build-out to 
occur. We did not get rotary dial in my hometown until 1964, 
and you had to sneak another phone into your house hoping that 
somehow Ma Bell wouldn't be able to tell that you were doing 
this. This was a world of enormous regulation and there was 
good justification for that.
    And I understand that the nature of this debate basically 
surrounds the issue of free markets and differing definitions 
of what freedom is and what context it belongs, and I am 
solidly on the side of those who believe that is a dangerous 
precedent to begin a whole new round of regulation for very 
different reasons, in my opinion, from those which we had in 
early days when the utility business was just getting 
established: rail, electricity and telecommunications.
    Now, having said that, Mr. Chairman, if I could ask for 
unanimous consent to add to the record a paper I have here by 
former Solicitor General Seth Waxman stating that Internet 
access service was never regulated as a telecommunications 
service.
    Mr. Walden. Without objection.
    Mr. Bass. Thank you.
    [The information appears at the conclusion of the hearing.]
    Mr. Bass. Commissioner McDowell, by the way, thank you for 
coming to visit me, and also Commissioner Clyburn, and I 
believe one of the other ones if you came as well but I was not 
here and I am most apologetic for that, and I welcome you all 
to come.
    Commissioner McDowell, some individuals continue to claim 
that the retail provision of Internet access service was once 
regulated as a telecommunications service. My understanding is 
that the FCC has never regulated such service. Wasn't this the 
genius that led to the explosive growth in the Internet as 
Chairman Kennard pointed out when he led the Commission?
    Mr. McDowell. Absolutely. In fact, if you look at the back 
of my dissent, you will see a letter that I filed with this 
committee last spring outlining sort of the history of the 
regulation of Internet access services and broadband in 
particular, and it has never been regulated as a phone company 
under Title II.
    Mr. Bass. Commissioner McDowell, the order that we have 
been debating this morning claims that network neutrality is 
needed to protect small upstart Internet companies, but aren't 
smart upstarts precisely the companies that might want to enter 
into specialized business arrangements with broadband providers 
so that they can compete against the great content providers--
we know who they are--and ironically, is it possible that this 
order might protect the web incumbents in the end?
    Mr. McDowell. It could. I think this order creates a lot of 
confusion in the marketplace and we are seeing the market 
respond in a lot of confusing ways.
    Mr. Bass. And lastly, Commissioner McDowell, the 
Commission's jurisdiction seems to be evolving. While the 
Commission has deregulated in certain areas--unbundling, cam 
armus reporting, cable price regulation--the agency has at 
least proposed regulations in new areas which we debated this 
morning--network neutrality, all vid, data roaming. What do you 
view as the Commission's core responsibilities? And I know this 
is a leading question. Has in your view the Commission strayed 
from those core responsibilities?
    Mr. McDowell. Well, our core responsibility by statute is 
given to us by Congress, and that is to protect the public 
interest, and I think the public interest is best served 
through competition, so as Commissioner Baker pointed out 
earlier, the best antidote to regulation is to have more 
competition for broadband services, and in my 4\1/2\ years on 
the Commission, that is what I have worked toward, whether it 
is making easier to get competitive fiber on the ground, 
freeing up more of the airwaves for either licensed or 
unlicensed use, etc., let us have more competition and that 
obviates the need for regulation.
    Mr. Bass. Thank you. I yield back, Mr. Chairman.
    Mr. Walden. The gentleman's time is expired. We will go 
into round two now, and I will lead with that.
    Chairman Genachowski, did you or any of your staff or any 
senior FCC officials explicitly or implicitly indicate to any 
members of industry that if they opposed your order, the FCC 
might move back to Title II approach or decide other 
proceedings of interest to them differently?
    Mr. Genachowski. No.
    Mr. Walden. OK. Chairman, have you adopted industry-wide-- 
you have adopted industry-wide net neutrality rules. Why was it 
appropriate to add network neutrality conditions to the 
Comcast/NBC Universal order, and if you are so confident of 
your authority, which we question obviously, why was it 
necessary to make those conditions continue to apply even if 
the network neutrality decision is overturned in court?
    Mr. Genachowski. All the conditions in the Comcast case, 
particularly that one, were transaction-specific. That 
particular transaction involved the country's largest Internet 
service provider combining with a very large content company. 
We certainly had a lot of information in the record of that 
transaction about the incentives to favor their own online 
content and disfavor others, and so having a condition relating 
to open Internet was a transaction-specific condition that I 
personally felt was very important.
    Mr. Walden. So I go back to something that the chairman 
emeritus, Mr. Dingell, referenced, his words, speaking of bank 
holdup methods. Look, I was a licensee for 22 years. The last 
thing you ever want to do is poke any of you in the eye because 
you might have another proceeding coming, and I have spoken to 
most of you directly about my concern about agencies that use 
that opportunity to effect policy over which they don't have, 
we believe, authority, and I find it interesting too that on 
the D block discussion, you have chosen to back off on doing 
what the law explicitly calls on you to do, which is auction 
the D block, because Senator Rockefeller and others have 
expressed concern. In this area, roughly 300 Members of the 
House said we don't think you have the authority but you chose 
move forward on that rather expeditiously at the closure of the 
year, so that is a subject that will continue to be of concern 
and focus on.
    I want to go back to the section 706 issue upon which is my 
understanding you based the decision to move forward with the 
net neutrality rules, and in 706(b) in the inquiry portion of 
that, the question arises, if the Commission shall determine 
whether advanced telecommunication capability is being deployed 
to all Americans in a reasonable and timely fashion, and I 
suppose the debate here is, what is reasonable and what is 
timely. In the FCC broadband plan that you put forward, you 
indicate that 95 percent of Americans have access to the 
Internet. The President now calls for 98 percent. And two-
thirds of Americans choose to subscribe, and we have gone from 
8 million subscribers to 200 million subscribers in 10 years. I 
can't think of a service in America that has ever exploded with 
growth quite like that, and that would seem to be both timely 
and reasonable to me. Why isn't it timely and reasonable to you 
all?
    Mr. Genachowski. Well, I think this is an important 
question. I am glad you asked it. There are 24 million 
Americans who don't have any access to Internet because there 
is no infrastructure in their areas, and as you mentioned, 
there are about 100 million Americans who don't subscribe for 
various reasons. Our rankings internationally are not where 
they should be. There is debate about what exactly the number--
--
    Mr. Walden. Right, but we are building out wireless and we 
are ahead of some countries on that.
    Mr. Genachowski. But I would say I respectfully disagree on 
this. I don't think the country is where it should be when it 
comes to broadband, and we have a lot of work to do to make 
sure our broadband infrastructure and adoption is globally 
competitive.
    Mr. Walden. But the issue that arises as a result of making 
that finding that we are not moving reasonably and in a timely 
manner, that is the predicate then that allowed you to trigger 
706 and use that as the crutch to get the authority to move 
forward with the regulation of net neutrality in part.
    Mr. Genachowski. Yes. There are other provisions that we 
relied on that I would be happy to address.
    Mr. Walden. But then it leads to the discussion because in 
706(a) it does talk about allowing State commissions to 
actually set price caps and all that. Now, I have heard today, 
I believe-correct me if I am wrong--that your order does not 
get into setting rates or controlling rates on the Internet.
    Mr. Genachowski. Right.
    Mr. Walden. And yet on page 39, number 67, and on page 43, 
number 76, you do contemplate rate control by saying that you 
can't pay for priority. Isn't that a form of rate control?
    Mr. Genachowski. I don't see it that way and I don't think 
that is how people in the industry see it, but it is the case 
that that kind of prioritization is something that the order 
said was disfavored.
    Mr. Walden. So if you say it is disfavored, that says you 
believe you have the authority to control rates on the 
Internet, correct?
    Mr. Genachowski. I really don't see it that way.
    Mr. Walden. Then how could you find that it is----
    Mr. Genachowski. I think it is fair to say that any order 
in this area that finds certain conduct inconsistent with 
Internet freedom principles would have the effect of saying 
particular transactions aren't permitted, and one could look at 
that and say well, you are saying that transaction----
    Mr. Walden. But you are saying a rate of zero. A rate of 
zero is the rate.
    Mr. Genachowski. Yes. That has been the history of 
Internet.
    Mr. Walden. And another commission could come back and say 
well, we think because all this has been found in part linked 
to 706(b) that indeed you have 706(a) authority to set caps, 
couldn't they? I mean, you don't have that plan, you tell us, 
but----
    Mr. Genachowski. If I could make a couple points, one is, 
the basis for this decision was both in 706, other sections of 
the statute working together and so we didn't address the 
question of whether 706 alone would be sufficient authority, 
and we didn't address some of the questions that you are 
raising because we didn't have to in the context of this 
proceeding.
    Mr. Walden. And the ranking member explained to me I am 
over my time, so I will stop with that even though I have let 
other members go over their time to get your responses. I will 
now turn to the ranking member, my friend from California.
    Ms. Eshoo. You are a gentleman, and I think that I am going 
to have to really stay within my time for having whispered that 
to you.
    First of all, the term ``cops on the beat'' has been used 
several times, and I think the best cop on the best is 
Commissioner Copps. He has been there for the American people 
and the consumer and in the deepest, broadest way understanding 
the democratization of the Internet and protecting the American 
people from forces that would chip away at it, so I salute you, 
sir.
    I want to make a couple of observations because now we have 
just about concluded the hearing. There are some curious things 
that have been advanced during this hearing. My Republican 
friends are questioning having any kind of framework. I think 
it is a light framework. That has been questioned, but that is 
my view. I think it is a light touch. And they don't want any 
of that, in fact, I think are going to be introducing the 
Congressional Review Act so that there is nothing so that it is 
just a flat earth without any on it whatsoever. But they are in 
denial about the past. There is a record from the past. There 
is a record from the past, and there is a timeline. It goes 
from 2005 to this year, to 2011, starting with the Madison 
River Communications blocking VoIP on its DSL network, settled 
by FCC consent decree that included a $15,000 payment, to 2006 
where Cingular blocked PayPal, 2007-2008, Comcast actually 
denied imbedded midst after FCC complaint filed that it blocked 
peer-to-peer traffic, 2008, issues in a study finding 
significant blocking of BitTorrent in the United States 
including across Comcast and Cox.
    So you can go through the record. These things actually 
occurred. This is not in the ether. This is not something that 
has been fabricated. There is a record of violations, and you 
know who those violations against? All of us. All of us and our 
constituents. So our first obligation is to the public, and if 
there is some misplay including any company that is in my 
district, you know what? There has to be a cop on the beat, not 
someone that takes out their stick and clubs someone but there 
has to be rules to the road. Now, if you ignore the past, then 
you don't have a roadmap for the future, and I think that it is 
very important to have these rules.
    Now, another curiosity of mine is about our--and you know 
how respect and regard I have for you, Commissioners McDowell 
and Baker, had the opportunity to remove the open Internet 
conditions on the Comcast merger before they voted but they 
chose not to dissent or object as far as I know.
    Mr. McDowell. Can I clarify that?
    Ms. Eshoo. Just a minute. Let me finish. I am going to use 
my time. So you essentially voted against them before voting 
for them, which is a real curiosity to me.
    Now, there is a lot of talk about markets and companies and 
whatever here today. A good number of them are my constituents. 
I want to ask for a unanimous consent request that all of these 
letters representing the companies, the interests, the very 
interest that are a part of this decision that have weighed in 
and support these rules, and they are also opposed to the CRA, 
and in this packet, which I love, the first one is from the 
United States Conference of Catholic Bishops. They even quote 
the pope. So I might for the record say I think we are on the 
side of the angels here. So Mr. Chairman, with all seriousness, 
I would really like to ask for a unanimous consent request that 
all of these letters be placed in the record. They are Internet 
companies, they are small, they are large, they are in between, 
and they have weighed in. No one has forced them to come 
forward and express any given view. They have offered this, and 
I think it is an eloquent statement about how they view it and 
that this is something that they agree with, so if you would 
grant that request?
    Mr. Walden. Without objection.
    Ms. Eshoo. And then I have--I think I have run out of time, 
so I can't ask any questions, but----
    Mr. Walden. But if you want to allow Mr. McDowell to 
respond----
    Ms. Eshoo [continuing]. Comments remain for the record, and 
I am so glad that we are on the side of the angels, and I thank 
the Catholic Conference of Bishops along with all the 
companies. Thank you.
    Mr. Walden. Do you want to allow Mr. McDowell to respond?
    Ms. Eshoo. Sure.
    Mr. McDowell. Thank you, Congresswoman.
    Ms. Eshoo. Why did you vote that way?
    Mr. McDowell. We didn't vote for the conditions. Actually 
net neutrality is not a condition in the merger. They are part 
of a side agreement. They are commitments in the side agreement 
between the chairman's office----
    Ms. Eshoo. Well, aren't there open Internet rules as part 
of the merger?
    Mr. McDowell. They are not merger conditions, no, ma'am.
    Ms. Eshoo. But they were voluntary. You could have objected 
to them----
    Ms. Baker. There is a----
    Ms. Eshoo [continuing]. If you thought they were so 
onerous.
    Mr. McDowell. They are in a separate side agreement between 
Comcast and the FCC.
    Ms. Eshoo. Did you ever ask them why they would, since you 
find them to be onerous, why they would find the to be 
acceptable? Did you ever question it?
    Mr. McDowell. Absolutely. I think they were desperate to 
get their merger done and they would have agreed to almost 
anything.
    Ms. Eshoo. But did you ask them----
    Mr. McDowell. Yes.
    Ms. Eshoo [continuing]. Why they were--and are you quoting 
them?
    Mr. McDowell. That is pretty much the answer I got. They 
were desperate to get their merger done.
    Ms. Eshoo. Are you quoting them?
    Mr. McDowell. That is a paraphrase.
    Ms. Eshoo. Well, I think there is a difference, with all 
due respect, because I don't think that--that is not the way it 
was presented to me. Yes, Commissioner Baker?
    Ms. Baker. I think that there are--well, there are 
absolutely serious legal differences between conditions to the 
merger and voluntary commitments that a company can make. There 
is a package of voluntary commitments. Some of them have to do 
with diversity. This one is a voluntary commitment that a 
company can make without regard to what he FCC has jurisdiction 
over so by their commitment, it doesn't imply anything to our 
statutory authority over net neutrality.
    Mr. Walden. I am going to have to----
    Ms. Eshoo. Thank you.
    Mr. Walden. Well, we are 2\1/2\ minutes over. Let us go now 
to the chairman of the oversight committee and the former 
chairman of this committee, Mr. Stearns.
    Mr. Stearns. Thank you, Mr. Chairman, and I regret I was 
prevented from being here. We were chairing an Oversight 
Committee looking into Obamacare, and so I just have a 
question. I would like to start with the chairman and just go 
down the line, if I could.
    Mr. Chairman, you obviously succeeded in putting net 
neutrality into Title I, but as I understand, the proceedings 
are still open for Title II. Is that correct?
    Mr. Genachowski. There is a proceeding that is open that 
looks at the effect of the Comcast decision on our authority.
    Mr. Stearns. OK. But I think in the industry, the 
perception is that the proceedings to do this in Title II is 
still there, and so my question is, do you think it should be 
closed down, this proceeding that you have open in Title II? 
Just yes or no.
    Mr. Genachowski. I don't think there is any confusion about 
where we are. It is Title I----
    Mr. Stearns. No, I mean in your opinion do you want to--do 
you think it should remain open or not?
    Mr. Genachowski. I think a proceeding to continue to have 
input our authority is a healthy thing and could benefit----
    Mr. Stearns. Mr. Copps, Commissioner Copps, do you think it 
should be continued to have the proceedings open for Title II?
    Mr. Copps. Yes, I do.
    Mr. Stearns. OK. Mr. McDowell?
    Mr. McDowell. I think it should be closed because I think 
the fact that it is open creates some certainty and shows that 
perhaps the Commission wants to move to a full explicit Title 
II reclassification.
    Mr. Stearns. Commissioner Clyburn?
    Ms. Clyburn. I think that we should stay on this pathway 
and that there is certainty with the decision that we made.
    Mr. Stearns. Commissioner Baker?
    Ms. Baker. If the chairman is serious that we are going to 
stay with Title I, then he should close Title II proceedings.
    Mr. Stearns. Well, I think that is my point, Mr. Chairman. 
I think, as you will agree with me, by keeping this open, it is 
sort of a veiled threat for industry and creates uncertainty 
and gives angst to them because, you know, things could change 
in this proceeding and still open. So I think certainly my 
position is, if you have made your case for Title I, then the 
proceedings should be closed for Title II, and I just think a 
lot of us are a little concerned that it is creating angst in 
the business environment.
    Commissioner McDowell, I think in terms of when they were 
talking about issuing it in Title I, there was some language 
that we don't want to get involved with regulating coffee shops 
and bookstores. But if you actually implement a net neutrality, 
aren't you in effect regulating the Internet in Starbucks by 
doing that?
    Mr. McDowell. Well, as I said before earlier today, there 
doesn't seem to be any limiting principle to the FCC's 
authority under its rule, under its order from December 21st. 
So if there is no limit to its authority, there is no limit to 
its authority.
    Mr. Stearns. So they could be in bookstores, they could be 
in coffee shops, anywhere there is WiFi. Wouldn't you agree?
    So let me just go back to this Title II. The chairman has 
indicated that this D.C. Circuit ruling in the Comcast case. 
Mr. Chairman, is it possible--I mean, you have indicated that 
you want to keep it open because of the Comcast case ruling. 
You might want to elaborate. I will give you a chance to 
elaborate on that to give it more justification because you see 
the two Republicans that say we should close it down. In my 
opinion, you are creating uncertainty. If you went ahead and 
did it in Title I, there is no reason to continue to go 
forward. In fact, I think the chairman of this committee would 
like you to let this committee have the jurisdiction instead of 
you unilaterally doing it, and I think you have indicated to me 
you would like to see us provide that direction. Is that true?
    Mr. Genachowski. Yes. The single best way to have clarity 
and certainty here would be for Congress to look at the 
statute, update it in a way that was appropriate. There are 
issues that have been raised. We certainly would be a resource 
to that. We were supportive of efforts that have occurred over 
time to cause that to happen, and I would continue to work with 
that.
    Mr. Stearns. So under what circumstances would you close 
down the open proceedings under Title II?
    Mr. Genachowski. I have to think about that and get back to 
you, but let me explain. It is not a Title II proceeding. It 
was a neutral proceeding that was launched after the Comcast 
decision to ask questions about our authority and different 
directions that could be gone, all presented in a neutral way. 
As the authority issue continues to be debated, having a 
proceeding open that is a vehicle for comment seems to me to 
make sense. I would be happy to agree to stop debating the 
authority issue and put that off to one side. But again, I 
think we have made our position very clear. I made my position 
very clear in the order in this case that our basis for moving 
forward under Title I is strong and that is a preferable way to 
proceed.
    Mr. Stearns. Would any of the other commissioners like to 
comment on this? Mr. Copps?
    Mr. Copps. Yes. I would like to keep that proceeding open 
while there is uncertainty and there is uncertainty right now 
with how the courts are going to decide, so I don't see any 
reason why that should be closed. I want to keep it open 
because I think there is probably a more solid foundation which 
you and I would disagree you on Title II.
    The third thing I want to say is, address this issue that a 
bunch of bureaucrats has end-run the wishes of the Congress. I 
worked in the United States Senate for 15 years. I am kind of a 
creature of the Congress. I take great pride in the service 
that I had here. I voted as I did on all these things because I 
think I am upholding and implementing the laws that Congress 
passed, and I passionately believe in what I have said here 
today, but I don't want to leave any impression that I am at 
odds with the wishes to Congress or at least how I see the 
wishes of Congress.
    Mr. Walden. The gentleman's time----
    Mr. Stearns. Thank you, Mr. Chairman. Unless any one of the 
commissioners wants to add something, I am done. Thank you for 
your time.
    Mr. McDowell. I would just like to add that I think the 
Title II docket, call it what you will, given the context of 
when it was opened in June of last year in the wake of the 
Comcast court case and given the so-called, the announcement of 
the so-called third wave proposal, which was a Title II 
proposal, that it remains open, it seems, as a contingency plan 
should the courts, or in my view, when the courts strike down 
the FCC's December 21st order under Title I. And so there was 
plenty of certainty in this marketplace until the FCC started 
examining regulating it.
    Mr. Walden. The gentleman's time is expired. Let us go now 
to the gentleman from Pennsylvania, Mr. Doyle, for 5 minutes.
    Mr. Doyle. Thanks, Mr. Chairman.
    Commissioner McDowell, I just wanted to revisit something 
that you said at the end of your comment when we talked about 
the stimulus bill and you said if Congress wanted us to 
implement these rules, we should have acted, and you know, in 
fact, we did in the Recovery Act actually require that. I just 
wanted to read a section from it. It says that ``pursuant to 
this section, the Assistant Secretary shall in coordination 
with the Commission publish non-discrimination and network 
interconnection obligations that shall be contractual 
conditions of the grants awarded under this section including 
at a minimum adherence to the principles contained in the 
Commission's broadband policy statement.'' So I think at some 
point Congress did indicate that we wanted you to move in that 
direction.
    But I want to ask Chairman Genachowski, now, we have heard 
a lot of our colleagues on the Republican side of the aisle 
suggest that the process that you used in the merger and also 
in this open Internet proceeding were unusual and perhaps 
inappropriate, and I want to give you the opportunity to share 
your thoughts on those suggestions. How did the process you 
used differ from past proceedings?
    Mr. Genachowski. Well, I think in both of those 
proceedings, we met or exceeded best practices in the area, and 
so to start with our open Internet proceeding, we launched with 
a notice last year that published the rules, which was a 
positive departure from prior precedent. We received over 
200,000 commenters. We held public workshops available offline 
and online that a number of commissioners, including those who 
disagreed with the direction participated in to make it open. 
We issued requests for further comment as we drilled down on 
particular issues and ultimately we exercised our judgment and 
interpreted the will of Congress and made a decision.
    With respect to the Comcast order, we inherited a situation 
where in past transactions there were just enormous complaints 
about length of time far longer than this took about a 
proceeding that was, well, let me just say it in a positive 
way. We ran a proceeding that was professional, that was 
focused, that specified the issues that we were concerned about 
coming out of a complex and large transaction, and for those 
who say that the parties acted a certain way in advance, which 
I don't believe, and they participated in proceedings up here 
in Congress and said similar things and so did other parties. 
After the transaction was over and they could have said 
anything they wanted, they praised the proceeding as fair, 
timely and thorough.
    Mr. Doyle. And we heard that two of the commissioners 
didn't get the order until 24 hours before. Tell me, how does a 
typical FCC order move forward? Are dissenting commissioners 
part of the negotiation process and when did Commissioners 
McDowell and Baker tell you they would dissent?
    Mr. Genachowski. Well, consistent with our practice, which 
is also a best practice, 3 weeks in advance of a Commission 
meeting, we circulate a draft of an order to be voted on, and 
that kicks off a process of deliberation among commissioners, 
and certainly it is my hope in that setting that everyone will 
reserve judgment until there was a chance for full discussion. 
In this case, unfortunately, I think two of the commissioners 
decided within 12 hours that there was nothing to deliberate 
about or talk about and announced that they would dissent. But 
there continued to be ongoing discussions. There were further 
drafts circulated. As we got closer to the meeting, obviously 
we needed to circulate a draft that had the support of three 
members. I would have been happy, as I think all of us would 
have been, to circulate that as soon as there was agreement of 
at least three members. That agreement occurred on the Monday, 
the day before the meeting, and as quickly as possible after 
that, we circulated that to the full Commission. We took steps 
to make sure that if there were any prejudice from that, 
perfecting a dissent, for example, that the commissioners would 
have the time that they needed to address any issues that came 
up, but there weren't material differences between what was 
circulated then and what had been circulated earlier.
    Mr. Doyle. Thank you. I don't have any other questions, Mr. 
Chairman. Thank you.
    Mr. Walden. I would go then to the gentleman from Texas, 
the chairman emeritus, Mr. Barton, for 5 minutes.
    Mr. Barton. Thank you. I said earlier I was impressed with 
the intellect of the Commission. I must also add too, I am 
impressed with their bladders. I think you all have been here 
for 3-1/2 hours continuously, so that is quite a compliment.
    I want to look at the Title II issue a little bit in this 
round. My understanding is that Title II regulates hard-line, 
monopolistic phone services like we had back in the 1930s 
through the 1960s. I am puzzled why we think that that model 
would be applied to the Internet where we have multiple 
providers. We obviously have a market that functions. We have 
multiple options for individuals to choose. The courts have 
ruled that it is an information service. I just don't see the 
connection.
    Commissioner Baker, can you enlighten me on how I am wrong 
when I look at Title II and I see a different system entirely 
than what we have in terms of the Internet?
    Ms. Baker. No, Mr. Chairman, I think you are entirely 
right. I think it was a contrived way to construe that we might 
have greater authority, which we don't have.
    Mr. Barton. What about you, Mr. McDowell, or Commissioner 
McDowell, I should say?
    Mr. McDowell. As you point out, this was created in 1934 
with the old circuit switched analog voice Ma Bell monopoly, 
and actually those rules were taken from the 19th century 
railroad monopoly regulations. So I don't think it fits the 
architecture of the Internet which really defies top-down 
authoritarian control, so I think it would be a mismatch.
    Mr. Barton. Well, to be fair, I should give the chairman an 
opportunity here. Chairman Genachowski, what is wrong with my 
analysis of Title II?
    Mr. Genachowski. Well, as you know, we decided, and I 
believe that proceeding under Title I was the right way to go. 
The only note that I would make in this discussion is that no 
one at the Commission had suggested a full-blown Title II 
approach. There was an approach----
    Mr. Barton. The gentleman to your left said----
    Mr. Genachowski. Let me--some suggested that the Title II 
mechanism that was used and is used for mobile voice could make 
sense but we listened, we looked at the record, we got input 
from Congress and others and decided to pursue a Title I 
direction.
    Mr. Barton. And I am not going to ask Commissioner Copps 
because he has already pointed out, he spent 15 years in the 
Senate and he could certainly filibuster that question for the 
next 2 minutes of my time but I will give him an opportunity in 
writing to respond.
    I want to go to Commissioner Baker for my last question. 
This is a question that the staff has prepared. It just goes to 
show that sometimes I can take direction here. Commissioner 
Baker, the order that we are discussing today, the net 
neutrality order, relies on section 706 for authority. Isn't 
section 706 about removing barriers to infrastructure 
investment and won't network neutrality rules deter investment, 
and hasn't the FCC in the past said that section 706 is not an 
independent grant of authority?
    Ms. Baker. Well done. Yes, Mr. Chairman----
    Mr. Barton. I can read.
    Ms. Baker. Yes. I think that this is an attempt to twist a 
14-year-old deregulatory policy statement into a direct grant 
of authority, and 706 does not constitute an independent grant 
of authority. Section 706 is about broadband deployment, and 
the FCC has no authority to erect obstacles in the name of 
removing them, so I think that we have completely misguided 
basing our authority here on 706. You have to keep in mind that 
section 706 is really the centerpiece of all broadband and 
Internet regulation going forward. It was actually a footnote 
in the 1996 Act. So this is an odd place for us to hang our hat 
on such an important and intrusive regulatory change.
    Mr. Walden. Mr. Chairman?
    Mr. Barton. I am going to yield the time to the 
distinguished----
    Mr. Walden. You are kind. I don't know if this even 
requires unanimous consent but I will ask for it. We have a 
vote on the Floor, and what I was thinking was, if we did two, 
two and two, we have three members here, we could get everyone 
in who has stayed around. If you can do less than that, do it.
    Mr. Terry. One minute for a question and one minute for an 
answer, I was thinking.
    Mr. Walden. Make it 20 seconds on the question. I recognize 
the vice chair.
    Mr. Terry. All right. And I am going to read it, but I 
actually wrote this question.
    Today, the broadband provider's business model offers tiers 
based on speed and size, for example, 7 megabits is less costly 
than the 10-, 15- or 20-megabit package or tier. So the 
question is, is a tiered system of size and speed unreasonable 
discrimination?
    Mr. Genachowski. The answer is no. We said so in the order 
and it was one of the ways that we brought certainty to the 
area and will boost investment in infrastructure.
    Mr. Terry. Does anyone else want to comment on that?
    Mr. McDowell. I think it is contradicted in the order by 
the ban on paid prioritization, so if you are consumer and you 
want a burst of speed to download a movie, you don't want to 
pay 24 by 7 for a big, fat broadband pipe, right? It is not 
cost-effective. Would that order prohibit that? Is that a form 
of tiering, paid prioritization? It gets confusing very 
quickly.
    Mr. Terry. OK. Thank you.
    Ms. Baker. I would agree. Our regulation was kind of clear 
as mud on that, so why don't you bring a declaratory ruling 
proceed to the FCC and we can decide. I am being sarcastic 
but----
    Mr. Terry. Micro Trend----
    Ms. Baker [continuing]. An awful lot of applications, what 
is the Kindle, what is the Garmin, what is Google voice and the 
next generation of the Facebook, what are these items, are they 
OK. I think the answer from our ruling is that you can either 
bring a complaint process or you can bring a declaratory ruling 
and we can tell you whether it is OK.
    Mr. Walden. We are going down to the gentlewoman from 
Tennessee for no more than 2 minutes.
    Ms. Blackburn. Thank you, Mr. Chairman.
    And I just want to go back to where I was with Ms. Clyburn 
in the first round. It is frustrating to us when you all 
mention that you have done market analysis but then there is 
not market analysis that would meet the OMB standards. You 
cannot point to a market failure. And that is frustrating, so 
if there is analysis that you want to submit to show how you 
came to these conclusions, I think that it would be important 
to do so.
    Chairman Genachowski----
    Ms. Clyburn. The chairman has committed to do that.
    Ms. Blackburn. OK. Thank you.
    And I apologize. We have had multiple hearings going on 
this morning. Mr. Chairman, you and I were out at CES last 
month, and I know you walked the same floor I walked. You 
talked to a lot of those innovators and a lot of those guys 
were out of Tennessee. They are working on health IT. They are 
working on digital music platforms. They are working on content 
distribution. AOL is moving their content headquarters into 
Nashville. Now, what I am hearing from a lot of these 
innovators at home and when I am out and about is hey, what is 
this business about having to seek permission from the FCC, are 
we going to have to go to them before we innovate, what is the 
chairman expecting us to do, are they going to tie our hands, 
what is this about anybody can object, they can go file a 
complaint while we are in the innovative process. This is the 
type uncertainty that stifle job creation.
    And Mr. Chairman, I don't know if anybody has submitted 
this Phoenix study for the record but I think it is excellent. 
When we talk about----
    Mr. Walden. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mrs. Blackburn [continuing]. Models that show how many jobs 
are created, indirect job losses, 327,600 jobs. This is serious 
because we want to get busy with jobs.
    I would like for you, Mr. Chairman, to outline for me and 
submit for the record what do our innovators expect? What is 
this asking permission process going to be? Are they going to 
have to file? You can submit it in writing. I know we are short 
on time.
    Mr. Walden. Yes, we want to get to----
    Ms. Blackburn. And just submit it for the record as a 
written statement, and I appreciate that you all have come and 
come prepared.
    Mr. Genachowski. Thank you. May I have 10 seconds to reply 
to that?
    Mr. Walden. Yes.
    Mr. Genachowski. Very quickly, just to be clear to the 
audience, the purpose of the order is to protect innovation 
without permission, and so no one has to come to the FCC for 
permission, and the Consumer Electronics Association supported 
open Internet and supported our order, and I look forward to 
continuing this dialog with you because it is very important.
    Mr. Walden. Now we go to Mr. Scalise for no more than two.
    Mr. Scalise. Thank you, Mr. Chairman. We will hit the 
lightning round.
    Chairman Genachowski, on the Open Internet Order, the FCC 
stated for a number of reasons these rules apply only to the 
provision of broadband Internet access service and not to edge 
provider activities. Are there no concerns about search engines 
or online video provider contents that they are doing anything 
improperly?
    Mr. Genachowski. Well, the history of this issue has been 
focused on Internet service providers, and that makes sense, 
particularly given the Communications Act, which focuses our 
authority on companies that are providing communication 
services by wire or spectrum.
    Mr. Scalise. Right, but we have seen, you know, there are 
real examples that have been reported widely in the media, for 
example, Google Street View where major privacy violations 
occurred, and yet they are exempted from this, and you know, it 
gives the impression that people feel like you all are picking 
winners and losers, and that is another whole set of problems 
that----
    Mr. Genachowski. I would say that with respect to any 
company like that that uses spectrum or infrastructure that is 
in our oversight purview, we will investigate, we will act 
regardless of company. The point of the proceeding was to make 
sure that the market and consumers pick winners and losers.
    Mr. Scalise. Commissioner McDowell, when it comes to these 
language provisions that were put in prohibiting providers from 
taking ``reasonable efforts'' to address things like--or 
nothing prohibits providers from taking reasonable efforts to 
address copyright infringements or other unlawful activity. A 
lot of people are expressing concern that there is no real 
definition of reasonable effort and there may be some concern 
that as these broadband providers try to protect their network 
from things like cyber attacks that they might also be 
concerned that the FCC is going to come behind and fine them 
because this reasonable effort is undescribed. Can you address 
that?
    Mr. McDowell. Again, that would have to be addressed 
through litigation, and that is part of the concern. The word 
``reasonable'' is perhaps the most litigated word in American 
history, so that will be determined by three votes.
    Mr. Scalise. And I know that creates a lot of uncertainty, 
and as we talk about the things that we want to see to 
encourage investment, to encourage job creation, it is those 
exact types of uncertainty that make it hard for people to make 
that investment.
    And Mr. Chairman, if I can close on this. I know a lot of 
us have conversations about whether or not network neutrality 
is good. I think if you at the American people, a bipartisan 
majority of Congress has said that they don't want this 
government intrusion and government takeover of the Internet 
and so I would hope you all would go back and look at that 
because ultimately innovation----
    Mr. Walden. The gentleman's----
    Mr. Scalise [continuing]. Is the great equalizer, and you 
know, when you look at today's college dropout can be 
tomorrow's billionaire and the dropout of today is able to 
compete and in many cases----
    Mr. Walden. The gentleman's time has expired.
    Mr. Scalise [continuing]. The big phone company or that 
other big company that out there that you all seem to have some 
concern about. So I would just----
    Mr. Walden. The gentleman's time----
    Mr. Scalise [continuing]. Ask that you keep that in mind, 
and I would yield back the balance of my time----
    Mr. Walden [continuing]. Is expired.
    Mr. Scalise [continuing]. Whatever that balance is.
    Ms. Blackburn. I seek unanimous consent to enter into the 
record an editorial by David J. Farber, grandfather of the 
Internet, arguing the Internet neutrality rules are bad because 
everyone would game the regulations rather than innovate. We 
have a couple of other documents that have been pre-cleared 
with the minority to also enter those in the record without 
objection.
    Mr. Walden. Without objection.
    [The information appears at the conclusion of the hearing.]
    Ms. Eshoo. I think the pope trumps it myself.
    Mr. Walden. I would also say as a final closing comment, at 
least speaking for some of us on this side of the aisle, the 
only entity more skeptical than our side of the aisle on these 
net neutrality rules may indeed be the D.C. Circuit Court.
    And finally in conclusion, I would like to thank all the 
witnesses and members that participated in today's hearing. I 
remind members they have 10 business days to submit questions 
for the record, and I ask that the witnesses all agree to 
respond promptly to these questions, which I know you will
    With that, we do appreciate your counsel, your insight and 
your hard work, and this hearing stands adjourned.
    [Whereupon, at 1:12 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

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