[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
FCC PROCESS REFORM
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
MAY 13, 2011
__________
Serial No. 112-48
Printed for the use of the Committee on Energy and Commerce
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
JOE BARTON, Texas HENRY A. WAXMAN, California
Chairman Emeritus Ranking Member
CLIFF STEARNS, Florida JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania EDOLPHUS TOWNS, New York
MARY BONO MACK, California FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina GENE GREEN, Texas
Vice Chair DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma LOIS CAPPS, California
TIM MURPHY, Pennsylvania MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California JAY INSLEE, Washington
CHARLES F. BASS, New Hampshire TAMMY BALDWIN, Wisconsin
PHIL GINGREY, Georgia MIKE ROSS, Arkansas
STEVE SCALISE, Louisiana ANTHONY D. WEINER, New York
ROBERT E. LATTA, Ohio JIM MATHESON, Utah
CATHY McMORRIS RODGERS, Washington G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi JOHN BARROW, Georgia
LEONARD LANCE, New Jersey DORIS O. MATSUI, California
BILL CASSIDY, Louisiana DONNA M. CHRISTENSEN, Virgin
BRETT GUTHRIE, Kentucky Islands
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia
7_____
Subcommittee on Communications and Technology
GREG WALDEN, Oregon
Chairman
LEE TERRY, Nebraska ANNA G. ESHOO, California
Vice Chairman Ranking Member
CLIFF STEARNS, Florida EDWARD J. MARKEY, Massachusetts
JOHN SHIMKUS, Illinois MICHAEL F. DOYLE, Pennsylvania
MARY BONO MACK, California DORIS O. MATSUI, California
MIKE ROGERS, Michigan JOHN BARROW, Georgia
MARSHA BLACKBURN, Tennessee DONNA M. CHRISTENSEN, Virgin
BRIAN P. BILBRAY, California Islands
CHARLES F. BASS, New Hampshire EDOLPHUS TOWNS, New York
PHIL GINGREY, Georgia FRANK PALLONE, J r., New Jersey
STEVE SCALISE, Louisiana BOBBY L. RUSH, Illinois
ROBERT E. LATTA, Ohio DIANA DeGETTE, Colorado
BRETT GUTHRIE, Kentucky JOHN D. DINGELL, Michigan
ADAM KINZINGER, Illinois HENRY A. WAXMAN, California (ex
JOE BARTON, Texas officio)
FRED UPTON, Michigan (ex officio)
(ii)
C O N T E N T S
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Page
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, opening statement...................................... 1
Prepared statement........................................... 4
Hon. Ann G. Eshoo, a Representative in Congress from the State of
California, opening statement.................................. 8
Prepared statement........................................... 10
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, prepared statement.............................. 12
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, prepared statement................................... 95
Witnesses
Julius Genachowski, Chairman, Federal Communications Commission.. 15
Prepared statement........................................... 18
Answers to submitted questions............................... 96
Michael Copps, Ph.D., Commissioner, Federal Communications
Commission..................................................... 27
Prepared statement........................................... 30
Answers to submitted questions............................... 117
Robert McDowell, Commissioner, Federal Communications Commission. 34
Prepared statement........................................... 36
Answers to submitted questions............................... 120
Mignon Clyburn, Commissioner, Federal Communications Commission.. 53
Prepared statement........................................... 55
Answers to submitted questions............................... 124
Submitted Material
``Rolling Back Regulations at the FCC: How Congress Can Let
Competition Flourish,'' National Review article by Randolph J.
May, dated April 18, 2011, submitted by Mrs. Blackburn......... 71
Letters, dated May 1, May 20, and May 21, 1991, between Mr.
Dingell and Alfred C. Sikes, Chairman, Federal Communications
Commission, submitted by Mr. Dingell........................... 75
FCC PROCESS REFORM
----------
FRIDAY, MAY 13, 2011
House of Representatives,
Subcommittee on Communications and Technology,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to notice, at 9:32 a.m., in
room 2123, Rayburn House Office Building, Hon. Greg Walden
(chairman of the subcommittee) presiding.
Present: Representatives Walden, Terry, Stearns, Shimkus,
Blackburn, Bilbray, Bass, Gingrey, Scalise, Latta, Kinzinger,
Barton, Eshoo, Markey, Doyle, Matsui, Christensen, Dingell (ex
officio), and Waxman (ex officio).
Staff Present: Gary Andres, Staff Director; Ray Baum,
Senior Policy Advisor/Director of Coalitions; Allison Busbee,
Legislative Clerk; Stacy Cline, Counsel, Oversight; Neil Fried,
Chief Counsel, C&T; Debbee Keller, Press Secretary; David Redl,
Counsel, Telecom; Roger Sherman, Minority Chief Counsel; Phil
Barnett, Minority Staff Director; Shawn Chang, Minority
Counsel; Jeff Cohen, Minority Counsel; and Sarah Fisher,
Minority Policy Analyst.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. I welcome the FCC Chairman and Commissioners to
our hearing today, and thank you for your thoughtful testimony
and the time you each took to meet individually with me to
discuss process reform ideas that could improve the
transparency and accountability of the FCC. As I told the
Chairman and each Commissioner, and as Ms. Eshoo and I
discussed and agreed yesterday, a discussion about reforming
process is not, and should not become, an exercise in
partisanship, or serve as a cloak to attack past or present
commissions or chairmen.
As I am sure all will notice, only four witness chairs are
occupied in light of Commissioner Baker's announcement
Wednesday. I would like to thank her for her many years of
public service not only as a Commissioner, but also in helping
us complete the DTV transition while she was heading up the
NTIA. I wish her well in her new endeavor.
Turning to today's topic, it is our responsibility to
review how independent agencies to whom we have delegated
authority and over which we have jurisdiction conduct the
public's business. At times the FCC succumbed to practices
under both Democratic and Republican chairmen that weaken
decisionmaking and jeopardize public confidence. While Chairman
Genachowski and some of his predecessors have taken steps to
improve process, we have all witnessed how process and
procedures of one Chairman can change dramatically under
another. One FCC is open and transparent, and the next is
closed and dysfunctional. The time is ripe to codify best
practices to ensure consistency from issue to issue and
Commission to Commission.
Many of my colleagues on this subcommittee have worked on
reform ideas in the past, and some have proposed changes in
bill form. We will consider those as well. To kick things off,
here are seven items to think about:
First, the FCC could be required to start new rulemaking
proceedings with a notice of inquiry rather than a notice of
proposed rulemaking. An NPRM presumes regulation is needed. The
FCC should first examine the state of the relevant markets,
services, and technologies. Even when regulation may be
appropriate, the FCC is unlikely to craft as useful a proposal
without first gathering preliminary information.
Second, the FCC does not always publish the text of
proposed rules for public comment before adopting final rules.
Providing specific text will allow for more constructive input
and a better end product. Crafting proposed rules should not be
difficult if there is a genuine need and the FCC has started
with an NOI.
Third, finite timelines for resolution of matters would be
helpful. Parties and the public should have some sense of when
resolution will come.
Fourth, the FCC now makes information available about which
draft items are circulating before the Commissioners. The FCC
could be required to provide additional information, such as a
list of all unfinished items at the Commission, the date the
items were initiated, their current status, and expected date
of completion.
Fifth, a bipartisan majority of Commissioners other than
the Chairman could be allowed to initiate items to prevent a
Chairman from stopping consensus items.
Sixth, the President's Memorandum for the Heads of
Executive Departments and Agencies, ``Regulatory Flexibility,
Small Business, and Job Creation,'' requires executive agencies
to conduct cost-benefit analyses before adopting regulations.
The memorandum does not apply, however, to independent agencies
like the FCC. We could remedy that by requiring the FCC to
identify actual consumer harm and conduct economic, market and
cost-benefit analyses before adopting any regulation.
Seventh, the FCC's transaction review standards are vague
and susceptible to abuse. Parties with a pending transaction
should not feel pressure to accept ``voluntary'' conditions on
the deal or to curtail their advocacy in other proceedings.
These concerns are neither new nor of concern to only one
party. Indeed, my good friend from Michigan, Chairman Emeritus
Dingell, observed in a March 2000 hearing that there is ``great
need to address and to reform the way the FCC handles its
merger reviews. These are a remarkable exercise in arrogance,
and the behavior of the Commission, oft-times by reason of
delay and other matters, approaches what might well be defined
as not just arrogance, but extortion.'' The concerns Mr.
Dingell raised then have been borne out with increasing
frequency over the last decade.
To address this, the FCC could be prohibited from adopting
any conditions unless they are narrowly tailored to any
transaction's specific harm. To prevent the FCC from using
transactions to commence industrywide changes it could not
otherwise adopt, the FCC could be required to show statutory
authority for the conditions outside the transaction review
provisions of the act.
These suggestions are simply meant as conversation
starters. I look forward to additional suggestions from my
colleagues or the Commissioners themselves.
[The prepared statement of Mr. Walden follows:]
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Mr. Walden. And on that note, I yield back the balance of
my time and would recognize the ranking member on the
subcommittee, Ms. Eshoo from California.
OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Eshoo. Thank you, Mr. Chairman, and good morning to
you. And welcome to Chairman Genachowski and the members of the
Federal Communications Commission. It is good to see you.
Today's hearing is an important opportunity to hear from the
FCC Chairman and the Commissioners on what is already working
well, because there are things that are working well, and where
there are opportunities to improve the Federal Communications
Commission. We should work together as a committee to subject
ideas and suggestions to healthy scrutiny and determine what
reforms can be embraced to better serve the public good. That
is why we are all here, and I think sometimes that gets lost in
the complexity and the layers of things. We are here to serve
the public good.
Under Chairman Genachowski's tenure, the Commission has
taken several key steps to increase openness, transparency, and
greater interaction with the public. The Spectrum Dashboard,
the new ex parte rules, the growing use of social media like
Twitter and Facebook are just a few ways that the FCC has
become more responsive to the needs of consumers and
businesses. But there is always much more that can be done, and
I welcome steps that will ensure that the Commission can
operate as a modern, 21st-century Federal agency.
Earlier this year I introduced the FCC Collaboration Act
with our colleagues Representatives Shimkus and Doyle. This is
a simple bipartisan reform measure which would modify the
current rules which prohibit more than two Commissioners from
talking to each other outside of an official public meeting.
Now, why is this important? In an agency that deals with the
highly technical issues like spectrum and universal service,
FCC Commissioners should be able to collaborate and benefit
from the years of experience that each one brings to the table.
We should move this bill forward in a timely manner and get it
done.
I welcome examining other ideas as well, like the FCC
Commissioners' Technical Resource Enhancement Act, a bill
introduced in the last Congress that would allow each
Commissioner to appoint an electrical engineer or a computer
scientist to their staff. Similar to the Collaboration Act, I
am open to looking at other ways to ensure that each
Commissioner is equipped to evaluate the complex technology and
telecommunications issues that the FCC is faced with today.
What would concern me would be proposals which diminish the
Commission's ability to protect the public interest and to
preserve competition in the telecommunications marketplace. The
FCC has a critical role to play in evaluating proposed mergers,
ensuring that broadband is universally deployed, and that the
market for voice and data service is actually competitive.
To stay in touch with a rapidly changing industry, the FCC,
I think, should make it part of its core mission to visit
companies both small and large. Last month Commissioner Copps
joined me in my congressional district, and we visited several
companies headquartered in Silicon Valley. We learned a great
deal. I extend a similar invitation to each Commissioner
because I believe these types of meetings with entrepreneurs,
engineers, and other technology experts are central to
understanding the issues you work on every day.
So thank you again for being here today. I really look
forward to this hearing, and I also look forward to hearing
your testimony and your fresh thinking.
I yield back the balance of my time.
[The prepared statement of Ms. Eshoo follows:]
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Mr. Walden. Now we are going to recess for about an hour.
We think it could take upwards of an hour, so why don't we plan
to just reconvene at 10:40. And with that, we stand in recess.
[Recess.]
Mr. Walden. I want to thank my colleague from Illinois for
his courtesy in yielding to Mr. Waxman, who has another
engagement at 11:30. So we will go out of our normal sequence.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you, Mr. Chairman. I particularly want to
thank Mr. Shimkus for his courtesy.
I would like to welcome Chairman Genachowski as well as
Commissioners Copps, McDowell, and Clyburn back to the
Subcommittee on Communications and Technology. We understand
how much effort goes into preparing to testify before Congress,
and we greatly appreciate your participation.
The topic of FCC reform is not new to this committee. As
one reporter's account of an October 28, 1999, hearing recalls,
quote, ``The FCC was criticized for its slow pace of
institutional reform, its handling of the e-rate and universal
service, its exercise of antitrust merger review authority, its
delay in completing antitrust merger reviews, and its
imposition of conditions on mergers,'' end quote. Well, today's
hearing will take us back to the future as we revisit many of
these same issues.
At the outset, let me say Chairman Genachowski should be
commended for his significant efforts and commitment to
improving agency operations and boosting employee morale. Since
he became Chairman, the agency has increased transparency,
expanded opportunities for public input, and improved
information sharing with other Commissioners and the public.
The agency now includes more details on proposed rules in
notices of proposed rulemaking, makes adopted rules available
to the public more quickly, and has revamped its ex parte rules
to enhance openness and transparency. These efforts have been
made better by the thoughtful bipartisan suggestion of his
fellow Commissioners.
And it is clear that today the FCC is a much better place
to work. According to the 2010 OPM employee survey, the FCC was
the most improved agency in the Federal Government.
I also want to commend subcommittee Chairman Walden for
looking at this issue in a nonpartisan manner. He has sought
input from all of the Commissioners and Republican and
Democratic committee members, and he is committed to explore
proposed process reforms in detail before we proceed toward
possible legislation.
If the committee does develop legislation regarding FCC
reform, we should be guided by a few basic questions about each
proposed change to ensure that we are promoting smart
regulation.
First, does a proposed change create an undue burden on the
FCC? When we impose statutory requirements of any kind, we need
to be wary of burdening the agency with compliance
requirements.
Second, are we undermining agency flexibility to act
quickly and efficiently in the public interest? If we put
prescriptive process requirements in statute, we could end up
promoting slower, not faster, decisionmaking.
And third, are we requiring additional process for valid
reasons? We must not impose procedural hurdles for their own
sake.
Fourth, are we making procedural changes in an attempt to
address outcomes with which we don't agree? For example, if we
limit the ability of the agency to negotiate voluntary
commitments related to mergers, are we also willing to accept
that certain mergers may then be rejected outright? Some might
view conditions as unfair, while others might see them as
critical tradeoffs that allow transactions that might otherwise
fail to go forward.
And finally, why the FCC? Are we imposing process reforms
on the FCC that should apply to all Federal agencies? If not,
what is our basis for treating the FCC differently?
I look forward to hearing our panel address these issues
and to receiving their advice about how to improve the FCC. I
look forward to working with you, Mr. Chairman, and I yield
back. Any other Members wish me to yield to them? If not, I
yield back the balance of my time.
Mr. Walden. I thank the gentleman for his kind comments and
look forward to continuing our discussion on these matters, and
I appreciate your comments on the principles.
I am now going to yield. We have 5 minutes on our side. We
have several speakers, so if we could kind of work a minute
apiece or not much over that. So at this time I would start
with Mr. Stearns and recognize him.
Mr. Stearns. Thank you, Mr. Chairman. I thank you for this
hearing. I think the ranking member, Mr. Waxman, has pointed
out that it is--the agency has come a long way. I think it has,
but in this area of Internet technology, I think there is still
a long way to go forward. And I think there is a litany of
necessary improvements, and I think this hearing will show
that.
For example, the merger review process, I think, needs to
be examined. Although the FCC internal shot clock to act on
mergers is 6 months, XM/Sirius took over 16 months, Mr.
Chairman, and Comcast/NBCU took nearly 11. So I think in a
rapidly evolving market here, uncertainty can sometimes create
havoc for markets, and deadlines for FCC action coupled with
ensuring merger reviews are handled in a transparent way is
important without endless strands of nonmerger-specific
conditions attached, I think, would provide future certainty.
So the bottom line, I think the agency could improve, and I
hope we can move forward.
Thank you.
Mr. Walden. I now recognize the gentleman from Illinois,
Mr. Shimkus.
Mr. Shimkus. Thank you, Mr. Chairman.
First of all, we want to thank Commissioner Baker for her
time, and hopefully we can expeditiously get her replaced in
the Commission. I know that is everyone's desire.
Chairman, we appreciate the movement on reform. It is
something that with the new technology, new age that is
important, and we know there are steps being made in that
direction.
And I have enjoyed my time working with Commissioner Copps
and, of course, Anna Eshoo. And on the sunshine bill, it just
doesn't make sense. Maybe three can't speak together, but to
have two not be able to speak of the Commissioners--Chairman
Walden and I spoke on the floor. I think it is something that
we can move expeditiously. Of course, I am not the Chairman, so
I will defer to his wisdom and guidance, but based upon the
last election, even in the cycle I said, I think the public is
tired of comprehensive, big bills. We ought to move things that
we can move clearly, concisely and defend, and maybe we will be
there at the end if other things can't be agreed upon. But I
have been--the Chairman has agreed to take a look at what we
are doing and hopefully merge those with the other things that
are not also in agreement and produce a good bill.
So with that I thank him, and I will probably ask some
questions on that if I am not on a plane. And I yield back.
Mr. Walden. I recognize the gentlelady from Tennessee, Mrs.
Blackburn.
Mrs. Blackburn. Thank you, Mr. Chairman, and welcome to all
of you.
Procedurally I do have some questions about license
transfers, indecency complaints, and FCC voting procedures. But
I think the biggest problem that I have and what I want to
discuss with you today is what I see is your overreach, going
beyond your statutory authority, and you do it without
consequence.
And the Chairman and I have discussed our disagreement on
net neutrality and regulation of the Internet, but I think
there is also overreach to other things like data roaming and
agencies scheming, which I think is a clever scheme, to
socialize our mobile networks. And I think that as you look at
privacy, and we will talk about this a little bit today, that
the FCC is moving into areas where it should not be with issues
like privacy.
So I am one of those that think it is time to maybe rein
the agency in a little bit and have a discussion about what
your structure should look like. So thank you for being here to
participate.
I yield back.
Mr. Walden. Mr. Bass or Mr. Gingrey, do you have any
comments?
Mr. Bass. If I could make a brief comment.
I want to thank all four of you for being here today. And I
am not sure whether I am going to be able to stay long enough
to ask the question, but I was hoping that the Chairman would
comment on this GPS, slash--you know, the spectrum issue, as to
whether or not it would be appropriate for that decision to be
one that the Commission itself makes rather than be done
through rule. There are significant potential issues associated
with this which need to be aired, and I am hopeful that the
Commission will have a process that will allow for both sides
in this debate to have their views considered and assure that a
proper decision is made by the Commission.
Thank you, Mr. Chairman.
Mr. Walden. The gentleman yields back the time. All time on
our side of the aisle has been yielded back. Same on the other.
So with that, I would like to welcome the Chairman of the
Federal Communications Commission, Mr. Genachowski. We
appreciate your testimony and your work at reform, and we
welcome your comments this morning, sir. Thank you.
STATEMENT OF JULIUS GENACHOWSKI, CHAIRMAN, FEDERAL
COMMUNICATIONS COMMISSION; MICHAEL COPPS, PH.D., COMMISSIONER,
FEDERAL COMMUNICATIONS COMMISSION; ROBERT MCDOWELL,
COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; AND MIGNON
CLYBURN, COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION
STATEMENT OF JULIUS GENACHOWSKI
Mr. Genachowski. Thank you, Chairman Walden, Ranking Member
Eshoo, members of the committee. Thank you for holding this
hearing on FCC process reform.
At the FCC we are focused on harnessing the power of
communications technology to benefit all Americans, grow our
economy, create jobs, enhance our competitiveness, and unleash
innovation.
On my first day as Chairman, I told the FCC staff that
whether we can achieve these goals depends on how our agency
works. That is why the FCC's processes and operations are
important, as Chairman Walden has said, and that is why I have
made it a priority to improve the way the FCC does business.
Our approach to reform rests on a number of core
principles: efficiency and fiscal responsibility;
accountability and transparency; reliance on facts and data, on
the power of technology to improve agency operations, and on
the benefits of collaboration.
To drive our reform efforts, I appointed a Special Counsel
on FCC Reform immediately after my confirmation, and I hired a
new Managing Director with experience running a multibillion-
dollar private-sector PNL to help lead our reform efforts.
My fellow Commissioners have been vital partners in this
effort. Commissioner Copps made FCC reform a priority when he
was acting Chairman. Commissioner McDowell has raised issues
with me on which we have taken positive action, and
Commissioner Clyburn has taken a lead and has helped us make
real progress on our process and relationships with the States.
In the past 2 years working together we have increased
efficiency, increased transparency, increased collaboration,
and increased the effectiveness of the FCC. I am proud of our
progress, and I am pleased that in the past 2 years, 95 percent
of the Commission's actions have been unanimous and bipartisan.
My written testimony includes many examples of the reforms
implemented in the last 2 years. As John Wooden said, We
shouldn't confuse activity with accomplishment, so I would like
to use my limited time to highlight some of the real results of
our reform efforts.
In the last 2 years, we have reduced the time between the
vote on a Commission decision and its public release from an
average of 14 days to 3 days, and to 1 day in most cases. We
have increased the number of notices of proposed rulemakings
that publish the text of proposed rules from 38 percent to 85
percent. We have eliminated many outdated regulations. Two
months ago we identified 20 sets of unnecessary data-collection
requirements to be eliminated, and just yesterday the
Commission identified and eliminated an additional 5 data
requirements.
We have acted on over 95 percent of transactions within the
180-day shot clock period. With respect to major transactions,
we have cut down the review time by more than 100 days. We have
reduced our broadcast application backlog by 30 percent and our
satellite application backlog by 89 percent. We have broken
down internal silos at the FCC and increased internal
communications. We have reformed our video relay service, a
reform that has already saved taxpayers about $250 million. We
are saving millions of dollars by harnessing technology to
improve the agency's operations including by consolidating
multiple licensing systems and reducing data centers.
A leading commentator said the Commission has gone from one
of the worst to one of the best in its use of online tools to
serve the public and all stakeholders. Just yesterday we
relaunched FCC.GOV after receiving and responding to broad
input on our beta launch. We have launched a public Spectrum
Dashboard. A few weeks ago we had the first joint blog post in
FCC history with all FCC Commissioners focusing on the
importance of reforming the Universal Service Fund.
We have held more than 85 public forums with active
participation from Commissioners, and for the first time have
made staff-led public workshops a routine part of Commission
work. We have adopted reforms of our ex parte process to
increase transparency, reforms of our voting process to
increase efficiency, and reforms of our filing process to
increase effectiveness.
Our National Broadband Plan has been lauded as ``a model
for other nations'' and has been praised for its process and
its substance.
OPM's governmentwide survey of Federal employees identified
the FCC as the most improved place to work in the Federal
Government. I thank Mr. Waxman for mentioning that. And just
last week the FCC team that worked on the National Broadband
Plan was nominated for a Service to America Medal, the most
prestigious independent award for America's civil servants.
I am proud of what we have achieved. The Commission is
working effectively. We are moving in the right direction. And
I thank my fellow Commissioners, as well as the FCC's
employees, who have been instrumental in making this possible,
as well as the many members of this committee who have over the
years and in my time offered very constructive suggestions to
improve our processes.
Of course, there is more we can do to improve performance,
and I am committed to continuing our efforts at reform. Making
the FCC work is important because the FCC's mission is
important. It matters to our economy, to our global
competitiveness, and to the quality of life of all Americans.
I look forward to working with the subcommittee on these
important issues. I thank you, and I look forward to your
questions.
Mr. Walden. Thank you, Chairman, we appreciate it.
[The prepared statement of Mr. Genachowski follows:]
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Mr. Walden. And we will get that high-technology ringing
device off over there in the corner. We are also streaming--if
you notice on the video screens here, all of your data is
streaming over your faces, too. It is part of what happens in
repacking if you don't get it right. So great to be the
technology.
Anyway, we want to go now to the senior member of the
Federal Communications Commission by length of service, I will
only approach it that way. We appreciate your service to the
country and on the Federal Communications Commission, Mr.
Copps, and we welcome your testimony and comments.
STATEMENT OF MICHAEL COPPS
Mr. Copps. Thank you very much. Good morning, Chairman
Walden, Ranking Member Eshoo, members of the subcommittee.
Thank you for holding this important meeting on FCC reform and
for inviting me to share some thoughts with you.
As Chairman Genachowski has explained, and many of you have
already noted, we have had real and measurable accomplishments
toward FCC reform under this current Commission, and I am proud
of those.
I know there are many other ideas and proposals you will
want to discuss this morning, and I am happy to comment on any
of them, but in my brief time now, I want to mention just three
ideas that I find especially important.
First and foremost, please allow the Commissioners to talk
to one another. That seems a strange request in a town fueled
by dialogue and debate when in FCC world, when three or more of
us are ever together outside of a public meeting, we must get
lockjaw. We cannot mention one iota of policy or substance,
float one idea for resolving a crisis, or suggest any
alternative path for addressing a problem. This has not only
irked me for years, but troubled me greatly, because it is like
sending a football team into a huddle and prohibiting the
players from talking to one another. That is the FCC under the
closed-meeting rule: the silent huddle.
So the first thing I want to do this morning is to applaud
Congressman Anna Eshoo and Congressman John Shimkus and
Congressman Mike Doyle for the introduction of their FCC
Collaboration Act. This proposed legislation is a modest,
commonsense, and much-needed reform to modify the closed-
meeting rule that prohibits more than two Commissioners from
ever talking to one another unless it is in a public meeting. I
have spoken about the need for this reform for many years
before the subcommittee. I am hopeful this will be the year
when legislation is finally enacted.
I have seen first-hand for the pernicious and unintended
consequences of this prohibition, stifling collaborative
discussions among colleagues, delaying timely decisionmaking,
discouraging collegiality, and shortchanging consumers and the
public interest.
Elected representatives, Cabinet officials, judges, even
the cardinals of my Catholic Church have the opportunity for
face-to-face discussion before making important issues. I see
no reason why the FCC Commissioners should not have the same
opportunity to reason together, especially when balanced, as
this legislation is, with specific safeguards designed to
preserve transparency. If it is good enough for Congress, the
courts, and Holy Mother Catholic Church, it ought to be good
enough for the FCC.
Reaching agreement on the complex issues pending before us
is difficult enough in the best of circumstances, but it is
infinitely more so when we cannot even talk about them among
ourselves. Each of the five Commissioners brings to the FCC
special experiences and unique talents that we cannot fully
leverage without communicating directly with one another.
This act is a prudent, balanced proposal that recognizes
the benefits of permitting the Commission to do its business
collectively, while maintaining full transparency of the
process. Enactment of this legislation would, in my mind,
constitute as major a reform of Commission procedures as any
that I can contemplate. It doesn't just protect the public
interest, it advances the public interest. And it is number one
on my list.
My second suggestion is let us get the FCC out of
Washington and on the road more frequently; I mean the full
Commission, all of the Commissioners. We live too much in an
isolated, inside-the-Beltway culture. We see the usual players,
make the same speeches every year, and attend the same
functions and events. And that is fine up to a point, but if it
comes at the expense of letting America see the FCC and letting
the FCC see America, it is not so good. Our deliberations would
surely and greatly benefit from taking the FCC outside
Washington, DC, and put it on the road so it could directly
hear from average Americans.
The Commission holds an open meeting each month, and I see
no reason why for at least few months out of a year we couldn't
conduct our meetings in places like Bend, or Benton Harbor, or
Boston, or Austin, or Mountain View. In communications, every
American is a stakeholder, and each of us is affected in so
many important ways by our media policies, spectrum
allocations, and universal service, just to name a few big-
ticket items on our agenda.
The idea here is not just that people would see the
Commission, but that the Commission would see the people and
gain a greater understanding of the impact of our decisions on
American consumers. It is just better communications, and,
after all, Communications is our middle name.
Third, and this is related to what I just suggested, we
need to encourage more input into our deliberations by what I
have called our nontraditional stakeholders. Although we hear
often, sometimes every day, from the big interests with their
armies of lawyers and lobbyists, we hear much less from
everyone else, all of those consumers and citizens who don't
have a lobbyist or lawyer in town to represent them, but who
nevertheless have to live with the consequences of what we do
in Washington.
I have devoted considerable time during my years at the
Commission to open our doors to the full panoply of American
stakeholders, including minorities, rural Americans, the
various disabilities communities, Native Americans, consumer
and advocacy organizations, and also educational institutions.
We were designed to be a consumer protection agency. Let us get
the skinny from those who consume what you and I do in
Washington, DC.
Another area where we need to see more progress and
partnering is in the Federal, State, local governmental
relationship. I believe more of this kind of interaction was
envisioned and encouraged by the Telecommunications Act of
1996. As we embark upon the formidable challenge of revamping
universal service and intercarrier compensation, it is vitally
important that we are sharing data, sharing ideas and sharing
responsibilities with our colleagues at all levels of
government.
I commend the Chairman for moving us forward in this regard
and also my colleague Commissioner Clyburn for the excellent
work she has done to reinvigorate our partnerships with the
States as Chair of the Federal-State Joint Boards. We need
always to be thinking about how to build upon the experiences
and knowledge that exist in such abundance at all levels of
government.
Let me say that this present Commission has made many and
impressive, important strides to increase transparency, to work
collaboratively with all stakeholders, and to hold workshops
both inside and outside the Nation's Capital. The Chairman's
statement recounts many of these, and I commend him for the
progress that has been made.
My point is this work is never done, and there is much more
that we can still do. There are years, decades of ``inside-the-
Beltway-itis'' to make up for, and this demands some
fundamental reorientation of the Commission. We can talk about
deadlines, shot clocks, what is an NOI versus an NPRM, and
those are all relevant matters to discuss. But above them all
is giving consumers and citizens confidence that their voices
are being heard, their suggestions given credence, and knowing
that their Commission exists to serve the public interest, a
term that, by my rough count, appears some 112 times in the
Telecommunications Act. That is our lodestar, and we need to
keep our fix on that lodestar every minute of every day.
Thank you for convening this conversation, and I look
forward to your comments and suggestions for the betterment of
the Good Ship FCC.
Mr. Walden. Mr. Copps, thank you, as always, for your
comments and suggestions.
[The prepared statement of Mr. Copps follows:]
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Mr. Walden. I go now to Commissioner McDowell. We welcome
you. We appreciate your thoughtful addition to this discussion,
and we welcome your testimony.
STATEMENT OF ROBERT MCDOWELL
Mr. McDowell. Thank you, Chairman Walden, and Ranking
Member Eshoo, all members of the committee. And I also see a
familiar face sitting behind Mr. Stearns over there, Brooke
Ericson, my former law clerk. And now that you are my overseer,
I really am hoping I was a nice boss.
But as you know, Congress created the FCC in 1934, almost
77 years ago. In that year Babe Ruth signed a contract for an
eye-popping $35,000 a year. Donald Duck made his movie debut,
the average new house cost less than $6,000, the entire Federal
budget was only $6.5 billion, and a gallon of gas cost 10
cents. And, my, how times have changed.
Although a few amendments have been made to the laws of the
Commission--the laws the Commission operates under since then,
many of the regulatory legacies from 1934 remain in place. The
technologies we take for granted in today's communication's
marketplace were unimaginable to even the most creative of
science fiction writers when existing mandates were written.
Against this backdrop it is fitting for this committee to
examine ways to reform the FCC to make it more efficient and
relevant to modern realities. I operate under the philosophy
that Congress should tell us what to do and not the other way
around, but given your solicitation of suggestions, I will
start by raising several possible statutory changes to improve
the FCC before moving on to possible procedural reforms that we
could effectuate.
Twenty-first-century consumers want to have the freedom to
enjoy their favorite applications and content when and where
they choose. Whether such material arrives over coaxial cable,
copper wires, fiber or radio waves is of little consequence to
most consumers so long as the market's supply of products and
services satisfies demand. Legacy statutory constructs,
however, have created market-distorting legal stovepipes based
on the regulatory history of particular delivery platforms.
While consumers demand that functionalities and technologies
converge, regulators and business people alike are forced to
make decisions based on whether a business model fits into
Titles 1, 2, 3, 6, or none of the above. As Congress
contemplates FCC reform, it may want to consider adopting an
approach that is more focused on preventing concentrations and
abuses of market power that result in consumer harm.
Furthermore, ideas from outside the Commission also deserve
serious consideration. For instance, Randy May, the president
of the Free State Foundation, has called for building on the
deregulatory bent of sections 10 and 11 of the Telecom Act of
1996 by adding an evidentiary presumption during periodic
regulatory reviews that would enhance the likelihood of the
Commission reaching a deregulatory decision.
With respect to procedural ideas, almost 2 1/2 years ago, I
sent to my colleague, then-Acting Chairman Mike Copps, a public
letter detailing some ideas to improve our agency's
effectiveness. He and I agree on many reform ideas, such as
modernization of the cumbersome and outdated sunshine rules
that prevent more than two of us from discussing Commission
business outside of a public meeting. Later, in July of 2009,
after Julius Genachowski became a Commission colleague as well,
I sent him an updated letter with additional ideas and
suggestions within existing statutory constructs. Time does not
allow me to enumerate all of them, so I have attached these
letters as part of my testimony and respectfully request to be
included in the record.
I am delighted to report that some reforms have already
been implemented. For example, many stale or ill-advised
Commission action items awaiting votes contained on what we
call the circulation list have been weeded out. A portion of
the backlog of the 1.4 million broadcast indecency complaints
that were defective on their face have been dismissed. And the
FCC now relies more on electronic internal communications
rather than paper deliveries.
Going forward, I am hopeful that other FCC reform
suggestions will be carried out as well. I have long called for
a full and public operational, financial, and ethics audit of
everything connected to the FCC, including the Universal
Service Administrative Company, also known as USAC. The
erroneous payment rate in the High Cost Fund alone has been far
too high, and we may need to make fundamental changes to fix
the problem.
Chairman Genachowski has made good progress in ensuring
that notices of proposed rulemaking contain actual proposed
rules. I applaud his efforts. I would encourage improving the
process further by codifying this requirement in our rules.
The Commission should include proper market power analyses
to justify new rules in notices of proposed rulemaking. If a
market power analysis is not appropriate, the FCC should
explain why.
When regulated entities are under scrutiny for alleged
violations of our rules, such as broadcasters being
investigated for airing indecent material, often they are not
notified in a timely manner of the investigation or its effects
on other matters before the Commission, such as license
renewals. Similarly, entities are not always informed of when
they have been cleared of wrongdoing. More transparency and
better communication in this area would not only be a matter of
appropriate due process, but simple good government as well.
To promote collegiality and efficiency we could improve the
productivity of all Commissioners' offices by routinely sharing
options memoranda prepared by our talented career public
servants. All Commissioners should be able to benefit from the
same advice and analysis enjoyed by our many chairmen over the
years. And perhaps we could call this our ``No Commissioner
Left Behind'' program.
Many, many, many more ideas abound, and I look forward to
discussing all suggestions and ideas with you, and thank you
again for the opportunity to appear before you today, and I
look forward to your questions.
Mr. Walden. Commissioner McDowell, thank you for your
suggestions.
[The prepared statement of Mr. McDowell follows:]
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Mr. Walden. Now we, for our final witness, turn to
Commissioner Clyburn. We appreciate the time you have taken to
engage in this matter with me and others on this committee, and
we look forward to your testimony.
STATEMENT OF MIGNON CLYBURN
Ms. Clyburn. Thank you, Mr. Chairman, for that and for
inviting me to participate in today's hearing. It is my
pleasure to see you, Ranking Member Eshoo and the other members
of the subcommittee. I respectfully request at this time that
my full statement be included in the record.
My colleagues and I work in an environment with many moving
parts. As with any Federal agency, there are checks and
balances in place, and the regulations and decisions we
consider and adopt receive thorough consideration and
incredible scrutiny. The Commission staff works diligently on
each item with the objective of delivering a finished product
that is cogent, precise, and effective. Such complexity often
does not lend itself to rocket dockets and express reviews, yet
the Commission has worked hard to streamline its processing of
many items.
Other proceedings, however, require significant examination
that takes time and an incredible amount of staff resources.
Thus, our consideration of many rulemakings and adjudications
can endure over weeks, months, and in some instances years.
Part of the reason why many of our deliberations take so much
time is because of our robust and all-inclusive public comment
mechanism.
During our consideration of a rulemaking item, the
Commission listens to any and all comers, petitioners, adverse
parties, interested participants, the public, and so on. So
criticisms about the FCC being sealed off from the public are
inaccurate, I believe, and I am proud of our process and the
number of public comments that stem from it.
We have made huge strides in putting an enhanced public
face on the Commission under Chairman Genachowski's leadership.
Through Reboot.FCC.gov, our external advisory committees,
public forums, and the FCC's numerous workshops, we welcome,
expect and, quite frankly, need voices and opinions from
outside of our walls to provide feedback, criticism, and
counsel. This is definitely not your grandfather's FCC.
Regarding our much-maligned sunshine rules, I have a
particular interest and potential tailor-made revisions to the
way in which we interact. The introduction of H.R. 1009 would
be a significant improvement in our deliberative process, and I
thank Ms. Eshoo, Mr. Shimkus and Mr. Doyle for this bill.
Recently, NARUC, the national body representing State
commissioners, praised the introduction of this legislation and
offered its support for it.
Allow me to bring me to your attention the fact that NARUC
did note the need for one minor change to the legislation in
order to improve its effectiveness with respect to the Federal
Commissioners' participation on the Joint Boards and
Conference. The Joint Boards and Joint Conference have Federal
and State representation, and each is involved in the
Commission's policymaking process with respect to their
subject-matter focus in the areas of universal service,
jurisdictional separations, and advanced services. Under
current law, three or more Commissioners may not participate in
a Joint Board or Conference meeting unless the meeting is open
to the public and has been properly noticed.
Currently Federal Commissioners must take turns
participating in our in-person meetings and conference calls.
This has made it extremely difficult for a constructive, and
effective and efficient deliberations when it comes to Joint
Board-recommended decisions. NARUC's letter makes the same
observation, and I join support of its request that H.R. 1009
include language to extend the proposed Sunshine Act's
exemption to cover FCC Commissioners who participate on the
Joint Boards and Conference.
I believe that it is critical that the FCC collaborate with
the States on telecommunications and broadband policy. It is my
belief that the understanding of local issues must be fully
considered, and State commissioners know these needs best.
When I came to the FCC, my primary goal was to improve the
communications and collaboration between our agency and the
States. Fortunately, Chairman Genachowski offered me the
position of Chair of all of the Joint Boards and Joint
Conference. With his support I believe we have revitalized and
strengthened the relationships with the States through these
bodies.
Thank you again, Mr. Chairman, for another opportunity to
appear before the committee. I hope that today's discussions
will highlight any areas of concern that the members of this
committee may have, be they process systems, agency rules, or
any other methods of practice we use.
Mr. Walden. Thank you, Commissioner Clyburn. We appreciate
your testimony and that of your colleagues on the FCC.
[The prepared statement of Ms. Clyburn follows:]
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Mr. Walden. I want to start with a question regarding the
Commission's agenda. I understand the Chairman is agency CEO,
controls the Commission's agenda. I have a question, though,
that a Chairman could prevent the FCC from addressing important
issues even when a bipartisan majority of the Commissioners
believes that moving forward is necessary.
So I would like each of you to answer, do you believe that
a bipartisan majority of the Commissioners other than the
Chairman should be allowed to work with the agency staff to
move an item?
Commissioner--we will start with the Chairman.
Mr. Genachowski. Well, having a collaborative process has
been important to me from the start, as I mentioned, and I
appreciate the collaborative way that all of us have worked
together. I can't imagine a situation----
Mr. Walden. I am going to keep you kind of short here
because I have got a series of questions. But again, this isn't
about you, and it is not about this Commission, because things
have changed. They can change again.
So the question is should you be able to be allowed to work
with the agency staff to move an item? Should the other
Commissioners?
Mr. Genachowski. I think the statute now is correct on
this. I think any organization needs a chief executive
responsible for the prompt----
Mr. Walden. So it is a no.
Commissioner Copps.
Mr. Copps. Yes, I do. I believe the three Commissioners
should have the power to call up an item, to delete an item
from an agenda, and to edit any and all documents.
Mr. Walden. Commissioner McDowell.
Mr. McDowell. This is another boring chapter in the long,
multivolume set known as the Copps-McDowell alliance. I agree
with my colleague to the right of me, ironically.
And so, yes, we actually, in all seriousness, in the fall
of 2008 could have resolved a lot of thorny questions on
universal service reform, intercarrier compensation because
there were four Commissioners, two Republicans, two Democrats,
in agreement, but the Chairman at the time did not move the
item.
Mr. Walden. Thank you.
Commissioner Clyburn.
Ms. Clyburn. We are the sum total of our experiences, so in
that regard, I have healthy engagement, and at this time I
don't see any need for any revisions in that manner.
Mr. Walden. OK.
Mr. Genachowski. Could I add just one other thing? Ninety-
five percent of what we do is unanimous. Historically this
hasn't been a problem except for, as far as I can tell, one
anomaly. And so I personally think that changing the statute to
address one anomaly when it hasn't been a problem, I can't
imagine an incidence when it wouldn't be three Commissioners
for a step that we couldn't work out together.
Mr. Walden. Commissioner Copps?
Mr. Copps. This reminds me of the old story from history
when Abraham Lincoln was meeting with his Cabinet to discuss a
very serious issue, and he took a vote, and there were three
noes from the Cabinet. And then he voted, and he said, the ayes
have it.
Mr. Walden. That is why I thought I would ask the
Commissioners, not the Chairman, and those who had been there
during other times. Appreciate it.
Commissioner McDowell, you mentioned in your written
testimony that the FCC should include proper market power
analyses to justify new rules or else explain why such analyses
are inappropriate. Could you elaborate on your views, and would
you agree that performance measures for regulators should be
built into the process for adopting new regulations so that the
public can monitor whether the purported benefits for
regulation actually play out?
Mr. McDowell. Sure. One assumes that if a new rule is going
to go in place, it is because something is not working in the
market. So why is there not something working in a market? So a
market power analysis, I think--and a proper market power
analysis, I think, is warranted. Now, there may be good reason
why a market power analysis is not needed, but the Commission
should then be required to explain why it is not doing a market
power analysis.
Mr. Walden. Commissioner Copps, do you care to comment on
that?
Mr. Copps. Well, I think that is one argument. I suppose
the other side of the argument is that that is why we have
notice and comment and the ability of all parties to explain
the advantages and disadvantages of a situation.
I think we should be doing basic economic analysis. I think
in all the cases that I have seen under this Commission, we
have probably done more of that than we have done in any of the
other Commissions that I have been a part of. Whether you put
that in a package and call it market power analysis and
differentiate it from all of that other stuff, I don't know. I
would vote to have a little more flexibility than that.
Mr. Walden. Commissioner Clyburn?
Ms. Clyburn. I would be open to this type of engagement and
conversations, but to my knowledge, a lot of this, whether it
is labeled so or not, is happening within the bureaus. So I
think we are having the benefit of some of the engagement even
if it is not called that.
Mr. Walden. Chairman Genachowski.
Mr. Genachowski. As a general matter this is what we do.
The APA requires us to consider all arguments presented to us,
and we certainly get arguments about market issues.
Affirmatively it is something we can and should do. There are
cases when the reasons stacked are different. If it is public
safety regulations, disabilities, rules, et cetera, it doesn't
make sense. But in any situation where what we are doing is
designed--where it would make sense, we do it; we do it as a
matter of practice, and the APA would require us to do it.
Mr. Walden. My time has expired, and I turn to my colleague
from California, Ms. Eshoo, for 5 minutes.
Ms. Eshoo. Thank you, Mr. Chairman.
I thank the Chairman of the Commission, and the
Commissioners, for your testimony and your ideas. I want to
congratulate you for what you have already done. It really
should not be skipped over. I took a look at your new Web site
last night. I think it is hot. I really do. I recommend it to
others as well.
First of all, is there anyone on the panel here today that
does not support the legislation for improving the decision-
making process at the agency, the legislation that myself and
Mr. Shimkus and Mr. Doyle have introduced?
Mr. Genachowski. I would just emphasize two things if I
could. One is the importance of making sure----
Ms. Eshoo. First, tell me yes or no.
Mr. Genachowski. No, I am supportive of it as long as it
preserves the transparency goals underlying the sunshine act
originally. And I think the joint board issue is one where I
would certainly support a measure that would take care of that
issue. It is really a conflict between two statutes that
doesn't make sense.
Ms. Eshoo. In California we have had the Brown Act for
years and years that has, I think, really served the public
interest very well. So I appreciate that. But it is good to
know that there is across-the-board support.
To Chairman Genachowski, in response to my posthearing
questions from our February 16 meeting, you indicated that a
proceeding is underway to determine whether the FCC's special
access rules are ensuring that the rates, the terms, and the
conditions for special access are just and reasonable. Are
there procedural changes in the way that the FCC operates that
could speed up this process?
Mr. Genachowski. I am not sure there are. We have heard
many complaints about the special access area. When we started
looking into it in my time there, we realized that the data
that the Commission had was really--provided no real basis to
actually make a judgment or support actions.
But we are in the middle of a process now to collect the
data we need. I think that is proceeding on schedule. I will go
back and look at whether there are procedural changes that
would be helpful, but I think we have the procedural
flexibility to do what we need to do.
Ms. Eshoo. Again to the Chairman, I understand that there
is often resistance from industry to provide the data necessary
to fulfill the Commission's goal of serving the public
interest. What are the roadblocks to obtaining this data and
how can we assist you in ensuring that you have the data needed
to preserve competition and consumer choice?
Mr. Genachowski. It is an important topic because we are
all committed to having the FCC be an agency that is about
facts and data. You can't be an agency about facts and data
without data.
What we have tried to do over the last 2 years, with the
help of the committee, is look both at old data collection
requirements that are outdated, that can be eliminated, and
also making sure that we are getting the data that we need in
this new world. So by removing data, we are showing, I hope,
establishing credibility that we are focused only on what we
really need to do.
Ms. Eshoo. Do you need us to help you do that?
Mr. Genachowski. I am not sure if we need rules changes,
but I think your interest in making sure that we have the data
that we need and supporting us in this effort is helpful.
Ms. Eshoo. Good. Does the Commission collect statistics on
wireless network quality and reliability? For instance, do you
have data relative to dropped calls?
Mr. Genachowski. On dropped calls, we actually built and
distributed an app to begin to get information from consumers.
Ms. Eshoo. So you are just starting that?
Mr. Genachowski. So we are just starting that. It is a new
thing. I agree, it is an area we should look at.
Ms. Eshoo. Good. Commissioner Copps mentioned in his
testimony the value of holding field hearings, and I know that
there were to examine the Comcast-NBC merger. Do you plan to
hold similar field hearings on AT&T and T-Mobile?
Mr. Genachowski. In general, we have done a number of field
hearings. We will continue to do them. We will be in Nebraska
next week on universal service reform. We have been in many
States.
Ms. Eshoo. Do you plan to do them on this gigantic merger?
Mr. Genachowski. We haven't announced the hearing schedule,
so if I can get back to you once we do that.
Ms. Eshoo. I would urge you to do it because the public
needs to come to these hearings and understand what is at stake
for them and ask you questions about what is going into this
decision. They are the ones that are going to be affected by
it. Here inside the Beltway, it is like gossip city, who said
what and how fast it is going and how slow and why and all of
that. And it is sexy inside the Beltway. But for people out
there, they want to know how is this going to affect my rates.
Mr. Genachowski. I agree.
Ms. Eshoo. These are becoming expensive utility bills. It
is important for you to hit the road.
Thank you, Mr. Chairman.
Mr. Walden. Thank you, Ms. Eshoo.
Just one quick question. There is nothing in statute that
precludes you from doing the public hearings you've talked
about; right? You don't need that from us?
Mr. Genachowski. I don't think so.
Mr. Walden. I turn now to Mr. Shimkus.
Mr. Shimkus. Thank you, Mr. Chairman.
Thank you for coming. I am bouncing between two committee
hearings, one with the EPA on rules and regs. I want to make
sure, this is on process reform, and sometimes we will get
jumbled in on what is going on and think a process reform may
solve it, but we really want to stay on what can we do to
transparency and the like.
Commissioner Clyburn, I appreciated the example, and we get
e-mail, too, from NARUC on extending that, and I think that is
a good idea and something that should be included. But it gave
me a question for the Commissioners, and Chairman, you can
weigh in too, if you would like; the Commissioners specifically
highlighted our piece of legislation as being beneficial.
Can you give me an example how that would be helpful?
Especially Commissioner Copps, you have been around a long
time. You probably have a few stories, like we did just prior.
Give us some real-world application why you think this would be
helpful.
Mr. Copps. Well, a joint board example like Commissioner
Clyburn was talking about, we will have a conference call and
Commissioner Clyburn and Commissioner Baker and myself are each
members of that board, but we cannot be on at the same time.
So, say Commissioner Baker is on for the first 10 minutes. Then
we say, well, Commissioner Baker, you have to get off;
Commissioner Copps is getting on, and then it goes back and
forth. So you really interfere with and retard the discussion.
But even going beyond that, I think there is something to
be gained by the synergies of having five individual people
chosen with five different skill sets, vetted by the White
House, confirmed by the Senate, to come to the Commission and
to just have them sit down in a room together. I think some of
the personality conflicts that we have had in previous
Commissions, and I don't want to overdramatize them or anything
like that, but I think things would have gone better and been
more easily resolved and more of the spirit of compromise and
collegiality would have attended those issues had we been able
to do that. I don't understand why we are not able to do that.
Mr. Shimkus. Mr. McDowell.
Mr. McDowell. Yes, I agree. So to go back to that fall of
2008 example with the universal service intercarrier
compensation where four Commissioners--again, two Republicans,
two Democrats--agreed on some fundamental reforms, it would
have been nice if all five of us could have gotten into a room,
or three of us, to try to figure out why that wasn't moving. So
I think it would speed the process.
I think it would be more efficient, as Commissioner Copps
said, it would breed more collegiality. And keep in mind, our
work product ultimately is public and appealable to the courts
if someone doesn't like it, so transparency is still there.
Mr. Shimkus. Commissioner Clyburn?
Ms. Clyburn. Coming from a joint board perspective, you
have already heard how inefficient the process, the current
process is. To give the public some assurances or some more
comfort in this, when we talk about the joint board and joint
conference, joint boards and joint conference experience, the
recommended decisions from these bodies are not final. They are
recommended decisions, and they are presented to the FCC, and
then at that point there is a notice, the process of noticing
goes into place. Then and only then, after that is exhausted,
that comes to the FCC for a decision. So these are not final.
Recommended decisions are not final decisions. They go through
processes, so the public should feel some comfort. But this
disconnect that we have is something that does not lend itself
for a good exchange.
Mr. Shimkus. Mr. Chairman, do you want to weigh in?
Mr. Genachowski. I agree that the joint board situation is
a problem that should be fixed.
Mr. Shimkus. Another process reform, and it is kind of the
age-old argument that people raise capital, assume risk, and
need some certainty whether to either produce or to withdraw
from the market. Some people have proposed issues like shot
clocks as far as time lines, minimum review periods after the
close of a comment cycle. Does anyone have to talk about that?
And I only have 34 seconds, so do it quickly.
Mr. Genachowski. I think in general, shot clocks can be an
effective management tool. They are one of the tools that we
use. I think preserving flexibility is important; but I think
it can be an effective management tool.
Mr. Copps. I would agree. I think sometimes shot clocks,
such as accompanied the Comm Act that we are looking at now, do
mandate that we take action. Again I think this Commission is
doing a good job generally on this score, so I don't know that
we would have to mandate it unless the problems got a lot
worse. I do agree that business needs certainty, but I think
that comes more from the substance of the rules than the
process, and having a clear idea of the rules that they are
going to operate under.
Mr. Shimkus. Commissioner McDowell?
Mr. McDowell. I think shot clocks can be very helpful. I
have long advocated them. I do agree with the Chairman that we
need to preserve some flexibility. Things can go wrong.
Sometimes we get a shot clock from Congress, with the Comm Act
or the Telecommunications Act of 1996; but internally, we
probably could use more.
Ms. Clyburn. In principle I am not in disagreement with
shot clocks; but I think they should be treated as guidelines
and not be allowed to rule the process.
Mr. Shimkus. I thank you all. I yield back the balance of
my time.
Mr. Walden. We now go to Dr. Christensen for the next 5-
minute round.
Mrs. Christensen. Thank you, Mr. Chairman, and welcome to
you, Mr. Chairman, and the other Commissioners. From the
outset, I want to make it clear that I know my question
regarding FCC's review of mergers and transactions is an issue
of authority and not one of process. It is clear that Congress
created a strong public interest mandate for the FCC. As
Commissioner Copps noted, the words ``public interest'' appear
112 times in the Communications Act. The FCC has clear
statutory authority under the act to conduct its public
interest evaluations of mergers and transactions, and the
courts have conferred great leeway for the agency to fulfill
these public interest duties.
Commissioner McDowell, I wanted to ask you whether you
agree with the statement made by Commissioner Baker in March
that the FCC has ``clear statutory obligation to closely
scrutinize transactions and reject those that violate the
Communications Act, FCC rules, or fail to serve the public
interest''?
Mr. McDowell. Yes, I agree with that.
Mrs. Christensen. Does everyone agree with that statement?
Mr. Genachowski. Yes.
Mrs. Christensen. Chairman Genachowski, why do you believe
that the FCC should have jurisdiction over transactions? Why
wouldn't DOJ or FTC review be sufficient?
Mr. Genachowski. Well, the Communications Act makes it
clear that the FCC must approve transfers of communications
license and find that they are in the public interest in order
to do so. Communications is something of importance to every
American. It is a sixth of our economy. They involve complex
technical issues where an expert agency is important, other
goals and values that are enshrined in the Communications Act,
and that has been our system for many, many years and it is
important to make it work effectively.
Mrs. Christensen. Some have complained that in reviewing
some of the mergers, the FCC has imposed conditions that are
not transaction-specific. For example, during the review of the
Comcast-NBC Universal transaction, conditions involving
broadband adoption and diversity were imposed. Do all of you
believe that those conditions are merger-specific? Mr.
Chairman?
Mr. Genachowski. Yes. If I can add one word, the statute
requires the FCC to make a determination that a transaction is
in the public interest. So it is not surprising that companies,
as they come to the FCC and file for approval, make the case
for why a transaction is in the public interest and point to
specific public interest benefits. With respect to some of the
benefits, given the potential harm of some transactions, it
becomes important to make sure those commitments are binding.
Mrs. Christensen. Commissioner Copps?
Mr. Copps. Yes, I agree very much that conditions on
transactions are perfectly within the purview of the
Commission. I know there is an argument whether they should be
company-specific or products of industrywide rulemaking. But
that is a hard line to draw. Some of these transactions, like
Comcast and NBC, are paradigm shifting. They change the whole
industry, so it is very difficult to make a clear division,
like some people would have us make.
Mrs. Christensen. Commissioner McDowell?
Mr. McDowell. I do not believe conditions should be imposed
that are not merger-specific. I think in that particular
transaction, there were a number of conditions or voluntary
commitments that were not merger-specific. They might be
evidence of good corporate citizenship, or evidence that they
wanted to try to sweeten the deal for FCC's approval, but some
of them had nothing to do with the merger itself.
Mrs. Christensen. Commissioner Clyburn?
Ms. Clyburn. I agree in terms of the public interest
standard that the FCC is basically mandated to do that. We are
the experts in this space. We not only are required to look at
competition, which is solely DOJ's purview, but we have to look
at the public benefits, and that includes a number of benefits
as well as harms, and we have to weigh those, and conditions
are sometimes warranted to answer those.
Mrs. Christensen. Let me just ask a question of Chairman
Genachowski in my last few minutes.
You talked about holding a public forum on reducing
barriers to broadband and band buildout, and we really commend
all of you for the forums that you have held. These events are
important to the successful implementation of States and
territories, for example like the U.S. Virgin Islands.
Are there some barriers that you have identified to
broadband buildout and is there technical assistance that FCC
would provide to overcome any of those barriers?
Mr. Genachowski. There are barriers. Some of the barriers
that we see are barriers that slow down infrastructure
companies, wired and wireless, from building out quickly or
that add costs. We took some steps in this area around tower
siting; shot clock, to come back to the shot clock concept, we
adopted one. We took steps in this area also with respect to
pole attachments which will help reduce costs and lower the
cost of broadband buildout.
We are very interested in hearing from industry and
stakeholders on other barriers that would be appropriate to
address. One that has been brought to our attention are
challenges around co-locating antennas on existing towers and
unnecessary delays in that process. So that is something we are
looking into now
Mrs. Christensen. Thank you.
Mr. Walden. I turn to the gentlelady from Tennessee, Mrs.
Blackburn, for 5 minutes.
Mrs. Blackburn. Thank you, Mr. Chairman.
Commissioner McDowell mentioned an article by Randolph May,
and, Mr. Chairman, I would like to submit that article for the
record. I agree with the Commissioner. I read it and I thought
it was very insightful.
Mr. Walden. Without objection.
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Mrs. Blackburn. Chairman Genachowski, I want to ask you,
looking at the process you followed on net neutrality, I want
to ask you about a Fortune magazine article, and you have
affirmed in that article two different times that net
neutrality rules were already in effect; so are these rules in
effect?
Mr. Genachowski. I think I may have been making the point
that on a bipartisan basis, before I got to the Commission, the
Commission had enforced net neutrality rules against companies.
Rules were just part of the problem.
Mrs. Blackburn. I hate to interrupt you, but I think what
the reporter said, that means they are law. These are rules
that have been written and are in effect. And your response was
``yes.''
What is interesting to me is that the FCC hasn't published
the order in the Federal Register yet. So my question would be:
What justification could there be for a 6-month wait or a delay
unless the FCC is seeking further delay and legitimate rules by
the courts or by Congress?
Mr. Genachowski. I understand your question now. The rules
are not in effect yet. They require publication in the Federal
Register, and they have to go through an OMB process and a
Paperwork Reduction Act process. These are not our processes.
We are complying with the processes as quickly as we can.
Mrs. Blackburn. Yes, I agree, and I think it would be
appropriate to get our policies published in the Federal
Register before we start implementing new rules, especially
since the impact that those rules are going to have are, in my
opinion, going to be damaging to the innovation and growth of
the Internet.
Let's look at the Comcast-NBCU order. It states that the
Comcast and NBCU shall comply with all relevant FCC rules
adopted by the Commission in GN docket No. 09-191, and I am
referring to the FCC's Open Internet order and its unique
application, this specific, on the merger conditions. Does the
FCC believe that even if a court overturns the FCC's decision,
that Comcast and Comcast alone will still be subject to these
ex-judicial rules, and where does the FCC get that authority?
Mr. Genachowski. The answer is yes. The authority comes
from the language obliging us to make a public interest
determination in approving transactions. This was a merger-
specific enforceable commitment that came out of the fact that
this was a merger between the largest broadband company in the
country, one of the largest content companies. We heard from
many businesses saying that a specific harm from this
transaction could be favoritism of some content over others.
Mrs. Blackburn. Does the FCC have a responsibility to
answer to the article 3 courts that by law review the FCC
decisions?
Mr. Genachowski. Of course.
Mrs. Blackburn. OK. Let's talk about copyright protection.
I support it, and I have supported voluntary cooperative
efforts among the ISPs and content community to address
infringement. And given the language specifically in paragraphs
107 and 111 of your open Internet order, what assurances can
the FCC give to the ISPs that they can enter into voluntary
agreements with copyright owners to address these infringements
online without running afoul of the net neutrality order?
Mr. Genachowski. My recollection is that the order says
pretty much that. That the rules apply only to lawful content,
not unlawful content like stolen intellectual property, and
that voluntary agreements to make enforcement of IP laws
effective is something that is not prohibited by the rule.
Mrs. Blackburn. I have to tell you, I think it would be
helpful for the FCC to provide the companies assurances that
they have reasonable discretion to address copyright
infringement, and I hope that you will do that.
Mrs. Blackburn. I only have 19 seconds left. I had another
question about broadband pricing, but I will submit that for a
written response.
I yield back.
Mr. Walden. We will get an answer from each Commissioner.
Mr. Doyle has been kind enough to yield to the chairman
emeritus of the Energy and Commerce Committee, Mr. Dingell.
Mr. Dingell. Mr. Chairman, I thank you for your courtesy,
and I thank you for the recognition. And I want to thank my
good friend from Pennsylvania. There are many, many courtesies
I have had at his hand.
Commissioners, welcome to the committee. I want to express
some distress at the delay in publication of the Commission's
Open Internet order in the Federal Register. I understand, and
clearly so, that this delay is more appropriately attributed to
the Office of Management and Budget than to the FCC.
Moreover, I wish to note for the record that the order was
adopted on December 21, 2010, and the order's text was released
to the public 2 days later on December 23. I want to commend
the Commission for this display of transparency.
There is, however, another type of delay that deprives the
public of a thorough understanding of the Commission's
decisions, and it does I think afford a marvelous opportunity
for rascality. This is the delay that can occur between the
time when the Commissioner adopts the report and order, and the
date on which the text of that report and order is released to
the public. A delay of this sort enables the staff to make
revisions to the order in the dark of the night. It enables
petitioners to seek and obtain tweaks in the agency's language.
It is a decision-making that is subject to the charge that it
is potentially the source of perhaps dishonest decision-making
that ought not exist at the Commission.
This type of delay has been the subject of this committee's
attention in the past. As the Chairman and I were discussing
yesterday, some 20 years ago in May of 1991, I engaged in an
exchange of letters with the then-Commission Chairman Al Sikes.
Mr. Chairman, I ask unanimous consent that copies of that
correspondence be entered at this point in the record.
Mr. Walden. Without objection, so ordered.
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Mr. Dingell. With this history in mind, I am going to
direct this question to you, Chairman Genachowski, and I am
going to ask you if you would please do exactly what I asked
Chairman Sikes to do in an earlier time. Would you please
provide this committee with a list of the Commission's
decisions where the text of the decision was released more than
30 days after the Commission announced its decision, together
with the best explanation you can make for the delay beginning
on January 1, 2010? Would you do that for us, please?
Mr. Genachowski. Yes, I will. I am happy to report that
period, we have closed in the last 2 years, that period from an
average of 14 days to 3 days. In most cases, release is 1 day
after Commission adoption of the order.
Mr. Dingell. Thank you.
Now, I recognize that the 30-day period which was referred
to in my questions is arbitrary and it does not respond to
either statute or regulation. It does seem to me that a delay
of 30 days or more does provide opportunity for impropriety,
and I would urge the Commission to comment on this opinion for
the record, especially in view of all of our desires to improve
the transparency at the Commission and this committee's ability
to conduct rigorous oversight.
Now, in the case of decisions whose release is delayed for
30 days or more, does the Commission commit at this time to
providing this committee with a written explanation of the
delay and projected date for the release?
Mr. Genachowski. Yes.
Mr. Dingell. Now, I want to make it clear, we have to make
a selection here between two situations, the first of which is
where the Commission releases the decision and there is a delay
between the time that the matter is then made final. There also
is the situation--and this I know afflicts the Commission
substantially, and that is, you have sent things over to the
Office of Management and Budget which duly forgets that you are
an independent agency of the Congress and insists that these
matters be held up over whatever qualm the Administration may
have on the matter.
So in any event, Mr. Chairman and members of the
Commission, I thank you.
Mr. Chairman, I thank you for your courtesies to me. I
yield back the balance of my time.
Mr. Walden. I thank the gentleman for his questions and his
willingness to work on these issues to improve the process at
the FCC.
Now I turn to the gentleman from Florida, Mr. Stearns, for
5 minutes.
Mr. Stearns. Thank you, Mr. Chairman.
Chairman Genachowski, this is a question for you, if you
can recollect this. I think we have already talked about the
Commission's backlog. How many petitions or applications are
currently pending before the Commission?
Mr. Genachowski. That is a number I don't have in my head.
I will get it for you.
Mr. Stearns. Can you guess? Give an approximate range? When
we do financial disclosure, we have a range.
Mr. Genachowski. There are many small ones. The number is
in the thousands, not in the tens.
Mr. Stearns. Do you have staff behind you that might know?
These staff, that is what they are paid for.
Mr. Walden. They are texting somebody right now.
Mr. Genachowski. We will get an answer within 5 minutes.
Mr. Stearns. OK. How many of these are more than 6 months
old?
Mr. Genachowski. That is another question I can't answer
off the top of my head.
Mr. Stearns. OK. How many are more than 2 years old; 5
years old? Do you think any of them are older than 2 years?
Mr. Genachowski. It is possible some of them are.
Mr. Stearns. Any over 5 years?
Mr. Genachowski. I don't know, but it is possible.
Mr. Stearns. We have heard that parties with a transaction
before the FCC sometimes feel pressure to curtail their
advocacy in unrelated proceedings. I guess my question is:
Fundamentally, do you agree that every constituency should be
free to advocate before the Commission without any pressure?
Mr. Genachowski. Absolutely. Can I say one word on the
previous question?
Mr. Stearns. Yes. I hear all the time that people are
totally intimidated by you folks, and I can understand why,
because a decision by you folks is not just a hundred-dollar
decision, it is billions. So you have this much power. They
come back to me, a lot of them are intimidated, so they want to
be free to be an advocate before the Commission without
pressure.
Mr. Genachowski. On this question, the Commission has an
obligation to base each decision that it makes on the issues
before it, on facts and data. We are all very committed to
that.
On the previous issue, there is an area for reform here
that I would like to mention briefly, which is that a lot of
the backlog comes from applications for review of relatively
routine bureau decisions that are made. Because of the APA,
sometimes it is thought that it requires the Commission to do
its work all over again in order to address it in advance of
litigation.
We have been exploring some reforms here to speed this up
and to help eliminate the backlog that relates to applications
for review from bureau orders. That is something I look forward
to working on with you and the committee.
Mr. Stearns. Commissioner McDowell, you touched on in your
opening statement, and I looked at some of your letters you
have written in the past, the FCC's transaction review
standards I think are vague and sometimes susceptible to abuse.
For example, parties with a pending transaction should not feel
pressure to accept voluntary conditions on the deal. The
Commission can also leverage its merger review process to adopt
conditions that it could not otherwise impose through a
transparent and public rulemaking.
My question for you is: How can we narrow the Commission's
authority to simply address these concerns?
Mr. McDowell. That can come through a statutory change, as
has been pointed out today already. There is a large, ambiguous
public interest standard by which we review mergers. But if a
statutory provision were added to say any conditions or
voluntary commitments extracted from the merging companies
should be specifically tailored to consumer harm that arises
out of the merger, and perhaps look into maybe sunsetting them
once market conditions obviate the need for any further
regulation.
Mr. Stearns. Mr. Chairman, do you want to add to that at
all?
Mr. Genachowski. In the Communications Act, Congress has
placed an important responsibility on the FCC to make a public
interest determination, to find that a proposed transaction is
in the public interest. That is something we take very
seriously. I think all Commissioners do. It is understandable
why companies would suggest the public interest reasons for a
transaction. Sometimes there are specific potential harms that
emerge from a transaction that in order to approve the
transaction, it is necessary to impose conditions. This has
happened under Democrats and Republicans at the FCC.
Mr. Stearns. My last question, Mr. Chairman, is to
Commissioner McDowell. Again, I am concerned that the FCC has
been regulating in areas without first clearly identifying its
own authority to act. From voice obligations, net neutrality,
to broadband outage reporting, the FCC has fallen into the
habit of proposing rules without first tying those rules to the
authority given to it by the Communications Act. I know every
bill I drop, I have to show constitutionally that that bill
complies with the Constitution. What best practices would you
recommend going forward based on what I just told you?
Mr. McDowell. The Commission in areas where I have
dissented certainly has made legal arguments justifying its
legal authorities. I can't think of an item that didn't have a
legal argument. But as lawyers know, there are legal arguments
that are colorable, and there are legal arguments that are
winnable. This is fine grades of distinction sometimes. It is
hard to say how do you keep the FCC to act within its authority
other than read the statute and the plain meaning of it.
Mr. Stearns. Mr. Chairman?
Mr. Genachowski. Two points. In the last few years, the FCC
record in court on statutory challenges has been overwhelmingly
positive. I don't remember the number of the top of my head,
but I will get it for you. But overwhelmingly successful.
The second thing is, when there are colorable questions of
authority, we seek comment on that in the notice and comment
stage. We did it yesterday in looking at updating our network
outage rules to protect the safety of the public in event of
emergencies. There is a colorable question about authority. We
will be looking at that carefully in the record.
It is vital that we move forward on public safety issues
like that, working together with the committee. If we don't
think we have the authority, we will come to you and ask for
the authority. But getting a public record and asking our
terrific legal team to focus seriously and honestly on the
authority issues is what we try to do.
Mr. Walden. I thank the gentleman from Florida.
I now turn to the gentleman from Pennsylvania, Mr. Doyle.
Mr. Doyle. Thank you, Mr. Chairman. Thank you for holding
this hearing.
Welcome to the members of the Commission. I have had the
opportunity to work with each and every one of you, and I have
appreciated your hard work and dedication. All of you are very
good members of the Commission.
Commissioner Copps, I know your term is expiring this year
and I just want you to know that if I were the benevolent
dictator of the universe, as scary as that thought may be, your
term would have no expiration date. Thank you for your service
to the Commission. You have been one of the best ever.
Now, Chairman Genachowski, I can't pass up the opportunity
while I have got you all here. As you know, just recently the
House and Senate passed, and the President signed into law, the
Local Community Radio Act last year. And this is legislation
that is going to open up the airwaves for hundreds of new low-
power radio stations across the country, including community
radio stations in cities like Pittsburgh and all across the
United States.
Mr. Chairman, I know the Commission is working on it, but I
want to make sure that the draft rules are going to come out by
the end of the spring. Could you give us a sense of timing on
this?
Mr. Genachowski. First of all, congratulations on the
passage of the legislation. Bipartisan, very important, and we
are working to implement it as quickly as possible because we
think it is a real achievement and will really help the local
communities. Our media bureau is working on it. I will redouble
my efforts to make sure that it happens as quickly as possible.
Mr. Doyle. I want to piggyback on some questions that Ms.
Eshoo talked about with special access to. I have always
thought that name ``special access'' is a misnomer. It should
be called ``critical access.'' I note that your broadband plan
agrees with that. I have real concerns about the affordability
of these lines as report after report comes out, whether it is
the GAO or the national broadband plan or others, that indicate
that the sellers of these lines are continuing to overcharge
their competitors.
Quite frankly, the FCC, it has been rather frustrating to
get you to address this question. It has taken quite a long
time to come to a decision on the matter, and I am just trying
to understand what is causing this delay, and when do you think
that you will obtain the information that you need to finally
bring a vote to the Commission? Please don't tell me ``as soon
as possible.'' Give me something more definitive than that.
Mr. Genachowski. My frustration was that when I arrived at
the Commission and we started to look into this issue, the
paucity of data that the FCC had was very troubling. There is
no point to doing something in this area that is not based on a
record, that is not based on facts and data, and that wouldn't
be upheld in court. We also didn't want to put out a broad data
request that, one, would be burdensome on industry; but, even
more important, would not be manageable for us because it is a
very complex area.
And I think our team did a fantastic job working in a
focused way to identify the data that we would need to be able
to make a determination on whether there is an issue that
requires us to act; and if so, what an appropriate action to
take would be.
We are still in that process. We have completed the first
round of data coming in. The staff is analyzing that. We will
continue to work with you on it. But I agree with with you on
the importance of this issue, and we are working very
diligently on it.
Mr. Doyle. By next year? By 2030?
Mr. Genachowski. Well before that.
Mr. Doyle. Well before 2030?
Mr. Genachowski. I agree with you. I can't say because we
are analyzing the data, and I don't want to prejudge it. I want
the staff to do its job as fast as it can because it is an
important issue that goes to competition and broadband
deployment.
Mr. Doyle. Do any other Commissioners have a comment on
special access?
Mr. Copps. I think it is important for us to get to a final
resolution. When you are talking about a market that is
approaching tens of billions of dollars a year, and you add in
there however many years this has been pending, and you think
are companies going out of business, is competition being
disrupted, it instills in me the same sense of urgency that you
have.
Mr. McDowell. Absolutely. I have been at the Commission
almost 5 years, and it is sort of like Groundhog Day on special
access. We are coming up on the fourth anniversary of
Congressman Markey's letter to the Commission insisting that we
have some resolution by September of 2007. It is now 2011.
Really what we need, as I have been saying for almost 5
years now, is cell site by cell site, building by building map
with price, terms, and conditions of all providers of special
access, competitive providers as well as incumbent providers.
This isn't as hard as it seems. The DOJ gathered this data in
2005 during the Bell long distance mergers, and it is really
not as daunting as it sounds.
Legally there might be an issue whether you can compel
certain companies to provide that data, and that is where the
problems have been. A lot of companies know that they don't
have to provide the data; it might be competitively sensitive,
things of that nature. But if you go to an industry trade show,
business-to-business trade show, they are buying and selling
special access circuits from each other. So all of the sales
guys have this data. It is not that hard to find. But that
would give us, let's get a real-time snapshot of what does the
market actually look like. I think where there is more
competition in a market, we ought to deregulate. And if there
is not enough competition, then we need to figure out what to
do.
Mr. Doyle. Commissioner Clyburn?
Ms. Clyburn. I agree with my colleagues. One of the first
meetings that I took as a Commissioner dealt with special
access. When these same parties see me, they look at me and we
don't even have to exchange words. So I agree with you about
the urgency. And especially being from a rural State, I agree
that this is a significant barrier for enhanced service. I am
looking forward to continuing to working with the Chairman in
order to get resolution here.
Mr. Doyle. Thank you.
Thank you, Mr. Chairman.
Mr. Walden. Thank you for your work on these issues, Mr.
Doyle.
We are going to do a second round of questions.
There are a couple of things I would like to go through.
First, the top seven best hits of our memo, some of the ideas
we kicked out there, and I would draw your attention to the
staff majority memo, if you have it. If not, if you can give us
your feedback on these seven items.
From the outset, I am not trying to lock you into stupid
restrictions, but I am trying to figure out is there a way to
put in the statute good things, some of which Chairman
Genachowski has already enacted as Chairman or you have
codified in your rules, so regardless who is chairing this or
regardless of the personality dynamics that may occur, 5, 8, or
10 years from now, the good processes are there for the public?
So I throw that out.
So the notion, and I know this doesn't work well, but yes
or no, the concept with flexibility built around all of these,
trying to go to notices of inquiry before NPRMs; does that make
sense? Does that not make sense? Commissioner Clyburn?
Ms. Clyburn. Yes or no, hmm. I think when the Commission
needs more information, yes, it is warranted. But we are in the
information exchange business. We have public notices and the
like, and so we get a lot of information. When we need more
information, then yes. But in the case where we don't, where we
have sufficient information, I think it would delay the
process.
Mr. Walden. Commissioner McDowell?
Mr. McDowell. Yes, with flexibility that can't be abused.
Mr. Copps. Yes, usually; but always remember there are
crises and emergencies, terror attacks and things that demand
expeditious action when you can't do that.
Mr. Genachowski. I would say as a general rule, we do it.
There are many exceptions. It might be a statutory mandate. It
might be further notice. It might be court remand. It might be
that we have enough information to proceed. I am not sure that
a statutory change is required.
Mr. Walden. That is fair.
Publishing the proposed rules, you don't always publish a
text for public comment before adopting the public rules.
Should the proposed rules always be published ahead? Chairman
Genachowski, yes or no?
Mr. Genachowski. That has been our policy. We have gone
from 38 percent to 85.
Mr. Walden. Any reason not to go to 100?
Mr. Genachowski. There are some cases where it might be a
form or it might be a further notice where the rules are
already out, or it might be that we are seeking comment on a
third party's proposals. Our practice is that we always need a
good reason in order not to publish proposed rules.
Mr. Copps. You know, sometimes people don't get serious
about we are doing something until you get beyond, well into
the NPRM stage, and then they get serious and tell you what
they like. So it is not always practical to do that. New data
comes in, and again I would say flexibility for emergencies and
things like that, but I would commend the Chairman on the
tremendous difference we have made in making sure that we do
now over 85 percent of the time.
Mr. Walden. Mr. McDowell.
Mr. McDowell. Yes, with flexibility that can't be abused.
Mr. Walden. Commissioner Clyburn.
Ms. Clyburn. Yes, flexibility that takes into account any
type of public comments.
Mr. Walden. Got it. What about minimum comment periods?
Statutory minimums for comment reply cycles, does that make
sense? Ms. Clyburn?
Ms. Clyburn. I think if there are statutory obligations
involved, they might be problematic. With our video relay,
Video Accessibility Act, we had a 6-month window. So if you had
certain obligations, that might impede that progress. So again,
flexibility and dexterity are my two words for the day.
Mr. Walden. Commissioner McDowell?
Mr. McDowell. Yes, with flexibility that can't be abused.
Mr. Walden. Commissioner Copps?
Mr. Copps. The same response.
Mr. Genachowski. I agree as well. The real issue is making
sure that the Commission pursues best practices, and we look
forward to working with you on that.
Mr. Walden. What about shot clocks? Parties and the public
should have some sense of when resolution would come. Hard shot
clocks or shot clocks as a report card mechanism, gives you the
flexibility, but you maybe report to Congress on your rates of
trying to achieve those shot clock numbers?
Again I am not trying to tie your hands, but I think there
are issues in the past, in some cases, where things dragged on.
I talked to a group recently, they have had a rulemaking for 6
years at the Commission. It was circulated last fall, I
believe, and it is still in somebody's in-boxes.
Mr. Genachowski. I think shot clocks may be an effective
tool. We are using it. It may make sense to use more shot
clocks. And we are looking at that, and we look forward to
looking at that with you.
Mr. Walden. Commissioner Copps.
Mr. Copps. Amen.
Mr. McDowell. Shot clocks helped break the UNC Chapel Hill
monopoly on basketball; I am all for that.
Mr. Walden. Wow.
Ms. Clyburn. I always come behind him, and it is always
problematic.
All transactions are not created equal; so again,
guidelines but not ruling the process is, I think, wise.
Mr. Walden. OK. What about publication of final draft for
an item scheduled for an open meeting? The FCC could be
required to make final draft public a certain amount of time in
advance so everyone knows precisely what the Commissioners are
being asked to vote upon?
Mr. Genachowski. I have always been troubled by the logical
impossibility of this because there is a draft, there is more
input. The draft changes. It gets put out again. And you end up
in something where it is actually impossible for the agency to
act effectively. The APA process is designed to do this, do a
notice, put out rules, get comment, the agency deliberates,
makes a decision. It is subject to further review. I think that
general process works.
Mr. Copps. People should know generally and have a clear
idea, but you can't keep doing this time and time again until
you get the last ``t'' crossed and last ``i'' dotted. At some
point we have to be, in the phrase of well-known persons, the
deciders on these issues.
Mr. Walden. Mr. McDowell.
Mr. McDowell. More often than not, it is a good idea.
Ms. Clyburn. I would not want anything to stifle any type
of exchange that could possibly take place in the improvement
of an item.
Mr. Walden. What draws me to this one is what we did to
change our House rules, require a 3-day calendar day layover so
everyone has a chance to see it. And sometimes that is
inconvenient if you want to cram something through. But it is
the public's business and public process. That is all I am
talking about. It would seem to me, you would want them to see
the final product and have a little time to comment.
With the indulgence of the committee, if I can go through
the remaining couple of items here.
Commissioner initiation of items. The Chairman, CEO
controls the agenda, but what about having a bipartisan group
of Commissioners being able to weigh in and put items on? I
know we went through this earlier, but let us see if
Commissioner Clyburn has been swayed by the incredible evidence
that has come out during the hearing.
Ms. Clyburn. Thank you, but no.
Mr. Walden. You don't want to be able to help set the
agenda?
Ms. Clyburn. I think I do that. I have that type ofrapport.
Mr. Walden. You weren't there in the old days. Commissioner
McDowell?
Mr. McDowell. Yes. I have supported this kind of concept
when I was in the majority on the Commission, and I support it
today.
Mr. Walden. Commissioner Copps?
Mr. Copps. I would just repeat what I said. I think three
Commissioners ought to have the ability to put an item on the
agenda, take an item off the agenda, and edit the agenda.
Mr. Genachowski. As I said, I think nothing is broken; 95
percent of our decisions are unanimous. We work
collaboratively. I can't imagine a situation where there would
be a problem, and there has only been one anomaly that I am
aware of historically.
Mr. Walden. I will stop with that. There are some others
here. I think you all have this. The committee has been very
kind to let me work through those.
We would like your feedback on them. We kicked these out as
discussion points. Some make sense, and some don't from a
statutory standpoint. Some you can go ahead and do, and you
are. And I appreciate that.
I would turn now to the gentleman from Massachusetts, the
always colorful Mr. Markey.
Mr. Markey. I will take that as a compliment.
Mr. Walden. As intended.
Mr. Markey. Welcome, all. We are at an historic juncture.
There is now an announced plan by AT&T to buy T-Mobile for $39
billion in the latest in a series of major transactions at the
Commission for you to review, pursuant with your authority.
The merger would reduce the number of national wireless
companies from four down to three, and then the next step would
be the inevitable gobbling up of Sprint by Verizon, so we would
be back down to two, which would be kind of going into the
telecommunications time machine back to 1993 before this
committee wisely decided that the two companies that had all of
the licenses, one of them was the progeny of AT&T, all of the
regional companies had one license, and other people had the
other one, McCaw significantly, but it was 50 cents a minute.
It was analog. It was not a particularly robust marketplace.
And people did not have cell phones in their pocket.
So I thought it would be good if we looked back through the
mists of mobile time so we can understand where we were, how we
got here, and why we really don't want to go back at all. This
isn't even an open question because we had more than enough
time to learn how big companies view how fast you can move in
the deployment of mobile technologies.
So back in October of 1993, on a bipartisan basis, it was a
beautiful thing; the general disgust that this committee had
with the lack of progress in the mobile area led us to moving
over 200 megahertz of spectrum for the creation of a third,
fourth, fifth and sixth license.
You two big boys, you really don't need any more unless it
is in a market you are not in anymore. So that was kind of our
message.
They weren't particularly happy with it. In fact, the
general who ran all spectrum for the Federal Government for the
Defense Department, he wasn't happy with it either. But we told
them all: Figure it out; you, know, do your best, but we need
that spectrum. We need a robust marketplace. We want to move
and be number one.
So we had this incredible breakthrough, and we moved from
50 cents a minute. Within 4 years, it was under 10 cents a
minute. All of the companies, including the two incumbents, had
to go digital, which is much more versatile. It was quite a
transformation.
If you can imagine, here is where we were when we passed
the bill. We had this brick. Anyone remembering carrying this
around in your pocket? This is the brick. And by 1996, we had
moved to the BlackBerry. Brick to BlackBerry, 4 years. This
committee, a lot of insight.
Those first two companies, they really didn't think that
they wanted to move this fast. As a matter of fact, they told
us in testimony they couldn't move this fast. It just wasn't
going to be a general consumer product. They were targeting
businessmen on mountaintops, I think. So that was it. Again,
their message was, don't regulate.
So the question is: Do we want to turn the clock back to
that duopoly? Do we want to go back to the brick in terms of
how fast companies are forced to innovate? Do we want to trust
those two companies again to move faster? I don't think we want
to do that.
I think it would be a historic mistake for the FCC to
approve this merger. I think we would go into a
telecommunications time machine, back to that point in time. We
already have got Verizon and AT&T pretty much dividing the
country into Bell East and Bell West, which is the plan.
Letting them have a national wireless duopoly is what is at
stake here.
I have seen the movie before. I know how it ends for
consumers, with them being tipped upside down and having money
shaken out of their pockets.
We are the ones in this committee that made sure that we
ended that era. I think it is critical for the FCC to apply its
own very brief history on this subject. You know, this is not
something where we have to go back to Alexander Graham Bell.
There are people within our own lifetime we can go back to.
They are still alive. They were here in 1993. They can still be
consulted about what the state of that marketplace was.
All I can tell you, it would be a historic mistake to go
back to that time with the promises that come from two
behemoths that they will continue to innovate. History tells
us, after 100 years from Alexander Graham Bell up until 1993,
they do not innovate. And that is the key. It is innovation and
it is investment in new technology and it is paranoia-driven
Darwinian competition that ultimately leads to the changes that
help consumers and competitors.
And I hope you all keep that in mind as you are going
forward, because this is going to be the biggest decision you
make, and I hope you make the right one.
Thank you, Mr. Chairman.
Mr. Walden. I thank the gentleman. I would remind members
of the committee that we have to be a little careful since this
is a decision before them when it comes to the Pillsbury rule
and all.
Mr. Markey. Are we in the Pillsbury time right now?
Mr. Walden. Back to the BlackBerry.
Mr. Markey. Excuse me? Was that a question?
Mr. Walden. No. They are going back to the BlackBerrys to
find out.
Mr. Markey. Are we in the Pillsbury time? Are we
constricted in our committee hearings from expressing our views
on a merger?
Mr. Walden. Not your views.
Mr. Markey. Yes.
Mr. Walden. And I am not an attorney. I think there are
issues. It was suggested in another hearing in another context
with an issue before a Commission that we have to be careful in
terms of how we convey our thoughts is all, I was told.
Mr. Markey. I am a lawyer.
Mr. Walden. I won't hold that against you.
Mr. Markey. And I think there are lawyers down there. Can
the staff assist? I think the staff is packed with lawyers. Are
we in the Pillsbury time frame right now?
Mr. Walden. That is what I said, they are going to their
BlackBerrys.
Meanwhile, we will proceed and go to Ms. Eshoo for 5.
Ms. Eshoo. Thank you, Mr. Chairman.
While the lawyers are going back and forth, I don't know a
time where Members cannot express an opinion. Mr. Markey is not
asking the Commissioners for their thinking on the matter that
he just raised. He expressed his opinion. And so God help us if
Members of Congress can't come in as members of a committee and
express an opinion. I understand that there is--that Mr.
Markey's opinion may be menacing to some, but nonetheless--or
discomforting--but it is an opinion. I think it is an important
opinion.
Whether Pillsbury or anything else gets in the way here, I
am not a lawyer to make that determination, but I don't think
that is the question, most frankly.
Chairman Genachowski, some have expressed concerns recently
that the FCC has shied away from using a notice of inquiry to
first examine a broad set of issues rather than proceeding
straight with the proposed rules in a notice of proposed
rulemaking. Do you think that proceeding with notices of
inquiry can be an effective approach, and have you employed the
NOIs more often under your chairmanship compared to previous
administrations?
Mr. Genachowski. We have used NOIs frequently. I think
about half of our notices of proposed rulemakings have been
preceded by NOIs. And often, especially when it is a new issue
or fresh issue, it is a good place to start. When we are
dealing with a statutory mandate to implement something, when
the Commission has vast experience coming out of prior
proceedings, when there are real timeliness issues around
perhaps public safety, then NOIs may not be the way to go. And
I think we try to be thoughtful about, with each proceeding,
how to get the balance right between developing a full,
inclusive public record and moving in an expeditious manner for
the public and all stakeholders.
Ms. Eshoo. But do you believe that an NOI must precede any
proposed rulemaking?
Mr. Genachowski. I don't think that it is now a requirement
or should be a firm requirement.
Ms. Eshoo. I don't have any other questions, Mr. Chairman.
I do think, if I might, the list of suggestions that you had
today, your punch list, that we have the Commissioners all
respond to them.
Mr. Walden. Yes. I actually asked them to do that. I agree.
Ms. Eshoo. I didn't hear that. I think it would be helpful,
after you have had some time to give some thought to it, that
we hear back from each one of you on them. Thank you.
Mr. Walden. I turn now to Mr. Doyle, if he has any further
questions.
Mr. Doyle. Mr. Chairman, in the interest of eating lunch, I
have no further questions.
Mr. Walden. With that then, I want to thank both of our
committee members who participated so well in this committee
hearing, and especially the FCC Commissioners and the Chairman.
Thank you for your thoughtful approach to this. We look forward
to continuing to work with you on a cause that I know we share,
which is to continue to improve----
Mr. Markey. Mr. Chairman, before you conclude, has the
Commission staff been able to identify whether or not a
Pillsbury--OK, not yet.
Mr. Walden. Do you want us to wait until they get an answer
or can we go ahead and adjourn? I think we will go ahead and
adjourn the hearing.
Mr. Markey. You raised the issue, and it was in the
aftermath of my comments, and I just wanted to know if my
congressional prerogatives are in any way contradicted by any
prerogatives of the FCC. If they are, I want all the members of
the committee to know how we are all restricted in terms of our
recommendations to the Commission, and I just don't want the
committee hearing to end until that is established because that
is quite a statement made to me.
Mr. Walden. No, let's not overtake what I said, OK. What I
said was I just would caution the committee, this is an issue
before the Commission and we have to be cognizant of these
rules. This was not a criticism of what you said. And we each
have the opportunity to express our views. That is not about
that. This was not about you or about what Ms. Eshoo said. We
will probably have a hearing on this issue, and rightfully so.
I just know in a different subcommittee with an issue
before the Nuclear Regulatory Commission that is before them,
we were advised not to try and affect the Commission's decision
in that process because it is something before them. So this
was in general context. That is all it was.
Mr. Markey. If the gentleman would yield, is the intention
of the hearing which you are going to have to in any way affect
the decision made by the FCC?
Mr. Walden. Not if it violates the Pillsbury rule.
Mr. Markey. No, you are saying if it does not violate the
Pillsbury rule. Do you know if that hearing will violate the
Pillsbury rule?
Mr. Walden. I won't hold it until I find out the answer to
that question.
Mr. Markey. OK, I think that is an important thing for you
to say. So rather than saying you are going to have the
hearing, you should say: I am going to have the hearing if it
is not a violation of the Pillsbury rule, because I don't want
any member of this committee to influence the way in which any
member of the FCC thinks. OK? If that is the opposition going
forward, I can live with that. In fact, if that is our
committee policy, then I would like to have that established so
I know that and every other member knows that.
Mr. Walden. Yes. Slow down. Take a breath. Here is the
deal.
Mr. Markey. I am not the person who made the accusation
that there is a potential Pillsbury violation.
Mr. Walden. Nor did I.
Mr. Markey. Yes, you did.
Mr. Walden. No, that was not my intent. I would be happy to
go back and listen.
Mr. Markey. Let me put it like this: It was the effect. If
it was not the intent, it had that effect.
Mr. Walden. All right. That was not my intent. If it was
assumed that way, I take that back. That was never my intent. I
am just trying to do something cautiously here and not get
anybody in any trouble.
And when we have a hearing, we might not have the
Commissioners before us. When they are not before us, I think
we are pretty open in what we can say, right? That is all. That
is all that it is.
With no other business to come before the subcommittee, we
are adjourned.
[Whereupon, at 1:06 p.m., the subcommittee was adjourned.]
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