[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
OVERSIGHT OF THE FEDERAL COMMUNICATIONS COMMISSION
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
JULY 10, 2012
__________
Serial No. 112-160
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
_____
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
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 Chairman 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 TAMMY BALDWIN, Wisconsin
CHARLES F. BASS, New Hampshire MIKE ROSS, Arkansas
PHIL GINGREY, Georgia JIM MATHESON, Utah
STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington DORIS O. MATSUI, California
GREGG HARPER, Mississippi DONNA M. CHRISTENSEN, Virgin
LEONARD LANCE, New Jersey Islands
BILL CASSIDY, Louisiana KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky JOHN P. SARBANES, Maryland
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia
_____
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, Jr., New Jersey
STEVE SCALISE, Louisiana BOBBY L. RUSH, Illinois
ROBERT E. LATTA, Ohio DIANA DeGETTE, Colorado
BRETT GUTHRIE, Kentucky JOHN D. DINGELL, Michigan (ex
ADAM KINZINGER, Illinois officio)
JOE BARTON, Texas HENRY A. WAXMAN, California (ex
FRED UPTON, Michigan (ex officio) 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........................................... 3
Hon. Lee Terry, a Representative in Congress from the State of
Nebraska, opening statement.................................... 4
Hon. Joe Barton, a Representative in Congress from the State of
Texas, opening statement....................................... 4
Prepared statement........................................... 5
Hon. Anna G. Eshoo, a Representative in Congress from the State
of California, opening statement............................... 7
Hon. Doris O. Matsui, a Representative in Congress from the State
of California, opening statement............................... 8
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 8
Prepared statement........................................... 10
Hon. Cliff Stearns, a Representative in Congress from the State
of Florida, opening statement.................................. 11
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 11
Hon. Donna M. Christensen, a Representative in Congress from the
Virgin Islands, opening statement.............................. 13
Witnesses
Julius Genachowski, Chairman, Federal Communications Commission.. 13
Prepared statement........................................... 16
Answers to submitted questions............................... 97
Robert M. McDowell, Commissioner, Federal Communications
Commission..................................................... 21
Prepared statement........................................... 23
Answers to submitted questions............................... 141
Mignon L. Clyburn, Commissioner, Federal Communications
Commission..................................................... 39
Prepared statement........................................... 41
Answers to submitted questions............................... 155
Jessica Rosenworcel, Commissioner, Federal Communications
Commission..................................................... 46
Prepared statement........................................... 48
Answers to submitted questions............................... 164
Ajit Pai, Commissioner, Federal Communications Commission........ 52
Prepared statement........................................... 54
Answers to submitted questions............................... 175
Submitted Material
Letter, dated June 6, 2012, from Mr. Gingrey, et al., to Julius
Genachowski, Chairman, Federal Communications Commission,
submitted by Mr. Gingrey....................................... 89
OVERSIGHT OF THE FEDERAL COMMUNICATIONS COMMISSION
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TUESDAY, JULY 10, 2012
House of Representatives,
Subcommittee on Communications and Technology,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:20 a.m., in
room 2123 of the Rayburn House Office Building, Hon. Greg
Walden (chairman of the subcommittee) presiding.
Members present: Representatives Walden, Terry, Stearns,
Shimkus, Bono Mack, Rogers, Blackburn, Bass, Gingrey, Scalise,
Latta, Guthrie, Kinzinger, Barton, Upton (ex officio), Eshoo,
Markey, Doyle, Matsui, Barrow, Christensen, DeGette,
Schakowsky, Dingell (ex officio), Sand Waxman (ex officio).
Staff present: Gary Andres, Staff Director; Ray Baum,
Senior Policy Advisor/Director of Coalitions; Neil Fried, Chief
Counsel, Communications and Technology; Debbee Keller, Press
Secretary; Alexa Marrero, Communications Director; Gib Mullan,
Chief Counsel, Commerce, Manufacturing, and Trade; David Redl,
Counsel, Communications and Technology; Charlotte Savercool,
Executive Assistant; Lyn Walker, Coordinator, Admin/Human
Resources; Daniel Tyrrell, Counsel, Oversight and
Investigations; Shawn Chang, Democratic Senior Counsel;
Margaret McCarthy, Democratic Professional Staff Member; Roger
Sherman, Democratic Chief Counsel; David Strickland, FCC
Detailee, Counsel; and Kara van Stralen, Democratic Special
Assistant.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. Good morning. I want to welcome a fully
constituted Federal Communications Commission to our
subcommittee today, and I extend a special greeting to the
newest Commissioners Rosenworcel and Pai. We are delighted to
have you both here. You will find that the members of this
subcommittee take their work seriously and are fully observant
of the activities at the Federal Communications Commission,
observant of the changes in the audio, video and data
marketplaces, and the need to keep the Internet free from
government control, foreign or domestic. We do our research,
and we complete our work.
I want to congratulate Commissioner McDowell for his fine
remarks in Rome in June. You, more than anyone I know, have
consistently and forcefully stood up for a free and open
Internet. Our subcommittee has heeded your message and, thanks
to the leadership of Representative Mary Bono Mack, provided
the House with a bipartisan resolution calling on our
negotiators at the World Conference on International
Telecommunications, WCIT, to maintain the multi-stakeholder
approach to Internet governance.
And while I know Chairman Genachowski sometimes has less
than laudatory comments regarding our work to free up spectrum
through incentive auctions and fulfill the call of the 9/11
Commission by finally approving legislation to pay for and
build out that interoperable public safety network, know that
we are keenly interested in making sure that the FCC and the
NTIA fulfill the intent of the legislation. Further, if either
agency has questions about the intent of the law or identifies
problems with it, the subcommittee expects to hear the specific
concerns immediately. We also continue to examine how Federal
agencies might use spectrum more efficiently so that we can put
more in the hands of commercial providers while simultaneously
helping the government do its work better. I anticipate that
Representatives Guthrie and Matsui, who Ranking Member Eshoo
and I have appointed to lead a working group on this issue, may
have questions for you in regards to government spectrum.
You need to know that I-and a majority of this
subcommittee, and indeed a majority of the House, remain deeply
committed to the cause of improving transparency and
accountability at the Federal Communications Commission. Too
often the public has had to turn to the courts to prove
procedural wrongs at the Commission, wasting taxpayer resources
and leaving the impression with some that the Commission
considers itself above due process. I commend the current
chairman, however, for the thoughtful reforms that he has
instituted, but these are but a bare minimum with no guarantee
that a less thoughtful chairman in the future would follow a
similar path.
Finally, our subcommittee is very interested in making sure
competitive market forces driven by empowered consumers are
allowed to work in a way that spurs new technology, innovation
and creation of American jobs. The Federal Communications
Commission is an important player in that effort, and should
not abuse its power to achieve outcomes it lacks statutory
authority to accomplish on its own.
Again, thank you for your service. Thank you for coming
before our subcommittee.
[The prepared statement of Mr. Walden follows:]
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Mr. Walden. With that, I would yield to Mr. Terry.
OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEBRASKA
Mr. Terry. Thank you, Mr. Chairman, and I recognize the
need to bring any and all available spectrum online as soon as
possible. It is absolutely necessary in order to meet our
growing demand.
The Commission should make finalizing near-term
opportunities like 4 megahertz of spectrum and the AWS-4 or 2
gigahertz band and the broadcast incentive auctions top
priority.
I have concerns about the regression analysis contained in
the recent high-cost order with admitted inaccuracies in the
data sets used, lawsuits filed and implementation beginning
this past Sunday. I worry that what started out as an honest
effort to modernize and create an efficient fund has developed
into a situation in which rural America could in fact see
declining service quality and higher prices.
I understand that the FCC has opened a proceeding seeking
comment on contribution reform, and I am eager to hear where
our witnesses stand on how contribution should be assessed,
what services and service providers should contribute, and most
importantly, what they understand their current authority is
when making such assessments.
Last, I have a few questions on a process in regard to
investigations at the FCC Office of Engineering and Technology.
I have been informed that a company in my district that
produces remote monitoring equipment for propane tanks has
filed a formal complaint alleging that one of their competitors
is operating in an unauthorized band, and I would like to know
more about how the Commission considers such allegations, and I
thank my friend from Oregon, and I yield back.
Mr. Walden. And I would yield now to the gentleman from
Texas, Mr. Barton, for the remaining 23 seconds.
OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Barton. Twenty-three seconds?
Well, I want to welcome our two new Commissioners from the
FCC to the Energy and Commerce Committee. We look forward to a
long and fruitful dialog with you two fine folks, and I hope
that in this hearing today, Mr. Chairman, we take a look at
your bill, H.R. 3309, the FCC Process Reform Act. I think it is
a good piece of legislation and I would like to hear what the
members of the FCC have to say about it.
And with that, I will put the balance of my statement in
the record and yield back the remaining 12 seconds.
[The prepared statement of Mr. Barton follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Walden. I thank the gentleman from Texas and now
recognize the ranking member of the subcommittee, Ms. Eshoo,
for 5 minutes.
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 the
full Commission. We have all five Commissioners before our
subcommittee for the first time this year, so welcome to you,
and an especially warm welcome to the two new Commissioners.
Congratulations to you. We look forward to working with you.
Today the FCC is faced with an enormous set of tasks that
will define the communications landscape in the second decade
of the 21st century. From implementation to voluntary spectrum
auctions to reforming the special-access market, the FCC has an
opportunity to create a more competitive marketplace supporting
greater consumer choice and a more robust wired and wireless
network for consumers and businesses across our country.
I would like to begin by addressing the implementation of
incentive auctions, a product of this subcommittee's work over
the last year and a half, practically a year and a half it took
us to produce that bill. The law was carefully crafted to
create new opportunities for unlicensed spectrum and ensure
that rules guiding the auction of spectrum, enhanced
competition, consumer choice and innovation. So as the
Commission proceeds with developing its rules, I look forward
to discussions that will ensure that the Congressional intent
is closely followed.
Second, the Commission has an opportunity to overhaul the
special-access market. As an FCC official noted last month,
there is widespread agreement that the existing framework is
broken. I am hopeful that the FCC will proceed expeditiously
with a mandatory data request and collect the data that is
necessary to reform the special-access market on a
comprehensive basis. This has been hanging around for a long
time. So I think that that needs to be really moved to the
front burner.
Third, in less than 30 days, the FCC's rules to place the
political file online will go into effect, and I want to thank
the Commission for what it has done. We have to sometimes
remind ourselves that we are in the 21st century, not the 19th
or the 20th. We need to go beyond wooden file cases, even metal
file cases. There is an Internet. Everything goes online. So I
look forward to this, as a long-time supporter of this action.
I want to thank the Commission and I look forward to seeing the
Commission proceed with bringing the information online, and as
I said, out of these cabinets that probably sit in the
basements of stations today.
There are many more issues I hope we will cover in today's
hearing including efforts to improve consumer disclosure of
wireless data plan terms and conditions, the impact of
discriminatory data caps on future innovation, and steps being
taken, and I know many have been, to expand broadband adoption.
So thank you, Mr. Chairman, for holding this hearing, and I
would like to yield my remaining time to Ms. Matsui.
OPENING STATEMENT OF HON. DORIS O. MATSUI, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Matsui. Thank you so much, Ranking Member Eshoo, for
yielding me time. I want to welcome our new Commissioners,
Commissioner Rosenworcel and Pai, along with our Chairman
Genachowski and Commissioners Clyburn and McDowell. We love to
have the full complement of Commissioners here.
While the FCC has a lot on its plate, one of its major
tasks will be undertaking arguably the most complex spectrum
auction in history. It is imperative that the process be
transparent, and I believe Congress must work closely with the
FCC to ensure the auction's success. As co-chair along with Mr.
Guthrie of the bipartisan Federal Spectrum Working Group, we
have another unique opportunity to work closely with the FCC,
NTIA, DOD and other relevant agencies in truly identifying
underutilized Federal spectrum.
Our Nation continues to face a spectrum crunch. As a first
step, Congressman Stearns and I introduced bipartisan
legislation to repurpose the 1755 to 1780 spectrum ban for
commercial use.
Lastly, while there are some tough decisions ahead, I want
to encourage the FCC to move forward with the USF reform
efforts. As part of its reforms, I am pleased that the
Commission is moving forward with a broadband adoption pilot
program similar to legislation I introduced last year, the
Broadband Affordability Act. These pilot projects will help
provide greater access to the Internet for seniors, the
disabled and lower-income Americans in both urban and rural
America. It is my hope that the FCC will use the data gathered
from the pilot program to implement a responsible, permanent,
broadband adoption program. I look forward to working with the
Commission on these and other issues, and yield back the
balance of my time.
Mr. Walden. The gentlelady yields the balance of her time.
The chairman now recognizes the chairman of the full
committee, the distinguished gentleman from Michigan, Mr.
Upton.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Thank you, Mr. Chairman. I too join in welcoming
our two new Commissioners and all five of you together.
This is an exciting time. We passed landmark spectrum
legislation earlier this year that will indeed help kick-start
our economy, promote investment and jobs, and provide Americans
access to new and innovative services. The legislation does
this by putting more frequencies in commercial hands as the
Internet goes mobile and demand for wireless broadband
continues to grow tremendously.
First, it requires the FCC to auction 65 megahertz of
particular spectrum within the next 3 years, and Mr. Chairman,
I look forward to hearing your plans for this spectrum,
including the frequencies from 2155 to 2180 megahertz, which
are ideally suited for pairing with the spectrum from 1755 to
1780.
Second, the legislation authorizes the FCC to conduct
incentive auctions in which the government shares some proceeds
with licensees, including broadcasters, that voluntarily return
spectrum to be auctioned for broadband services. I am eager to
learn when you will start implementing the incentive auctions
and when you think the broadcast incentive auction will indeed
take place. I also want to reinforce what we required in the
legislation: that the FCC not preclude parties from
participating in the auction. The FCC should not be picking
winners and losers, and the more robust an auction, the more
successful that it will be.
I would also like to hear about your plans for special
access services. I am glad you chose not to move forward with
the draft order that would have suspended the current pricing
flexibility regime even though parties had petitions pending.
This regime was put in place by a Democrat-led FCC to allow
limited deregulation where the parties demonstrate the presence
of competition. And as we know, we have made good process a
priority in this Congress, and it would have been inappropriate
to change the rules in the middle of the game.
I understand you may be redrafting that item. I am
interested to know whether you will first move forward with a
mandatory data collection, as reported, to determine whether
changes are appropriate and, if so, what kind. I also want to
make sure that you keep in mind the purpose of the pricing
flexibility regime: to gradually stop applying some old rules
to old technology in the presence of competition, not to start
imposing new rules on new technology, like fiber facilities and
Ethernet services designed for the broadband world.
I also look forward to hearing about the impact of the
massive storm that swept from the Midwest through the Mid-
Atlantic region just over a week ago. There were reports that
phone service and 911 call centers were down. How extensive was
it? What were the causes? What can we do to stop them again?
I yield the balance of my time to Mr. Stearns.
[The prepared statement of Mr. Upton follows:]
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OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Mr. Stearns. Thank you, distinguished full Chairman, and
let me just also welcome the two Commissioners, and I want to
applaud the FCC for taking the steps to reform the Universal
Service Fund. Any small step forward is good. I encourage you
to conclude your operation and work forward.
I think I am also interested in how the FCC believes
Federal spectrum can alleviate today's spectrum crunch, and the
Federal Government occupies approximately 60 percent of the
best spectrum which the FCC must strongly consider as it seeks
to reach its goal set out in the national broadband plan.
Mr. Chairman, I think you and I had called for an inventory
during the stimulus package when you had the broadband
deployment of $7.5 billion. We wanted to map it before it was
given out; it wasn't. I think we should also have a spectrum
inventory of the military and elsewhere to see how much they
have to possibly see how much of that is available to help the
private sector. I have introduced a bill, as Congresswoman
Matsui mentioned, H.R. 4817, Efficient Use of Government
Spectrum Act. This is a small step forward, which we believe is
helpful and we would like to have a hearing on it.
And finally, Mr. Chairman, the FCC must continue to work
diligently on clearing its backlog. Part of the problem that we
find across government is there is a backlog, whether it is in
the Veterans Administration or the FCC. The agency is making
headway. I compliment you on that. But many items that could
fuel job growth and investment have lingered. Perhaps I will
just name a few without taking any positions on the merits of
these. That is the Securus petition, Anda's application for
review, Sky Angel's program access complaint, and of course,
the Illinois Public Telephone Association petition for a
declaratory ruling. I hope the FCC will look at that.
I thank you, Mr. Chairman.
Mr. Walden. The gentleman's time has expired.
The chair recognizes the distinguished gentleman from
California, Mr. Waxman, for 5 minutes.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you, Mr. Chairman, for holding this
hearing, and I want to welcome back Chairman Genachowski and
Commissioners Clyburn and McDowell. You have been before our
committee before. And I am pleased to also welcome the two new
members from the Commission, Jessica Rosenworcel and Ajit Pai.
I am sure you are both going to prove worthy of the long wait
you had to get your confirmation to join the Commission, and we
are all looking forward to working with you as well.
The communications and technology industry is a source of
incredible innovation and it is an engine for national economic
growth. The FCC's charge is to promote robust competition,
ensure access to service for all, and safeguard the American
consumer, and all these become even more important as these
technologies play an increasing role in our daily lives.
This was certainly brought home to us as recent weather-
related incidents made abundantly clear. Americans rely on
broadband devices and applications more than ever, and our
lives are greatly enhanced by access to these critical
services. When we had the massive power outages throughout the
mid-Atlantic region, it led millions of Americans to malls and
coffee shops, not necessarily to seek an air-conditioned
environment, shop or drink coffee, but to recharge their
phones, tablets and computers. These devices needed to have
power in large part so that they could be connected to the
Internet.
In light of our increasing reliance on the Internet, it is
imperative that our communications laws and regulatory policies
not only continue to promote the innovation that our Nation
exports worldwide, but also ensure that Americans have
reliable, affordable, access to the Internet at home.
Earlier this year, Congress passed legislation charging the
FCC with carrying out two critical tasks: ensuring
interoperability for a nationwide broadband network for first
responders and making more spectrum available for mobile
broadband through incentive auctions, and I am pleased that the
Chairman has retained a world-class team to help design and
implement these unprecedented auctions.
I also understand the FCC is now considering how to
integrate jurisdictions that had previously received waivers to
build-out their public safety network into FirstNet. I strongly
urge the Commission to limit the potential for early builders
to undermine the long-term success of FirstNet.
The FCC has also taken long overdue steps to modernize the
high-cost and low-income Universal Service Fund programs. These
limited public dollars must be used wisely to connect millions
of Americans unserved by broadband or facing barriers to
adoption, and I urge you to continue moving forward with
reform. Under Chairman Genachowski's leadership, you are
collectively making the tough policy calls that need to be made
and I support your efforts.
Special access is a concern. It is long overdue for reform.
There is widespread agreement that the current deregulatory
triggers are broken, even from many incumbent providers of
these services, and I hope the Commission will move quickly to
gather additional industry data as needed and address the
potentially anticompetitive terms and conditions in special-
access contracts.
And finally, I urge the Commission to scrutinize carefully
the transactions between Verizon and four of the Nation's
largest cable companies. Serious questions have been raised
about the impact these integrated deals will have on video,
broadband and wireless competition. We are hearing from a
variety of corporate and public interest stakeholders who are
very concerned about what these deals mean for competition. I
know the Department of Justice as well as the FCC both have
important responsibilities in this process and should
coordinate their respective reviews as the agencies examine
these proposed arrangements.
I look forward to your testimony and want to thank you
again for appearing before our committee.
Mr. Chairman, I want to yield the balance of my time to our
colleague, Ms. Christensen.
OPENING STATEMENT OF HON. DONNA M. CHRISTENSEN, A
REPRESENTATIVE IN CONGRESS FROM THE VIRGIN ISLANDS
Mrs. Christensen. Thank you, Mr. Chairman, and I would also
like to add my word of welcome to Commissioners Clyburn and
McDowell, who are back with us, and of course, Mr. Chairman and
to the two new members, and I really want to thank the
Commission for the work that you have done to streamline and
make the work of the Commission more efficient and also more
transparent.
I am particularly interested in the FCC's USF reform
proposed changes to intercarrier compensation and its potential
impact on rural service providers in territories. In my
district, the U.S. Virgin Islands, we are extremely concerned
that the proposed cost model currently being reviewed by the
Wireline Competition Bureau would reduce support for our
incumbent provider potentially from $16.4 million to only
$400,000.
And also, as a member of the Working Group on Spectrum, I
look forward to working with you and service providers to
address spectrum scarcity. I know that companies like Verizon
Wireless and T-Mobile are taking the initiative to find
solutions and they are under your review right now, but working
with you and the working group, I know that we will find some
solutions as well.
Thank you. I yield back the balance of my time.
Mr. Walden. The gentlelady yields back the balance of her
time. Does the gentleman yield back the balance of his time? He
does.
And now we will proceed on to our witnesses, and we are
certainly delighted to have all of you here today and respect
the work that you do, and Chairman Genachowski, we are going to
lead off with you. Thank you for being here and we look forward
to your testimony.
STATEMENTS OF JULIUS GENACHOWSKI, CHAIRMAN, FEDERAL
COMMUNICATIONS COMMISSION; ROBERT M. MCDOWELL, COMMISSIONER,
FEDERAL COMMUNICATIONS COMMISSION; MIGNON L. CLYBURN,
COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION; JESSICA
ROSENWORCEL, COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION;
AND AJIT PAI, COMMISSIONER, FEDERAL COMMUNICATIONS COMMISSION
STATEMENT OF JULIUS GENACHOWSKI
Mr. Genachowski. Thank you, Chairman Walden and Ranking
Member Eshoo, members of the committee. I am pleased to be
joined by a full complement of Commissioners including my
newest colleagues, Commissioners Rosenworcel and Pai. I am
certain that the members of this committee will find them to be
excellent additions to the Commission, as I have.This is my
seventh time testifying before this committee and I have been
fortunate to meet with many of you individually.
So by now, most of you know that that my primary focus as
Chairman has been promoting innovation, investment, competition
and consumers in the ICT sector. We focused the agency on
maximizing the benefits of broadband communications, and on
harnessing wired and wireless broadband to grow our economy,
create jobs, enhance U.S. competitiveness, and foster
improvements in areas like education, health care and public
safety.
Let me provide a brief overview of some recent developments
since I last testified before you about 5 months ago. First, we
continue to receive good news for the United States from across
the broadband sector. The United States has regained global
leadership, particularly in mobile. The United States leads the
world in 3G subscribers by a wide margin, and we are leading
the world in deploying 4G mobile broadband at scale.
The apps economy continues to grow, and U.S. firms and
developers continue to lead the way. In the last 3 years, the
percentage of smartphones globally with U.S. operating systems
has grown from 25 percent to more than 80 percent. And in the
last 3 years, we have gone from less than 20 percent of our
population living in areas with broadband infrastructure
capable of broadband speeds above 100 megabits to approximately
80 percent, more than triple in 3 years, putting us at or near
the top of the world.
Of course, in this fast-moving sector, there are many
challenges ahead, and our global competitors remain focused on
broadband opportunities. So at the FCC, we continue to work to
help drive our broadband economy. We continue our efforts to
spur broadband buildout, including by removing barriers to
deployment. Just last month, the President issued an Executive
Order implementing recommendations of the FCC's National
Broadband Plan, our Technological Advisory Council, and members
of this committee, and I acknowledge Congresswoman Eshoo's
leadership on this. The Executive Order took steps to ease
access to Federal roads, lands and buildings for broadband
infrastructure. It also directed the Department of
Transportation to develop ``dig once'' policies.
As part of our Mobile Action Plan, we have taken several
recent actions to spur mobile innovation and investment and
free up spectrum. In March, we launched a rulemaking on a
proposal to remove barriers to flexible spectrum use in the
proposed AWS-4 band. We are close to completing our work to
free up 25 megahertz of spectrum in the WCS band. In May, we
removed outdated rules on spectrum use in the 800 megahertz
band, which will help accelerate LTE. And in August I expect
that we will continue our ongoing efforts to remove unnecessary
rules hindering the deployment of wireless backhaul.
We are making progress on other pieces of our Mobile Action
Plan. The Commission is working with NTIA to facilitate
industry tests of LTE sharing in the 1755-1780 megahertz band,
and of course, we are hard at work designing the world's first
incentive auctions to implement the landmark recently enacted
law, a complex task affecting major parts of our economy and
involving many challenging questions of economics and
engineering. I expect the Commission will put forward proposals
by the fall and seek broad public comment.
We are also on track to fulfill our obligations under the
recent law that relate to the new national mobile broadband
public safety network, and we continue to work on a full range
of public safety communications issues. I am concerned about
911 and other communications outages during the recent storm in
the DC area. This is something we are investigating and take
seriously.
On other matters, we are moving forward with implementation
of our unanimously approved comprehensive reform of the
Universal Service Fund (USF). These reforms will finally bring
broadband to millions of unserved people in rural America while
putting the fund on a fiscally responsible budget. We recently
announced the availability of the first rounds of funding under
the Connect America Fund and Mobility Fund, and just yesterday
Frontier announced that it will be deploying broadband to
approximately 200,000 unserved Americans as a result of the new
Connect America Fund.
The Commission is also helping to tackle threats to our
broadband economy. As the result of an FCC-led process on
cybersecurity, ISPs serving 90 percent of all U.S. residential
broadband subscribers have committed to adopting voluntary,
concrete measures to combat three major threats: botnets, IP
route hijacking and domain name fraud. Working with the
Nation's police chiefs, we reached an agreement with the major
mobile carriers to create a database of stolen cell phones,
which will help crack down on the growing problem of smartphone
theft.
And I continue to speak both publicly and privately with my
international counterparts about the vital importance of
preserving Internet freedom and the multi-stakeholder model of
international Internet governance. I commend this committee for
its bipartisan resolution reaffirming the United States'
unequivocal support for the successful multi-stakeholder model.
On top of all of these efforts, we continue working to make
the agency more open, efficient and effective. I have
previously reported on the many concrete steps we have taken to
reduce backlogs and speed decisions. I am pleased to report
today that over the past 6 months we have made significant
reductions in our backlog, including a more than 20 percent
reduction in items pending more than 6 months in the Wireline
Bureau, and an across-the-board 20 percent reduction in license
applications and renewals pending more than 6 months. We have
also cut the average number of days required to review routine
wireless transactions in 2012 by more than half.
I appreciate the opportunity to be here today. I look
forward to continuing to work with this committee to identify
opportunities to unleash communications technologies to benefit
our economy and all Americans. Thank you.
[The prepared statement of Mr. Genachowski follows:]
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Mr. Walden. Thank you, Chairman. We appreciate your
testimony and your work and now we will turn to Commissioner
McDowell. Thank you for being here. We look forward to your
comments as well.
STATEMENT OF ROBERT M. MCDOWELL
Mr. McDowell. Thank you, Chairman Walden and Ranking Member
Eshoo and all members of the committee. It is great to be back
here. I was just here 6 weeks ago, so it is good to be back.
The FCC's to-do list is quite lengthy. Among the many tasks
that face the agency are, in no particular order: implementing
the new spectrum auction law; completing universal service
contribution, or tax reform; modernizing our media ownership
rules; determining a path forward in the wake of the Supreme
Court's recent ruling regarding our indecency policies; and
turning back international efforts to regulate the Internet.
First, as the Commission works to implement the new
spectrum auctions law, we should do it with simplicity,
humility and restraint. History teaches us time and again that
over-engineered or micromanaged auctions and spectrum policies
inevitably lead to harmful unintended consequences such as
interoperability complications, reduced investment and less
revenue generated at auction for the Treasury. Band plans and
auction rules should be minimal and future-proof so no
innovation is preempted by government action and no market
player is excluded from the opportunity to bid.
Second, to help put more spectrum into the hands of
American consumers, we need to find new ways to encourage the
Executive Branch to relinquish Federal spectrum for auction, as
well as help create a policy framework to encourage
technological advancements and investments in spectral
efficiency, that is, how can we squeeze more capacity out of
currently available airwaves.
Third, although the Commission has completed most of its
work on the spending side of the universal service ledger, we
are overdue for an overhaul of the taxing side. As this
automatic tax increase skyrockets into unprecedented
stratospheric heights, we have an obligation to finalize
fiscally prudent reform as soon as possible.
Fourth, way back in 1996, Congress directed the FCC to
clear away unnecessary regulations in the media marketplace as
competition takes root. Although complicated by several
appellate rulings, the Commission owes it to Congress, the
courts and, most importantly, the American people to modernize
our rules to reflect the competitive realities of the new media
age. In my view, the newspaper broadcast cross-ownership rule
is outdated, is contributing to a loss of voices in the media
marketplace and should be largely eliminated.
Fifth, as the father of three young children, protecting
them from inappropriate content is a high priority for our
family. The Commission should act with all deliberate speed to
clarify its indecency policy in the wake of the recent Supreme
Court decision on this matter and work to process the roughly
1.5 million indecency complaints, some of which have been
pending for over 9 years.
Lastly, I would like to thank this subcommittee in
particular once again for raising the profile of the
international effort to regulate the Internet. The May 31st,
which hearing was watched literally around the world, as I
learned from my trip to Italy recently, it delivered a loud and
clear message that not only is it the strong bipartisan policy
of the United States to ensure that the expansion of
intergovernmental powers over the Net never takes place, but
that failure to prevent this effort would harm developing
nations the most.
So thank you again for having us here, and I look forward
to answering your questions.
[The prepared statement of Mr. McDowell follows:]
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Mr. Walden. Thank you for your thoughtful testimony.
We now go to Commissioner Clyburn. Thank you for being here
and we appreciate the work you are doing on the Commission and
look forward to your comments as well.
STATEMENT OF MIGNON L. CLYBURN
Ms. Clyburn. Thank you. Good morning, Chairman Walden,
Ranking Member Eshoo and members of the committee.
I am grateful for the opportunity to testify before you
today. Through a collaborative and inclusive decision-making
process, the Commission is issuing rulemakings and setting
policies that are creating a foundation for innovation and
investment, for we all share the goal of promoting robust
competition throughout all industry sectors, and by continuing
this dialogue between the Commission, Congress and all
stakeholders, we are on the path towards fostering a vibrant
and dynamic communications marketplace.
The ideal communications environment consists of a host of
viable competitors, constantly innovating and challenging one
another with a myriad of products and service offerings.
Today's reality, however, is far from this utopian ideal. There
are still times where the communications ecosystem fails to
properly address key consumer interests. When that occurs, the
FCC is charged with playing a vital role that necessitates
striking the delicate balance between two equally important
considerations: the protection of consumers and regulatory
certainty for businesses.
Under the leadership of Chairman Genachowski, the FCC has
worked collaboratively with stakeholders in crafting policies
and solutions in response to industry concerns. And while we
encourage voluntary solutions that will give the marketplace
greater flexibility to respond to ever-evolving consumer needs,
we recognize that this will not always take place. The
Commission is justified in some instances in the adoption of
smart, targeted regulations when necessary to promote
meaningful competition in order to ensure that basic
protections are in place. And even in instances where the
Commission must codify regulations, we make sure that lines of
communication remain open and have implemented waiver
procedures so that we can take into consideration the unique
circumstances of industry participants.
Last October, the Commission adopted reforms to the
Universal Service Fund put it on a sound, more sustainable
path. Today, with more Americans using mobile services than
ever before, and with broadband now serving as a gateway by
which most Americans obtain critical information and services,
the fund needed to be updated to reflect modern-day realities.
The reforms that we adopted will promote significant
broadband deployment to millions of unserved consumers in our
Nation as quickly as possible over the next 6 years. Most
importantly, our reform carefully balances the need for
certainty and predictability for carriers by avoiding flash
cuts and providing transitions so they may adjust to the
changes.
Another example of how efficient progress is being made
through collaboration is reflected in recent Commission action
to spur the creation of new Body Medical Area Networks, or
MBANs. These devices, which are about the size and shape of a
Band-Aid, are going to revolutionize health care. They are
disposable, low-cost inventions that send signals to a nearby
information aggregation device by way of a low-power radio
transmitter. They will allow hospitals to monitor patients'
vital signs, such as heart rate and blood pressure levels,
without all the wires and cables that tether a patient to
machines. MBAN devices should also attract capital
investigation and spur business development and job creation as
the health care profession and the wireless industry again join
forces in deploying innovation nationwide.
At the FCC, we are also committed to equal provision of
communications services to all. In addition to expanding
sustainable broadband service to rural and underserved
Americans, we are also tackling addressing those with
disabilities. Congress paved the way for the Commission's
advocacy of these issues by enacting the 21st Century
Communications and Video Accessibility Act. Under the CVAA, two
initiatives will come into effect this month. The first is
network video descriptions, which will allow blind or sight-
impaired viewers to more fully benefit from network programs.
The second is the National Deaf-Blind Equipment Distribution
Program, which will provide funding for up to $10 million
annually for the local distribution of communications equipment
to low-income individuals who are deaf-blind. This represents
an important moment towards ensuring that individuals who are
deaf-blind are better able to utilize our Nation's
communications systems.
At this juncture, I will yield out of respect for time and
will offer myself for questions that you may have. Thank you.
[The prepared statement of Ms. Clyburn follows:]
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Mr. Walden. I thank the Commissioner. We appreciate your
work and your testimony.
Ms. Rosenworcel, we are delighted to have you here before
the committee. We welcome you and we and look forward to your
comments.
STATEMENT OF JESSICA ROSENWORCEL
Ms. Rosenworcel. Good morning, Chairman Walden, Ranking
Member Eshoo and members of the subcommittee. It is an honor to
appear before you today in the company of my new colleagues at
the Federal Communications Commission. I also would like to
thank Chairman Genachowski, Commissioner McDowell, Commissioner
Clyburn and the FCC staff for the warm and generous welcome I
received when I was sworn into office with Commissioner Pai
just 2 months ago.
Let me begin by noting that there is no sector of the
economy more dynamic than communications. By some measures,
communications technologies account for one-sixth of the
economy in the United States. They support our commerce, they
connect our communities, and they enhance our security. They
help create good jobs. By unlocking the full potential of
broadband, they will change the way we educate, create,
entertain and govern ourselves.
But communications technology is changing at a brisk pace.
Laws and regulations struggle to keep up. So it is important
that the FCC approach its tasks with a healthy dose of
humility. At the same time, I believe that there are enduring
values in the Communications Act that must always inform our
efforts.
First, public safety is paramount. Congress directed the
FCC to promote the safety of life and property in the very
first sentence of the Communications Act. The Middle Class Tax
Relief and Job Creation Act builds on this principle with its
framework for a nationwide network for first responders. Just
last week in Washington we were reminded how vulnerable we are
without access to communications. Weather-related power outages
across the region brought life to a halt, as wireless towers
and 911 centers failed too many of us. Now the FCC must begin
an investigation. It must search out the facts wherever they
lead and apply the lessons we learn, so that our networks are
more resilient, more secure and more safe.
Second, universal service is essential. No matter who you
are or where you live, prosperity in the 21st century will
require access to broadband. The FCC's ongoing efforts at
broadband deployment and adoption are built on this simple
truth. But I believe the principle of universal service goes
further. It incorporates the direction from Congress and this
committee in the 21st Century Communications and Video
Accessibility Act, which has helped the FCC expand digital age
opportunity to 54 million Americans with disabilities.
Third, competitive markets are fundamental. Competition
inspires private sector investment. It is the far and away the
most effective means of facilitating innovation and ensuring
that consumers reap its benefits.
Fourth, consumer protection is always in the public
interest. Communications and media services are growing more
complex and becoming a more substantial part of household
budgets. It is vitally important to get consumers the
information they need to make good choices in a marketplace
that can be bewildering to navigate. Here the FCC, working with
industry, has made strides, including with its new bill shock
initiatives. But going forward, the FCC should strive to make
the data it produces more useful for consumers and make the
complaint process more responsive to their needs.
In the months ahead, the FCC will have no shortage of
challenging issues to address. Let me highlight one that you
are undoubtedly familiar with: the growing demand for spectrum.
The statistics vary, but are undeniably striking. In the next 5
years, mobile data traffic will grow between 16 and 35 times.
But let me start by traveling back. For nearly 2 decades,
the FCC's path-breaking spectrum auctions have led the world.
The agency has held more than 80 auctions, issued more than
36,000 licenses, and raised more than $50 billion for the
United States Treasury. In the Middle Class Tax Relief and Job
Creation Act, Congress provided the FCC with authority to hold
a new kind of auction--incentive auctions. I am confident that
with the right mix of engineering and economics, the agency can
once again serve as a pioneer. It should strive to do so in a
manner fair to all stakeholders. I also believe that with a
concerted effort, the FCC can identify ways that guard bands
can support new and innovative unlicensed services,
contributing billions to our economy. But I do not believe that
incentive auctions alone will meet our spectrum challenge.
The equation here is simple. The demand for airwaves is
going up. The supply of unencumbered airwaves is going down.
This is the time to innovate. We must put American know-how to
work and create incentives to invest in technologies--
geographic, temporal and cognitive--that will multiply the
capacity of our airwaves. We also must find ways that reward
Federal users when they make efficient use of their spectrum
and provide real incentives for sharing or return when their
allocations are underutilized.
It is an exciting time in communications. The issues before
the FCC are not easy. But the rewards of getting them right are
tremendous. They will grow the economy, create jobs, raise
wages and enhance our civic life.
Thank you for the opportunity to appear before you today. I
look forward to any questions you might have.
[The prepared statement of Ms. Rosenworcel follows:]
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Mr. Walden. Thank you, Commissioner. We appreciate your
comments, especially the ones at the end. We have a working
group on government spectrum and we would welcome any comments
you may have as they continue their work, so we may be calling
on you.
We recognize now the--are you the newest Commissioner? I
don't know, in the seating order, who came last?
Mr. Pai. Technically, yes, I am the most junior member.
Mr. Walden. All right. Well, we will save your testimony
for last, then, but now you are on. Thank you for being here,
Commissioner Pai. We welcome your comments and your service on
the Commission, and please feel free to go ahead.
STATEMENT OF AJIT PAI
Mr. Pai. Thank you, Mr. Chairman. Chairman Walden, Ranking
Member Eshoo, and members of the committee, thank you for
inviting me to testify at this hearing today. I have been
honored to meet recently with many of you, and it is a
privilege to make my first appearance before you in my capacity
as a Commissioner.
At my confirmation hearing, I testified that a good
Commissioner must be a good listener. During my first 7 weeks
in office, I have tried to be just that. I have held over 80
meetings with representatives of companies, public interest
groups, trade associations, Members of Congress, and others.
Everyone, of course, has distinct views on how the FCC is
doing, but there is a common refrain: the FCC needs to become
more nimble in discharging its responsibilities.
I have been struck by how many parties have suggested that
the Commission has delayed taking action in a particular
proceeding for months, for a year, or even for the better part
of a decade. This has been a longstanding issue. I believe we
must act with the same alacrity as the industry we regulate
because delays at the Commission have real-world consequences:
new technologies remain on the shelves; capital lies fallow;
entrepreneurs stop hiring or, even worse, reduce their
workforce as they wait for the regulatory uncertainty to work
itself out. None of these outcomes benefits the American
economy or the American consumer. That is why one of the
members of this subcommittee recently advised me that what was
most needed from the FCC was speed. To that end, I support
initiatives such as shot clocks and sunset clauses. The former
measure sets deadlines for Commission action while the latter
requires periodic re-evaluation of existing rules. In different
ways, each ensures timelier decision-making at the Commission
as well as a regulatory framework better calibrated to a
dynamic marketplace.
One critical area where we must act with greater dispatch
is spectrum. The National Broadband Plan set two targets: 300
megahertz in additional spectrum by 2015 for mobile broadband;
and 500 megahertz by 2020. Unfortunately, we are not on track
currently to meet these goals. Two years after the plan was
adopted, none of the bands identified today can be used for
mobile broadband. This situation must change.
One near-term opportunity is the 40 megahertz of spectrum
in the AWS-4 band. Earlier this year, the Commission issued a
NPRM on establishing service, technical and licensing rules for
this band to facilitate its use for terrestrial broadband. The
comment cycle in that proceeding has ended, and I believe we
should issue rules by the end of September.
In the intermediate term, incentive auctions hold the
greatest promise of increasing the stock of commercial spectrum
for wireless broadband thanks to legislation passed by Congress
and shaped by the subcommittee. It is an exciting opportunity
but also a daunting one. No nation has ever held a more complex
set of auctions. My view is that we should roll up our sleeves
and commence a rulemaking no later than the fall.
Over the longer term, we need an all-of-the-above approach
to spectrum policy. We must allocate and encourage the
efficient use of any and all bands that can be utilized for
commercial wireless broadband services. We must work with NTIA
to facilitate the relinquishment of Federal spectrum. We must
expedite a review of secondary market transactions. We must
remove barriers that stand in the way of spectral efficiency,
and we must encourage unlicensed use of spectrum where
appropriate.
Spectrum aside, the Commission must recognize that the
country is moving away from copper wire networks toward a
competitive world of IP networks but billions of dollars in
potential capital investment are sitting on the sidelines
because of uncertainty over how the Commission intends to
regulate IP networks. I am worried that recent hints about the
direction of special-access regulation, not to mention the
still-open Title II proceeding, are only going to further chill
investment. These proposals signal to the private sector that
outdated economic regulations are very much on the table when
it comes to IP networks. I do not support imposing these
regulations on high-capacity services because that will only
depress infrastructure investment and discourage job creation.
Moving to the issue of process reform, I want to thank this
subcommittee for its views on improving the Commission's work.
The FCC does not have to wait, however, for a law to be
enacted. Indeed, we can incorporate some of these proposals
now. To give just an example, the adoption of new regulations
always should be predicated upon the Commission's determination
that their benefits outweigh their costs.
In conclusion, my goal is to work with the Chairman and my
fellow Commissioners to bring communications regulations fully
into the 21st century. The FCC needs to be a nimble agency that
removes barriers to technological innovation and infrastructure
investment, for it is innovation and investment that will
result in better services, lower prices, economic growth and
job creation, and working together, I am very confident that we
can do just that.
Thank you once again, Mr. Chairman, for affording me this
opportunity and I look forward to the questions from members of
the panel.
[The prepared statement of Mr. Pai follows:]
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Mr. Walden. Mr. Pai, thank you for your fine words and the
compliments of our work, and I appreciate some of the staff
hires you have made there with Nick as well. You got him out of
our hair. No, he is doing a great job.
We are going to start off with questions now and I am going
to start with the Chairman. Chairman Genachowski, under your
new order, the FCC's new order, television stations in the top
50 markets by August 2nd, which is 22 days away, are going to
have begin posting on a new site information related to
television buys. There are questions about what is going to
have to be posted. I know you have got a webinar coming up, I
think next week, but I wonder, in terms of having been a
broadcaster what is required, can you show us on your Web site
where we could go to find what they are required to post in
specificity? Because the order came out in April, I think, and
the Commission said it would make a version of the political
database available very soon after adoption of the item. That
has been almost a couple months ago now. A lot is happening,
and we have got your site up here. Can you tell us--I have
never been good at navigating your site, by the way. That is
another issue for another day. Can you tell us, if you a TV
broadcaster in the top 50 market where on the FCC's Web site
you go to find out how to comply and what is required?
Mr. Genachowski. Sure. They are on the Web site. If you
search for public inspection file, I think that one of the
things you will see is the announcement for the demonstration
and workshop next week, which will be the primary way in
addition to the order that came out, which was quite clear that
broadcasters can learn exactly what is required. Of course, it
is very simple. Broadcasters already keep records in their
public files in their stations on all the elements that need to
be filed online. They will be able either to email them to the
FCC or to upload them. It is a very simple process----
Mr. Walden. So will this----
Mr. Genachowski [continuing]. Next week will help
elucidate.
Mr. Walden. And so that is spelled out here. It is whatever
in the public file goes up online?
Mr. Genachowski. Well, the order itself says very clearly
what is required as well as the press release that summarizes
the order.
Mr. Walden. So is that order available right there? I can't
read it either.
Mr. Genachowski. Unfortunately, I can't read it from here.
Mr. Walden. Well, I guess--so if I have got an order in to
my stations starting--well, it doesn't start August 2nd. Let us
say it starts in October but I have received it today but I may
have a couple of flights. Some may run in September, some may
run in October, some may run this month. I mean, there is a war
going on out in about 9 States right now at the presidential
level. What has to go up online August 2nd?
Mr. Genachowski. Well, again, the primary requirements are
already in place. Broadcasters are already obliged to place in
their public files documents relating to----
Mr. Walden. So is it the buy that is running now that goes
through then? Is it the information on the buy starting August
2nd forward?
Mr. Genachowski. The general rule of thumb that we adopted
in the order was that the implementation would go forward. I am
not sure of the answer to your question what that means. I
presume that it would mean that any buys that occur after the
date of August 2nd, but that is the kind of question that will
come up----
Mr. Walden. Does this include inquiries for time? Do they
have to be posted up there even if a buy hasn't taken place?
Mr. Genachowski. Beginning August 2nd, anything a
broadcaster would otherwise have to put physically in its
public file at the station, it will also have to put online.
And by the way, we found since we did this that companies like
Time Warner made the decision a couple of years ago to just put
everything they were doing online because they found it cheaper
and more efficient and effective to do it. They moved to online
from paper, and we expected that as broadcasters implement----
Mr. Walden. And when you talk about Time Warner, you are
talking about their broadcast television side, not their cable?
Mr. Genachowski. No, I am talking about the cable side
because they also have to keep certain files under----
Mr. Walden. So the cable operator is going to have to put
this up as well?
Mr. Genachowski. The rules that we adopted apply only to
broadcasters. I was pointing out that companies like Time
Warner have decided on their own that online is actually
cheaper and more effective than paper anyway.
Mr. Walden. Let me shift gears, because there has been a
lot of incoming regarding NTIA's suspension of the BTOP grants
in some States. My colleague from California, Mr. Waxman,
mentioned a bit about that. I am hearing from some States
including my own concerns about the suspension of the grants
and that in some cases that may put States out of compliance
with the requirement that allows them to have this spectrum
which I think in Mississippi's case by September could mean
that you would have the authority to take back their public
safety spectrum. So I guess the question is, do you think NTIA
has this authority on its own to suspend these grants? Question
one.
Mr. Genachowski. Well, I wouldn't comment on NTIA's
authority. I think NTIA should speak to its authority.
Mr. Walden. All right. But that may fall into your lap at
the FCC if NTIA suspends the grants, a State is then out of
compliance. You then have the authority to take back some of
their spectrum because they are out of compliance. So at some
point you are going to have to make a decision whether they
have the authority or not, right? So are you telling me you
don't know of any authority they have to suspend these grants?
Mr. Genachowski. Congress in the new law did something that
was a landmark step even separate from incentive auctions, and
that is finally move forward on creating a national
interoperable public safety network.
Mr. Walden. Right.
Mr. Genachowski. And the clear direction of Congress was
one network, FirstNet, in addition to asking the NTIA to take
the lead on that. As you point out, we do have some pending
specific issues that we have to work through. We are doing it
together with NTIA and I look forward to working with the
committee----
Mr. Walden. But to interrupt you, some of these States have
told me they have contracts with their providers that require
that whatever gets built out matches whatever FirstNet puts out
for interoperability and yet they are being suspended.
Mr. Genachowski. Well, these are the issues. What we need
to do now is together with NTIA look specifically at the waiver
grants and determine how to get the balance right between
moving forward as Congress intended with a nationwide FirstNet
and dealing with particular public interest issues that come
up. The fundamental goal that we understand is a nationwide
interoperable network giving----
Mr. Walden. Right. Nobody disagrees with that. Their
concern, and I am sure you are keenly aware of this as we are,
we want both. There is no question. We don't want the taxpayer
money wasted. We want to build out. We want it to be
interoperable. I am being told that is what they are doing.
September 2nd may be the drop-dead date where they are out of
compliance so you can imagine their panic here is what do we do
if our money has been withheld, we have been stopped but we
could be out of compliance with your agency by September 2nd.
My time is expired. I flagged that for you. Maybe later we
can talk more.
Mr. Genachowski. Thank you.
Mr. Walden. I now recognize the ranking member of the
subcommittee, Ms. Eshoo.
Ms. Eshoo. Thank you, Mr. Chairman, and thank you to all
the Commissioners for your wonderful and important testimony.
Chairman Genachowski, bravo. Those were very, very
impressive numbers, and as you know, I have said ad nauseum
here that the United States of America should be number one--
number one in broadband, number one across the board, and I
think that these numbers are really very, very important, that
we are reclaiming important leadership in what you outlined, so
I congratulate you and the members of the Commission.
Tomorrow, there will be hundreds of people from around the
bay area that are going to gather at Stanford University for a
one-day event on the power and the potential of the unlicensed
economy. You know that the auction provisions in the spectrum
bill were really carefully crafted to preserve, protect and
enhance unlicensed spectrum. So my question to you is, what
steps are you taking to ensure through FCC rules that will
provide innovators and entrepreneurs with the regulatory
certainty they need to develop the next generation of
unlicensed technologies? I have a whole list of questions so
just be as brief as you can.
Mr. Genachowski. I will answer briefly.
Ms. Eshoo. I need a good flavor of what you are going to
do.
Mr. Genachowski. I completely agree with your premise and I
think it is widely shared at the FCC. Unlicensed has been an
extraordinary success story. It gave us WiFi, trillions of
dollars of impact on our economy, and so in looking at
incentive auctions consistent with the law, taking seriously
the opportunities of unlicensed is something that we will do,
and also looking at the need to address WiFi congestion and
other unlicensed opportunities in other spectrum bands, but
there is no question that the incentive auction bands provides
an opportunity, and I was glad that the legislation provides
some opportunity for unlicensed there.
Ms. Eshoo. Great. I would encourage the Commissioners to
come out to Silicon Valley and meet with the unlicensed
community there because it is very exciting about what is going
on, and whatever collaboration you can develop with them I
think would be highly instructive as you move forward with your
rules.
This is for all the witnesses. Last year, I introduced
legislation to help consumers understand exactly what they are
getting when they sign up for a wireless data plan. There are a
lot of people that advertise a lot of things, but there isn't
consistency to it. So as much are we are all looking forward to
4G without a standard definition of the technology, consumers
really are experiencing or often experience a vastly different
experience on speeds depending on the wireless provider and the
location. This in turn has led to a great deal of consumer
confusion. So my question to the Commissioners is, what can the
Commission do under existing statute to help consumers make a
more informed decision when choosing a wireless provider?
Mr. Genachowski. I would just note briefly that we paid
close attention to complaints we have gotten from consumers in
this area. It led to our efforts on bill shock so that mobile
consumers get alerts before they exceed their data plans.
Ms. Eshoo. But that is not really what I am talking about.
I am talking about speeds.
Mr. Genachowski. Yes.
Ms. Eshoo. Because there is a lot of advertisement where we
are the only ones and we do this and we don't do that but we
don't have a standard, number one, which then leads to, you
know, companies putting out very exciting ads, I mean, it
sounds just delicious; I want to grab that, that sounds like
the best thing since sliced bread. Except there isn't any
standard and in many ways it is false advertising.
Mr. Genachowski. On broadband speeds, we are about to
release the second of our broadband speed tests that reports on
the exact speeds offered by broadband providers. It compares it
to their advertising. We have seen it has had a positive impact
in the market and it is something that we will----
Ms. Eshoo. So you are on it? Is that what you are saying?
Mr. Genachowski. We are on that, and we will follow up with
you on the broadband speed test.
Ms. Eshoo. I just have a quick question to the two new
Commissioners. How can the Commission better use the
information that it puts out and the information that comes to
it from consumers in order to make sense out of it? I mean you
issue a lot of reports. I don't know who reads them and who
understands them. So how can we be relevant? I mean, it is the
21st century. We keep using that term. Do you have ideas about
how as the new Commissioners you infuse the new blood in the
Commission that we can address this?
Ms. Rosenworcel. I think that is a terrific point. I think
the data suggests that in the last quarter, complaints at the
agency actually rose 32 percent. That is not because there is
some bad dealings on those that provide services but the honest
truth is that communications has become a much more important
part of all of your household budgets. We rely on all of these
devices more than ever before. We need to start studying those
complaints as they come in and we should identify what are
consistent concerns and then we should see how we can use the
existing reports and data that we produced to try to help
consumers address those concerns.
Mr. Pai. And Ranking Member, I will build up my colleague's
response by saying that to the extent that the wave of
complaints suggests that the Commission's rules in a particular
area are lacking, we should consider actively whether a new
framework is necessary to address those concerns so that
complaints in the future are removed and also to----
Ms. Eshoo. Just don't write it the way you said because no
one will understand it except us here in the hearing room.
Mr. Pai. Right. And to go the other point you raised, I
think the consolidating reporting initiatives that have been
discussed in Congress would help present a single unified
product the FCC can put out that we will try our best to write
in plain English so that both the legal community and the
consumers and the Congress can understand.
Ms. Eshoo. Thank you.
Thank you, Mr. Chairman.
Mr. Walden. You are welcome.
Let us go now to the chairman of the full committee, Mr.
Upton.
Mr. Upton. Thank you.
Chairman Genachowski, in 2003, the FCC adopted on a
bipartisan basis a hands-off approach for fiber and Internet
protocol networks to promote investment, encourage deployment.
Analysts report that fiber now passes over 22 million homes in
the United States up from 180,000 homes in 2003. In January
2010, the FCC reported that 1,442 competitive carriers were
providing service. That again is up from 536 that the FCC
reported operating in 2003, and analysts report that there are
more than 770 providers of fiber to the home networks around
the country.
So would you agree based on that evidence that the hands-
off approach is working?
Mr. Genachowski. In general, we have seen, as I mentioned
in my opening remarks, tremendous progress in the space and a
light touch and relying on competition is our dominant
strategy.
Mr. Upton. And you don't have any plans to reverse that, do
you?
Mr. Genachowski. I don't have any plans to revisit those
forbearance but----
Mr. Upton. That is good.
At the heart of the special-access proceeding is the
question of whether there are sufficient competitive
alternatives in the market today, inherently a fact-based
inquiry. The Commission has twice made a voluntary request for
data from the ILECs and CLECs cable companies and fixed
wireless companies that compete in the market with little
response. How does the Commission intend to collect the data
needed to proceed with its determination of whether the market
is competitive?
Mr. Genachowski. Well, this is something I have discussed
with my colleagues and we intend to move forward with a
comprehensive data collection order. We also have a sufficient
amount of information, a great deal of information already to
make wise decisions as we move forward.
Mr. Upton. So again, you don't plan any preemptive strike
without getting all the information?
Mr. Genachowski. Well, we plan to steer through consistent
with our obligations under the Communications Act to promote
competition and to drive investment in new services.
Mr. Upton. Lastly, let me say in April, the chief of the
FCC's Wireline Competition Bureau said about special-access
data, he said, ``There is an incredible dearth of data and that
we need to be able to show costs either do or don't relate to a
market. We cannot do the analysis without the data.'' Yet a
senior official in your office recently told the press that the
Clinton administration's deregulatory policies for special
access are not working as intended. How did the official reach
the conclusion with a dearth of data?
Mr. Genachowski. There is a great deal of data and indeed
wide consensus that the current framework for special access is
not working. It is both overinclusive and underinclusive. We
know that. We don't have the data to determine what framework
should replace it, and that is what we are working on.
Mr. Upton. I yield back. Thank you.
Mr. Walden. The gentleman yields back the balance of his
time.
The chair recognizes the ranking member of the full
committee, Mr. Waxman.
Mr. Waxman. Thank you very much, Mr. Chairman.
With the passage of the Middle Class Tax Relief and Job
Creation Act, and the creation thereby of the First Responder
Network Authority, or FirstNet, we have an unprecedented
opportunity to develop a nationwide interoperable public safety
network. At the time of the Act's passage, however, the FCC had
already granted waivers to several jurisdictions allowing them
to deploy local or regional public safety broadband networks
that would utilize public safety broadband spectrum
immediately. With the creation of FirstNet, concerns have been
raised that moving forward with these waivers may undermine
FirstNet by establishing regional networks that are not truly
integrated and will require more taxpayers' dollars to
eventually incorporate into the national network. As NTIA
noted, ``The law's vision is plainly at odds with the
continuation of the Commission's pre-legislation waiver
approach. If the Commission does not take consistent Congress's
vision, it could jeopardize nationwide interoperability as well
as harm FirstNet's ability to carry out its powers, duties and
responsibilities.''
Chairman Genachowski, given the dramatic change in
circumstances created by the passage of this new law, what do
you think of NTIA's concerns about the pre-legislation waiver
approach and how do we ensure that we are protecting taxpayer
funds and not undermining our core goal of nationwide
interoperability?
Mr. Genachowski. I think NTIA is right to have concerns
given the change in circumstances of the statute, and we are
working closely with NTIA to chart a course to make sure that a
nationwide FirstNet could be stood up without any unnecessary
encumbrances and look as required by law to specific situations
and work through them, and we are working very closely with
NTIA on that.
Mr. Waxman. Thank you.
Commissioner Rosenworcel, you are familiar with this issue
because of your previous role with Senator Rockefeller at the
Senate Commerce Committee. Do you have any suggestions of how
we can ensure that FirstNet is not undermined by the pre-
legislation waiver approach NTIA is concerned about?
Ms. Rosenworcel. I think this is largely a challenge of
timing. The Commission made some choices to provide local
jurisdictions with access to spectrum held by the Public Safety
Spectrum Trust early on so that they could develop local
interoperability. Since that time, Congress passed a very
substantial law in the Middle Class Tax Relief and Job Creation
Act and contemplated for the first time a nationwide network
for interoperability for first responders. It is now the task
of the NTIA and the FCC working together with local
jurisdictions to figure out how to harmonize all these efforts
so we produce that nationwide network that Congress
contemplated.
Mr. Waxman. Thank you.
As I mentioned in my opening statement, special access is
an area of policy that is long overdue for reform. Although
some have argued that special access is a legacy technology
that is becoming increasingly irrelevant, I am skeptical of
this argument.
We have heard repeatedly from a wide variety of wireless
and wireline competitors, large and small businesses,
educational institution, public-interest organizations and
government agencies that significant demand for special access
remains. The same stakeholders assert that the high price of
special access has impeded innovation and competition for the
industry as carriers are forced to purchase these services from
their competitors at artificially high rates. We are also told
that the four largest ILECs combined for over $12 billion in
sales of special-access services in 2010. That doesn't sound
like a legacy technology just yet.
Chairman Genachowski, I know that you have been a strong
proponent of policies that promote innovation and investment in
communications services. Are you concerned about the state of
the market for special-access services and its potential to
stifle innovation and investment? And what information do you
now need to complete this proceeding and make a final policy
determination so we can resolve this matter?
Mr. Genachowski. Yes, I agree with your point. Even as
fiber is rolled out, special access remains a very large
market. You may have said this number, but it is about a $12
billion market, and even more important perhaps, special access
is an essential input into competition in general in broadband
and into competition in mobile. So we need to make sure as the
statute requires that there is competition in that space. I
expect that we will move forward with a comprehensive data
collection that is designed to give us efficiently the
information we need to adopt a new framework for the space that
promotes competition.
Mr. Waxman. Thank you.
Commissioner Pai and Commissioner McDowell, based on your
statements, you seem to be more skeptical about FCC
intervention into the special-access market. How would you
respond to the concerns we have heard from businesses and other
purchasers of special-access services that deregulation has
translated into higher prices?
Mr. Pai. Ranking Member Waxman, thank you for the question.
I guess I first would echo Ranking Member Eshoo's call for
mandatory data collection. I think we need to understand what
exactly the current state of the marketplace is before adopting
any regulatory framework. I think everyone would agree that
regulating in the dark is always a dangerous proposition.
Furthermore, to the extent that there are competitive
problems, we should address them obviously after we conduct the
data collection but we should also remember that the Clinton-
era flexibility triggers that were adopted in 1999 also were
found to benefit some of the very customers you were
mentioning. For example, phase 1 of the triggers allows a
carrier to reduce prices, to give them discounts in particular
cases so that contracts can be more consumer friendly, so to
the extent that we would be suspending those triggers moving
forward without having adequate data to know what the
replacement regulatory framework would be would, I think, be
bad for everybody. It would be bad for the consumer, as you
mentioned. It would be bad for the carriers in terms of their
incentive to build out fiber.
Mr. Waxman. Could we hear from Mr. McDowell briefly, Mr.
Chairman?
Mr. Walden. Sure.
Mr. McDowell. Thank you, Mr. Chairman. Excellent question,
and for 6 years I have been talking about this issue myself. We
are past the fifth anniversary of then-Subcommittee Chairman
Markey's letter to the FCC of May of 2007 asking us to resolve
this by September of 2007. I have been asking for a mandatory
data collection of all market players in the space for, I
think, almost 6 years so what the chairman says in that regard
is music to my ears.
Then once we have that data--and by the way, the Commission
is on record with the Federal appeals court here in Washington
saying that we don't have enough data to make a substantive
decision just yet, and I agree with that pleading before the
court. So once we do get that data, then there is going to be
an opportunity for an important economic analysis. So for
instance, if incumbents in certain markets are indeed charging
far above cost, the question from an economic perspective is,
doesn't that then give an incentive for a competitor to come in
and build if there is a lot of headroom with pricing. Some
competitors then come back to say well, when that happens, the
incumbent lowers their price. But as policymakers, isn't that
exactly what we want? We want falling prices.
So there are a lot of more thorny issues here than at first
blush and I welcome the mandatory comprehensive data collection
so we can move forward before my gray hair turns white.
Mr. Walden. Or in my case, falls out.
Let us go now to the gentleman from Texas, Mr. Barton.
Mr. Barton. Thank you, Mr. Chairman.
I want to follow up on something that former Chairman
Waxman asked. These grants, these BTOP grants that NTIA has
suspended, I think it is questionable to suspend them, and so
my first question would be to the Chairman, Mr. Genachowski, is
it better to have a system that is actually operable although
not perfect rather than a system that is perfect but not
operable at all?
Mr. Genachowski. I think the answer is yes. What I believe
the statute----
Mr. Barton. Yes, it is better to have a system that is
operable but not perfect?
Mr. Genachowski. Yes. I think that what the statute
contemplates is something different, which is an operable,
effective nationwide----
Mr. Barton. I think you just made my point. We have got a
system in Mississippi that got a BTOP grant that is about to be
operational, or could be very quickly if it wasn't suspended,
and there are one or two grants in Texas that are also close to
being operable. I would postulate that there is a much greater
likelihood that the first-responder unit in Houston, Texas, is
going to have to communicate with the first responders in Sugar
Land, Texas, which is a suburb outside of Houston, as opposed
to the first responders in Houston having to communicate with
the first responders in Los Angeles, California.
So I think it would be better to go forward with these BTOP
grants with the caveat that they have to be able to
interconnect when the FirstNet system is up and running, so
they have to be interoperable with the national system when it
happens but in the meantime it is a lot better to let Biloxi
communicate with Jackson, Mississippi, or vice versa than it is
to have a theoretical requirement that Biloxi be able to
communicate with New York City, and this suspension, you know,
when several of these grants, as I understand it, are within
months of being operable.
So to go back to the original question, I believe it is
better to have an operable system although perhaps imperfect
than to have an inoperable system that is theoretically perfect
which probably won't exist for another 4 to 5 years. Do you,
Mr. Chairman, have a problem with the thesis that I just
propounded?
Mr. Genachowski. I think Commissioner Rosenworcel said it
very well, I think, which is that our goal together with NTIA
and local public safety authorities is to harmonize the various
goals that we would all like to accomplish.
Mr. Barton. That is a good word, ``harmonize.'' I like
that.
My next question is to Mr. McDowell. Is there any place in
the country, the lower 48, where there is not wireless service
available to anybody who wishes to purchase it?
Mr. McDowell. Oh, there may very well be a lot of coverage
issues. Some of that is local zoning or just buildout in more
remote areas, so yes, but I think is the heart of your
question, you know, nine out of ten American consumers have a
choice of at least five wireless providers.
Mr. Barton. Well, I don't want to beat a dead horse but I
am going to. I am more and more at a loss as to why we continue
to fund the Universal Service Fund, and I know that the
Commission has got some ongoing reviews and I know we have got
some reform proposals here in the Congress, but I am told that
almost 100 percent of the population has wireless accessibility
at very reasonable prices, and in most cases, numerous
potential providers and yet we still are spending I think in
the neighborhood of between $5 and $10 billion on universal-
service subsidies that basically tax the cities and the suburbs
to subsidize systems that may have once actually had a
legitimate right to have a Universal Service Fund but in
today's America, I don't think that need exists. What is your
comment about that?
Mr. McDowell. Well, first of all, Congress has mandated
this through Section 254 under the 1996 Act.
Mr. Barton. So you are going to blame us?
Mr. McDowell. Well, I am not blaming anybody. I am just
trying to follow your----
Mr. Barton. That is a pretty low blow. Would you support
repeal of that section? Let us put it that way.
Mr. McDowell. Well, if Congress passes it and the President
signs it, obviously we would----
Mr. Barton. That is not as good an answer.
With that, Mr. Chairman, I yield back.
Mr. Walden. The gentleman yields back.
The chair now recognizes the gentleman from Michigan, Mr.
Dingell, for 5 minutes.
Mr. Dingell. Mr. Chairman, I thank you.
I would like to begin by welcoming all the Commissioners.
My questions will be largely directed to Chairman Genachowski,
so I want to welcome you, Mr. Chairman. The questions I hope
you will answer yes or no. Is it true that the Commission
expects notice of proposed rulemaking later this year to begin
to implement the voluntary incentive auction of broadcast
frequencies authorized by the Middle Class Tax Relief and Job
Creation Act? Yes or no.
Mr. Genachowski. Yes.
Mr. Dingell. Mr. Chairman, I have tried for some time to
get the Commission to share with me not only the allotment
optimization model, the AOM, that it has used to broadcast an
incentive auction but also, and I believe more importantly, the
variables and other assumptions that the Commission inputs into
the AOM to evaluate such an auction. The Commission has to date
refused to share these variables and assumptions which is quite
disappointing because I believe they should be a matter of
public record. Further, such information will be of invaluable
assistance to broadcasters, wireless companies and the
citizenry in general when it comes to their participation in or
their approval or disapproval of an incentive auction.
Now, Mr. Chairman, will the Commission make public the AOM
as well as the assumptions and variables that it has put into
the AOM when it publishes its NPRM to implement the voluntary
incentive auction of broadcasting frequencies? Yes or no.
Mr. Genachowski. Yes, the Commission will make public all
the information that is relevant to make decisions and move
forward with incentive auctions.
Mr. Dingell. Mr. Chairman, I hope you realize that that is
liable to be the subject of a lawsuit, and if you fail to make
all that information available, you may find that a lawsuit
will not be sustained for want of proper information by the
Commission to support its actions.
Now, Mr. Chairman, the Middle Class Tax Relief and Job
Creation Act allows the Commission to assign broadcast channels
along the northern and southern borders subject to the
coordination with Canada and Mexico. Has the Commission updated
the AOM using this statutory requirement as an input? Yes or
no.
Mr. Genachowski. I am not sure of the answer to that, so I
could get back to you.
Mr. Dingell. If you please.
Now, Mr. Chairman, on a related note, has the Commission or
any other agency begun consultations with Canada and Mexico
about abiding by treaty stipulations when reassigning U.S.
broadcasting channels? Yes or no.
Mr. Genachowski. Yes, discussions have begun with both
Mexico and Canada.
Mr. Dingell. Now, would you submit then for the record a
summary of the issues discussed at such meeting or meetings as
well as their outcome, please? Yes or no.
Mr. Genachowski. Yes.
Mr. Dingell. Mr. Chairman, now that the Commission's June
2012 repacking roundtable is over, the Harris Corporation noted
that 3 years might not be sufficient time in which to modify
all broadcast towers impacted by repacking. Has the Commission
gathered empirical evidence to support or refute such claims?
Yes or no.
Mr. Genachowski. I am not sure of the answer to that. The
purpose of the proceeding is to gather and make sure that we
have all the relevant information to make decisions to
implement the Act.
Mr. Dingell. Of course, we had this little problem that it
has to be done and it has to be done in a way that it is done
within the time and will sustain a lawsuit.
Now, does the Commission believe that 3 years' time is
sufficient? Yes or no.
Mr. Genachowski. I don't think I can answer that. I think
many of these questions have to be answered on the record that
we will eventually receive and we will reach out to all
stakeholders to participate in that proceeding.
Mr. Dingell. I would be much more comforted if I thought
you knew what the answer to the question was.
Now, Mr. Chairman, my last question on this matter pertains
to consultants that the Commission has retained to help it
design the voluntary incentive auction. Have any of these
consultants previously lobbied the Commission or otherwise
advocated on behalf of incentive auctions? Yes or no.
Mr. Genachowski. I don't know the answer but I am sure that
all rules have been complied with.
Mr. Dingell. Would you please submit to the committee the
names of those who have been retained to do this kind of work?
Now, to all witnesses, I would like to ask this. The
provisions of the Middle Class Tax Relief and Job Creation Act
of 2012, they required that the Commission take certain steps
to protect and to assure that broadcasters along the borders of
the United States and Canada, Alaska and Canada, receive
certain assurances that they will receive protection of their
licenses and so forth. Do you all commit that you will see to
it that those provisions are carried forward, Mr. Chairman?
Mr. Genachowski. Yes.
Mr. Dingell. And other members of the Commission?
Mr. McDowell. Yes.
Mr. Pai. Yes.
Mr. Dingell. Thank you.
Now, do you also commit to ensuring that the Commission's
intentions implementation the voluntary incentive auction are
readily available to the Congress and the stakeholders in full?
Yes or no.
Mr. Genachowski. Yes. Our goal will be--the short answer is
yes, we will provide the information that we can that is
actually helpful and relevant to making decisions.
Mr. Dingell. Thank you, Mr. Chairman.
Mr. Walden. The gentleman's time is expired.
Mr. Dingell. Mr. Chairman, I thank you for your courtesy.
Mr. Walden. Absolutely. And to the chairman, the AOM is
going to be obviously critically important to the success of
the incentive auctions, so we need to discuss how this can be
done as transparently as possible in the process, and
recognizing that you have got to do your work, but I think
there is obviously a lot of interest, and the committee has a
lot of interest, and clearly, the former chairman has a lot of
interest, so we look forward to that.
I recognize the gentleman from Nebraska, the vice chair of
the subcommittee, Mr. Terry.
Mr. Terry. Thank you, Mr. Chairman.
Mr. Genachowski, yes or no. If industry was able to
compress the data that Mr. Dingell is able to compress the
number of questions into 5 minutes, we would have no shortage
of spectrum.
Mr. Genachowski. Yes.
Mr. Terry. You don't have to answer that. I think it would
be yes. I am always in awe of his ability to ask questions.
Now, getting a little bit to USF and particularly the
regression order, incredibly complex order, and I can't imagine
how much time and brainpower has been invested in the
regression order to date, so congratulations on that.
But I hear from some that they feel that the modeling used
is incorrect. There are complaints about incorrect data being
used within the modeling and around April 25th even your own
folks have said there may have been inaccurate data used in the
process. So there is at least from my some outside the FCC have
been very critical about the viability of that regression
order. Do you have concerns about the regression order? Are
there plans to perhaps review the modeling back to the very
beginning and start over? Is there another potential order
looming out there? Where are we?
Mr. Genachowski. Thanks to my colleagues, and with your
help, Congressman Terry, we were able to take a program that
lacked accountability, that was inefficiently spending public
money and transform it to one that will efficiently get
broadband to unserved America, and no one is more familiar with
the problems in the old program than you are. Multiple
competitors in a single market getting funding, subsidizing
some companies who were competing against unsubsidized
competitors and a system that gave control of the funding
spigot to recipients of funding. We have ended that, and we
have put in place a system of accountability to deal with
things like situations where two companies providing services
near each other getting funding, correcting for geography and
population where one was receiving three or four times as much
as another, and the regression analysis and benchmarks are an
important part of ensuring accountability in the program and
fiscal responsibility. I have great faith in our staff that is
doing this. It has been an open process. I have instructed them
to continue to be open to issues, concerns that companies raise
and we have shown a willingness to say you know what, you are
right about this, we will make a change, and I expect that we
will continue to do that even as we move forward with
implementing these reforms because every day we don't do that,
we are wasting time.
Mr. Terry. Just to maybe summarize, you are going forward
based on the current regression modeling or analysis that has
already been done?
Mr. Genachowski. Yes.
Mr. Terry. So you are confident enough in it now that you
are going forward?
Mr. Genachowski. We are moving forward, and we continue to
consider improvements, modifications to the program that we
have adopted including the regression analysis.
Mr. Terry. Is everybody else comfortable on going forward
on the current data?
Mr. McDowell. As I said, Congressman, this order, which was
historic in nature, is iterative, and as we get data, we will
make adjustments if necessary. I think the chairman agrees with
that. I want to make sure that whatever we do, we don't delay
or change expectations that there will be reform. From my
perspective, we had a historic opportunity to flatten the
growth curve on a Federal entitlement, and this took full
advantage of that.
Mr. Terry. Now, one other point that I hear criticism is
that the cap can change every year from year to year, which is
impacting their ability to do multiple-year business plans. Is
that a concern to the FCC, Chairman?
Mr. Genachowski. Well, providing predictability is of
course a goal, and changes in year-to-year funding has been a
part of the program for a very long time. The transition period
of course is the hardest period. As we work through these
issues together with the carriers, we will work every day to
improve certainty and predictability while meeting our goals of
accountability and getting broadband to unserved parts of the
country and there still is, you know, millions of Americans who
live in areas that don't have broadband.
Mr. Terry. Mr. McDowell?
Mr. McDowell. Well, I think predictability is absolutely
important. I understand there are a lot of rural carriers that
have a great deal of anxiety right now. I think we are trying
to work with them as best we can and we will try to provide as
much certainty as we can going forward without changing the
ultimate goals that we laid out last fall.
Mr. Terry. I appreciate that, and to our two new great
additions to the FCC, if you ever want to take the Genachowski
tour of rural America, I invite you to Nebraska.
Mr. Genachowski. Well worth it.
Mr. Terry. Yield back.
Mr. Walden. The gentleman yields back.
I recognize the gentlelady from California, Ms. Matsui. And
by the way, thank you for the work you are doing on our special
effort on government spectrum.
Ms. Matsui. Thank you, Mr. Chairman.
As you all know, the 1755-1805 spectrum band continues to
be a priority. Mr. Chairman, you said in the past that the
1755-1780 band presents a near-term opportunity to free up
spectrum that can help drive U.S. economic growth and our
global competitiveness. Do you believe as a first step we
should focus on repurposing the lower 25 megahertz that is 1755
to 1780 for commercial us to meet demand and spur innovation?
Mr. Genachowski. Yes, I do, and I think that there are new
opportunities given new technologies and dynamic access and
sharing that make that even more of a reality and potentially
could lead to freeing up even more of that spectrum.
Ms. Matsui. So the other Commissioners agree with that too?
Mr. Pai. Yes.
Mr. McDowell. Absolutely. If Congress wanted to take
leadership to get the executive branch to relinquish more
spectrum for auction, I think that would be terrific.
Ms. Matsui. Mr. Chairman, some have suggested that we look
at developing incentives to help alleviate some of the
reluctance some agencies may have in repurposing their
underutilized Federal spectrum for commercial use. We will need
additional spectrum in the marketplace. Otherwise we will lose
our competitive edge in technology and innovation.
As we look for creative ways to help break any potential
impasses with Federal agencies, are there any financial
incentives or any other incentives we should consider moving
forward on?
Mr. Genachowski. I think that could be a productive area.
In the past, Congress has done things that have created and
provided incentives. Certainly we need the cooperation of
Federal spectrum holders in order to free up the spectrum we
need for our commercial marketplace.
Ms. Matsui. Commissioner McDowell?
Mr. McDowell. I think Congress could unleash a whole host
of incentives, especially on the tax side in terms of capital
investment, tax incentives there. That is not necessarily the
purview of this committee but I think that could be very
constructive.
Ms. Matsui. Any ideas?
Ms. Clyburn. And also some sharing opportunities. Sharing
discussions have been taking place, and I think that is again a
worthwhile pathway for us to consider.
Ms. Matsui. Certainly.
Commissioner Rosenworcel?
Ms. Rosenworcel. The Commercial Spectrum Enhancement Act as
modified by the Middle Class Tax Relief and Job Creation Act is
two important things. First, it compensates Federal authorities
when they relocate off of their existing allocation. Second, it
provides some upfront planning money so that they can make
plans for when they might have to relocate. Both of those
things are good, but in addition to sticks, carrots tend to
work too, and I think adding to those two things a set of
incentives would be a prudent thing to do and I would certainly
support it.
Ms. Matsui. Commissioner Pai?
Mr. Pai. Congresswoman, I would add to my colleagues'
comments that to the extent that the incentives can be tailored
to the particular incumbents within the 1755 band where
relocation or compression is most feasible in the short term,
that would be ideal. So, for example, in the NTIA report
earlier this year, precision-guided munitions, fixed point-to-
point microwave and other applications were identified as the
types of services that could be moved relatively quicker than
some of the other applications, for example, telemetry where
just because of the nature of the operations it would be very
difficult and/or expensive to move. So the incentives,
tailoring them to the particular incumbents could get the most
bang literally for the buck.
Ms. Matsui. Thank you.
Mr. Chairman, the Middle Class Tax Relief and Job Creation
Act requires the FCC to auction 25 megahertz of spectrum
between the 2155-2180 megahertz in 3 years. Many stakeholders
have suggested that the spectrum band should be paired with the
25 megahertz of spectrum between the 1755 and 1780. Do you
believe that the Federal Government should reallocate and
auction the spectrum between 1755 and 1780 megahertz in time to
be paired with the 2155-2180 megahertz block?
Mr. Genachowski. That would be a great outcome, to be able
to auction off that spectrum as a pair. It is why we are moving
aggressively with--we should move aggressively with the idea of
sharing solutions on 1755. We now have an application for an
experimental license from T-Mobile supported by CTIA to begin
immediate testing of sharing in the 1755 band. Moving forward
on that quickly is important for precisely the reason you
mentioned, which is that we have a 3-year deadline on
auctioning the other, so we need to resolve 1755 quickly. The
committee's role here could be very important, and we look
forward to working with you on it.
Ms. Matsui. Do the other Commissioners agree with this too?
Mr. McDowell. From a macro perspective, I think it is
important for us to start looking at this from a different
perspective. Right now the law says that if it costs more to
move a Federal user off of spectrum than it would raise at
auction, it is not going to happen. So let us look at maybe the
cost of how much it would cost to move a Federal user off of
spectrum versus the overall economic effect, and I think that
is going to start to tilt the scales in a different direction.
Ms. Matsui. OK. I see I have used up my time, and unless
the others want to make a quick comment? OK. Thank you.
Mr. Walden. Thank you.
We now recognize the gentleman from Illinois, Mr. Shimkus,
for 5 minutes.
Mr. Shimkus. Thank you, Mr. Chairman, and I appreciate you
all coming. I guess I know how long I have been here when you
finally get a full FCC Commissioner panel that since I started
is all new, really. You guys are--unfortunately, that means you
have been around a long time, which is not always good in
Washington these days.
But thank you for coming and it is always an exciting time
when you are talking about communications, and as many of you
know, I don't try to do gotchas and stuff like that, but I want
to--and I say that hesitantly because, Chairman, I want to talk
about your new Web site which I have up, which is kind of
snazzy. Some people are saying it is a little more difficult
than the old one, so I hope that we can address may be some of
those concerns.
But I do that because I did put in--I tried to figure out
and do the search to find the title to reclassification
proceeding on the site. I just went into the search thing and
did Title II reclassification, and I can find nothing. It is
very quiet. It moved me to number twos and all sorts of other
stuff but maybe I am wrong but maybe you can help me direct
that through eventually.
I am not going to go much further, but the question is, is
the Title II reclassification still open?
Mr. Genachowski. It is still open. Generally speaking, with
notices of inquiry, the norm is to keep them open as----
Mr. Shimkus. And we can pull that down. I don't need that.
Mr. Genachowski. And in fact, in that proceeding we have
received over the last year I think about 19 different
comments, and so the norm is to keep notice of inquiries open.
Mr. Shimkus. Nineteen?
Mr. Genachowski. I believe that is the number.
Mr. Shimkus. Is that abnormally high or abnormally low?
Mr. Genachowski. You know, for the 19 people who commented,
it is important, and I would say the fundamental test for us
is, are our policies having a positive effect on the broadband
sector, and the broadband sector is moving very strongly in the
right direction, and I think the Commission together has done a
good job driving investment in U.S. leadership.
Mr. Shimkus. So you don't plan on closing that?
Mr. Genachowski. It would be unusual to close it. I have no
plans to close it.
Mr. Shimkus. So then my follow-up question, with our last
hearing, I don't know if you had presence here or not, but we
did have a hearing on the U.N. ITU regulation. I think
Commissioner McDowell made public comments on that. It was
pretty much the consensus, I think, from the committee on both
sides about the concern of controlling the Internet from
places. There is a concern that if we don't close down the
hearing process or we don't close down the reclassification,
that there is a possible default or a movement to the
government having bigger control of the Internet. Do you
recognize that that concern is out there?
Mr. Genachowski. I have heard that concern. I don't share
it. I believe very strongly in Internet freedom, clear and
consistent position, no gatekeepers to the Internet, public or
private.
Mr. Shimkus. But you don't think that keeping the
reclassification system open sends an opposite signal?
Mr. Genachowski. I don't think so at all.
Mr. Shimkus. Does anyone else want to comment on that real
quickly because I have two more points.
Mr. McDowell. I would disagree. Whenever I speak to
international audiences, this comes up as issue, isn't the
United States being hypocritical opposing IT regulation of the
Net but at the same time wanting to go into the space of
regulating Internet network management.
Mr. Shimkus. Ms. Clyburn?
Ms. Clyburn. I am not in agreement, with all due respect,
with your premise.
Mr. Shimkus. That is fine. Great.
Commissioner Rosenworcel?
Mr. Rosenworcel. I agree with the chairman as well.
Mr. Shimkus. Mr. Pai?
Mr. Pai. And I testified in November at my confirmation
hearing. I said as well in my opening statement that I would
support closing the Title II proceeding in order to provide
certainty to people in the industry and around the world.
Mr. Shimkus. And then I only have 35 seconds left, and I
plan to use them to really make a statement. We haven't really
talked about--I don't know if we have. I have been upstairs for
an energy hearing, but Congresswoman Eshoo and I do E-911,
telecommunications safety obviously with the storms, especially
Fairfax County. I hope we are looking at that and offer some
recommendations and the like.
And before I get a response, let me also just make--because
we talked about Universal Service Fund, and I do represent
rural America, 30 counties out of 102 in southern Illinois, and
I just want to put on record that Universal Service today is
also broadband access and speed. It is just not cellular
communications, and even in cellular communications you may not
have--you will need multiple towers. So I hope in your
consideration we get equity in the ability of rural America to
have access of speed in broadband technologies, and I think
that you will some support in movement in that direction.
Thank you, Mr. Chairman. I yield back my time.
Mr. Walden. The gentleman yields back the balance of his
time.
The chair now recognizes the gentlewoman from the Virgin
Islands, Dr. Christensen, for 5 minutes.
Mrs. Christensen. Thank you, Mr. Chairman.
And I am sure it won't surprise you that my questions are
going to be related to insular issues. Mr. Chairman, in the USF
ICC transformation order, the FCC recognized that unique
circumstances exist in insular areas and directed the wireline
competition bureau consider those special circumstances as it
implements a forward-looking cost model for price cap carriers.
You also instructed the bureau that if the adopted phase II
cost model doesn't adequately account for costs of the price
cap companies outside of the contiguous United States, it could
choose to exclude those companies from the phase II mechanism
and continue to provide them phase I support instead. So my
question is, given that phase I support for the noncontiguous
States and territories accounts for less than 5 percent of the
total high-cost budget for price cap companies, wouldn't you
agree that it might make more sense for the bureau to get the
cost model right for the companies in the contiguous States
first since they account for 95 percent of the budget and then
make adjustments for the noncontiguous States and insular areas
later?
Mr. Genachowski. Well, first of all, I thank you for
recognizing the steps that the order took to recognize the
importance of the territories and the relevance of broadband
access. We take that very seriously. The answer to the question
is really the same in both the territories and the States.
Moving forward with reform is the best way to get broadband to
people all over the country and the territories who don't have
broadband today and we have an obligation to the consumers
paying money into the fund to make sure that their money is
being used in a defensible way. So we will continue to listen
to all concerns including from the territories, make
adjustments as appropriate, but we are proud of the forms that
we adopted and we think they will finally deliver broadband to
unserved Americans all over the country while having the fund
on a fiscally responsible budget.
Mrs. Christensen. Well, you know, we obviously want to
discuss that further with the Commission as we move ahead.
I don't know if our new Commissioner, Commissioner
Rosenworcel, having had experience in working with Senator
Inouye in Hawaii, if you had any comments.
Ms. Rosenworcel. Well, I did not participate in the very
big effort that my colleagues here did and undertook last
October in reforming Universal Service Fund, and I
wholeheartedly support the thrust of that effort. I think it
puts the fund on a more sustainable course. It puts it on a
budget and it makes it more financially accountable. At the
same time, going forward, we are going to be open to continuing
to have discussions about its impact on different areas of the
country and obviously that includes insular areas. Insular
areas is one of the criteria that is set out in section 254 of
the statute, so I think on a going-forward basis we should make
sure that we listen to the words Congress placed in there.
Mrs. Christensen. Thank you.
Mr. Chairman, again, in the order, as I said, you
recognized that unlike mainland rural company services, we are
a bit different. For example, insular areas face higher costs
to ship, deploy and maintain communications infrastructure
because of their remoteness, and also our exposure sometimes to
severe weather. In addition to that, the Virgin Islands and
Northern Marianas and America Samoa are outside of the custom
zone of the United States, so our companies pay duties on
equipment and materials that come in from the United States as
well as foreign areas.
So can you talk about Connect America Fund phase II cost
model could take into account these factors in producing and
projecting the costs of deploying broadband service in insular
areas? Would those factors be able to be taken into
consideration?
Mr. Genachowski. Yes. We recognize that in insular areas
and in some States that are unique circumstances that in
fairness we need to take into account. We have sought to
address that in the order and also through the waiver process
that we set up as sort of a safety net in case our mechanisms
miss any criteria that are important to take into account. The
door is open for legitimate waiver requests.
Mrs. Christensen. Thank you.
And a question on spectrum. How long do you anticipate it
will take to complete the incentive auctions, both the reverse
and forward auction?
Mr. Genachowski. We don't know yet. It is important that we
move quickly but also move in a way that maximizes the
opportunities of the auction. So I think we intend to start the
process very soon. We have started in many respects but to move
forward with additional notices in the fall and then as we get
more participation from stakeholders, I think we will be able
to make a judgment on what the right time is to hold the
auction to maximize the benefits.
Mrs. Christensen. Thank you, Mr. Chairman.
Mr. Terry [presiding]. Thank you.
The chair recognizes the gentlelady from California for 5
minutes.
Mrs. Bono Mack. Thank you, Mr. Chairman, and I would like
to thank the entire Commission for being here today. Oversight
hearings like this can be very helpful for us because they give
us an opportunity to reflect on where we have been and talk
about where we are going. As lawmakers, our job is to
constantly evolve the marketplace to ensure that consumers are
protected, that there is sufficient competition and that the
rules on the books are not unduly harming investment and
innovation.
We all know that the Internet has radically changed how we
receive and share information. In 1996, when Congress did its
first and only rewrite of the Communications Act, approximately
36 million people used the Internet, less than 1 percent of the
world's population. The copper wire was king and people waited
patiently, very patiently while an image slowly loaded onto
their screen. But today more than 2.2 billion people are on the
web and people all across the globe are more connected than
ever before. We share and access information on the web
constantly and we can do it from the phone in our pocket. It is
pretty hard to argue that the landscape isn't drastically
different than it was 16 years ago.
We also know that the technology sector is among the most
dynamic and innovative parts of our economy. We all care deeply
about jobs. But I wonder, do our dated laws actually harm
innovation and inhibit investments? Too often, it seems the FCC
has overreached in interpreting its authority, perhaps because
that authority was granted in a different world than we live in
today.
I would like to ask the new Commissioners, Rosenworcel and
Pai, do you think the--these are complete opposite of Mr.
Dingell's. These are multifaceted questions and you may
elaborate. Do you think the FCC has jurisdiction to regulate
all IP networks? How about all fiber networks? Do you think the
FCC should regulate such networks, and what is the proper
regulatory framework for IP-based services to the two new
Commissioners, and welcome.
Ms. Rosenworcel. I think the FCC has jurisdiction to do so.
Congress in laying out the definitions at the front of the
Communications Act speaks to telecommunications services
regardless of the technology used. That definition informs the
definition of telecommunications and the definition of
information services. So I think the jurisdiction is present.
But your question is a good one. Does that mean that the
agency should then go take an extensive regulatory role? And I
think the question for the agency is, are its rules promoting
competition which can inure to the benefit of consumers? Are
its rules promoting universal service so that we get these
services everywhere? And I think that those are the
fundamentals that should really drive the agency in its
decision-making at this time.
Mrs. Bono Mack. Commissioner Pai?
Mr. Pai. Representative, I share your concerns about the
Commission's occasionally elastic interpretation of its own
statutory authority, and even to the extent that, say, for
example, Title I would broadly seem to cover IP networks, the
question is whether we are being faithful to the actual
language of the statute and the intent of Congress. But putting
that aside, assuming for the sake of argument that the
Commission has authority, the question, as my colleague pointed
out, is whether the Commission should exercise that authority
with respect to IP networks.
As I said forth in my opening statement, I have very
serious concerns about extending the legacy economic
regulations of the old copper-wire networks to fiber networks,
and the reason is because we want to maximize the incentives
for companies and carriers to deploy more fiber, so to the
extent that additional regulations of the type that were
present in the copper area are applied to fiber, that dampens
the incentive for a company to deploy fiber if they know that
prices or other terms can be regulated and changed and so they
don't have the certainty they need from the Commission in order
to make those investments. So I take a slightly different
approach to that question.
Mrs. Bono Mack. Commissioner McDowell, would you like to
weigh in on that?
Mr. McDowell. First of all, I think it is important to note
that if the Act gives us jurisdiction over telecommunications
services, that doesn't mean that we can then foist upon
information services the same powers. And it is important to
also note that information services, broadband Internet access
in particular, has never been regulated under Title II--never.
So the other part of your question, which is should it be,
I agree with Commissioner Pai in that we should be very
careful. We should encourage the buildout of new systems. But I
think overall--I have said this on the record many times
before--Congress should take a fresh look at the Act. It is
stovepipes of regulation based on legacy technologies. It might
be wireless. It might be coaxial cable. It might be copper. It
might be other types of wireless technologies as well,
broadcast versus mobile broadband etc.
So consumers really don't understand the difference. I try
to look at the marketplace through the eyes of my children, and
they don't see what the regulatory difference should be based
on any sort of technology differential. So let us look at
concentrations of market power, abuses of that power, and
whether or not that leads to harm to consumers. I think that
would help inspire a fresh look at a new statutory construct.
Mrs. Bono Mack. Thank you very much. My time is expired. I
yield back.
Mr. Terry. I thank the gentlelady and now we recognize the
gentleman from Boston.
Mr. Markey. I thank the gentleman very much.
And I would like to extend a particular welcome to our two
new Commissioners. Congratulations. It is going to an exciting
tour of duty for you. It is just the most exciting area in all
of public policy.
Yesterday I released the findings of an investigation into
law enforcement requests for consumers' mobile phone records.
It is the first-ever accounting of such information. The
responses from the carriers are startling in both volume and in
scope. In 2011, law enforcement made more than 1.3 million
requests for personal information from wireless carriers, and
this number has been increasing every single year. With
wireless devices now ubiquitous, mobile-phone records,
geolocation data and text messages have become indispensable
tools in the hands of law enforcement authorities. Law
enforcement should have access to this data as long as it is
granted according to court warrants and appropriate legal
processes.
Since the transfer of mountains of mobile data to law
enforcement raises a number of important privacy concerns that
we have to deal with. For instance, while police are searching
for the guilty needle, innocent people in the rest of the
haystack may be swept up in a digital dragnet.
So let me ask you, Mr. Chairman, do you think this process
should be more transparent so that innocent consumers whose
information is being included in these data dumps can better
understand how their personal information is collected, handled
and stored?
Mr. Genachowski. Yes, and I think the information that you
released provided a real service. If I can make one brief point
on the importance of privacy, important as a fundamental value
that we all care about but also important for the success of
the Internet and broadband in driving economic growth and all
the benefits. If people don't trust the Internet and their
information on the Internet, that will drive down adoption and
usage so I think you are doing something very valuable.
Mr. Markey. Commissioner McDowell, do you agree?
Mr. McDowell. I would also like to thank you for your
leadership on this issue. There are obviously some Fourth
Amendment concerns here.
Mr. Markey. Commissioner Clyburn?
Ms. Clyburn. Yes, and again, I appreciate you for that, and
I woke up with the morning news reaffirming your statement and
I would embrace appropriate legislative action.
Mr. Markey. Commissioner Rosenworcel?
Ms. Rosenworcel. Yes.
Mr. Markey. Commissioner Pai?
Mr. Pai. Yes, and I thank you again for your inquiry.
Mr. Markey. OK. Now, court warrants are required before
carriers turn over data to law enforcement except in emergency
situations when lives are at sake. This makes sense, of course.
However, I found that there don't seem to be uniform
requirements for law enforcement to furnish warrants to
carriers after the emergency has passed but while police still
want carriers to provide additional data. Do you think that
more certainty with respect to the legal standards in this area
would be beneficial for both the carriers and for consumers?
Mr. Genachowski. Yes.
Mr. McDowell. Yes.
Ms. Clyburn. Yes.
Ms. Rosenworcel. Yes.
Mr. Pai. Yes.
Mr. Markey. Thank you.
Now, law enforcement is routinely asking for geolocation
information rather than wire taps because they are easier to
obtain. How does the FCC plan to address this shift to
geolocation information, particularly as nearly every person
now carries a GPS tracker, their cell phone? The telephone
companies know where we are.
Mr. Genachowski. This is an important issue. We have open
proceedings on this and our goals are to protect consumer
choice, make sure there is transparency and information to
consumers and preserve consumer trust in the communications
networks.
Mr. Markey. Do you each agree that this is an important
area where we have to give the consumer some confidence that
they are not being tracked at all times? Commissioner McDowell?
Mr. McDowell. It is an important area. The FCC's legal
authority in this area is unclear regarding privacy. We have a
few discreet statutory areas that give us some authority but I
am not sure--in fact, I don't think it is very expensive.
Ms. Clyburn. I have yet to review all of the comments of
the providers, but again, if it demonstrates a need for
enhanced interaction, I would be supportive.
Mr. Markey. Thank you.
Ms. Rosenworcel. Here is what we know in the digital age.
The technology exists to track where we go and what we do both
on the Internet and with our mobile devices. Law enforcement is
interested in this information and businesses want to monetize
it. I think the more challenging course is to try to understand
what consumers understand about this situation and whether or
not----
Mr. Markey. Nothing. They have no idea that this is a
tracker. They know nothing, right?
Ms. Rosenworcel. I agree with you.
Mr. Markey. OK. Let me just ask one quick question. Kids 15
and under, do they deserve an online privacy bill of rights so
that they are not just turned into commodities? Mr. Chairman?
Mr. Genachowski. Yes.
Mr. Markey. Mr. McDowell, 15 and under?
Mr. McDowell. That is all three of my kids right there you
just described, so yes, I would agree.
Ms. Clyburn. Yes, even though I don't have kids. Yes.
Mr. Markey. OK. Great.
Ms. Rosenworcel. Yes.
Mr. Pai. Yes.
Mr. Markey. Yes, 15 and under, we just have to have a
privacy bill of rights, and the longer we wait is the more
these kids are just going to get exploited, and this committee
has the jurisdiction to move it.
Thank you, Mr. Chairman, very much.
Mr. Terry. Thank you, Mr. Markey.
I recognize Mr. Stearns for 5 minutes.
Mr. Stearns. Thank you, Mr. Chairman.
Commissioner McDowell, I have called into question NTIA's
March report in which it estimated that it would cost about $18
billion in 10 years to relocate Federal users off the 1755-1850
band. Apparently NTIA based these estimates on agency reporting
without conducting an independent analysis. What are your
thoughts on this report?
Mr. McDowell. First of all, I think our friends at NTIA did
their best to try to produce that report. They are completely
dependent upon the information supplied to them from other
executive-branch agencies, and that is where it gets very
opaque as to who is providing that information, what are the
assumptions, what is the data upon which all of those financial
numbers rely. So I think there is a lot more work to be done.
The good news about the executive branch is that it ultimately
culminates with one person and some new Executive Orders I
think could be very helpful in trying to focus the executive
branch on relinquishing more spectrum and then Congress could
come into play by not just looking at how much it costs to
relocate Federal users of spectrum but what would the economic
effect, the net economic effect be of placing that spectrum
into the hands of consumers through an auction.
Mr. Stearns. OK. Chairman Genachowski, there has been a lot
of discussion within NTIA and the FCC on spectrum sharing with
government users. The wireless industry was built on clearing
and auctioning spectrum with exclusive rights. This spectrum
model has created huge economic benefits for our country. Has
there been any economic analysis of the likely outcomes of
auctioning shared spectrum? I am concerned about assumptions
being made about a business model that will work within a
sharing regime.
Mr. Genachowski. In my opinion, we have to do both. We have
to completely clear more spectrum and ship it to commercial but
we also have to be open to the possibility that as technology
is developed, sharing might provide new opportunities to add
spectrum on top of that, and the spectrum crunch is so
significant, I have come to the view that we need to pursue
both avenues, sharing, but not at the expense of clearing.
Mr. Stearns. OK. You have also noted that during your
tenure the Commission has moved to eliminate 200 unnecessary
and outdated regulations. Can you tell me which of these was
the most significant in terms of moving the needle in a way
that improves the climate for investment in the telecom sector?
Mr. Genachowski. Sure. I will mention a few. Just recently,
we removed the dual carriage requirement for cable that will
free up cable capacity for broadband. We have removed
regulations that limited the ability to provide wireless
backhaul in rural areas. We have eliminated regulations in the
800 megahertz band to accelerate deployment of LTE. So those
are just some examples of regulations that we have eliminated.
Mr. Stearns. I guess Commissioner McDowell, do you believe
that the Commission has been aggressive enough in burning off
this regulatory sort of underbrush?
Mr. McDowell. First of all, I think the Chairman should be
commended for some of the steps he has taken. I think as we
continue to look through that list of 200 or so regulations,
there are a lot there that aren't really substantive
eliminations of rules. I think there is a lot more that can be
done. I think some day I would love for the Commission, for
Congress to examine whether or not all Commissioner rules
should be sunsetted and have to be reauthorized because we know
the facts change in this marketplace so very quickly. So just
as certain bills regarding agency authorization expire and
Congress looks at those from time to time, I think the
Commission ought to have that sort of presumption when it
promulgates new rules.
Mr. Stearns. OK. Commissioner Pai, one of the first
statements you made upon arriving at the Commission was about
the need to breathe new life into the biannual review process.
I think you mentioned that. Can you tell us more about what you
think the Commission should be doing in that regard?
Mr. Pai. Thank you for the question, Representative.
Section 11 of the Communications Act, as you know, requires the
Commission in every other year to review its regulations with
respect to communications services and evaluate whether they
continue to be in the public interest as a result of
competition. To the extent that Commission determines that
those regulations are no longer in the public interest, we are
required to repeal those regulations.
When I was at the Commission in the general counsel's
office in 2007, 2008 and early in 2009, part of my work
involved compiling some of the recommendations from the various
bureaus and offices with respect to biannual review. What I
found was that a lot of staff work is involved in getting the
recommendations together and sending them to the general
counsel's office but often the Commission itself didn't take
formal action or at least didn't make the Section 11 process as
robust and as meaningful as it could be.
So my view, and the same that you referred to, was that
instead of or in addition to bureau-level recommendations, it
would be a terrific idea and would give the Commission a better
sense of--or would allow the Commission to better calibrate its
regulations to the current marketplace. If a Commission-level
order or set of orders, if necessary, were adopted with respect
to biannual review, that would mean commitment of resources on
the Commission level, of course, but I think it would also give
the staff a sense that a lot of their carefully considered
recommendations were in fact getting acted upon.
Mr. Stearns. Thank you, Mr. Chairman.
Mr. Terry. Thank you, Mr. Stearns.
At this time we recognize the gentleman from western
Pennsylvania.
Mr. Doyle. Thank you, Mr. Chairman.
Chairman Genachowski, Commissioner McDowell, Commissioner
Clyburn, welcome back. Commissioner Rosenworcel and
Commissioner Pai, I look forward to working with both of you
and welcome to your first hearing in front of the committee.
I just want to say very briefly, there has been some
concern expressed on this committee about the reclassification
proceedings leading to some sort of government censorship. I
just want to say for the record, I think that is a misinformed
view. Quite the opposite, I think this promotes an open
Internet that protects our consumers' access to the content of
their choosing. But let me move on.
Chairman Genachowski, we have had a number of
conversations, maybe 200, 300 or 400, on special access, and I
know that you are aware that the resolution of this issue is
important to the industry. You have recently circulated an
order that would freeze pricing flexibility pending further
reform of the special-access market. I fully support that
effort. You mentioned here today that the FCC's pricing
flexibility rules are not working properly. Would you agree
that it is difficult for the industry to operate under rules
that the FCC admits are broken, even in the short term?
Mr. Genachowski. Yes, and I think the process of----
Mr. Doyle. That is good, so are you planning to bring this
order to a vote in the short term, and if so, when might you do
that?
Mr. Genachowski. There is a draft order currently before my
colleagues. It is something that we have been discussing and
that we hope to resolve in the near future.
Mr. Doyle. When might that be? The near future has been
since 2007, so----
Mr. Genachowski. No, no, no, this is under active
consideration at the Commission and I think you can expect some
action in the very near future.
Mr. Doyle. And then also we understand that you are going
to issue another data request, this one being mandatory, and my
understanding is that a mandatory data request is something
that most of the stakeholders are in favor of. But as I said
before, going back to as far as 2007, this committee has been
promised multiple times that the FCC would complete the
special-access proceeding expeditiously. This is giving new
meaning to the term ``expeditiously.'' So we have heard this
all before, but what is the timeline by which the FCC will
issue this mandatory data request, analyze the data and
complete this proceeding? And please don't say ``soon.''
Mr. Genachowski. We expect to issue, or I expect to ask my
colleagues to vote on, the data collection order in the coming
weeks as quickly as it can be finalized, and then once we get
the data, it is hard to predict exactly when we would bring the
order to conclusion, but I think your point----
Mr. Doyle. How long will it take to get all the data?
Mr. Genachowski. I don't know what comment cycle we will
put in that but we will do----
Mr. Doyle. Weeks, months, years?
Mr. Genachowski. Not years, months, and I think----
Mr. Doyle. More than 3 months?
Mr. Genachowski. The shortest comment cycle that----
Mr. Doyle. I am looking at Commissioner McDowell's head
going like this. Two to three months?
Mr. Genachowski. Yes, sir, or--the answer is yes. We want
to have a comment cycle that gets us the information we need as
quickly as possible.
Mr. Doyle. OK. I am going to get off your back at this
point but we are going to be on your back. This needs to get
done.
I want to talk about minority and female media ownership
too. Federal appeals court last year ruled that the FCC does
not have enough accurate data on female and minority ownership
to demonstrate that it is serving its statutory mandate to
promote diversity. The court has directed the FCC to study
minority and female ownership before changing any media
ownership rules. In Pittsburgh, where I live, minority and
female ownership of broadcast outlets has decreased rather than
increased in recent years. We have less than a handful of
broadcast stations owned by minorities or women. I remember
growing up, WAMO-FM in Pittsburgh was a very important radio
station in the African American community for many years, and
it is no longer minority owned. What are your plans, Mr.
Chairman, for moving forward with this assessment of minority
and female ownership? And after you have answered, I would like
to throw that out to the rest of the Commissioners too.
Mr. Genachowski. This is an important issue. I am glad you
are raising it. We have taken steps in the wake of that order
to gather data that we need, that the court said that we need.
That is underway and we will continue to make sure that we have
the data we need to meet these objectives, which are clearly
stated in the Communications Act.
Mr. Doyle. Commissioner McDowell?
Mr. McDowell. Thank you for raising this. This has been a
very important issue of mine as well. In December of 2007, we
had a unanimous 5-0 vote on the diversity order where I
supported the 13 proposals, some of which got turned back by
the 3rd Circuit here not too long ago, but one that did
withstand the appeal was the ban on no urban, no Hispanic
dictates, and I am very proud of that. That was the first civil
rights rule codified by the Federal Government in about a
quarter-century.
But we can do a lot more. I think we need to, you know,
finish the diversity studies actually would be the first point
of order here at the Commission, and that will give us the
factual and legal context under the shadow of the Supreme
Court's Adarand decision from many years ago to make sure what
we do is legally enforceable, but we need to first of all
provide incentives for those who hold broadcast licenses to
divest them. Congress could be helpful by reinstating a version
of the tax certificate law that was in place for many, many
years. It was flawed but it could be improved upon, and I have
long advocated that. I think there are a whole host of ideas
and I know you want to talk to the other Commissioners, so I
will be quiet now.
Mr. Doyle. Commissioner Clyburn?
Ms. Clyburn. Well, you have taken an important first step
in this direction by in essence releasing or codifying a study,
and that is online for anyone's review. Again, this is an
important first step and I am hoping that we are in the process
of funding and getting more robust information that is needed
for us to make decisions, not only in this aspect but in
overall media ownership proceeding coming forward.
Ms. Rosenworcel. As you note, this is an important issue.
The statistics right now are not encouraging, and the 3rd
Circuit remanded these issues to the FCC. In addition, the FCC
has statutory duties under section 257 of the statute to
continually look at minority and small-business ownership of
communications properties. And then finally, it is the right
thing to do. I do agree with Commissioner McDowell, however,
that the minority tax certificate program, which was in place
from 1978 to 1995, was one of the most effective means of
promoting diversity of ownership.
Mr. Pai. I agree that this is an important issue. As you
know, the 3rd Circuit decision in this case was paired with a
decision with respect to media ownership rules generally, and
as the Chairman has pointed out, the quadrennial process is
ongoing. We are collecting facts, and I support action ideally
by the end of the year if we can get it in order to address
these serious issues.
Mr. Doyle. Mr. Chairman, thank you for your courtesy, and
let us get those LPFM licenses going.
Mr. Terry. Second.
The gentleman from New Hampshire is recognized for 5
minutes.
Mr. Bass. Thank you, Mr. Chairman, and I am going to
associate myself with the remarks of all my preceding
colleagues in welcoming you all here, especially the new
members of the Commission.
This committee recently held a hearing on the future of
video, and I believe that there was broad agreement that the
video marketplace has changed significantly since the passage
of the 1992 Cable Act. Chairman Genachowski, tens of thousands
of New Hampshire residents woke up this morning to a blue
screen due to a retransmission consent impasse between Time
Warner Cable and Hearst. As a result, our State's only full-
power network-affiliated broadcast station went dark on Time
Warner Cable.
Mr. Chairman, you and I have corresponded over the past
year, in fact, one instance in particular just before the Super
Bowl, regarding how consumers should not be harmed during these
negotiations and why I think it is essential that the
Commission complete its review of the retransmission consent
rules expeditiously. What is the scope of the agency's
authority on this matter and when will you be completing your
proceeding so that Congress may act accordingly?
Mr. Genachowski. I share your concern about the issues,
particularly the effects on consumers. As I said before, the
Commission's authority under the old laws is limited and I have
said that we look forward to working with the committee on
whether the retransmission consent provisions should be updated
as a result of changes in the marketplace. It is obviously an
area that we continue to monitor so it is an area that I look
forward to working with you and the committee.
Mr. Bass. When will you be completing your proceedings so
that--I will repeat my question. Is there any timeline here?
Mr. Genachowski. If I could, I would like to get back to
you on that but our options are limited, and I wouldn't say
that that should hold up any inquiry by the committee into
changing the law because we have stated very clearly the
limited nature of our ability to intervene under the current
statute.
Mr. Bass. So the scope of your authority on this matter you
think is very limited?
Mr. Genachowski. Yes.
Mr. Bass. OK. Ericsson recently estimated that by 2017,
worldwide mobile broadband subscriptions will grow to 5
billion, and with the evolving use of devices, mobile data
traffic will grow 15 times over. Recognizing the significance
of efficient spectrum deployment to consumers, our Nation's
economy and our global competitiveness, this committee and
Congress passed bipartisan spectrum reform legislation earlier
this year which we know, acknowledging that spectrum from
incentive auctions is a ways off, I believe that it is vitally
important that we firstly bring Federal spectrum to market in a
responsible manner, and secondly, ensure that an efficient
secondary market occurs.
You have answered the issue about relocating cost estimates
that was asked by Mr. Stearns and somebody else preceding him,
but regarding the secondary market, and without opining on any
particular matter, shouldn't the FCC be treating spectrum swaps
and sales with timely, predicable and reasoned evaluation as a
clear means of alleviating near-term spectrum shortage?
Mr. Genachowski. Yes, and we have processed hundreds of
secondary market transactions over the last few years. Our pace
of reviewing those transactions is increasing and I agree with
you on its importance.
Mr. Bass. Any others? Commissioner McDowell?
Mr. McDowell. Absolutely, I agree 100 percent that we need
to continue to make our secondary spectrum markets as vibrant
as possible. The best way the Commission can help is for speedy
review and approval of transactions.
Mr. Bass. Commissioner McDowell, Chairman Genachowski
stated in his opening statement that the United States has
``regained global leadership, particularly in mobile'' under
his leadership. When and how did we lose that leadership in
mobile?
Mr. McDowell. Well, I would--I appreciate his enthusiasm
and his optimism. I don't think we ever lost it. I think we
have always been the leader in mobile ever since Marty Cooper
invented the cell phone in 1973. We never lost it.
Mr. Bass. Very well.
Thank you very much, Mr. Chairman, and I will yield back.
Mr. Terry. The gentleman yields back.
Since the gentlelady from Illinois is not part of the
subcommittee, we are going to finish with those that are. So I
know you are there.
The gentleman from Georgia is recognized.
Mr. Gingrey. Mr. Chairman, I want to thank you for calling
today's hearing on the oversight of the FCC, and I would also
like to welcome Chairman Genachowski and all the Commissioners.
In particular, I would like to welcome the two newest members
of the FCC, Commissioners Rosenworcel and Pai. Welcome indeed.
In a May 13, 2011, hearing before this subcommittee on
process reform at the FCC, Chairman Genachowski testified that
the FCC is ``committed to clearing out the backlogs'' and that
it has reduced the pending number of broadcast applications by
30 percent. Earlier this year, the House passed H.R. 3309, the
FCC Process Reform Act. That legislation was the product of
stakeholder input that will create more regulatory certainty
and will make the Commission work in a more efficient manner.
Believe me, I have got a question in all of this.
I appreciate Commissioner Pai's testimony which stated that
the FCC ``must act with the same alacrity as the industry we
regulate.'' Unfortunately, despite these comments, Chairman
Genachowski's testimony and the inaction by the Senate on H.R.
3309, the Commission is still riddled with process laws that
cause significant delays for an ever-changing industry. I would
like to spend the remainder on this very issue that impacts
companies in my home State of Georgia as examples of why
statutory process reform is desperately needed at the FCC.
In 1999, 13 years ago, WTHC CD 42, the Atlanta channel,
filed an application for class A status along with six other
stations across the Southeast. Due to some clerical errors in
the application, the Atlanta channel's application was the only
one of the seven that was denied. In 2000, the Atlanta channel
filed an appeal that is still pending before the FCC. Recently,
I along with my Georgia Republican colleagues--we also got
letters from the Democrats in Georgia--sent a letter to
Chairman Genachowski asking the Commission to approve the class
A status for the Atlanta channel which has yet to receive a
response. Mr. Chairman, I want to ask unanimous consent to
include the letter in the record.
Mr. Terry. Without objection, so ordered.
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Mr. Gingrey. Thank you, Mr. Chairman.
I believe that this example is precisely why we need to
ensure that process reform is a priority for the Commission
because this industry is at the cutting edge of innovation and
companies should not be forced to wait 12 years to receive an
answer from the agency that regulates them.
Here is the question. Chairman Genachowski, based on your
previous testimony before the subcommittee and the recent
Congressional inquiry, yes or no, will you commit to resolve
this year the pending appeal from the Atlanta channel that has
been before the Commission since Bill Clinton was in the White
House?
Mr. Genachowski. Well, I commit to resolving it as quickly
as possible. I am not familiar with the details but I certainly
agree that no one should have to wait that long for a decision.
Mr. Gingrey. And the answer is yes?
Mr. Genachowski. If there is any way to do so, yes.
Mr. Gingrey. Chairman, I thank you and the other members of
the Commission.
Chairman McDowell?
Mr. McDowell. I agree to commit the Chairman to working
very quickly on that application, yes, sir.
Mr. Gingrey. Chairwoman Clyburn?
Ms. Clyburn. Thank you for the promotion.
Mr. Gingrey. Commissioner Clyburn.
Ms. Clyburn. And again, I will work with the Chairman.
Mr. Gingrey. And Commissioner Pai?
Mr. Pai. Yes.
Mr. Gingrey. And Commissioner?
Ms. Rosenworcel. Yes. Nobody should have to wait that long.
Mr. Gingrey. Yes. Well, hey, that is great. I don't know
whether I used more of my allotted time or less of my allotted
time, but with that response, I thank all five of you and I
thank you for being with us today and giving testimony on
process reform.
Mr. Chairman, I yield back.
Mr. Terry. Thank you for yielding back.
The gentleman from Kentucky is recognized for 5 minutes.
Mr. Guthrie. Thank you, Mr. Chairman. I would like to
welcome our two new Commissioners. I enjoy working with you
guys.
I have a question. I am the co-chair of the Government
Spectrum Working Commission with Ms. Matsui and have worked
pretty closely with Deputy Secretary Strickling, and they were
trying to work to move forward, but I have a couple of
questions, and I know that NTIA oversees that, not you, but
Commissioner McDowell, I just wanted to hear maybe some of your
experiences, and there is a March 2012 report that on the 95
megahertz between 1755 and 1850, that the estimated cost to
restack that is $18 billion. That is what the estimated cost
came to was $18 billion to clear it and repackage it. And I
know that estimates like this have been wildly exaggerated and
they come far under costs what has been estimated, so I just
want to get your opinion on that.
The other thing too on your opinion is, it seems that it is
coming out of NTIA that they think sharing is probably the best
way to reclear and repack the spectrum, so it looks like we
have high, high costs to repack, and from what I understand, if
it is shared, it is probably going to be the least valuable if
it is shared as opposed to clear spectrum. So we are going
through an exercise to try to free up government spectrum but
we are looking at estimated high costs offering probably the
lower value for our people who want to buy it, and it just
seems like that is not a good way to go, and I just wanted to
see your experience and the high cost and the sharing in terms
of sharing some of your experience. I know we have a vote
coming too, so----
Mr. McDowell. Sure, and thank you for coming at that issue
from a slightly different angle too. First of all, we have no
way of knowing if that $18 billion figure is real, how real
that it is. We don't know what the underlying data is.
Mr. Guthrie. But your experience, they have been higher?
Mr. McDowell. Well, it is hard to say. These are executive-
branch numbers. We are an independent agency. We don't have any
reach into the executive branch. So we don't really know. And
NTIA has to rely on information given to it from other agencies
so I don't want to fault the good people at----
Mr. Guthrie. Right, and we have worked well with the Deputy
Secretary.
Mr. McDowell. Right, so they are given what they are given
and they have to spit out the numbers that they are given, but
beyond that, we can't drill down any deeper, and there is a
disincentive, a strong disincentive for any user of spectrum or
holder of a license, be they private sector or public sector,
to relinquish that license, and that is going to be especially
true of the Federal Government, so we have to ask a fundamental
question, which is, are all agencies of the Federal Government
using all of their spectrum efficiently. I think the answer to
that question is probably no. That is a hypothesis. But we
don't really know because there has never been an exhaustive
audit or exhaustive study in that regard, and I think one is
needed, but that is going to take leadership directly probably
from the West Wing of the White House, from the Oval Office.
You have a huge, vast executive-branch bureaucracy here
regarding operators and users of spectrum but it does culminate
with one person and I think this translates across who has been
in the White House over the years. It is not a partisan issue,
but the President with Executive Orders that are clear and
defined could resolve this issue. So thus far it is sort of
muddled.
So here we are in a bit of a cul-de-sac, a bit of a dead
end, which is, we need spectrum. The broadband plan calls for
500 megahertz to be auctioned. I am skeptical that the
incentive auction legislation will produce 80 megahertz. It is
also a matter of 80 megahertz where. Is it going to be in those
congested urban areas or where it is less needed in rural
areas? And then so if you look at the Federal Government
occupying perhaps 60 percent of the best spectrum, that is
perhaps some very low-hanging fruit right there, but again,
that takes executive-branch leadership to get that moving.
So then Congress has a role here, which is, there is a law
that says if it costs more to move a Federal user off the
spectrum than it would raise at auction, that is not to be
auctioned. So do we need to reformulate that? Do we need to
look at the net economic effect of that spectrum? Do we need to
look at that whole problem through that different lens? And I
think we do, but we are at a dead end right now. We are not
going to get to 500 megahertz that the National Broadband Plan
talks about. Consumers are going to be frustrated for years,
and even if we could find spectrum today, it does take the
better part of a decade before it actually reaches the hands of
consumers just because of due process and funding and buildout
and all the rest. So we are looking at a real drought for
spectrum right now absent some quick action and leadership.
Mr. Guthrie. Yes, this has been an interesting thing for
me, eye-opening for me, and I think not many people understand
and I still don't understand exactly how it all works, but the
process by how we need to get spectrum out there because it is
our competitiveness as a country, and I always kind of joking
since I have been doing this task force, I never ran around
Kentucky saying send me to Washington and I will get you more
spectrum. That was never in my platform moving forward, but I
enjoy doing it because it is an extremely important thing that
we need to do and be very serious about because we have uses,
everything going forward that we have to have spectrum for.
Thank you very much, Mr. Chairman.
Mr. Terry. Thank you, Mr. Guthrie.
At this time, since there are no other members from the
subcommittee, I am able to recognize the gentlelady from
Illinois, Ms. Schakowsky. You are recognized for 5 minutes.
Ms. Schakowsky. Mr. Chairman, I appreciate your allowing me
to just ask one short question.
Chairman Genachowski, let me begin with a compliment. The
FCC I believe has done an impressive job under your leadership
of improving the responsiveness and increasing efficiency. The
Commission's significant reduction in the number of open
dockets is particularly impressive.
However, there are several pending petitions which we have
been hearing about filed by State pay-phone associations
requesting the FCC to order a remedy for violations of previous
FCC orders that are still awaiting decisions. I previously
asked about one specific petition submitted by pay-phone
operators in Illinois. It is now 8 years after that petition
was filed. So I am asking what specific efforts have been made
in recent months to reach a final decision on the outstanding
pay-phone petitions. What will be done in the near future to
bring this issue to a conclusion? And can you say when final
orders on those petitions will be completed, and from my point
of view particularly, the Illinois petition?
Mr. Genachowski. Thank you for your comments, and I
appreciate you drawing attention to that proceeding. There is a
draft order in that proceeding that is before the other
Commissioners, and I can't speak for them but I would expect
that we will see action on that in the near future.
Ms. Schakowsky. Since it is now dependent on the others,
might comment on that.
Mr. McDowell. You know, I graduated from law school in
1990, and one of my first projects was to work on a pay-phone
matter before the FCC when I was in private practice, and what
tends to happen is that the FCC will act. It goes to an
appellate court. It goes back down to the FCC, several years in
between actions, and this has been going on literally in my 22
years of practice and work in this area. But I do think that we
should get to work on all matters that are easily decidable and
I agree with the Chairman in his answer.
Ms. Schakowsky. OK. Anyone else?
Ms. Clyburn. My office will continue to do all that they
can to expedite this process.
Ms. Schakowsky. Thank you.
Ms. Rosenworcel. Yes, we should get to work.
Mr. Pai. I have aggressively reviewed the list of orders on
circulation and have tried to vote them as quickly as possible,
and I will take a particular look at this order and take the
appropriate action within a very short period of time.
Ms. Schakowsky. Pretty soon no one alive will remember pay
phones, so I hope that we will be able to resolve this very
soon. Thank you so much.
And Mr. Chairman, again, thank you.
Mr. Terry. Thank you.
Mr. Kinzinger will now take over.
Mr. Kinzinger [presiding]. Thank you. The chair now
recognizes himself for questions. This is what you do. You go
vote early and then you can pretend like you are the chairman
for a few minutes.
From everybody's written testimony, many of you talk about
spectrum controlled by the Federal Government. As a military
pilot, I understand and agree that certain agencies and
departments have critical needs which must be prioritized in
the realm of communications availability. I have also realized
in my short time here that the Federal Government isn't exactly
the model of efficiency. I know that doesn't surprise too many
people. I was happy to see the FCC and NTIA initiate some plans
to free up spectrum in the 1755 band but I believe there is
more we can do to move this conversation along in the meantime.
To take a page from Commissioner Pai's testimony, sometimes
you just have to get the first run across the plate to get the
ball rolling. That being said, I have been working with Senator
Kirk's office to do just that by introducing legislation which
would relinquish Federal spectrum through a BRAC-style
commission. It is H.R. 4044.
Now, everyone has their own opinion on how Federal spectrum
should be reallocated but it is my hope that I will be able to
work with each of you here today on a way forward and that we
will be willing to talk about those ideas. And if you any of
you have anything on the subject that you would like to talk
about, hopefully we can do that as we move forward. It is an
extremely important issue and I believe we can solve it if we
start working together now.
Now, on to my question, and this is just fairly quick here.
I guess this was touched on a little bit already, but to the
whole panel I would like to ask this question. Through various
proceedings, the FCC has stated that the Communication Act is
technologically neutral. Do each of you continue to hold that
view?
Mr. Genachowski. Fundamentally, yes.
Mr. Kinzinger. OK. Next?
Mr. McDowell. If you mean does it treat all technologies
the same, I think the answer is no. It is very stovepipy in
nature, so as I stated earlier, whether you are a copper-based
common carrier or wireless provider or a broadcaster or
providing a service over coaxial cable or over some other
medium, the law will look at you differently rather than
through the eyes of the consumer. So no, I don't think it is
technologically neutral.
Ms. Clyburn. I think in terms of our engagement and
recognition of an ever-evolving marketplace in terms of how we
evaluate these technologies, we take as neutral a stance as
possible.
Ms. Rosenworcel. We should try to take as neutral a stance
as possible but we should also acknowledge some of the
direction that Congress provided in the statute, which does on
occasion treat, for instance, local exchange carriers, cable
operators and wireless licensees differently.
Mr. Kinzinger. Mr. Pai?
Mr. Pai. Our goal certainly should be technological
neutrality. The problem, as Commissioner McDowell identified,
is that we are compelled to apply statutory requirements and in
some cases predate the very industries we purport to regulate
by decades.
Mr. Kinzinger. Chairman Genachowski, the FCC issued a
report claiming it had eliminated some 200 rules. How many of
those rules were regulations that were still in force that you
used your discretion to eliminate?
Mr. Genachowski. I don't know the number. I would be happy
to get that for you.
Mr. Kinzinger. Can you give me an example?
Mr. Genachowski. I hesitate to do that, but I would also
point out that that list underestimates actions we have taken
to modify regulations to reduce their impact in a way that
wasn't a complete elimination so we didn't include it on the
list.
Mr. Kinzinger. Of the 200, maybe you will be able to tell
me how many had already been invalidated by a court? Do you
know the answer to that?
Mr. Genachowski. I don't know the answer to that.
Mr. Kinzinger. OK. And you will be able to get that to me,
I hope?
Mr. Genachowski. Sure, absolutely.
Mr. Kinzinger. And I will ask you this too. How many had
already expired is another question I have, and I assume you
probably can't answer that here. How many of these were simply
cross-references to other bills is another question I would
like answered on that, or cross-references to other rules. I am
sorry. And if you are really going to meet President Obama's
challenge to deregulate, don't you need to review all your
rules with the presumption that the rule is unnecessary unless
the Commission finds compelling evidence to the contrary?
Mr. Genachowski. Well, we do do regular reviews, biannual
reviews, of all of our rules. I think our record on eliminating
unnecessary rules is very good. We have also adopted rules that
are necessary to promote competition like our broadband data
roaming rule. We don't always agree on all of these things but
I think we have made a very strong effort to eliminate
unnecessary regulations, and at the same time to fulfill our
responsibilities under the statute.
Mr. Kinzinger. Mr. McDowell, do you have any input on that
at all?
Mr. McDowell. Well, first of all, sections of the statute
such as section 10, section 11, which apply only to
telecommunications providers, it would be great if we had a
mandatory look-see if all rules regardless of what kind of
company they apply to, so I think that could be very helpful.
And as I stated before, the FCC could look at sunsetting
its rules to revisit them after X number of years because the
marketplace does change so quickly. I haven't looked at all of
the Chairman's rules that he says have been taken off the
books, and I want to give him credit for at least taking those
steps, and we have worked together on many eliminations. There
are a number that are cross-references or that were struck down
by courts such as broadcast flag or haven't been enforced in a
long time such as the Fairness Doctrine, things like that. But
I think we should look at that, you know, with the best spirit
and credit due but also to understand that we could do better
and be more aggressive in terms of scrubbing the Code of
Federal Regulations and reducing its volume.
Mr. Kinzinger. I agree.
With that, I will yield back.
Members have 10 days to submit material for the record, and
we will now adjourn. By the way, thank you, everybody, for
coming out and spending time with us. We appreciate it. And we
will go ahead and adjourn.
[Whereupon, at 12:53 p.m., the subcommittee was adjourned.]
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