[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







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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

                              ----------                              
                                                                   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

                              ----------                              


                         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:]

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    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.
    [The information follows:]

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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.]
    [Material submitted for inclusion in the record follows:]

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